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chapter-206m•Hawaii Revised Statutes, Chapter 206M — Hawaii Technology Development Corporation
chapter-206mHaw. Rev. Stat. ch. 206MCode01.01.1983
Division 1. Government — Title 13. Planning and Economic Development
Hawaii Revised Statutes as published by the Hawaii State Legislature (files updated 1/5/2026 7:14 PM).
As used in this chapter, unless the context clearly requires otherwise:
"Board" means the board of directors of the development corporation established in section 206M-2, and any successor thereto.
"Bonds" or "special purpose revenue bonds" mean bonds, notes, and other instruments of indebtedness of the State issued pursuant to this part.
"Cost" means the total cost in carrying out all undertakings that the development corporation deems reasonable and necessary for the development of a project or economic zone, including but not limited to the cost of studies, surveys, plans, and specifications, architectural, design, engineering, or any other special related services; the cost of site preparation and development, demolition, construction, reconstruction, rehabilitation, and improvement; the cost of financing such project or economic zone, including interest on bonds issued to finance such project or economic zone from the date thereof to the estimated date of completion of such project or economic zone as determined by the board; the cost of an allocable portion of the administrative and operating expenses of the development corporation related to the development of such project or economic zone; and the cost of indemnity and surety bonds, premiums on policies of insurance, legal fees, and fees and expenses of trustees, depositories, and paying agents for the bonds, and for the issuance of letters of credit or other banking arrangements whether for the development corporation or a qualified person; all as the development corporation shall deem necessary.
"Development corporation" means the Hawaii technology development corporation established by section 206M-2.
"Direct investment" means an investment by the corporation in qualified securities of an enterprise to provide capital to an enterprise.
"Economic development project" means an endeavor related to industrial, commercial, or advanced technology-based agricultural enterprise. "Economic development project" shall not include that portion of an endeavor devoted to the construction of housing.
"Economic zone" means a tract of real property determined by the board as being suitable for use as building sites for projects by one or more industrial, processing, production, or manufacturing enterprises engaged in technology, including but not limited to high technology support facilities, such as greenhouses and manufacturing, value-added, processing, and packaging facilities; research; training; technical analyses; software development; pilot plant; energy development; or prototype product development. "Economic zone" includes the installation of improvements to the tract incidental to the use of real property as an economic zone, such as water, sewer, sewage and waste disposal, and drainage facilities, sufficient to adequately service projects in the economic zone, and the provision of incidental transportation facilities, power distribution facilities, and communication facilities. "Economic zone" does not include any buildings or structures of any kind except for buildings or structures incidental to improvements to the economic zone.
"Enterprise" means a person with a place of business in Hawaii which is, or proposes to be, engaged in business in Hawaii; provided that the endeavor shall not be devoted to the sale of goods at retail, construction of housing, or tourism-related services.
"Minority-owned businesses" means businesses at least fifty per cent owned, controlled, and managed by socially or economically disadvantaged persons.
"Person" means a sole proprietorship, partnership, joint venture, corporation, or other association of persons organized for commercial or industrial purposes.
"Professional investor" means any bank, bank holding company, savings institution, trust company, insurance company, investment company registered under the federal Investment Company Act of 1940, financial services loan company, pension or profit-sharing trust or other financial institution or institutional buyer, licensee under the federal Small Business Investment Act of 1958, or any person, partnership, or other entity of whose resources a substantial amount is dedicated to investing in securities or debt instruments and whose net worth exceeds $250,000.
"Project" means the acquisition, construction, improvement, installation, equipping, and development of any combination of land, buildings, and other improvements thereon, including, without limitation, parking facilities for use of, or to assist a technology industrial, manufacturing, or processing enterprise located within or without an economic zone, including, without limiting the generality of the foregoing, machinery, equipment, furnishings, and apparatus that shall be deemed necessary, suitable, or useful to the enterprise.
"Project agreement" means any agreement entered into under this chapter by the development corporation with a qualified person to finance, construct, operate, or maintain a project or an economic zone from the proceeds of special purpose revenue bonds, or to lend the proceeds of special purpose revenue bonds to assist a technology industrial, manufacturing, or processing enterprise, including, without limitation, any lease, sublease, loan agreement, conditional sale agreement, or other similar financing contract or agreement, or any combination thereof.
"Public agency" means any office, department, board, commission, bureau, division, public corporation, agency, or instrumentality of the federal, state, or county government.
"Qualified person" means any individual, firm, partnership, corporation, association, cooperative, or other legal entity, governmental body or public agency, or any combination of the foregoing, possessing the competence, expertise, experience, and resources, including financial, personnel, and tangible resources, required for the purposes of a project and other qualifications as may be deemed desirable by the development corporation in administering this chapter and which enters into a project agreement with the development corporation.
"Qualified security" means any note, stock, treasury stock bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, preorganization certificate of subscription, transferable share, investment contract, certificate of deposit for a security, certificate of interest or participation in a patent or patent application, or in royalty or other payments under such a patent or application, or, in general, any interest or instrument commonly known as a "security" or any certificate for, receipt for, or option, warrant, or right to subscribe to or purchase any of the foregoing.
"Real property" means lands, structures, and interests therein, and natural resources including water, minerals, and all such things connected with land, including lands under water and riparian rights, space rights, air rights, and any and all other things and rights usually included within the term. Real property also means any and all interests in such property less than fee title, such as leasehold interests, easements, incorporeal hereditaments, and every estate, interest, or right, legal or equitable, including terms for years and liens thereon by way of judgments, mortgages, or otherwise.
"Seed capital" means financing provided for the earliest stage of business development, including but not limited to developing a working prototype, preparing a business plan, performing an initial market analysis, or organizing a management team.
"Technology" means industries that are technology-intensive, including but not limited to electronics, biotechnology, software, computers, telecommunications, and other computer-related technologies.
"Venture capital investment" means any of the following investments in a business:
(1) Common or preferred stock and equity securities without a repurchase requirement for at least five years;
(2) A right to purchase stock or equity securities;
(3) Any debenture or loan, whether or not convertible or having stock purchase rights, which are subordinated, together with security interests against the assets of the borrower, by their terms to all borrowings of the borrower from other institutional lenders, and that is for a term of not less than three years, and that has no part amortized during the first three years; and
(4) General or limited partnership interests.
[L 1983, c 152, pt of §2; am L 1984, c 103, §1; am L 2000, c 72, §4 and c 297, §22(2); am L 2017, c 69, §§4, 5; am L 2019, c 56, §6; am L 2022, c 55, §§1, 2]
(a) There is established the Hawaii technology development corporation, which shall be a public body corporate and politic and an instrumentality and agency of the State. The development corporation shall be placed within the department of business, economic development, and tourism for administrative purposes, pursuant to section 26-35. The purpose of the development corporation shall be to facilitate the growth and development of the commercial technology industry in Hawaii. Its duties shall include but not be limited to:
(1) Connecting Hawaii-based technology companies and entrepreneurs to new market opportunities;
(2) Developing and encouraging economic zones as technology innovation centers and other technology infrastructure projects and developing or assisting with the development of projects within or outside of economic zones, including participating with the private sector in such development;
(3) Encouraging, initiating, and aiding in the development and commercialization of local innovation and technology;
(4) Furnishing the financial and other support and services to institute and grow local innovation and technology;
(5) Developing policy and resource allocations to enable and support start-up companies, sustain existing companies, and attract companies to relocate or establish offices in Hawaii;
(6) Attracting resources from public and private sector organizations and agencies to develop a local qualified innovation research and technology workforce;
(7) Coordinating with other state agencies and entities to support the innovation and technology industry;
(8) Collecting and analyzing information on the state of local and global technology activity; and
(9) Taking any and all other actions reasonably designed to promote the purposes of the corporation in the interest of promoting the general welfare of the people of the State.
(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, shall serve as ex officio[,] voting members of the board. 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.
(c) The members of the board appointed under subsection (b) shall serve without compensation, but may be reimbursed for expenses, including travel expenses, incurred in the performance of their duties.
(d) The board shall appoint a chief executive officer, who shall serve at the pleasure of the board and shall be exempt from chapter 76. The board shall set the salary and duties of the executive officer.
(e) The board shall appoint a management advisory committee for each economic zone and related project or projects governed by the board. Each committee shall have five members, who shall serve without compensation but may be reimbursed for expenses incurred in the performance of their duties. The members shall be drawn from fields of activity related to each economic zone and related project or projects.
[L 1983, c 152, pt of §2; am L 1987, c 336, §7; am L 1989, c 274, §2; am L 1990, c 293, §8; am L 1991, c 288, §1; am L 2000, c 72, §§5, 6, c 253, §150, and c 297, §25; am L 2017, c 69, §§4, 5; am L 2019, c 56, §7; am L 2022, c 55, §2]
(a) The meetings of the board shall be open to the public as provided in section 92-3, except that when it is necessary for the board to receive information that is proprietary to a particular enterprise that seeks entry into or use of one of its facilities or the disclosure of which might be harmful to the business interests of the enterprise, the board may enter into an executive meeting that is closed to the public.
(b) The board shall be subject to the procedural requirements of section 92-4, and this authorization shall be an addition to the exceptions listed in section 92-5, to enable the development corporation to respect the proprietary requirements of enterprises with which it has business dealings.
(c) The board shall be exempt from section 26-35(a)(4) and (5).
