STAND. COM. REP. NO. 327

Honolulu, Hawaii

RE: S.B. No. 1444

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committees on Technology and Energy, Economic Development, and Tourism, to which was referred S.B. No. 1444 entitled:

"A BILL FOR AN ACT RELATING TO THE HAWAII TECHNOLOGY DEVELOPMENT CORPORATION,"

beg leave to report as follows:

The purpose and intent of this measure is to:

(1) Require the Hawaii Technology Development Corporation to adopt rules to require awardees of Hawaii Small Business Innovation Research (HSBIR) program grants who relocate their principal place of business outside the State within five years of receiving the award to reimburse funds awarded; and

(2) Appropriate funds for the continuance of the HSBIR program operated by the Hawaii Technology Development Corporation.

Your Committees received testimony in support of this measure from the Hawaii Technology Development Corporation; Neurobehavioral Research, Inc.; Akabotics LLC; Hawai‘i Farm Bureau; Makai Ocean Engineering, Inc.; Hawaii Biotech, Inc.; Experiad Solutions; Maui Chamber of Commerce; Marine Genetics; and one individual.

Your Committees find that the Hawaii Technology Development Corporation has a vision to create 80,000 new innovation jobs in Hawaii earning $80,000 or more by 2030. Aiding in that goal is the HSBIR program, which provides matching grants to help companies further the development of new products to solve critical issues. Applicants must have received federal Small Business Innovation Research Program grants or contracts to qualify for the matching HSBIR program, which provides up to a fifty per cent match in funds. Initially, the HSBIR program only funded companies that received Phase I grants, but in 2016, the program was expanded to help companies who are moving their advanced technology products from research into the market. Your Committees further find that HSBIR's Phase II and Phase III awardees should be supported so that their technologies can contribute to Hawaii's economy, but the State should ensure that Hawaii benefits from its investment in these companies by requiring grant funds to be returned if the recipient moves its principal place of business outside the State within five years.

Your Committees have amended this measure by:

(1) Inserting a blank appropriation amount; and

(2) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the records of votes of the members of your Committees on Technology and Energy, Economic Development, and Tourism that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1444, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1444, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Technology and Energy, Economic Development, and Tourism,

________________________________ GLENN WAKAI, Chair

________________________________ JARRETT KEOHOKALOLE, Chair