HOUSE OF REPRESENTATIVES |
H.R. NO. |
108 |
TWENTY-FOURTH LEGISLATURE, 2007 |
H.D. 1 |
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STATE OF HAWAII |
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HOUSE RESOLUTION
ENCOURAGING THE EMPLOYEES' RETIREMENT SYSTEM TO INVEST IN HAWAII VENTURE CAPITAL.
WHEREAS, Hawaii's desire for economic growth that benefits all residents depends on building our state's human resources; and
WHEREAS, Hawaii's longstanding desire for economic diversification and sustainability turns on applying the state's highly-skilled resources to the creation and adoption of innovation across the economy; and
WHEREAS, economic growth and diversification throughout many communities have been enhanced by the availability of venture capital funding for entrepreneurs who are able to attract capital and establish innovative new ventures; and
WHEREAS, well-known regions such as Silicon Valley; Route 128 in Boston; Austin, Texas; and the Research Triangle in North Carolina have benefited greatly from the combination of scientific research, an entrepreneurial culture driving high technology growth, and funding availability for early stage equity investments; and
WHEREAS, other areas similar in size and population to Hawaii, including San Diego, Salt Lake City, Seattle, and Boulder have also developed strong technology-based businesses with the assistance of venture capital; and
WHEREAS, the source of this venture capital is derived largely through employee pension funds with over half of the approximately $25 billion of venture capital investments taking place in 2006 being provided by pension funds; and
WHEREAS, many public pension funds target in-state investments to provide enhanced returns to pensioners and support the development of high-growth businesses within local communities; and
WHEREAS, the Employees' Retirement System of the State of Hawaii (ERS) has committed approximately $300,000,000 to the alternative asset category, including venture capital, but none of it is invested in Hawaii; and
WHEREAS, this lack of investment in Hawaii venture capital by the ERS may be due to a lack of large-scale qualified investment opportunities and concerns over the possible breach of fiduciary duty and prudent investor rules related to early stage investing; and
WHEREAS, while this may be true, some jurisdictions encourage local investment by pension funds by relieving fiduciaries of liability for investing in local venture capital while others, such as the state of Oregon, have legislated investment by the public pension fund in local venture capital, where prudent; and
WHEREAS, if Hawaii is to pursue, implement, and sustain a high technology and innovative economy, investments in local companies must be encouraged; now, therefore,
BE IT RESOLVED by the House of Representatives of the Twenty-fourth Legislature of the State of Hawaii, Regular Session of 2007, that the ERS is encouraged to invest in Hawaii venture capital to the extent that it is prudent to do so; and
BE IT FURTHER RESOLVED that the ERS propose structural changes to its investment system to enable prudent investment in Hawaii venture capital; and
BE IT FURTHER RESOLVED that the ERS submit a report to the Legislature no later than 20 days prior to the convening of the Regular Session of 2008 listing any investments made in Hawaii venture capital and detailing the ERS' review or consideration of Hawaii venture capital investments; and
BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the Governor and Board of Directors of the ERS.
Encourages the ERs to invest in Hawaii venture capital.