STAND. COM. REP. NO.  1173-16


Honolulu, Hawaii

                , 2016


RE:   S.B. No. 3109

      S.D. 1

      H.D. 1




Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii




     Your Committee on Economic Development & Business, to which was referred S.B. No. 3109, S.D. 1, entitled:




begs leave to report as follows:


     The purpose of this measure is to increase economic development in the State through the promotion of manufacturing by extending, for one year, the lapse date for the appropriation of funds for the continuation of the manufacturing grant program in the High Technology Development Corporation.


     The High Technology Development Corporation, Meadow Gold Dairies, KYD, Inc. dba K. Yamada Distributors, Hawaii Food Industry Association, and Chamber of Commerce Hawaii testified in support of this measure.


     Recognizing the potential economic benefits provided by the manufacturing industry, the Legislature appropriated $2,000,000 in the Regular Session of 2015 to establish a manufacturing grant program within the High Technology Development Corporation to assist companies with qualified manufacturing expenses.  However, delays in establishing this program have occurred as the process for the adoption of rules has taken longer than expected.  While the High Technology Development Corporation has prepared rules for this program, distribution of grant monies cannot occur until these rules are adopted.  As the initial appropriation for this program lapses at the end of the current fiscal year, your Committee finds that extending the lapse date for funds appropriated in 2015 by one year will allow for the implementation of the manufacturing grant program, thereby strengthening Hawaii's manufacturing economy.


     Your Committee further notes that, according to the High Technology Development Corporation, rules regarding the manufacturing grant program were adopted in late February.  Since that time, 21 grant applications have been received with a total value of approximately $1.2 million.  Your Committee finds that this is a promising sign that the program will be successful and that the provision of additional funding for fiscal year 2016-2017 deserves consideration.  Accordingly, your Committee has amended this measure by additionally appropriating an unspecified sum for fiscal year 2016-2017 for the continuation of the manufacturing grant program.


     Technical, nonsubstantive amendments were also made for clarity, consistency, and style.


     As affirmed by the record of votes of the members of your Committee on Economic Development & Business that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3109, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 3109, S.D. 1, H.D. 1, and be referred to your Committee on Finance.



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