House Floor Written Comments on HB 3057 HD1

Representative Jon Riki Karamatsu
House Written Comments For House Journal
House Bill 3057, House Draft 1
Tuesday, March 7, 2006

I rise in support.

The Hawaii small business innovation research grant program was created to encourage small businesses to develop commercially viable technologies or innovations. Prior to 1989, there were only two Hawaii small business innovation research grant program-awarded companies, but since 1989, fifty-six Hawaii companies have won two hundred forty-five small business innovation research grant program awards. These grant program awards brought approximately $56,500,000 in federal small business innovation research grant program Phase I and Phase II funds to Hawaii. In addition to these grants, $57,500,000 in Phase III small business innovation research grant program commercialization contracts have been awarded to Hawaii companies. According to the United States Department of Agriculture, Hawaii companies have won the highest number of United States Department of Agriculture small business innovation research grant program awards per capita of any state.

Hawaii must be a strong participant in accessing matching funds from the federal small business innovation research grant program, which has $2,000,000,000 in funds. Hawaii's cumulative state investment in the Hawaii small business innovation research grant program of $3,700,000 has a return ratio of 15:1 in federal Phase I and II grants and 30:1 if the Phase III commercial contracts are included.

The current annual general fund appropriation of approximately $260,000 for the grant program has remained relatively the same over the past sixteen years and actually decreased in some years from a high of $400,000. However, the increase in the number of participating Hawaii companies and grants awarded has caused a significant reduction in the amount of funding available from the Hawaii small business innovation research grant program for recipients of the federal program. Small business innovation research-funded, start-up projects and companies are an important part of the pipeline that feeds and increases the size and number of research and development companies seeking to commercialize technologies in Hawaii. This program, other similar programs, and the efforts of those involved result in a more stable technology-based economy in the state. Therefore, through this bill, the appropriation for the Hawaii small business innovation research grant program, and other related technology grant programs being created this legislative session within the High Technology Development Corporation will be increased to $500,000 to help foster further growth in the technology industry.