[L 1989, c 274, pt of §1; am L 2000, c 297, §26; am L 2004, c 16, §4]
(a) The development corporation shall have all the powers necessary to carry out its purposes, including the powers to:
(1) Sue and be sued;
(2) Have a seal and alter the same at its pleasure;
(3) Make and execute, enter into, amend, supplement, and carry out contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this chapter, including, with the approval of the governor, a project agreement, or an amendment or supplement to an existing project agreement, with a qualified person, and to enter into and carry out any agreement whereby the obligations of a qualified person under a project agreement shall be unconditionally guaranteed or insured by, or the performance thereof assigned to, or guaranteed or insured by, a person or persons other than the qualified person; and extend or renew any project agreement or any other agreement related thereto; provided that any such renewal or extension shall be subject to the approval of the governor unless made in accordance with provisions for the extension or renewal contained in a project agreement or related agreement theretofore approved by the governor;
(4) Make and alter bylaws for its organization and internal management;
(5) Adopt rules under chapter 91 necessary to effectuate this chapter in connection with economic zones, projects, multi-project programs, and the operations, properties, and facilities of the corporation;
(6) Through its chief executive officer, appoint officers, agents, consultants, advisors, and employees, prescribe their duties and qualifications, and fix their salaries, without regard to chapter 76;
(7) Prepare or cause to be prepared development plans for economic zones;
(8) Acquire, own, lease, hold, clear, improve, and rehabilitate real, personal, or mixed property and assign, exchange, transfer, convey, lease, sublease, or encumber any project, including by way of easements;
(9) Acquire, construct, improve, install, equip, or develop or provide for the acquisition, construction, improvement, installation, equipping, or development of any project and designate a qualified person as its agent for such purpose;
(10) Own, hold, assign, transfer, convey, exchange, lease, sublease, or encumber any project;
(11) Arrange or initiate appropriate action for the planning, replanning, opening, grading, or closing of streets, roads, roadways, alleys, easements, or other places, the furnishing of improvements, the acquisition of property or property rights, or the furnishing of property or services in connection with an economic zone or project;
(12) Prepare, or cause to be prepared, plans, specifications, designs, and estimates of cost for the acquisition, construction, reconstruction, improvement, installation, equipping, development, or maintenance of any project or economic zone, and from time to time modify the plans, specifications, designs, or estimates;
(13) Engage the services of consultants on a contractual basis for rendering professional and technical assistance and advice;
(14) Procure insurance against any loss in connection with its property and other assets and operations in amounts and from insurers as it deems desirable;
(15) Issue special purpose revenue bonds and refunding special purpose revenue bonds pursuant to and in accordance with this chapter in principal amounts as may be authorized from time to time by law to finance or refinance the cost of a project, singly or as part of a multi-project program, or an economic zone as authorized by law and provide for the security thereof as permitted by this chapter;
(16) Lend or otherwise apply the proceeds of the bonds issued for a project or an economic zone either directly or through a trustee to a qualified person for use and application by the qualified person in the acquisition, construction, improvement, installation, equipping, or development of a project or economic zone, or agree with the qualified person whereby any of these activities shall be undertaken or supervised by that qualified person or by a person designated by the qualified person;
(17) As security for the payment of the principal of, premium, if any, and interest of the special purpose revenue bonds issued for a project to:
(A) Pledge, assign, hypothecate, or otherwise encumber all or any part of the revenues and receipts derived or to be derived by the development corporation under the project agreement for the project for which the bonds are issued;
(B) Pledge and assign the interest and rights of the development corporation under the project agreement or other agreement with respect to the project or the special purpose revenue bonds;
(C) Pledge and assign any bond, debenture, note, or other evidence of indebtedness received by the development corporation with respect to the project; or
(D) Any combination of the foregoing;
(18) With or without terminating a project agreement, exercise any and all rights provided by law for entry and reentry upon or take possession of a project at any time or from time to time upon breach or default by a qualified person under a project agreement, including any action at law or in equity for the purpose of effecting its rights of entry or reentry or obtaining possession of the project or for the payments of rentals, user taxes, or charges, or any other sum due and payable by the qualified person to the development corporation pursuant to the project agreement;
(19) Enter into arrangements with qualified county development entities whereby the board would provide financial support to qualified projects proposed;
(20) Create an environment in which to support technology economic development, including but not limited to:
(A) Supporting all aspects of technology-based economic development;
(B) Developing instructive programs, identifying issues and impediments to the growth of technology industry in Hawaii; and
(C) Providing policy analysis and information important to the development of technology industries in Hawaii;
(21) Develop programs that support start-up and existing technology companies in Hawaii and attract new companies to relocate to or establish operations in Hawaii by assessing the needs of these companies and providing the physical and technical infrastructure to support their operations;
(22) Coordinate its efforts with other public and private agencies involved in stimulating technology-based economic development in Hawaii, including but not limited to:
(A) The department of business, economic development, and tourism;
(B) The Pacific international center for high technology research;
(C) The office of technology transfer and economic development of the University of Hawaii; and
(D) The state energy office;
(23) Promote and market Hawaii as a site for commercial technology activity, including the expenditure of funds for protocol purposes at the discretion of the board;
(24) Provide advice on policy and planning for technology-based economic development;
(25) Finance, conduct, or cooperate in financing or conducting technological, business, financial, or other investigations that are related to or likely to lead to business, technology, and economic development by making and entering into contracts and other appropriate arrangements, including the provision of loans, start-up and expansion capital, loan guaranty, loans convertible to equity, equity charged and received by the corporation, and other forms of assistance;
(26) Solicit, study, and assist in the preparation of business plans and proposals of new or established businesses;
(27) Provide advice, technical and marketing assistance, support, and promotion to enterprises in which investments have been made;
(28) Acquire, hold, and sell qualified securities;
(29) Consent, subject to the provisions of any contract with noteholders or bondholders, whenever the corporation deems it necessary or desirable in the fulfillment of the purposes of this chapter, to the modification, with respect to rate of interest, time of payment of any installment of principal or interest, or any other terms, of any contract or agreement of any kind to which the corporation is a party;
(30) Invest any funds held in reserves or sinking funds, or any funds not required for immediate disbursement, in such investments as may be lawful for fiduciaries in the State;
(31) Coordinate the development corporation's programs with any education and training program;
(32) Carry out specialized programs designed to encourage the development of new products, businesses, and markets;
(33) Prepare, publish, and distribute such technical studies, reports, bulletins, and other materials as it deems appropriate, subject only to the maintenance and respect for confidentiality of client proprietary information;
(34) Organize, conduct, sponsor, or cooperate in and assist in the conduct of conferences, demonstrations, and studies relating to the stimulation and formation of businesses;
(35) Provide and pay for such advisory services and technical, managerial, and marketing assistance, support, and promotion as may be necessary or desirable to carry out the purposes of this chapter;
(36) Accept donations, grants, bequests, and devises of money, property, service, or other things of value that may be received from the United States or any agency thereof, any governmental agency, or any public or private institution, person, firm, or corporation, to be held, used, or applied for any or all of the purposes specified in this chapter. Receipt of each donation or grant shall be detailed in the annual report of the development corporation. The report shall include the identity of the donor or lender, the nature of the transaction, and any conditions attaching thereto;
(37) Acquire real property, or an interest therein, by purchase or foreclosure, where that acquisition is necessary or appropriate to protect or secure any investment or loan in which the development corporation has an interest; sell, transfer, and convey the property to a buyer and if the sale, transfer, or conveyance cannot be effected with reasonable promptness or at a reasonable price, to lease the property to a tenant;
(38) Acquire, own, hold, dispose of, and encumber personal property of any nature, or any interest therein;
(39) Enter into agreements or other transactions with any federal, state, or county agency;
(40) Appear on its own behalf before state, county, or federal agencies;
(41) Appoint advisory committees as deemed necessary;
(42) Exercise any other powers of a corporation organized under the laws of the State; and
(43) Do any and all things necessary or convenient to carry out its purposes and exercise the powers given and granted in this chapter.
(b) The corporation shall be exempt from chapter 102.
[L 1983, c 152, pt of §2; am L 1989, c 274, §3; am L 1991, c 288, §2; am L 2000, c 72, §7, c 253, §150, and c 297, §27; am L 2004, c 216, §27; am L 2017, c 69, §5; am L 2019, c 56, §8; am L 2022, c 55, §2]
The corporation may contract with others, public or private persons, for the provision of all or a portion of the services necessary for the management and operation of the corporation. The corporation shall have the power to use all appropriations, grants, contractual reimbursements, and all other funds not appropriated for a designated purpose to pay for the proper general expenses and to carry out the purposes of the corporation.
[L 2000, c 297, pt of §22(1)]
The development corporation shall report annually to the legislature twenty days prior to the convening of the session on the impact of the program on:
(1) Increasing the awareness of the federal small business innovation research program and the number of companies submitting proposals to federal agencies;
(2) Increasing the number of phase I awards received by Hawaii businesses under the small business innovation research program; and
(3) Increasing the number of phase I to phase II conversions by Hawaii businesses.
[L 1989, c 196, §2]
The issuance of special purpose revenue bonds with respect to any project or economic zone under this chapter shall not relieve any qualified person or other user of the project or economic zone from the laws, ordinances, and rules of the State or any political subdivision thereof, or any department or board thereof with respect to the construction, operation, and maintenance of any project or economic zone, or zoning laws or regulations, obtaining of building permits, compliance with building and health codes and other laws, ordinances, or rules and regulations of similar nature pertaining to the project or economic zone, and the laws shall be applicable to the qualified person or the other user to the same extent they would be if the costs of the project or economic zone were directly financed by the qualified person.
[L 1983, c 152, pt of §2; am L 2000, c 72, §8; am L 2022, c 55, §2]
Whenever the proceeds of special purpose revenue bonds are used to finance the cost of an economic zone, the board shall adopt rules under chapter 91 to be followed during the course of the development of any economic zone, which are to be known as development rules in connection with health, safety, building, planning, zoning, and land use. The rules, upon final adoption of a development plan for an economic zone, shall supersede all other inconsistent ordinances and rules relating to the use, zoning, planning, and development of land and construction thereon within the economic zone. Rules adopted under this section shall follow existing law, rules, ordinances, and regulations as closely as is consistent with standards meeting minimum requirements of good design, pleasant amenities, health, safety, and coordinated development. The corporation shall establish policies and procedures for monitoring and ensuring that the operation of the economic zone complies with these development rules and may establish fines and penalties or take any other means available under the law to eliminate any noncomplying action.
[L 1983, c 152, pt of §2; am L 1985, c 112, §1; am L 2000, c 72, §9; am L 2022, c 55, §2]
The governor may set aside available public lands to the development corporation for the purposes specified in this chapter; provided that the setting aside would not impair any covenant between the State or any department or board thereof and holders of any bonds issued by the State or such department or board thereof. The development corporation also may lease available state lands from the department of land and natural resources.
