HB999 CD1

SECTION 1. Section 206M-2, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The governing body of the development corporation shall consist of a board of directors having nine voting members. The director of business, economic development, and tourism, [~~and an appointed member from the University of Hawaii, or their designated representatives,~~] or the director's designee, and the chairperson of the board of regents of the University of Hawaii shall serve as ex officio[[],[]] voting members of the board[.]; provided that the chairperson of the board of regents, with the approval of the board of regents and subject to quorum and majority requirements, may designate another regent to serve. All members shall have knowledge, interest, and proven expertise in, but not limited to, one or more of the following fields: finance, commerce and trade, corporate management, marketing, economics, engineering, telecommunications, innovation, and other technology fields. Seven of the members shall be appointed by the governor pursuant to section 26-34 for staggered terms; provided that membership shall include:

(1) Three members who shall be appointed by the governor from a list of four nominees submitted by the president of the senate, and three members who shall be appointed by the governor from a list of four nominees submitted by the speaker of the house of representatives; provided that if fewer than four nominees are submitted for each appointment, the governor may disregard the list; and

(2) One member who shall be appointed by the governor from the economic development board of Maui, Kauai, or Hawaii county.

The governor shall make board member appointments to ensure the fulfillment of all requirements of paragraphs (1) and (2); provided that upon the occurrence of a vacancy subject to paragraph (1), the governor shall notify the president of the senate and the speaker of the house of representatives of any unfulfilled requirements pursuant to paragraphs (1) and (2), and the president of the senate or the speaker of the house of representatives, as appropriate, shall submit nominees who fulfill the requirements pursuant to paragraphs (1) and (2). All appointed members of the board shall continue in office until their respective successors have been appointed. The director of business, economic development, and tourism shall serve as the chairperson until such time as a chairperson is elected by the board from the membership. The board shall elect other officers as it deems necessary."

PART II

SECTION 2. The legislature finds that, in light of the State's ongoing economic recovery from the outbreak of the coronavirus disease 2019 (COVID-19), the State must accelerate its economic diversification efforts through substantial, strategic, coordinated investments.

This part establishes a policy framework for Hawaii technology development corporation projects that will ensure economic success. The legislature finds that the implementation of this framework will not require a significant additional investment in overhead resources but will require funds for specific projects that are identified collaboratively by the legislature and the Hawaii technology development corporation. The implementation will also require the establishment of specific goals that these projects shall address and reports to the legislature that assess the effectiveness of the projects in meeting those goals.

The legislature further finds that through this part, the Hawaii technology development corporation will serve as a facilitative catalyst for innovation in the State and will help to align the State with the emerging knowledge-based, zero‑emission, and digital global economy while putting Hawaii on the path toward economic prosperity.

Accordingly, the purpose of this part is to promote economic recovery and diversification by:

(1) Establishing state goals for economic growth fueled by innovation and technology;

(2) Appropriating funds to the Hawaii technology development corporation to implement specific projects that address those goals; and

(3) Requiring the Hawaii technology development corporation to submit annual reports to the legislature that summarize:

(A) The progress of projects assigned to the Hawaii technology development corporation by this part;

(B) The outcomes of the projects, including an assessment of each project's effectiveness in achieving the state goals for economic growth; and

SECTION 3. (a) The legislature declares that the projects for which funds are appropriated pursuant to section 4 of this Act shall align with one or more of the following goals that address economic diversification:

(1) Economic diversification through participation in the digital economy: projects shall address economic diversification by strengthening Hawaii's participation in the digital economy, including:

(A) Accessing new markets and market opportunities;

(B) Strengthening business capacity and readiness to participate in the digital economy;

(D) Strengthening digital economy infrastructure, including broadband affordability and coworking facilities; and

(E) Increasing the number of businesses, revenue, and employees dedicated to the digital economy;

(2) Economic diversification through strengthened trade activities: projects shall address economic diversification by strengthening traded activities that redistribute Hawaii's gross domestic product, including:

(A) Increasing the export of goods manufactured in the State;

(B) Increasing the export of knowledge-based professional services;

(C) Increasing the value of knowledge-based professional services through research and development and intellectual property;

(D) Strengthening the post-production capacity for value-added agriculture and manufacturing; and

(E) Increasing the number of businesses, revenue, and employees in traded sectors; and

(3) Economic diversification through increase in activity to reduce and mitigate climate change: projects shall address economic diversification by focusing on activities at the intersection of technology development and climate change mitigation, including:

(A) Making renewable energy more affordable;

(B) Retaining and strengthening businesses that are increasing revenues through solutions to reduce climate change;

(D) Increasing the number of businesses, revenue, and employees in renewable energy sectors.

(b) The Hawaii technology development corporation shall implement the projects for which funds are appropriated in section 4 of this Act for the purpose of meeting the goals described in subsection (a); provided that the Hawaii technology development corporation may work with any other state or county agency for the implementation of the assigned projects.

(c) No later than twenty days prior to the convening of the regular sessions of 2024, 2025, and 2026, the Hawaii technology development corporation shall submit a report to the legislature that includes:

(1) A summary of the progress of the projects assigned to the Hawaii technology development corporation by this part;

(2) The outcomes of the projects assigned to the Hawaii technology development corporation by this part, including an assessment of each project's effectiveness in achieving the goals described in subsection (a); and

(3) Any findings and recommendations, including any proposed legislation.

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $6,000,000 or so much thereof as may be necessary for fiscal year 2023-2024 and the same sum or so much thereof as may be necessary for fiscal year 2024-2025 for economic diversification, as described in section 3(a) of this Act, as follows:

(1) $2,000,000 to accelerate economic diversification by supporting, enhancing, and encouraging new accelerator programs;

(2) $2,000,000 to support economic development opportunities with the trade sector, especially products manufactured in Hawaii; and

(3) $2,000,000 to support economic development opportunities with the defense sector, including aerospace, and to support companies conducting small business innovation research through matching grants.

The sums appropriated shall be expended by the Hawaii technology development corporation for the purposes of this part.

PART III

SECTION 5. In accordance with section 9 of article VII of the Hawaii State Constitution and sections 37‑91 and 37‑93, Hawaii Revised Statutes, the legislature has determined that the appropriations contained in H.B. No. 300, H.D. 1, S.D. 1, C.D. 1, will cause the state general fund expenditure ceiling for fiscal year 2023‑2024 to be exceeded by $1,063,767,367 or 10 per cent. In addition, the appropriations contained in this Act will cause the general fund expenditure ceiling for fiscal year 2023‑2024 to be further exceeded by $6,000,000 or 1 per cent. The combined total amount of general fund appropriations contained in only these two Acts will cause the state general fund expenditure ceiling for fiscal year 2023‑2024 to be exceeded by $1,069,767,367 or 11 per cent. The reasons for exceeding the general fund expenditure ceiling are that:

(1) The appropriation made in this Act is necessary to serve the public interest; and

(2) The appropriation made in this Act meets the needs addressed by this Act.

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect on July 1, 2023.

HOUSE OF REPRESENTATIVES	H.B. NO.	999
THIRTY-SECOND LEGISLATURE, 2023		H.D. 1
STATE OF HAWAII		S.D. 2
		C.D. 1