REPORT TITLE:
Technology Omnibus


DESCRIPTION:
Consolidates high tech agencies under a special advisor for
technology development; creates tax credits for technology
training or job creation and investment in technology business;
prohibits the imposition of taxes on Internet commerce integrates
information technology with Hawaii's tourism and marketing
industry; establishes Hawaii Internet exchange; establishes UH
work force development training program; and establishes an
educational technology program for public schools.  (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1583
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO TECHNOLOGY.


BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1                              PART I.
 
 2      SECTION 1.  The legislature finds that Hawaii is one of the
 
 3 most geographically isolated communities on earth, and for many
 
 4 years, our economic opportunities were limited by this isolation.
 
 5 Recent advances in telecommunications, information technology,
 
 6 and the explosive growth of the Internet, however, present
 
 7 significant new opportunities for the State to develop and
 
 8 diversify its economy, opening the global market to Hawaii
 
 9 businesses.
 
10      Fiber optic cables, connecting Hawaii with the mainland
 
11 United States and Asia, and new communications satellites have
 
12 dramatically increased both the volume of information sent and
 
13 the range of transmittal.  While transmission capacity increases,
 
14 costs continue to fall.  Today, Internet commerce represents a
 
15 small fraction of all business transacted, but industry watchers
 
16 estimate that within the next seven years, half of all business
 
17 and consumer purchases will be done by computer.  In this new
 
18 era, connection is everything.
 
19      The legislature further finds that Hawaii's opportunities
 
20 also represent new challenges.  Businesses -- particularly the
 

 
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 1 small, start-ups associated with high technology -- no longer
 
 2 need to factor in Hawaii's geographic isolation, but must still
 
 3 consider the cost of doing business in the State.  They also face
 
 4 a confusing, often overlapping group of state agencies that
 
 5 provide support for technology-related business.  Providing
 
 6 targeted assistance to these businesses, as well as a clear focus
 
 7 of responsibility within state government for aggressive
 
 8 development and support will better serve the burgeoning
 
 9 technology industry.
 
10      The legislature also finds that education will be forever
 
11 changed as businesses and workers alike demand new skills and
 
12 rapid-response delivery of these skills.  Our schools must move
 
13 beyond the traditional book and classroom delivery and embrace a
 
14 technologically connected model for learning.  In 1998, the
 
15 legislature appropriated funds to provide high-speed Internet
 
16 access to the university and all state agencies, including
 
17 schools.  As a result, establishing schools and libraries as
 
18 community access points can be accelerated.
 
19      If Hawaii is to become a state known for leading its people
 
20 effectively into the twenty-first century, the legislature
 
21 believes progress and change must begin immediately.  The purpose
 
22 of this Act is to support the growth and development of high
 
23 technology industries in Hawaii by:
 

 
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 1      (1)  Consolidating the State's high technology agencies,
 
 2           divisions, and offices under the coordination and
 
 3           direction of a special advisor for technology
 
 4           development and creating a governor's special advisory
 
 5           council for technology development to assist the
 
 6           advisor;
 
 7      (2)  Offering a tax incentive through a technology training
 
 8           or job creation tax credit to offset the cost of
 
 9           training, retraining, and related job creation costs;
 
10      (3)  Offering a tax incentive for investment in new high
 
11           technology businesses;
 
12      (4)  Integrating technology with Hawaii's tourism and
 
13           marketing industries;
 
14      (5)  Prohibiting the imposition of taxes on Internet
 
15           commerce;
 
16      (6)  Establishing the Hawaii Internet exchange to serve as a
 
17           catalyst for the development of Internet-focused
 
18           businesses;
 
19      (7)  Focusing work force development programs to ensure a
 
20           pool of technology professionals; and
 
21      (8)  Accelerating high speed access to the Internet for the
 
22           University of Hawaii and the public schools, and
 
23           establishing educational technology programs within
 

 
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 1           public schools.
 
