STAND. COM. REP. 290

Honolulu, Hawaii

, 2003

RE: H.B. No. 1579

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Economic Development and Business Concerns, to which was referred H.B. No. 1579 entitled:

"A BILL FOR AN ACT RELATING TO THE ECONOMIC DIVERSIFICATION AUTHORITY,"

begs leave to report as follows:

The purpose of this bill is to establish an Economic Diversification Authority within the Department of Business, Economic Development, and Tourism for administrative purposes.

Among other things, this bill transfers all of the rights, powers, functions, and duties of the following agencies and programs that are attached to the Department of Business, Economic Development, and Tourism to the Economic Diversification Authority: the Aloha Tower Development Corporation, Hawaii Community Development Authority, Hawaii Strategic Development Corporation, High Technology Development Corporation, Community-Based Economic Development Advisory Council, and the Energy and Marketing Divisions of the Department of Business, Economic Development, and Tourism.

The Authority, which is to be headed by a board of directors and managed by an executive director, may: develop and implement a long-range plan for economic diversification in the State; work to eliminate or reduce barriers to economic diversification in Hawaii; coordinate all agencies and cooperate with the private sector in economic diversification; and establish a public information and educational program to inform the public about economic diversification. The Authority may also develop projects relating to economic diversification, enter into contracts with private contractors, and develop a state program for energy planning and conservation.

Your Committee received testimony in favor of the intent of this measure from the Department of Business, Economic Development, and Tourism; the High Technology Development Corporation; and the Natural Energy Laboratory of Hawaii Authority. Testimony in opposition to the measure was received from the Hawaii Community Development Authority. Your Committee also received comments on this measure from the Department of Budget and Finance.

Your Committee agrees with the intent of this bill, and finds that there is a need to improve strategic planning, efficiency of operations, and coordination of state agencies involved in diversifying the State's economy. However, your Committee finds that restructuring the Department of Business, Economic Development, and Tourism in the manner proposed by the bill is premature.

Accordingly, upon further consideration, your Committee has amended this bill by:

(1) Deleting most of the contents of this bill, but retaining language establishing an Economic Diversification Authority within the Department of Business, Economic Development, and Tourism for administrative purposes, to be headed by a board of directors and managed by an executive director;

(2) Changing the composition of the board of directors to include the following members or their designees:

(A) The Director of Business, Economic Development, and Tourism, who is to serve as chairperson of the board;

(B) The Division Head of the Energy, Resources, and Technology Division of the Department of Business, Economic Development, and Tourism;

(C) The Administrator of the Business Development and Marketing Division of the Department of Business, Economic Development, and Tourism;

(D) The Chief Executive Officer of the Aloha Tower Development Corporation;

(E) The Executive Director of the Hawaii Community Development Authority;

(F) The President of the Hawaii Strategic Development Corporation;

(G) The Chief Executive Officer of the High Technology Development Corporation;

(H) The Executive Director of the Natural Energy Laboratory of Hawaii Authority;

(I) The Chairperson of the Community-Based Economic Development Advisory Council; and

(J) Four members from the private sector to be appointed by the governor, including one member to be appointed from a list of nominees submitted by the President of the Senate, and one member to be appointed from a list of nominees submitted by the Speaker of the House of Representatives;

(3) Requiring, rather than allowing, the Authority to develop and implement a long-range economic diversification plan, work to eliminate or reduce barriers to economic diversification in Hawaii, and engage in other economic diversification activities without contracting out functions to the private sector;

(4) Requiring the Authority to: foster increased collaboration and dialog among the agencies represented on the board of directors; explore ways to remove redundancies in the delivery of services to the public relating to economic diversification, to increase efficiency in the delivery of those services, cut costs, reduce public inconvenience, and realize significant long-term savings; and annually submit a report of the Authority's activities and proposed legislation implementing its economic diversification plan to the Governor and Legislature; and

(5) Making technical, nonsubstantive changes for the purposes of clarity and consistency.

Finally, your Committee finds that there is a need for a review of the fiscal impacts of the board members' travel expenses and the salary of the executive director of the Economic Diversification Authority, and recommends that these issues be further examined by the Committee on Finance.

As affirmed by the record of votes of the members of your Committee on Economic Development and Business Concerns that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1579, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1579, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Economic Development and Business Concerns,

 

____________________________

BRIAN SCHATZ, Chair