[L 1983, c 152, pt of §2; am L 2000, c 72, §10]
(a) The development corporation prior to entering into negotiations with respect to a project agreement or at any time during such negotiations shall require that as a condition to such negotiations or the continuation thereof the State shall be reimbursed for any and all costs and expenses incurred by it even though a project agreement may not be entered into and may further require the deposit of moneys with the development corporation as security for such reimbursement. Any amount of such deposit in excess of the amount required to reimburse the State shall be returned by the development corporation to the party which has made such deposit.
(b) The development corporation shall not enter into any project agreement with respect to any project or economic zone unless the legislature shall have first authorized the issuance of special purpose revenue bonds to finance a project or projects, an economic zone or economic zones, or a multi-project program pursuant to section 206M-9, and the development corporation has thereafter found and determined either that:
(1) The qualified person is a responsible party, whether by reason of economic assets or experience in the type of enterprise to be undertaken through the project, or otherwise; or
(2) The obligations of the qualified person under the project agreement will be unconditionally guaranteed by a person who is a responsible party, whether by reason of economic assets or experience in the type of enterprise to be undertaken through the project or otherwise.
[L 1983, c 152, pt of §2; am L 2000, c 72, §11; am L 2022, c 55, §2]
(a) No special purpose revenue bonds shall be issued unless at the time of issuance the development corporation shall have entered into a project agreement with respect to the project or economic zone for the financing of which the special purpose revenue bonds are to be issued. Any project agreement entered into by the development corporation with a qualified person shall contain provisions unconditionally obligating the qualified person:
(1) To pay the development corporation during the period or term of the project agreement, exclusive of any renewal or extension thereof and whether or not the project or economic zone to which the project agreement relates is used or occupied by the qualified person, at the time or times and in the amount or amounts that will be at least sufficient:
(A) To pay the principal of, and premium, if any, and interest on all special purpose revenue bonds issued to finance the cost of the project, or an allocable portion of the special purpose revenue bonds issued to finance the economic zone, as the case may be, as and when the special purpose revenue bonds become due, including upon any required redemption thereof;
(B) To establish or maintain the reserves, if any, as may be required by the instrument authorizing or securing the special purpose revenue bonds, or an allocable portion of the reserves, if less than all of the proceeds of the special purpose revenue bonds are utilized for the qualified person;
(C) To pay the fees and expenses of the paying agents and trustees for the special purpose revenue bonds, or an allocable portion of the fees and expenses, if less than all of the proceeds of the special purpose revenue bonds are utilized for the qualified person; and
(D) To pay the expenses incurred by the development corporation in administering the special purpose revenue bonds or in carrying out the project agreement, or an allocable portion of the expenses, if less than all of the proceeds of the special purpose revenue bonds are utilized for the qualified person; and
(2) To operate, maintain, and repair the project as long as the project is used as provided in the project agreement and to pay all costs of the operation, maintenance, and repair.
(b) The development corporation in determining the cost of any project, may also include the following:
(1) Financing charges, fees, and expenses of any trustee and paying agents for special purpose revenue bonds issued to pay the cost of the project;
(2) Interest on the bonds and the expenses of the State in connection with the bonds and the project to be financed from the proceeds of the bonds accruing or incurred prior to and during the estimated period of construction and for not exceeding twelve months thereafter;
(3) Amounts necessary to establish or increase reserves for the special purpose revenue bonds;
(4) The cost of plans, specifications, studies, surveys, and estimates of costs and of revenues;
(5) Other expenses incidental to determining the feasibility or practicability of the project;
(6) Administration expenses;
(7) Legal, accounting, consulting, and other special service fees;
(8) Interest cost incurred by the project party with respect to the project prior to the issuance of the special purpose revenue bonds; and
(9) Other costs, commissions, and expenses incidental to the acquisition, construction, improvement, installation, equipping, or development of the project, the financing, placing of same in operation, and the issuance of the special purpose revenue bonds, whether incurred prior to or after the issuance of the bonds.
(c) Any project agreement entered into by the development corporation may contain provisions as the development corporation deems necessary or desirable to obtain or permit the participation of the state and federal government in the project or economic zone or in the financing of the cost thereof.
(d) A project agreement also shall provide that the development corporation shall have all rights and remedies generally available at law or in equity to reenter and take possession of a project upon the breach or default by a qualified person of any term, condition, or provision of a project agreement.
(e) Each qualified person with a project agreement with the development corporation shall allow the development corporation full access to the qualified person's financial records. Upon the request of the development corporation for the examination of any financial records, the qualified person shall allow the development corporation to examine the requested records within a reasonably prompt time from the date of the request. If the development corporation requests copies of the records, the qualified person shall provide the copies.
(f) To provide the public with full knowledge of the use of the proceeds and benefits derived from special purpose revenue bonds issued under this chapter, the development corporation shall require each qualified person with a project agreement with the development corporation to make available to the public all relevant financial records that pertain to the use of or savings resulting from the use of special purpose revenue bonds.
(g) Each qualified person with a project agreement with the development corporation shall estimate the benefits derived from the use of the proceeds of special purpose revenue bonds. The benefits estimated shall be based on the creation of new jobs and potential effect on tax receipts. The format of and method for determining the estimates shall be established by the development corporation and shall be uniform for each qualified person.
(h) To promote public understanding of the role played by special purpose revenue bonds in providing benefits to the general public, the development corporation shall take appropriate steps to ensure public access to and scrutiny of the estimates determined under subsection (g).
(i) The development corporation shall adopt rules under chapter 91 for the purposes of this section.
(j) Moneys received by the development corporation pursuant to subsection (a)(1)(D) shall not be, nor be deemed to be, revenues or receipts derived under the project agreement which may be pledged as security for special purpose revenue bonds and shall be paid into the technology special fund.
A qualified person may comply with the unconditional obligation to make payments required by subsection (a), if the obligations are unconditionally guaranteed or insured by, or the performance thereof assigned to, or guaranteed or insured by, a person or persons other than the qualified person who is satisfactory to the development corporation.
[L 1983, c 152, pt of §2; am L 2000, c 72, §12; am L 2001, c 55, §7; am L 2017, c 69, §5; am L 2022, c 55, §2]
(a) In addition to the other powers that it may have, the development corporation may issue special purpose revenue bonds to finance, in whole or in part, the costs of projects of, for, or to loan the proceeds of the bonds to assist qualified persons. All revenue bonds issued under this chapter are special purpose revenue bonds and part III of chapter 39 shall not apply thereto. All special purpose revenue bonds shall be issued in the name of the development corporation and not in the name of the State.
The legislature finds and determines that the exercise of the powers vested in the development corporation by this chapter constitutes assistance to a technology industrial, manufacturing, or processing enterprise and that the issuance of special purpose revenue bonds to finance facilities of, for, or to loan the proceeds of the bonds to assist qualified persons, is in the public interest.
(b) The development corporation, with the approval of the governor, may issue special purpose revenue bonds for each single project or economic zone or multi-project program that has been authorized by the legislature by an affirmative vote of two-thirds of the members to which each house is entitled; provided that the legislature shall find that the issuance of the special purpose revenue bonds is in the public interest. Special purpose revenue bonds shall be issued in principal amounts as may be authorized from time to time by law and at the time or times as the development corporation deems necessary and advisable to finance the cost of a project, economic zone, or multi-project program as authorized by law. With respect to the financing of a multi-project program with the proceeds of special purpose revenue bonds, the legislature may authorize the issuance from time to time in one or more series by the development corporation, in each case with the approval of the governor, of special purpose revenue bonds in the aggregate principal amount and during the period as the legislature shall provide. The principal of, premium, if any, and interest on the special purpose revenue bonds shall be payable:
(1) Exclusively from the revenues and receipts derived or to be derived by the development corporation under project agreements or from the revenues and receipts together with any grant from the government in aid of the project or economic zone financed from the proceeds of the bonds;
(2) Exclusively from the revenues and receipts derived or to be derived by the development corporation from a particular project agreement, whether or not the project or economic zone to which it relates is financed in whole or in part with the proceeds of the special purpose revenue bonds; or
(3) From revenues and receipts derived or to be derived by the development corporation generally.
Neither the board members nor any person executing the special purpose revenue bonds shall be liable personally on the bonds by reason of the issuance thereof.
All special purpose revenue bonds of the same issue (or, in the case of an authorized issue for a multi-project program, series), subject to the prior and superior rights of outstanding bonds, claims, obligations, or mechanic's and materialman's liens, shall have a prior and paramount lien on the revenues derived from the project agreement with respect to the project for which the bonds have been issued, over and ahead of all special purpose revenue bonds of the issue (or series) payable from the revenues which may be subsequently issued and over and ahead of any claims or obligations of any nature against the revenues subsequently arising or subsequently incurred; provided that the development corporation may reserve the right and privilege to subsequently issue additional series of special purpose revenue bonds, from time to time, payable from the revenues derived from the project agreement on a parity with the issue or series of special purpose revenue bonds theretofore issued, and the subsequently issued series of special purpose revenue bonds may be secured, without priority by reason of date of sale, date of execution, or date of delivery, by a lien on the revenues in accordance with law, including this chapter.
(c) Special purpose revenue bonds issued pursuant to this chapter may be in one or more issues and in one or more series within an issue and shall be further authorized pursuant to resolution of the board. The special purpose revenue bonds shall be dated, shall bear interest at the rate or rates, shall mature at the time or times not exceeding forty years from their date or dates, shall have the rank or priority, and may be made redeemable before maturity at the option of the development corporation, at the price or prices and under the terms and conditions, all as may be determined by the development corporation.
The development corporation shall determine the form of the special purpose revenue bonds, including interest coupons, if any, to be attached thereto, and the manner of execution of the special purpose revenue bonds, and shall fix the denomination or denominations of the special purpose revenue bonds and, subject to the approval of the director of finance, the place or places of payment of principal and interest, which may be at any bank or trust company approved by the director of finance within or without the State.
The special purpose revenue bonds may be issued in coupon or in registered form, or both, as the development corporation may determine, and provisions may be made for the registration of coupon bonds as to principal alone and also as to both principal and interest, and for the reconversion into coupon bonds of special purpose revenue bonds registered as to both principal and interest. Subject to the approval of the director of finance, the development corporation may sell special purpose revenue bonds in such manner, either at public or private sale, and for such price as it may determine.