 2                             PART II.
 
 3      SECTION 2.  Over the years, the legislature has created a
 
 4 number of state agencies charged with promoting the development
 
 5 of a variety of technological industries.  While these agencies
 
 6 provide valuable services, they lack focus and in some cases
 
 7 their original missions have changed considerably.  Consolidation
 
 8 of these agencies under a single entity to coordinate their
 
 9 activities will provide a more focused effort in attracting high
 
10 technology businesses to Hawaii.
 
11      SECTION 3.  The Hawaii Revised Statutes is amended by adding
 
12 two new sections to be appropriately designated and to read as
 
13 follows:
 
14      "§   -     Special advisor for technology development.  (a)
 
15 There is established within the office of the governor a special
 
16 advisor for technology development to be appointed by the
 
17 governor as provided in section 26-34.
 
18      (b)  The duties of the special advisor shall include, but
 
19 not be limited to:
 
20      (1)  Developing, coordinating, and implementing short- and
 
21           long-range state policies and directions to enhance the
 
22           development of high technology industries in Hawaii;
 
23      (2)  Coordinating all state high technology agencies while
 

 
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 1           developing a plan for reorganization or consolidation
 
 2           of these agencies in the interests of greater
 
 3           efficiency and cost effectiveness;
 
 4      (3)  Advising the private sector in the development of high
 
 5           technology activities and resources, and providing
 
 6           technical or other assistance to private industry upon
 
 7           request;
 
 8      (4)  Creating, disseminating, and updating a listing of all
 
 9           high technology assistance programs in the State and
 
10           where they can be reached;
 
11      (5)  Pursuing appropriate public-private sector business
 
12           partnerships;
 
13      (6)  Coordinating the State's promotion and marketing of the
 
14           high technology industry, including a review of current
 
15           marketing efforts;
 
16      (7)  Arranging for the conduct of research through
 
17           contractual services with the University of Hawaii or
 
18           any agency or other qualified persons;
 
19      (8)  Encouraging the development of educational, training,
 
20           and career programs in high technology industries; and
 
21      (9)  Performing other necessary or desirable functions to
 
22           facilitate the intent of this section.
 
23      (c)  In carrying out the duties of this section, the special
 

 
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 1 advisor for technology development may utilize the services of
 
 2 the State's high technology agencies, including those of the
 
 3 University of Hawaii, as appropriate.
 
 4      §   -     Governor's special advisory council for technology
 
 5 development; establishment; appointment, number, and term of
 
 6 members; duties.  (a)  There is established within the office of
 
 7 the governor, for administrative purposes, an advisory council to
 
 8 be known as the governor's special advisory council for
 
 9 technology development, which shall review and make
 
10 recommendations on matters relating to the marketing and
 
11 promotion of Hawaii as a location for high technology companies.
 
12 The council shall be composed of         members appointed in
 
13 accordance with section 26-34, and shall include representatives
 
14 of the high technology industry, business leaders, educators,
 
15 government leaders, and legislators.
 
16      (b)  The members shall be appointed by the governor for four
 
17 years, except that the terms of the members first appointed shall
 
18 be for two and four years, respectively, as designated by the
 
19 governor at the time of appointment.  The council shall elect a
 
20 chairperson from among its members.
 
21      (c)  In appointing members, the governor shall select
 
22 persons who have knowledge of the high technology industry, the
 
23 educational needs of the industry, or in the marketing and
 

 
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 1 promotion of high technology industries.  The members of the
 
 2 council shall serve without compensation but shall be reimbursed
 
 3 for expenses, including travel expenses, necessary for the
 
 4 performance of their duties.
 
 5      (d)  The council shall assist the special advisor for
 
 6 technology development in developing and coordinating the
 
 7 marketing and promotion of the high technology industry in
 
 8 Hawaii.
 
 9      (e)  This section is repealed on January 1, 2005."
 
10      SECTION 4.  There is appropriated out of the general
 
11 revenues of the State of Hawaii the sum of $           , or so
 
12 much thereof as may be necessary for fiscal year 1999-2000, and
 
13 the same sum, or so much thereof as may be necessary, for fiscal
 
14 year 2000-2001, for the special advisor for technology
 
15 development and the governor's special advisory council for
 
16 technology development.  The sums appropriated shall be expended
 
17 by the office of the governor for the purposes of section 3.
 
18                             PART III.
 
19      SECTION 5.  While the advantages of Hawaii's proximity to
 
20 Pacific and Asian markets are a lure for technology business in
 
21 Hawaii, the costs of doing business are high.  Opportunities must
 
22 be created for high technology companies through tax credits, tax
 
23 exemptions, and by proving additional investment capital through
 

 
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 1 targeted assistance to technology start-ups.
 
 2      SECTION 6.  Chapter 235, Hawaii Revised Statutes, is amended
 
 3 by adding a new section to be appropriately designated and to
 
 4 read as follows:
 
 5      "§235-     Tax credit for technology training or job
 
 6 creation.  (a)  Each taxpayer in this State may claim a tax
 
 7 credit for technology training or job creation under this section
 
 8 in a qualified high technology business in this State.  The
 
 9 credit shall be for the cost of training the taxpayer or the
 
10 taxpayer's employees to up-grade the taxpayer or taxpayer's
 
11 employees technology related skills or for the creation of
 
12 technology related jobs in a qualified high technology business
 
13 in this State.  The credit shall be equal to the cost of this
 
14 training or creating those jobs but shall not exceed $        .
 
15 The credit may be claimed against the taxpayer's income tax
 
16 liability for the taxable year.
 
17      (b)  The tax credits claimed by a taxpayer pursuant to this
 
18 section shall be deductible from the resident taxpayer's
 
19 individual income tax liability, if any, for the tax year in
 
20 which they are properly claimed.  If the tax credits claimed by a
 
21 taxpayer exceed the amount of income tax payment due from the
 
22 taxpayer, the excess of credits over payments due shall be
 
23 refunded to the taxpayer; provided that tax credits properly
 

 
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 1 claimed by an individual who has no income tax liability shall be
 
 2 paid to the individual; and provided further that no refunds or
 
 3 payment on account of the tax credits allowed by this section
 
 4 shall be made for amounts less than $1.
 
 5      (c)  All claims for tax credits under this section,
 
 6 including any amended claims, must be filed on or before the end
 
 7 of the twelfth month following the close of the taxable year for
 
 8 which the credits may be claimed.  Failure to comply with the
 
 9 foregoing provision shall constitute a waiver of the right to
 
10 claim the credit.
 
11      (d)  For the purpose of this section:
 
12      "Qualified high technology business" means:
 
13      (1)  A business, employing or owning capital or property, or
 
14           maintaining an office, in this State; and
 
15      (2)  (A)  That has qualified research expenses paid or
 
16                incurred for research conducted in this State, or
 
17           (B)  That receives income derived from qualified
 
18                research expenses; provided that the income is
 
19                received from products sold from, manufactured, or
 
20                produced in the State; or services performed in
 
21                this State.
 
22 The term "qualified high technology business" does not include
 
23 any trade or business involving the performance of services in
 

 
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 1 the field of law, engineering, architecture, accounting,
 
 2 actuarial science, performing arts, consulting, athletics,
 
 3 financial services, or brokerage services, or any trade or
 
 4 business where the principal asset of the trade or business is
 
 5 the reputation or skill of one or more of its employees; any
 
 6 banking, insurance, financing, leasing, rental, investing, or
 
 7 similar business; any farming business, including the business of
 
 8 raising or harvesting trees; any business involving the
 
 9 production or extraction of products of a character with respect
 
10 to which a deduction is allowable under section 611 (with respect
 
11 to allowance of deduction for depletion), 613 (with respect to
 
12 basis for percentage depletion), or 613A (with respect to
 
13 limitation on percentage depleting in cases of oil and gas wells)
 
14 of the Internal Revenue Code; any business operating a hotel,
 
15 motel, restaurant, or similar business; any trade or business
 
16 involving a hospital, a private office of a licensed health care
 
17 professional, a group practice of license health care
 
18 professionals, or nursing home.
 