(d) Prior to the preparation of definitive special purpose revenue bonds, the development corporation may issue interim receipts or temporary bonds, with or without coupons, exchangeable for definitive bonds when the bonds have been executed and are available for delivery.
(e) Should any special purpose revenue bond issued under this chapter or any coupon appertaining thereto become mutilated, lost, stolen, or destroyed, the development corporation may cause a new bond or coupon of like date, number, and tenor to be executed and delivered in exchange and substitution for, and upon the cancellation of the mutilated bond or coupon, or in lieu of and in substitution for the lost, stolen, or destroyed bond or coupon. The new bond or coupon shall not be executed or delivered until the holder of the mutilated, lost, stolen, or destroyed bond or coupon:
(1) Has paid the reasonable expenses and charges in connection therewith;
(2) In the case of a lost, stolen, or destroyed bond or coupon, has filed with the development corporation or its fiduciary evidence satisfactory to the development corporation or its fiduciary that the bond or coupon was lost, stolen, or destroyed and that the holder was the owner thereof; and
(3) Has furnished indemnity satisfactory to the development corporation.
(f) The development corporation in its discretion may provide that CUSIP identification numbers shall be printed on the special purpose revenue bonds. If the numbers are imprinted on the bonds:
(1) No such number shall constitute a part of the contract evidenced by the particular bond upon which it is imprinted; and
(2) No liability shall attach to the development corporation or any officer or agent thereof, including any fiscal agent, paying agent, or registrar for the bonds by reason of the numbers or any use made thereof, including any use thereof made by the development corporation, any such officer, or any such agent, or by reason of any inaccuracy, error, or omission with respect thereto or in such use. The development corporation in its discretion may require that all costs of obtaining and imprinting the numbers shall be paid by the purchaser of the bonds. For the purposes of this subsection, the term "CUSIP identification numbers" means the numbering system adopted by the Committee for Uniform Security Identification Procedures formed by the Securities Industry Association.
(g) Whenever the development corporation has authorized the issuance of special purpose revenue bonds under this chapter, special purpose revenue bond anticipation notes of the development corporation may be issued in anticipation of the issuance of the bonds and of the receipt of the proceeds of sale thereof, for the purposes for which the bonds have been authorized. All special purpose revenue bond anticipation notes shall be authorized by the development corporation, and the maximum principal amount of the notes shall not exceed the authorized principal amount of the bonds. The notes shall be payable solely from and secured solely by the proceeds of sale of the special purpose revenue bonds in anticipation of which the notes are issued and the moneys, rates, charges, and other revenues from which would be payable and by which would be secured the bonds; provided that to the extent that the principal of the notes shall be paid from moneys other than the proceeds of sale of the bonds, the maximum amount of bonds that has been authorized in anticipation of which the notes are issued shall be reduced by the amount of notes paid in this manner. The authorization, issuance, and the details of the notes shall be governed by this chapter with respect to special purpose revenue bonds insofar as the same may be applicable; provided that each note, together with all renewals and extensions thereof, or refundings thereof by other notes issued under this subsection, shall mature within five years from the date of the original note.
(h) To secure the payment of any of the special purpose revenue bonds issued pursuant to this chapter, and interest thereon, or in connection with the bonds, the development corporation shall have the power as to the bonds:
(1) To pledge all or any part of the revenues and receipts derived or to be derived by the development corporation as provided in this chapter to the punctual payment of special purpose revenue bonds issued with respect to the project or economic zone financed from the proceeds thereof, and interest thereon, and to covenant against thereafter pledging any such revenues and receipts to any other bonds or any other obligations of the development corporation for any other purpose, except as otherwise stated in the proceedings providing for the issuance of special purpose revenue bonds permitting the issuance of additional special purpose revenue bonds to be equally and ratably secured by a lien upon such revenues and receipts;
(2) To pledge and assign the interest and right of the development corporation under any project agreement and other agreements related to a project or economic zone, and the rights, duties, and obligations of the development corporation thereunder, including the right to receive revenues and receipts thereunder;
(3) To pledge or assign all or any part of the proceeds derived by the development corporation from proceeds of insurance or condemnation awards;
(4) To covenant as to the use and disposition of the proceeds from the sale of the special purpose revenue bonds;
(5) To covenant to set aside or pay over reserves and sinking funds for the special purpose revenue bonds and as to the disposition thereof;
(6) To covenant and prescribe as to what happenings or occurrences shall constitute "events of default", the terms and conditions upon which any or all of the bonds shall become or may be declared due before maturity, and as to the terms and conditions upon which the declaration and its consequences may be waived;
(7) To covenant as to the rights, liabilities, powers, and duties arising upon the breach by the development corporation of any covenant, condition, or obligation;
(8) Subject to the approval of the director of finance, to designate a national or state bank or trust company within or without the State, incorporated in the United States, to serve as trustee for the holders of the special purpose revenue bonds and to enter into a trust indenture, trust agreement, or indenture of mortgage with the trustee. The trustee may be authorized by the development corporation to receive and receipt for, hold, and administer the proceeds of the special purpose revenue bonds and to apply the proceeds to the purposes for which the special purpose revenue bonds are issued, or to receive and receipt for, hold, and administer the revenues and receipts derived or to be derived by the development corporation under a project agreement or other agreement related to a project or economic zone, and to apply such revenues and receipts to the payment of the principal of and interest on the special purpose revenue bonds, or both, and any excess revenues and receipts to the payment of expenses incurred by the development corporation in administering the special purpose revenue bonds or in carrying out the project agreement or other agreement. If the trustee shall be appointed, any trust indenture, trust agreement, or indenture of mortgage entered into by the development corporation with the trustee may contain whatever covenants and provisions as may be necessary, convenient, or desirable in order to secure the special purpose revenue bonds. The development corporation may pledge and assign to the trustee the interest of the development corporation under a project agreement and other agreements related thereto and the rights, duties, and obligations of the development corporation thereunder, including the right to receive revenues and receipts thereunder. The development corporation may appoint the trustee to serve as fiscal agent for the payment of the principal and interest, and for the purchase, registration, transfer, exchange, and redemption of the special purpose revenue bonds, and may authorize and empower the trustee to perform the functions with respect to the payment, purchase, registration, transfer, exchange, and redemption, as the development corporation may deem necessary, advisable, or expedient, including, without limitation, the holding of the special purpose revenue bonds and coupons that have been paid and the supervision of the destruction thereof in accordance with law;
(9) To execute all instruments necessary or convenient in the exercise of the powers herein granted or in the performance of its covenants and duties;
(10) To invest or provide for the investment of the proceeds of special purpose revenue bonds and revenues and receipts derived by the development corporation in the securities and in such manner as it deems proper; and
(11) To make such covenants and do any and all acts and things as may be necessary, convenient, or desirable in order to secure the special purpose revenue bonds, notwithstanding that the covenants, acts, or things may not be enumerated in this chapter.
No holder or holders of special purpose revenue bonds issued under this chapter shall ever have the right to compel any exercise of the taxing power of the State or any political subdivision of the State to pay the special purpose revenue bonds or the interest thereon and no moneys other than the revenues pledged to the special purpose revenue bonds shall be applied to the payment thereof.
(i) Special purpose revenue bonds bearing the signature or facsimile signature of officers in office on the date of the signing thereof shall be valid and sufficient for all purposes, notwithstanding that before the delivery thereof and payment therefor any or all of the persons whose signatures appear thereon shall have ceased to be officers of the development corporation. The special purpose revenue bonds shall contain a recital that they are issued pursuant to this chapter which recital shall be conclusive evidence of their validity and of the regularity of their issuance.
(j) Subject to authorization by an act enacted by the legislature by an affirmative vote of two-thirds of the members to which each house is entitled, the development corporation may issue special purpose revenue bonds for the purpose of refunding special purpose revenue bonds then outstanding and issued under this chapter whether or not the outstanding special purpose revenue bonds have matured or are then subject to redemption. The development corporation may issue special purpose revenue bonds for the combined purposes of:
(1) Financing or refinancing the cost of a project or economic zone, or the improvement or expansion thereof; and
(2) Refunding special purpose revenue bonds that shall theretofore have been issued under this chapter and then shall be outstanding, whether or not the outstanding bonds have matured or then are subject to redemption.
Nothing in this subsection shall require or be deemed to require the development corporation to elect to redeem or prepay special purpose revenue bonds being refunded, or to redeem or prepay special purpose revenue bonds being refunded that were issued, in the form customarily known as term bonds in accordance with any sinking fund installment schedule specified in any proceeding authorizing the issuance thereof, or, if the development corporation elects to redeem or prepay any such bonds, to redeem or prepay as of any particular date or dates. The issuance of the special purpose revenue bonds, the maturities and other details thereof, the rights and remedies of the holders thereof, and the rights, powers, privileges, duties, and obligations of the development corporation with respect to the bonds, shall be governed by the foregoing provisions of this chapter insofar as the same may be applicable.
(k) If special purpose revenue bonds issued pursuant to this chapter are issued bearing interest at a rate or rates which vary from time to time and with a right of holders to tender the bonds for purchase, the development corporation may contract for such support facility or facilities and remarketing arrangements as are required to market the special purpose revenue bonds to the greatest advantage of the development corporation upon such terms and conditions as the development corporation deems necessary and proper.
The development corporation may enter into contracts or agreements with the entity or entities providing a support facility; provided that any contract or agreement shall provide, in essence, that any amount due and owing by the development corporation under the contract or agreement on an annual basis shall be payable solely from the revenue and receipts of the project agreement and any obligation issued or arising pursuant to the terms of the contract or agreement in the form of special purpose revenue bonds, notes, or other evidences of indebtedness shall only arise at such time as either:
(1) Moneys or securities have been irrevocably set aside for the full payment of a like principal amount of special purpose revenue bonds issued pursuant to this chapter; or
(2) A like principal amount of the issue or series of special purpose revenue bonds to which the support facility relates are held in escrow by the entity or entities providing the support facility.
[L 1983, c 152, pt of §2; am L 2000, c 72, §13; am L 2017, c 69, §5; am L 2022, c 55, §2]
(a) Notwithstanding any law to the contrary, the director of finance is authorized, with the approval of the governor, to make loans up to the aggregate sum of $1,000,000, or so much thereof as may be necessary, to the development corporation. The loans shall be made from the state general fund moneys which are in excess of the amounts necessary for immediate state requirements, and shall be used for the purpose of paying administrative and other costs associated with the development of economic zones and other projects and activities that encourage the growth of the technology industry in Hawaii.