19      "Qualified research expenses" means
 
20      (1)  Research:
 
21           (A)  With respect to which expenditures may be treated
 
22                as expenses under Internal Revenue Code section
 
23                174 (with respect to research and experimental
 

 
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 1                expenditures);
 
 2           (B)  Which is undertaken for the purpose of discovering
 
 3                information
 
 4                (i)  Which is technological in nature; and
 
 5               (ii)  The application of which is intended to be
 
 6                     useful in the development of a new or
 
 7                     improved business component of the taxpayer;
 
 8                     and
 
 9           (C)  Substantially all of the activities of which
 
10                constitute elements of a process of
 
11                experimentation for a purpose described in
 
12                paragraph (3).
 
13           This term does not include any activity described in
 
14           paragraph (4).
 
15      (2)  Tests to be applied separately to each business
 
16           component:
 
17           (A)  Paragraph (1) shall be applied separately with
 
18                respect to each business component of the
 
19                taxpayer.
 
20           (B)  The term "business component" means any product,
 
21                process, computer software, technique, formula, or
 
22                invention which is to be:
 
23                (i)  Held for sale, lease, or license; or
 

 
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 1               (ii)  Used by the taxpayer in a trade or business
 
 2                     of the taxpayer.
 
 3           (C)  Special rule for production processes.  Any plant
 
 4                process, machinery, or technique for commercial
 
 5                production of a business component shall be
 
 6                treated as a separate business component (and not
 
 7                as part of the business component being produced).
 
 8      (3)  Purposes for which research may qualify for credit. For
 
 9           purposes of paragraph (1)(C):
 
10           (A)  Research shall be treated as conducted for a
 
11                purpose described in this paragraph if it relates
 
12                to:
 
13                (i)  A new or improved function;
 
14               (ii)  Performance; or
 
15              (iii)  Reliability or quality.
 
16           (B)  Certain purposes not qualified.  Research shall in
 
17                no event be treated as conducted for a purpose
 
18                described in this paragraph if it relates to
 
19                style, taste, cosmetic, or seasonal design
 
20                factors.
 
21      (4)  Activities for which credit not allowed.  "Qualified
 
22           research expenses" shall not include the following:
 
23           (A)  Any research conducted after the beginning of
 

 
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 1                commercial production of the business component;
 
 2           (B)  Any research related to the adaptation of an
 
 3                existing business component to a particular
 
 4                customer's requirement or need;
 
 5           (C)  Any research related to the reproduction of an
 
 6                existing business component (in whole or in part)
 
 7                from a physical examination of the business
 
 8                component itself or from plans, blueprints,
 
 9                detailed specifications, or publicly available
 
10                information with respect to the business
 
11                component;
 
12           (D)  Any efficiency survey; activity relating to
 
13                management function or technique; market research,
 
14                testing, or development (including advertising or
 
15                promotions); routine data collection; or routine
 
16                or ordinary testing or inspection for quality
 
17                control;
 
18           (E)  Any research with respect to computer software
 
19                which is developed by (or for the benefit of) the
 
20                taxpayer primarily for internal use by the
 
21                taxpayer, other than for use in
 
22                (i)  An activity which constitutes qualified
 
23                     research (determined with regard to this
 

 
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 1                     subparagraph); or
 
 2               (ii)  A production process with respect to which
 
 3                     the requirements of paragraph (1) are met;
 
 4           (F)  Any research conducted outside the State;
 
 5           (G)  Any research in the social sciences, arts, or
 
 6                humanities; and
 
 7           (H)  Any research to the extent funded by any grant,
 
 8                contract, or otherwise by another person (or
 
 9                governmental entity)."
 