(b) The development corporation, to the extent moneys become available from bond proceeds or otherwise, shall repay the general fund the principal amount of any loan made by the director of finance. No interest shall be required for any such loan.
(c) Loans authorized by this section shall be drawn upon by the development corporation from time to time upon at least five days notice to the director of finance and upon the filing with the director of finance of a certificate of the chairperson of the board setting forth the amount being borrowed, the names of the persons, firms, or corporations to which moneys will be paid from the proceeds of such borrowing and the amount to be paid to each. In addition, the chairperson of the board shall file with the director of finance a copy of the resolution or resolutions of the board approving contracts for services which will be paid from the proceeds of the borrowing.
[L 1983, c 152, pt of §2; am L 1991, c 288, §3; am L 2000, c 72, §14; am L 2017, c 69, §5; am L 2022, c 55, §2]
No holder or holders of special purpose revenue bonds issued under this chapter shall ever have the right to compel any exercise of the taxing power of the State to pay the bonds or the interest thereon and no moneys other than the revenues pledged to the bonds shall be applied to the payment thereof. Each special purpose revenue bond issued under this chapter shall recite in substance that the bond, including interest thereon, is not a general or moral obligation of the State and is payable solely from the revenues pledged to the payment thereof, and that the bond is not secured, directly or indirectly, by the full faith and credit or the general credit of the State or by revenues or taxes of the State other than the revenues specifically pledged thereto.
[L 1983, c 152, pt of §2; am L 2000, c 72, §15]
Special purpose revenue bonds and the income therefrom issued pursuant to this chapter shall be exempt from all state taxation, except inheritance, transfer, and estate taxes.
[L 1983, c 152, pt of §2; am L 2000, c 72, §16]
Special purpose revenue bonds issued pursuant to this chapter, to the extent practicable, shall be issued to comply with requirements imposed by applicable federal law providing that the interest on the special purpose revenue bonds shall be excluded from gross income for federal income tax purposes (except as certain minimum taxes, environmental taxes, or other federal taxes or tax consequences may apply). The development corporation may enter into agreements, establish funds or accounts, and take any action required to comply with applicable federal law. Nothing in this chapter shall be deemed to prohibit the issuance of special purpose revenue bonds, the interest on which may be included in gross income for federal income tax purposes.
[L 2000, c 72, §2]
The special purpose revenue bonds issued pursuant to this chapter shall be and are declared to be legal and authorized investments for banks, savings banks, trust companies, savings and loan associations, insurance companies, credit unions, fiduciaries, trustees, guardians, and for all public funds of the State or other political corporations or subdivisions of the State. The special purpose revenue bonds shall be eligible to secure the deposit of any and all public funds of the State and any and all public funds of counties or other political corporations or subdivisions of the State, and the bonds shall be lawful and sufficient security for the deposits to the extent of their value when accompanied by all unmatured coupons, if any, appertaining thereto.
[L 1983, c 152, pt of §2; am L 2000, c 72, §17]
Notwithstanding any of the provisions of this chapter or any recital in any special purpose revenue bond issued under this chapter, all such special purpose revenue bonds shall be deemed to be investment securities under the Uniform Commercial Code, chapter 490, subject only to the provisions of the special purpose revenue bonds pertaining to registration.
[L 1983, c 152, pt of §2; am L 2000, c 72, §18]
(a) All moneys necessary to carry out the purposes of this section shall be allocated by the legislature through appropriations out of the state general fund. The development corporation shall include in its budgetary request for the upcoming fiscal period, the amounts necessary to effectuate the purposes of this section. All moneys, interest charges, and other fees collected by the development corporation under this section shall be deposited to the credit of the state general fund. In making any expenditure under this section, the development corporation shall analyze each funding request to determine whether the project to be undertaken will be economically viable and beneficial to the State.
(b) The development corporation may provide grants to any business in Hawaii that:
(1) Receives a federal small business innovation research phase I or II award or contract from any participating federal agency, up to fifty per cent of the amount of the federal award or contract;
(2) Receives a federal small business technology transfer program award or contract from any participating federal agency, up to fifty per cent of the amount of the federal award or contract;
(3) Receives a federal small business innovation research phase III or small business technology transfer program phase III award or contract, up to fifty per cent of the amount of the award or contract funded by private sector or government sources outside of the program; or
(4) Applies for a small business innovation research federal grant or a small business technology transfer program federal grant, in an amount not to exceed $3,000,
subject to the availability of funds.
(c) The development corporation shall adopt rules pursuant to chapter 91 that:
(1) Specify the qualifications for eligibility of grant applicants;
(2) Establish priorities in determining eligibility in the event that insufficient funds are available to fund otherwise qualified applicants; and
(3) Give preference to all qualified businesses receiving their first award in one fiscal year over multiple award grantees.
The development corporation may adopt any other rules pursuant to chapter 91 necessary for the purposes of this section.
[L 1983, c 152, pt of §2; am L 1989, c 196, §3; am L 1991, c 85, §1; am L 1992, c 63, §1; am L 1993, c 280, §18; am L 2000, c 72, §19; am L 2006, c 282, §2; am L 2009, c 136, §1; am L 2015, c 216, §2; am L 2017, c 69, §5; am L 2018, c 68, §2]
(a) There is established the manufacturing development program, through which the development corporation may provide grants to any business in Hawaii that is a manufacturer in the State and requires assistance for any of the following items:
(1) Purchasing of manufacturing equipment;
(2) Training of employees on the use of manufacturing equipment;
(3) Improving existing energy efficiency manufacturing equipment or the purchase of improved energy efficiency equipment in the manufacturing process; or
(4) Studying or planning the implementation of a new manufacturing facility;
provided that no grant shall exceed twenty per cent of the cost of any of the above items, and no company shall receive a grant exceeding $100,000 in any given year.
(b) All moneys necessary to carry out the purposes of this section shall be appropriated by the legislature through appropriations out of the state general fund.
(c) In reviewing grant applications pursuant to this section, the development corporation shall analyze each application to determine whether the item to be undertaken will be economically viable and beneficial to the State.
(d) The development corporation shall submit a report to the legislature no later than twenty days prior to the convening of the regular session held in every even-numbered year. The report shall include the following items:
(1) The total number of grants provided;
(2) The sectors provided with grants;
(3) The total projected economic and employment growth facilitated by the grants provided; and
(4) The actual economic and employment growth that occurred as a result of the grants provided.
[L 2015, c 215, §1]
(a) There is established within the development corporation, the research and development program, to help Hawaii-based small businesses optimize research and development performed in Hawaii.
(b) Subject to available funds, the research and development program shall:
(1) Apply funds to support product development, technology transfer, and commercialization;
(2) Provide capital to support accelerated commercialization activities for qualified Hawaii-based small businesses;
(3) Provide capital to sustain high-potential infrastructure development to assist qualified Hawaii-based small businesses towards commercial success;
(4) Promote efforts that reverse the loss of qualified workers to other states by providing jobs to retain existing Hawaii technology employees and enable highly qualified scientists and engineers to return to living-wage jobs in Hawaii;
(5) Promote efforts that keep technology companies in Hawaii by limiting the need to seek out-of-state venture capital, which dilutes local ownership and increases the probability of high-potential technology companies moving from Hawaii; and
(6) Provide grants of up to $300,000 for critical product development that enables a qualified Hawaii-based small business to achieve significant product development and technical milestones.
(c) To receive funding, a Hawaii-based small business shall submit to the development corporation proof of the federal research and development tax credits received. Proof shall be in the form of copies of the small business Internal Revenue Service Form 6765 Credit for Increasing Research Activities as filed. The business shall be eligible to receive a grant in an amount equal to the average of the federal tax credit for the prior three tax years.
(d) In reviewing grant applications pursuant to this section, the development corporation shall analyze each application to determine whether the item to be undertaken will be economically viable and beneficial to the State.
(e) The development corporation may adopt rules pursuant to chapter 91 necessary to carry out the purposes of this section.
(f) For purposes of this section:
"Hawaii-based small business" means a company:
(1) Headquartered in the State;
(2) Doing business in the State for not less than five years; and
(3) Employing fifteen or more residents with income subject to taxation pursuant to chapter 235.
"Resident" shall have the same meaning as in section 235-1.
[L 2018, c 141, pt of §2; am L Sp 2021, c 9, §30]
[Repealed]
[L Sp 2021, c 9, §33]
There is established in the state treasury a fund to be known as the technology special fund, into which shall be deposited, except as otherwise provided by section 206M-17:
(1) Any appropriations or other funds required to be deposited by law; and
(2) All moneys, fees, and equity from tenants, qualified persons, or other users of the development corporation's economic zones, projects, other leased facilities, and other services and publications;
provided that the total amount of moneys in the fund shall not exceed $300,000 at the end of any fiscal year. All moneys in the fund are appropriated for the purposes of and shall be expended by the development corporation for the operation, maintenance, and management of its economic zones, projects, facilities, services, and publications, and to pay the expenses in administering the special purpose revenue bonds of the development corporation or in carrying out its project agreements.
[L 1989, c 274, pt of §1; am L 2000, c 72, §20 and c 297, §28; am L 2016, c 76, §3; am L 2017, c 69, §5; am L 2019, c 56, §16; am L 2022, c 55, §2]
[Repealed]
[L Sp 2021, c 9, §34]
(a) All revenues and receipts derived by the development corporation from any project or economic zone or under a project agreement or other agreement pertaining thereto shall be exempt from all state and county taxation. Any right, title, and interest of the development corporation in any project or economic zone shall also be exempt from all state and county taxation. Except as otherwise provided by law, the interest of a qualified person or other user of a project or economic zone under a project agreement or other agreements related to a project or economic zone shall not be exempt from taxation to a greater extent than it would be if the costs of the project or economic zone were directly financed by the qualified person or user.
(b) The development corporation shall not be subject to any requirement of law for competitive bidding for project agreements, construction contracts, lease and sublease agreements, or other contracts unless a project agreement with respect to a project or economic zone shall so require.
[L 1983, c 152, pt of §2; am L 1989, c 274, §4; am L 2000, c 72, §21; am L 2022, c 55, §2]
The development corporation shall establish separate special funds in accordance with section 39-62 for the deposit of the proceeds of special purpose revenue bonds and special facility revenue bonds authorized under this part and [part III] respectively. The development corporation shall have the right to appropriate, apply, or expend the revenues derived with respect to the project agreement for a project for the following purposes:
(1) To pay when due all special purpose revenue bonds and special facility revenue bonds, premiums, if any, and interest thereon, for the payment of which the revenues are or have been pledged, charged, or otherwise encumbered, including reserves therefor; and
(2) To the extent not paid by the qualified person to provide for all expenses of administration, operation, and maintenance of the project, including reserves therefor.
Unless and until adequate provision has been made for the foregoing purposes, the development corporation shall not transfer the revenues derived from the project agreement to the technology special fund of the State.
[L 1983, c 152, pt of §2; am L 1993, c 280, §16; am L 2000, c 72, §22; am L 2017, c 69, §5]
Every state or county agency may render services to the development corporation upon request of the development corporation.
[L 1983, c 152, pt of §2]
Any action or proceeding to which the development corporation, the State, or a county may be party, in which any question arises as to the validity of this chapter, shall be preferred over all other civil causes, except election cases, without respect to position on the calendar. The same preference shall be given upon application of counsel for the development corporation in any action or proceeding questioning the validity of this chapter in which the development corporation has duly intervened.
[L 1983, c 152, pt of §2]
The powers conferred by this chapter shall be in addition and supplemental to other powers conferred by any other law. This chapter shall constitute and be enabling legislation for the development corporation, as an agency and instrumentality of the State, to issue special purpose revenue bonds in accordance with the provisions of the Constitution of the State of Hawaii and this chapter. Insofar as the provisions of this chapter are inconsistent with the provisions of any other law, this chapter shall be controlling.
[L 1983, c 152, pt of §2]
(a) Notwithstanding chapters 92, 92F, or any other law to the contrary, any documents or data made or received by any member or employee of the corporation shall not be a public record to the extent that the material or data:
(1) Consists of trade secrets;
(2) Consists of commercial or financial information regarding the operation of any business conducted by an applicant for, or recipient of, any form of assistance that the corporation is empowered to render; or
(3) Relates to the competitive position of that applicant in a particular field of endeavor;
provided that if the corporation purchases a qualified security from an applicant, the commercial and financial information, excluding confidential business information, shall be deemed to become a public record of the corporation. If the information is made or received by any member or employee of the corporation after the purchase of the qualified security, it shall become a public record three years from the date the information was made or received.
(b) Any discussion or consideration of trade secrets or commercial or financial information shall be held by the board, or the subcommittee of the board, in executive sessions closed to the public; provided that the purpose of any such executive session shall be set forth in the official minutes of the corporation, and business that is not related to that purpose shall not be transacted nor shall any vote be taken during the executive sessions.
[L 2000, c 297, pt of §22(1)]
Chapters 661 and 662 or any other law to the contrary notwithstanding, nothing in this chapter shall create an obligation, debt, claim, cause of action, claim for relief, charge, or any other liability of any kind whatsoever in favor of any person or entity, against the State or its officers and employees, without regard to whether that person or entity receives any benefits under this chapter. The State and its officers and employees shall not be liable for the results of any investment, purchase of securities, loan, or other assistance provided pursuant to this chapter. Nothing in this chapter shall be construed as authorizing any claim against the corporation in excess of any note, loan, or other specific indebtedness incurred by the corporation or in excess of any insurance policy acquired for the corporation or its employees.
[L 2000, c 297, pt of §22(1)]
(a) The director of the Hawaii center for advanced transportation technologies of the development corporation shall serve as the state hydrogen implementation coordinator.
(b) The state hydrogen implementation coordinator, under the delegated authority of the chief energy officer of the Hawaii state energy office, shall facilitate the establishment of infrastructure and policies across all agencies of the State to promote the expansion of hydrogen-based energy in Hawaii.
[L 2015, c 98, §1, am L 2019, c 122, §3]
(a) There is established the sustainable aviation fuel program, through which the development corporation may provide matching grants to any small business in the State that is developing products related to sustainable aviation fuel or greenhouse gas reduction from commercial aviation operations and requires assistance for any of the following items:
(1) Business planning;
(2) Technology development;
(3) Engineering; or
(4) Research.
(b) In reviewing grant applications pursuant to this section, the development corporation shall analyze each application to determine whether the item to be undertaken will be economically viable and beneficial to the State.
(c) For the purposes of the program, product development activities eligible for matching funds grants shall reduce commercial aviation greenhouse gas emissions through:
(1) Sustainable aviation fuel production;
(2) Airborne operations fuel efficiency;
(3) Ground support equipment fuel replacement;
(4) Ground support equipment fuel efficiency; or
(5) Airport operations support to reduce overall jet fuel consumption.
(d) Hawaii jet fuel baseline carbon intensity shall be set at eighty-nine grams of carbon dioxide equivalent per megajoule, in line with the benchmark established by the International Civil Aviation Organization. This carbon intensity may be revised upon recommendation from the Hawaii state energy office based upon future revisions to the United States Department of Energy's Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation full life-cycle model; provided that carbon intensity shall be measured in the units of grams of carbon dioxide equivalent per megajoule.
(e) For the purposes of this section:
"Grant" means financial assistance provided to Hawaii small business innovation research, small business technology transfer, and other agency and private sector awardees and applicants under the terms and conditions provided in this chapter.
"Hawaii small business innovation research", "small business technology transfer", and "sustainable aviation fuel program" means the programs administered by the development corporation to encourage participation by enterprises in federal research and development programs.
"Other agency" means an entity that receives an award or contract granted by the United States Departments of Agriculture, Transportation, Energy, Defense, or Commerce, or other federal agencies for activities consistent with those defined in this section.
"Small business" shall have the same meaning as in section 201M-1.
"Sustainable aviation fuel" means ASTM International D7566-compliant renewable aviation turbine fuel derived from biofuels, as defined in section 269-91, and with a greenhouse gas lifecycle carbon intensity lower than the baseline for jet fuel defined by the International Civil Aviation Organization.
[L 2021, c 180, §2; am L 2022, c 109, §4]
§ §206M-31 to 206M-35 REPEALED. L 2017, c 69, §7.
As used in this part, unless the context clearly requires otherwise:
"Special facility" means one or more buildings, structures, or facilities and the land thereof located in an economic zone for the technology industry, including, without limitation, facilities for technology research, development, support, processing, and manufacturing, which are the subject of a special facility lease.
"Special facility lease" includes a contract, lease, or other agreement, or any combination thereof, the subject matter of which is the same special facility.
"Special facility revenue bonds" means all bonds, notes, and other instruments of indebtedness of the State issued pursuant to this part and part III of chapter 39.
[L 2000, c 72, pt of §1; am L 2017, c 69, §5; am L 2022, c 55, §2]
In addition to any other powers granted to the development corporation by law, the development corporation may:
(1) Without compliance with chapter 103D, but with the approval of the governor, enter into a special facility lease or an amendment or supplement thereto whereby the development corporation agrees to acquire, construct, improve, install, equip, and develop a special facility solely for the use by another party to a special facility lease;
(2) With the approval of the governor, issue special facility revenue bonds in principal amounts that may be necessary to yield the amount of the cost of any acquisition, construction, improvement, installation, equipping, and development of any special facility, including, subject to paragraph (6), the costs of acquisition of the site thereof; provided that the total principal amount of the special facility revenue bonds which may be issued pursuant to the authorization of this section shall not exceed $100,000,000;
(3) With the approval of the governor, issue refunding special facility revenue bonds with which to provide for the payment of outstanding special facility revenue bonds (including any special facility revenue bonds theretofore issued for this refunding purpose) or any part thereof; provided any issuance of refunding special facility revenue bonds shall not reduce the principal amount of the bonds that may be issued as provided in paragraph (2);
(4) Perform and carry out the terms and provisions of any special facility lease;
(5) Notwithstanding section 103-7 or any other law to the contrary, acquire, construct, improve, install, equip, or develop any special facility, or accept the assignment of any contract therefor entered into by the other party to the special facility lease;
(6) Construct any special facility on land owned by the State; provided that no funds derived herein shall be expended for land acquisition; and
(7) Agree with the other party to the special facility lease whereby any acquisition, construction, improvement, installation, equipping, or development of the special facility and the expenditure of moneys therefor shall be undertaken or supervised by another person.
[L 2000, c 72, pt of §1; am L 2004, c 216, §28; am L 2006, c 292, §10]
The development corporation shall not enter into any special facility lease unless the development corporation, at or prior to the entering into of the special facility lease, shall find and determine:
(1) That the building, structure, or facility that is to be the subject of the special facility lease shall not be used to provide services, commodities, supplies or facilities that are then adequately being made available otherwise in the State;
(2) That the use or occupancy of the building, structure, or facility under the special facility lease would not result in the reduction of the revenues derived from the economic zones or other properties of the development corporation to an amount below the amount required to be derived therefrom by section 39-61; and
(3) That the entering into of the special facility lease would not be in violation of or result in a breach of any covenant contained in any resolution or certificate authorizing any bonds of the State then outstanding.