10      SECTION 7.  Chapter 241, Hawaii Revised Statutes, is amended
 
11 by adding a new section to be appropriately designated and to
 
12 read as follows:
 
13      "§241-     Tax credit for funds invested in qualified high
 
14 technology businesses.  (a)  Any bank, building and loan
 
15 association, development company, financial corporation,
 
16 financial services loan company, trust company, mortgage loan
 
17 company, financial holding company, small business investment
 
18 company, or subsidiary may claim a tax credit for funds invested
 
19 in qualified high technology businesses in this State under this
 
20 section.  The credit shall be equal to      per cent of the total
 
21 investment in a qualified high technology business in this State,
 
22 but shall not exceed $           .
 
23      (b)  The tax credits claimed pursuant to this section shall
 

 
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 1 be deductible from the bank, building and loan association,
 
 2 development company, financial corporation, financial services
 
 3 loan company, trust company, mortgage loan company, financial
 
 4 holding company, small business investment company, or
 
 5 subsidiary's tax liability, if any, for the tax year in which
 
 6 they are properly claimed.  If the tax credits claimed by a bank,
 
 7 building and loan association, development company, financial
 
 8 corporation, financial services loan company, trust company,
 
 9 mortgage loan company, financial holding company, small business
 
10 investment company, or subsidiary exceed the amount of tax
 
11 payment due, the excess of credits over payments due shall be
 
12 refunded; provided that no refunds or payment on account of the
 
13 tax credits allowed by this section shall be made for amounts
 
14 less than $1.
 
15      (c)  All claims for tax credits under this section,
 
16 including any amended claims, must be filed on or before the end
 
17 of the twelfth month following the close of the taxable year for
 
18 which the credits may be claimed.  Failure to comply with the
 
19 foregoing provision shall constitute a waiver of the right to
 
20 claim the credit.
 
21      (d)  For the purpose of this section:
 
22      "Qualified high technology business" has the same meaning as
 
23 in section 235-   .
 

 
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 1      "Qualified research expenses" has the same meaning as in
 
 2 section 235-   ."
 
 3                             PART IV.
 
 4      SECTION 8.  The purpose of this part is to foster the
 
 5 development of knowledge-based industries by integrating those
 
 6 industries with Hawaii's economy in a way that enhances and
 
 7 strengthens the tourism industry.
 
 8      SECTION 9.  Section 201-97, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "§201-97  Integration and development of the tourism
 
11 industry.  The office shall be responsible for planning for the
 
12 integrated and coordinated development and expansion of the
 
13 tourism industry of the State.  The office shall investigate and
 
14 recommend to appropriate governmental officers, agencies,
 
15 legislative committees, and private groups ways and means of
 
16 coordinating promotional activities on behalf of tourism with the
 
17 development of recreational and other facilities, and with
 
18 existing and potential information and communications technology
 
19 networks and services in the State, for improved tourism
 
20 development.  The office shall also review the expenditure of
 
21 governmental funds for tourism-related activities and shall
 
22 prepare an annual report on the expenditures, together with any
 
23 recommendations the office may have.  The annual report shall be
 

 
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 1 submitted to the legislature as part of the annual report
 
 2 required under section 201-98."
 
 3      SECTION 10.  Section 201B-6, Hawaii Revised Statutes, is
 
 4 amended by amending subsection (a) to read as follows:
 
 5      "(a)  The authority shall be responsible for developing a
 
 6 strategic tourism marketing plan, which shall be updated every
 
 7 three years[, that] and includes the following:
 
 8      (1)  Identification and evaluation of current and future
 
 9           tourism needs for the different regions of the State;
 
10      (2)  Goals and objectives in accordance with identified
 
11           needs;
 
12      (3)  Statewide promotional efforts and programs;
 
13      (4)  Targeted markets;
 
14      (5)  Efforts to enter into brand marketing projects that
 
15           make effective use of cooperative advertising programs;
 
16      (6)  Measures of effectiveness for the authority's
 
17           promotional programs; and
 
18      (7)  Coordination of marketing plans of all destination
 
19           marketing organizations receiving state funding prior
 
20           to finalization of the authority's marketing plan.
 