[L 2000, c 72, pt of §1; am L 2022, c 55, §2]
(a) In addition to the conditions and terms set forth in this part, any special facility lease entered into by the development corporation shall at least contain provisions obligating the other party to the special facility lease:
(1) To pay to the development corporation during the initial term of the special facility lease, whether the special facility is capable of being used or occupied or is being used or occupied by the other party, a rental or rentals at the time or times and in the amount or amounts that will be sufficient to:
(A) Pay the principal and interest on all special facility revenue bonds issued for the special facility;
(B) Establish or maintain any reserves for these payments; and
(C) Pay all fees and expenses of the trustees, paying agents, transfer agents, and other fiscal agents for the special facility revenue bonds issued for the special facility;
(2) To pay to the development corporation:
(A) A ground rental, equal to the fair market rental of the land, if the land on which the special facility is located was not acquired from the proceeds of the special facility revenue bonds; or
(B) A properly allocable share of the administrative costs of the development corporation in carrying out the special facility lease and administering the special facility revenue bonds issued for the special facility if the land was acquired from the proceeds of the special facility revenue bonds;
(3) To either operate, maintain, and repair the special facility and pay the costs thereof or to pay to the development corporation all costs of operation, maintenance, and repair of the special facility;
(4) To:
(A) Insure, or cause to be insured, the special facility under builder's risk insurance (or similar insurance) in the amount of the cost of construction of the special facility to be financed from the proceeds of the special facility revenue bonds;
(B) Procure and maintain, or cause to be procured or maintained, to the extent commercially available, a comprehensive insurance policy providing protection and insuring the development corporation and its officers, agents, servants, and employees (and so long as special facility revenue bonds are outstanding, the trustee) against all direct or contingent loss or liability for damages for personal injury or death or damage to property, including loss of use thereof, occurring on or in any way related to the special facility or occasioned by reason of occupancy by and the operations of the other person upon, in and around the special facility;
(C) Provide all risk casualty insurance, including insurance against loss or damage by fire, lightning, flood, earthquake, typhoon, or hurricane, with standard extended coverage and standard vandalism and other malicious mischief endorsements; and
(D) Provide insurance for workers' compensation and employers' liability for personal injury or death or damage to property (the other party may self-insure for workers' compensation if permitted by law); provided that all policies with respect to loss or damage of property including fire or other casualty and extended coverage and builder's risk shall provide for payments of the losses to the development corporation, the other party or the trustee for the special facility revenue bonds as their respective interests may appear; and provided further that the insurance may be procured and maintained as part of or in conjunction with other policies carried by the other party; and provided further that the insurance shall name the development corporation, and so long as any special facility revenue bonds are outstanding, the trustee, as additional insured; and
(5) Indemnify, save, and hold the development corporation, the trustee, and their respective agents, officers, members, and employees harmless from and against all claims and actions and all costs and expenses incidental to the investigation and defense thereof, by or on behalf of any person, firm, or corporation, based upon or arising out of the special facility or the other party's use and occupancy thereof, including, without limitation, from and against all claims and actions based upon and arising from any:
(A) Condition of the special facility;
(B) Breach or default on the part of the other party in the performance of any of the party's obligations under the special facility lease;
(C) Fault or act of negligence of the other party or the party's agents, contractors, servants, employees, or licensees; or
(D) Accident to or injury or death of any person or loss of or damage to any property occurring in or about the special facility, including any claims or actions based upon or arising by reason of the negligence or any act of the other party.
Any moneys received by the development corporation pursuant to paragraphs (2) and (3) shall be paid into the technology special fund and shall not be nor be deemed to be revenues of the special facility.
(b) The term and all renewals and extensions of the term of any special facility lease (including any amendments or supplements thereto) shall not extend beyond the lesser of the reasonable life of the special facility that is the subject of the special facility lease, as estimated by the development corporation at the time of the entering into thereof, or thirty years.
(c) Any special facility lease entered into by the development corporation shall be subject to chapter 171 and shall contain other terms and conditions that the development corporation deems advisable to effectuate the purposes of this part.
[L 2000, c 72, pt of §1; am L 2017, c 69, §5]
All special facility revenue bonds authorized to be issued under this part shall be issued pursuant to part III of chapter 39, except as follows:
(1) No revenue bonds shall be issued unless at the time of issuance, the development corporation has entered into a special facility lease with respect to the special facility for which the revenue bonds are to be issued;
(2) The revenue bonds shall be issued in the name of the development corporation and not in the name of the State;
(3) No further authorization of the legislature shall be required for the issuance of the special facility revenue bonds, but the approval of the governor shall be required for the issuance;
(4) The revenue bonds shall be payable solely from and secured solely by the revenues derived by the development corporation from the special facility for which they are issued;
(5) The final maturity date of the revenue bonds shall not be later than either the estimated life of the special facility for which the revenue bonds are issued or the expiration of the initial term of the special facility lease;
(6) If deemed necessary or advisable by the development corporation, or to permit the obligations of the other party to the special facility lease to be registered under the U.S. Securities Act of 1933, the development corporation, with the approval of the director of finance, may appoint a national or state bank within or without the State to serve as trustee for the holders of the revenue bonds and may enter into a trust indenture or trust agreement with the trustee. The trustee may be authorized by the development corporation to collect, hold, and administer the revenues derived from the special facility for which the revenue bonds are issued and to apply the revenues to the payment of the principal and interest on the revenue bonds. In the event that any trustee shall be appointed, any trust indenture or trust agreement entered into by the development corporation with the trustee may contain the covenants and provisions authorized by part III of chapter 39 to be inserted in a resolution adopted or certificate issued, as though the words "resolution" or "certificate" as used in that part read "trust indenture or trust agreement".
The covenants and provisions shall not be required to be included in the resolution or certificate authorizing the issuance of the revenue bonds if included in the trust indenture or trust agreement. Any resolution or certificate, trust indenture, or trust agreement adopted, issued, or entered into by the development corporation pursuant to this part may also contain any provisions required for the qualification thereof under the U.S. Trust Indenture Act of 1939. The development corporation may pledge and assign to the trustee the special facility lease and the rights of the development corporation including the revenues thereunder;
(7) If the development corporation, with the approval of the director of finance, shall have appointed or shall appoint a trustee for the holders of the revenue bonds, then notwithstanding the provisions of section 39-68, the director of finance may elect not to serve as fiscal agent for the payment of the principal and interest, and for the purchase, registration, transfer, exchange, and redemption of the revenue bonds, or may elect to limit the functions the director of finance shall perform as the fiscal agent. The development corporation, with the approval of the director of finance, may appoint the trustee to serve as the fiscal agent, and may authorize and empower the trustee to perform the functions with respect to payment, purchase, registration, transfer, exchange, and redemption, that the development corporation may deem necessary, advisable, or expedient, including, without limitation, the holding of the revenue bonds and coupons, if any, that have been paid and the supervising and conducting of the destruction thereof in accordance with sections 40-10 and 40-11. Nothing in this paragraph shall be a limitation upon or construed as a limitation upon the powers granted in paragraph (6) to the development corporation with the approval of the director of finance to appoint the trustee, or granted in sections 36-3, 39-13, and 39-68 to the director of finance to appoint the trustee or others, as fiscal agents, paying agents, and registrars for the revenue bonds or to authorize and empower the fiscal agents, paying agents, and registrars to perform the functions referred to in paragraph (6) and sections 36-3, 39-13, and 39-68, it being the intent of this paragraph to confirm that the director of finance may elect not to serve as fiscal agent for the revenue bonds or may elect to limit the functions the director of finance shall perform as the fiscal agent, that the director of finance may deem necessary, advisable, or expedient;
(8) The development corporation may sell the revenue bonds either at public or private sale;
(9) If no trustee is appointed to collect, hold, and administer the revenues derived from the special facility for which the revenue bonds are issued, the revenues shall be held in a separate account in the treasury of the State, separate and apart from the technology special fund, to be applied solely to the carrying out of the resolution, certificate, trust indenture, or trust agreement authorizing or securing the revenue bonds;
(10) If the resolution, certificate, trust indenture, or trust agreement provides that no revenue bonds issued thereunder shall be valid or obligatory for any purpose unless certified or authenticated by the trustee for the holders of the revenue bonds, the signatures of the officers of the State upon the bonds required by section 39-56 may be facsimiles of their signatures;
(11) Proceeds of the revenue bonds may be used and applied by the development corporation to reimburse the other party to the special facility lease for all preliminary costs and expenses, including architectural and legal costs; and
(12) If the special facility lease requires the other party to operate, maintain, and repair the special facility that is the subject of the lease, at the other party's expense, the requirement shall constitute compliance by the development corporation with section 39-61(a)(2), and none of the revenues derived by the development corporation from the special facility shall be required to be applied to the purposes of section 39-62(2). Sections 39-62(4), 39-62(5), and 39-62(6) shall not apply to the revenues derived from a special facility lease.
[L 2000, c 72, pt of §1; am L 2017, c 69, §5]
L 2012, c 240, §§6, 8.
The purpose of the strategic development programs is to encourage economic development and diversification in Hawaii through innovative actions in cooperation with private enterprises. The development corporation shall establish programs to stimulate private capital investment in Hawaii toward investments that promote the welfare of citizens in this State, economic growth, employment, and economic diversification. The development corporation may use public funds to provide incentives to private investment activity, by co-investing public funds in private financial organizations to increase the impact of the public investment while utilizing the investment acumen of the private sector, and by using public funds to reduce the risks of private investments. The development corporation shall have the flexibility to provide various types of financial assistance. When providing financial assistance, the development corporation shall make provision for the recovery of its expenditures, as far as possible.
[L 2019, c 56, pt of §2]
There is established the strategic development programs revolving fund. The following moneys shall be deposited into the strategic development programs revolving fund and shall not be considered part of the general fund: all moneys appropriated by the legislature, received as repayments of loans, earned on investments, received pursuant to a venture agreement, received as royalties, received as premiums or fees charged by the development corporation, or otherwise received by the development corporation.
[L 2019, c 56, pt of §2]
(a) There shall be established the hydrogen investment special fund, into which shall be deposited:
(1) Appropriations made by the legislature to the fund;
(2) All contributions from public or private partners;
(3) All interest earned on or accrued to moneys deposited in the special fund; and
(4) Any other moneys made available to the special fund from other sources.
(b) Moneys in the fund shall be expended by the development corporation:
(1) To provide seed capital for and venture capital investments in private sector and federal projects for research, development, testing, and implementation of the Hawaii renewable hydrogen program, as set forth in section 196-10; and
(2) For any other purpose deemed necessary to carry out the purposes of section 196-10.
[L 2019, c 56, pt of §2]
The development corporation may contract with others, public or private, for the provision of all or a portion of the services necessary for the management and operation of the strategic development programs. The development corporation may use all appropriations, grants, contractual reimbursements, and all other funds not appropriated for a designated purpose to pay for the proper general expenses and to carry out the purposes of the strategic development programs.