21      The authority shall develop and include in its marketing
 
22 plan goals and objectives for marketing the State to the
 
23 techno-tourism niche as well as for integrating marketing
 

 
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 1 objectives with existing and potential state telecommunication
 
 2 and information resources in the public and private sectors."
 
 3                              PART V.
 
 4      SECTION 11.  Economic development opportunities are
 
 5 changing.  The playing field is now the world and not the next
 
 6 state or country.  The Internet is the catalyst and the enabling
 
 7 infrastructure is technology and telecommunications.  The
 
 8 legislature finds that exempting Internet commerce from state
 
 9 taxation for five years and an Internet exchange will be a key
 
10 element that allows Hawaii's businesses to establish a global
 
11 presence.
 
12      SECTION 12.  The Hawaii Revised Statutes are amended by
 
13 adding a new section to be appropriately designated and to read
 
14 as follows:
 
15      "§  -    Hawaii Internet Tax Freedom Act.  (a)  No income
 
16 tax, general excise tax, or use tax shall be imposed on Internet
 
17 electronic commerce.
 
18      (b)  As used in this section:
 
19      "Electronic commerce" means any transaction conducted over
 
20 the Internet or through Internet access, comprising the sale,
 
21 lease, license, offer, or delivery of property, goods, services,
 
22 or information, whether or not for consideration, and includes
 
23 the provision of Internet access.
 

 
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 1      "Internet" means collectively the myriad of computer and
 
 2 telecommunications facilities, including equipment and operating
 
 3 software which comprise the interconnected world-wide network of
 
 4 networks that employ the Transmission Control Protocol/Internet
 
 5 Protocol, or any predecessor or successor protocols to that
 
 6 protocol, to communicate information of all kinds by wire or
 
 7 radio.
 
 8      "Internet access" means a service that enables users to
 
 9 access content, information, electronic mail, or other services
 
10 offered over the Internet, and may also include access to
 
11 proprietary content, information, and other services as part of a
 
12 package of services offered to user.  The term does not include
 
13 telecommunication services as defined in section 269-1.
 
14      (c)  This section is repealed on January 1, 2005."
 
15      SECTION 13.  Chapter 304, Hawaii Revised Statutes, is
 
16 amended by adding a new section to part II, subpart L, to be
 
17 appropriately designated and to read as follows:
 
18      "§304-      Hawaii Internet exchange; established.  There is
 
19 established within University of Hawaii Internet technology
 
20 services, an Internet exchange that shall be known as the Hawaii
 
21 Internet exchange.  The Hawaii Internet exchange shall serve as a
 
22 switching and peering point for Internet service providers."
 
23      SECTION 14.  Section 226-103, Hawaii Revised Statutes, is
 

 
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 1 amended by amending subsection (g) to read as follows:
 
 2      "(g)  Priority guidelines to promote the development of the
 
 3 information industry: 
 
 4      (1)  Establish an information network that will serve as the
 
 5           catalyst for establishing a viable information industry
 
 6           in Hawaii.
 
 7      (2)  Encourage the development of services such as financial
 
 8           data processing, a products and services exchange,
 
 9           foreign language translations, telemarketing,
 
10           teleconferencing, a twenty-four-hour international
 
11           stock exchange, international banking, [and] a Pacific
 
12           Rim management center[.], and an Internet exchange.
 
13      (3)  Encourage the development of small businesses in the
 
14           information field such as software development, the
 
15           development of new information systems and peripherals,
 
16           data conversion and data entry services, and home or
 
17           cottage services such as computer programming,
 
18           secretarial, and accounting services.
 
19      (4)  Encourage the development or expansion of educational
 
20           and training opportunities for residents in the
 
21           information and telecommunications fields.
 
22      (5)  Encourage research activities, including legal research
 
23           in the information and telecommunications fields.
 

 
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 1      (6)  Support promotional activities to market Hawaii's
 
 2           information industry services."
 
 3      SECTION 15.  There is appropriated out of the general
 
 4 revenues of the State of Hawaii the sum of $         , or so much
 
 5 thereof as may be necessary, for fiscal year 1999-2000, and the
 
 6 same sum, or so much thereof as may be necessary, for fiscal year
 
 7 2000-2001, to purchase the information technology equipment and
 
 8 support services necessary for the establishment of the Hawaii
 
 9 Internet exchange within the University of Hawaii, office of
 
10 technology transfer and economic development.  The sums
 
11 appropriated shall be expended by the University of Hawaii for
 
12 the purposes of section 13.
 
13                             PART VI.
 
14      SECTION 16.  While Hawaii's economy struggles with low
 
15 economic growth for the eighth consecutive year, jobs in the
 
16 information industry continue to grow.  Industry watchers
 
17 estimate that there are 190,000 jobs in the high-tech industry
 
18 that are currently unfilled, and the shortage is not expected to
 
19 resolve itself anytime soon.  By the year 2005, more than 750,000
 
20 additional high-tech jobs are expected to be created.  It has
 
21 been estimated that Hawaii will have 5,000 technical jobs by the
 
22 year 2000 that will go unfilled by the local employment pool.
 
23      SECTION 17.  Chapter 304, Hawaii Revised Statutes, is
 

 
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 1 amended by adding a new section to part II, subpart L, to be
 
 2 appropriately designated and to read as follows:
 
 3      "§304-      Technology work force development training
 
 4 program.  (a)  There is established a technology work force
 
 5 training program hereinafter referred to as the training program.
 
 6 The training program shall be placed within the University of
 
 7 Hawaii for administrative purposes as provided for in section
 
 8 26-35.  The training program shall provide accelerated technology
 
 9 education and training on the post-high-school to graduate
 
10 levels, and shall include public, private, and for-profit
 
11 educational institutions.  In the design and delivery of
 
12 programs, the training program may cooperate or contract with
 
13 other public, private, and for-profit institutions.
 
14      (b)  The administrator of the training program shall seek
 
15 and encourage partnerships between members of the private
 
16 information technology industry and the training program, as may
 
17 be appropriate, to provide preemployment or employment training,
 
18 or on-the-job training for local residents hired by businesses
 
19 relocating to Hawaii or expanding local operations.
 
20      (c)  The university shall establish and lead an inter-agency
 
21 task force to include representatives from the department of
 
22 business, economic development, and tourism, the department of
 
23 labor and industrial relations, and the county economic
 

 
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 1 development boards to advise on the program design, industry
 
 2 recruitment, and training delivery activities of participating
 
 3 entities."
 
 4      SECTION 18.  There is appropriated out of the general
 
 5 revenues of the State of Hawaii the sum of $           , or so
 
 6 much thereof as may be necessary, for fiscal year 1999-2000, and
 
 7 the same sum, or so much thereof as may be necessary, for fiscal
 
 8 year 2000-2001, to provide funds to educational institutions to
 
 9 establish an information and telecommunications training program.
 
10 The sums appropriated shall be expended by the University of
 
11 Hawaii for the purposes of section 17.
 
12                             PART VII.
 
13      SECTION 19.  The legislature finds that Hawaii's students
 
14 will require high-speed access to the Internet.  Hawaii, because
 
15 of its remote geographic location, pays a significant cost for
 
16 high-speed access.  A university on the continental United States
 
17 pays $20,000 per year for high speed access to the Internet
 
18 whereas the same access would cost $2,500,000 per year for the
 
19 University of Hawaii.  Hawaii's students must have equal access
 
20 to the Internet to ensure global competitiveness.  
 