[L 2019, c 56, pt of §2]
(a) All actions taken by the development corporation shall be necessary to achieve the purposes and objectives of this part. The development corporation shall evaluate all programs after three years to determine their effectiveness. The development corporation shall establish rules to assure equal opportunity to minority-owned businesses, and shall encourage the development of minority-owned businesses. The development corporation shall support and encourage participation by Hawaii companies in federal grant programs, such as the Small Business Innovation Research Program.
(b) Financial participation shall be made on the condition that the recipient of the assistance shall utilize the money to assist economic development projects within the State that have potential for creating new jobs or retaining current jobs within the State.
(c) Financial participation by the development corporation in private financial investment funds shall be made with the provision that the private fund shall make investments in Hawaii in amounts at least equal to the amount of state participation.
(d) The development corporation shall not make direct investments in individual businesses except upon a two-thirds vote of the board in each case considered. When deciding whether to enter into a direct investment, the development corporation shall consider whether:
(1) The project is economically sound;
(2) The project can be successfully completed;
(3) The project will promote economic diversification;
(4) The project is located in or will locate in the State and has a reasonable potential to create desirable employment opportunities for residents of the State;
(5) The project has been unable to obtain sufficient funding on reasonable terms through ordinary means; and
(6) The project can be partially financed through ordinary means at reasonable terms.
The development corporation shall not acquire securities to an extent that would provide the development corporation effective voting control of any enterprise after giving effect to the conversion of all outstanding convertible securities of the enterprise.
(e) Investments by the development corporation to persons shall be made on the basis of solicitation and a competitive technical review process, subject to the availability of funds allocated to the development corporation for making investments. Investments by the development corporation shall not be subject to chapter 42F. Any organization applying for an investment shall meet the following standards:
(1) Have bylaws or policies that describe the manner in which business is conducted and policies relating to nepotism and management of potential conflict of interest situations;
(2) Be licensed and accredited, as applicable, in accordance with the requirements of federal, state, and county governments;
(3) Comply with applicable federal and state laws prohibiting discrimination against any person on the basis of race, color, national origin, religion, creed, sex, age, or physical handicap; and
(4) Comply with other requirements as the board may prescribe.
[L 2019, c 56, pt of §2]
The development corporation shall develop procedures to set priorities as to which types of businesses and industries are most likely to provide significant opportunities for economic development and diversification in the State, consistent with the purposes of this subpart. This evaluation shall take into account the guidelines provided by the state plan for economic development. Based on these findings, the development corporation shall establish targets by which the operations and programs of the development corporation under this part shall be guided.
[L 2019, c 56, pt of §2]
Notwithstanding chapter 92, 92F, or any other law to the contrary, any documents or data made or received by any member or employee of the development corporation under this part, to the extent that the material or data consist of trade secrets, commercial or financial information regarding the operation of any business conducted by an applicant for, or recipient of, any form of assistance that the development corporation is empowered to render, or regarding the competitive position of that applicant in a particular field of endeavor, shall not be a public record; provided that if the development corporation purchases a qualified security from an applicant, the commercial and financial information, excluding confidential business information, shall be deemed to become a public record of the development corporation. If the information is made or received by any member or employee of the development corporation after the purchase of the qualified security, it shall become a public record three years from the date the information was made or received. Any discussion or consideration of trade secrets or commercial or financial information, shall be held by the board, or any subcommittee of the board, in executive sessions closed to the public; provided that the purpose of any such executive session shall be set forth in the official minutes of the development corporation and business which is not related to that purpose shall not be transacted, nor shall any vote be taken during the executive sessions.
[L 2019, c 56, pt of §2]
(a) The board shall approve or disapprove requests for assistance within ninety days of receiving a written application under this part. Upon written request by an applicant, the board may reconsider its denial of an application for assistance or may waive the ninety-day deadline for approving or disapproving an application.
(b) Any person who submits any statement, report, application, or other document to the development corporation under this part that is known to the person to be false in any material respect shall be guilty of a class C felony.
(c) The development corporation may condition any assistance of any type under this part by placing restrictions on the recipient in regard to the recipient's assets or indebtedness or in any other manner deemed appropriate by the development corporation. A recipient who accepts assistance from the development corporation under this part shall be deemed to agree to be bound by any conditions or restrictions imposed by the development corporation.
[L 2019, c 56, pt of §2]
Significant private sector financial support shall be associated with any economic development project for which the development corporation provides assistance under this part.
[L 2019, c 56, pt of §2]
Not more than $5,000,000 in financial assistance, excluding rights and royalties under a venture capital agreement, shall be provided to any one enterprise at any time under this part. The direct investments of the development corporation shall not exceed five per cent of the assets of the development corporation, excluding rights and royalties under a venture capital agreement; provided that by a two-thirds vote of the board, this amount may be increased to a limit of twenty-five per cent of the total assets of the development corporation.
[L 2019, c 56, pt of §2]
Chapters 661 and 662 or any other law to the contrary notwithstanding, nothing in this part shall create an obligation, debt, claim, cause of action, claim for relief, charge, or any other liability of any kind whatsoever in favor of any person or entity, without regard to whether that person or entity receives any benefits under this part, against the State or its officers and employees. The State and its officers and employees shall not be liable for the results of any investment, purchase of securities, loan, or other assistance provided pursuant to this part. Nothing in this part shall be construed as authorizing any claim against the development corporation in excess of any note, loan, or other specific indebtedness incurred by the development corporation or in excess of any insurance policy acquired for the development corporation or its employees.
[L 2019, c 56, pt of §2]
The development corporation shall submit an annual report to the legislature no later than twenty days prior to the convening of a regular session on the specific annual outcome achieved through the activities and expenditures of the HI growth initiative.
[L 2019, c 56, pt of §2]
The books and records of the strategic development programs shall be subject to an annual audit by an independent auditor.
[L 2019, c 56, pt of §2]
The development corporation shall establish a program for seed capital assistance.
[L 2019, c 56, pt of §2]
Subject to this subpart, the development corporation may invest in:
(1) A certified development company under sections 501 to 503 of the Small Business Investment Act of 1958 (15 U.S.C. 695 to 697) and the regulations adopted under those sections;
(2) A small business investment company under the Small Business Investment Act (15 U.S.C. 631 to 634, 636 to 649) and the regulations adopted under those sections;
(3) A minority enterprise small business investment corporation or equivalent venture capital corporation;
(4) A similar entity that may leverage its capital under a federal program; or
(5) A seed capital fund or partnership.
[L 2019, c 56, pt of §2]
(a) Investments may be used for any purpose consistent with the purposes and objectives of this part, including but not limited to:
(1) Developing a working prototype;
(2) Preparing a development plan;
(3) Performing an initial market analysis;
(4) Organizing a management team; and
(5) Any other purpose reasonably related to an economic development project.
(b) Investments may be made on such terms and conditions as the development corporation shall determine to be reasonable, appropriate, and consistent with the purposes and objectives of this part.
[L 2019, c 56, pt of §2]
The development corporation shall establish a program for venture capital.
[L 2019, c 56, pt of §2]
Subject to this subpart, the development corporation may invest in:
(1) A certified development company under sections 501 to 503 of the Small Business Investment Act of 1958 (15 U.S.C. 695 to 697) and the regulations adopted under those sections;
(2) A small business investment company under the Small Business Investment Act (15 U.S.C. 631 to 634, 636 to 649) and the regulations adopted under those sections;
(3) A minority enterprise small business investment corporation or equivalent venture capital corporation;
(4) A similar entity that may leverage its capital under a federal program; or
(5) A venture capital fund or partnership.
[L 2019, c 56, pt of §2]
(a) Investments may be used for any purpose consistent with the purposes and objectives of this part.
(b) Investments may be made on such terms and conditions as the development corporation shall determine to be reasonable, appropriate, and consistent with the purposes and objectives of this part.
[L 2019, c 56, pt of §2]
The development corporation shall establish a program for capital access.
[L 2019, c 56, pt of §2]
The development corporation, through the program for capital access, may:
(1) Procure insurance, a guarantee, or a letter of credit from any source for all or a part of a loan, debenture, or lease of others, public or private, or a revenue bond issue of the State or other entity or authority authorized by law to issue revenue bonds; and
(2) Procure insurance, a guarantee, or a letter of credit for either a single loan, debenture, or lease or for any combination of loans, debentures, or leases, or a single revenue bond issue or for all or a part of any combination of revenue bond issues.
[L 2019, c 56, pt of §2]
(a) Insurance, guarantees, or letters of credit procured pursuant to section 206M-81 shall be procured only for economic development projects within the State that are consistent with the purposes and objectives of this part.
(b) The development corporation shall give paramount priority in procuring insurance, guarantees, and letters of credit to economic development projects that have the greatest potential for creating new jobs or retaining current jobs within the State.
[L 2019, c 56, pt of §2]
(a) Insurance, guarantees, or letters of credit shall not be procured pursuant to section 206M-81 unless the development corporation is assured that the loans, debentures, or leases insured, or guaranteed, or for which letters of credit are issued, shall be used to assist economic development projects that also have significant private sector financial support.
(b) Insurance, guarantees, or letters of credit may be procured on such terms and conditions as the development corporation, in its sole discretion, shall determine to be reasonable, appropriate, and consistent with the purposes and objectives of this part.
(c) The development corporation shall charge the lender or the borrower, or both, a fee or premium for procuring loan, debenture, or lease insurance, guarantee, or a letter of credit. Rules for premiums or fees shall be established by the corporation.
[L 2019, c 56, pt of §2]
The development corporation shall enter into agreements with lenders for participation in the program for capital access that shall include but not be limited to:
(1) Authorization for the lender to determine, collect, and transmit to the development corporation a fee or premium charge within a specified range established consistent with the purposes and objectives of the development corporation;
(2) Specification of whether the premium charge shall be paid by the lender, the borrower, the development corporation, or by a combination thereof in specified proportions;
(3) The procedure by which a lender may make a claim upon the development corporation upon default by the borrower, and the conditions under which a claim may be made; and
(4) The maximum amount of claims a lender may make upon the development corporation, which amount may be equal to or less than the proportion of the total premiums contributed by the development corporation.
[L 2019, c 56, pt of §2]
The development corporation may establish a special fund or funds for capital access into which fees or premiums collected by the development corporation are deposited.
[L 2019, c 56, pt of §2]
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