21      In addition, students must be afforded opportunities in new
 
22 educational technologies, such as the E Academy concept, which
 
23 will provide relevant, challenging, and meaningful course
 

 
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 1 offerings for students interested in pursuing a career in the
 
 2 advanced technology fields.  This educational program will
 
 3 provide Hawaii's students with meaningful and relevant
 
 4 preparation for both immediate opportunities in entry level
 
 5 technology positions, and advanced studies in post secondary
 
 6 information technology, science, engineering, and math.
 
 7      SECTION 20.  Section 226-107, Hawaii Revised Statutes, is
 
 8 amended to read as follows:
 
 9      "§226-107  Quality education.  Priority guidelines to
 
10 promote quality education:
 
11      (1)  Pursue effective programs which reflect the varied
 
12           district, school, and student needs to strengthen basic
 
13           skills achievement.
 
14      (2)  Continue emphasis on general education "core"
 
15           requirements to provide common background to students
 
16           and essential support to other university programs.
 
17      (3)  Initiate efforts to improve the quality of education by
 
18           improving the capabilities of the education work force.
 
19      (4)  Promote increased opportunities for greater autonomy
 
20           and flexibility of educational institutions in their
 
21           decisionmaking responsibilities.
 
22      (5)  Increase and improve the use of information technology
 
23           in education [and encourage] by the availability of
 

 
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 1           telecommunication equipment for:
 
 2           (A)  The electronic exchange of information;
 
 3           (B)  Statewide electronic mail; and
 
 4           (C)  Access to the Internet.
 
 5           Encourage programs which increase the public's
 
 6           awareness and understanding of the impact of
 
 7           information technologies on our lives.
 
 8      (6)  Pursue the establishment of Hawaii's public and private
 
 9           universities and colleges as research and training
 
10           centers of the Pacific.
 
11      (7)  Develop resources and programs for early childhood
 
12           education.
 
13      (8)  Explore alternatives for funding and delivery of
 
14           educational services to improve the overall quality of
 
15           education.
 
16      (9)  Strengthen and expand educational programs and services
 
17           for students with special needs."
 
18      SECTION 21.  (a)  The department of education shall
 
19 establish twelve to fourteen E Academies throughout the State
 
20 with onsite locations based at selected public high schools in
 
21 each district.  The department of education shall also develop
 
22 new challenging high school course offerings in math, science,
 
23 and technology content areas and include the new courses in the
 

 
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                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 Authorized Course Code and Number guide, for the purposes of the
 
 2 E Academies.  The department of education shall provide an
 
 3 innovative training program for E Academy teachers, and conduct
 
 4 instructional assessment activities beginning in the 1999-2000
 
 5 school year.  
 
 6      (b)  As used in this section, "E Academy" means a virtual,
 
 7 site-based school which provides students with industry and
 
 8 academic standards-based instruction and assessments in 
 
 9 technology, science, math, and engineering.
 
10      SECTION 22.  There is appropriated out of the general
 
11 revenues of the State of Hawaii the sum of $           , or so
 
12 much thereof as may be necessary for fiscal year 1999-2000, and
 
13 the same sum, or so much thereof as may be necessary, for fiscal
 
14 year 2000-2001, to provide funds for the establishment of twelve
 
15 to fourteen E Academies statewide at selected schools in each of
 
16 the school districts.  The sum appropriated shall be expended by
 
17 the department of education for the purposes of section 21.
 
18                            PART VIII.
 
19      SECTION 23.  Statutory material to be repealed is bracketed.
 
20 New statutory material is underscored.
 
21      SECTION 24.  This Act shall take effect upon its approval;
 
22 provided that sections 4, 15, 18, and 22 take effect on July 1,
 
23 1999; provided that section 6 shall apply to taxable years
 

 
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 1 beginning after December 31, 1998; and provided further that
 
 2 section 7 shall apply to calendar year 1999 and for calendar
 
 3 years thereafter, or if a fiscal year taxpayer, section 7 shall
 
 4 apply to the fiscal year in which January 1, 1999, occurs and
 
 5 fiscal years thereafter.