RELATING TO THE HAWAII TECHNOLOGY DEVELOPMENT CORPORATION.

SB3284

THE SENATE

S.B. NO.

3284

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to the Hawaii technology development corporation
.

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

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SECTION 1.
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The
legislature finds that the Hawaii technology development corporation serves as
a facilitative catalyst for technology and innovation in the State and will
align the State with emerging technologies, including computer software,
biotechnology, ocean science, energy, nanotechnology, artificial intelligence,
sensor and communication systems, health, medical devices, medical tests or
other health care technologies, and aerospace and defense.

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The legislature further finds that,
according to the National Academies of Sciences, Engineering, and Medicine's
2026 review of the Department of Defense Small Business Innovation Research and
Small Business Technology Transfer programs:

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(1)
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States
underserved by venture capital markets, such as Hawaii, benefit
disproportionately from the programs in building their own innovation
ecosystems;

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(2)
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For
every dollar invested in the programs, participating firms attract more than
four dollars in additional federal research and development funding;

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(3)
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The
programs serve as gateways for small firms to enter the defense innovation
ecosystem and defense industrial base;

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(4)
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Firms
receiving five or more Small Business Innovation Research and Small Business
Technology Transfer program awards demonstrate higher rates of patent
generation, follow-on financing, and successful technology transition; and

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(5)
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Firms
receiving state matching support are more likely to secure follow-on federal
contracts, generate intellectual property, and contribute to national security
capabilities.

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The legislature additionally finds that the
State's unique strategic position in the Indo-Pacific, combined with federal
facilities including military bases and research institutions, creates
exceptional opportunities for Hawaii-based companies to support critical
defense and dual-use technology development.

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The legislature also finds that the federal
government's rigorous Small Business Innovation Research and Small Business
Technology Transfer review process provides sufficient technical and business
merit evaluation, and requiring an additional state-level review would create
an unnecessary administrative burden and delay time-sensitive technology
development.

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The legislature believes that a permanent
state Small Business Innovation Research and Small Business Technology Transfer
matching program with streamlined approval will enable the State to leverage
federal investments, build a sustainable innovation ecosystem, and contribute
to both economic diversification and national security priorities.

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Accordingly, the purpose of this Act is to:

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(1)
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Establish
the Hawaii small business innovation research matching program within the
Hawaii technology development corporation to provide matching grants to
Hawaii-based companies that have received federal Small Business Innovation Research
or Small Business Technology Transfer program awards;

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(2)
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Establish
the
science, technology, engineering, and mathematics education
outreach program within the Hawaii technology development corporation to be
administered in collaboration with the department of education, to require
participants in the
Hawaii small business innovation research matching program
to deliver presentations to public school students in the State; and

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(3)
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Require
the development corporation to submit annual reports to the legislature.

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SECTION 2.
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Chapter 206M, Hawaii Revised Statutes, is amended by adding two new
sections to be appropriately designated and to read as follows:

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206M-A
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Hawaii
small business innovation research matching program; established.
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(a)
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There is established the Hawaii small business innovation research
matching program within the development corporation to provide matching grants
to Hawaii-based companies that have received federal Small Business Innovation Research
or Small Business Technology Transfer awards.

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(b)
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Any company with a principal place of business in the State that has
received a federal phase I or phase II award from the Small Business Innovation
Research or Small Business Technology Transfer programs from any federal agency
shall be eligible for state matching funds without additional state technical
or business review.
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The Hawaii small
business innovation research matching program shall be open to companies that
are first-time participants to the Small Business Innovation Research or Small
Business Technology Transfer programs and companies that have previously
received funding from the Small Business Innovation Research or Small Business
Technology Transfer programs.

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Receipt of a federal Small Business
Innovation Research or Small Business Technology Transfer program award shall
constitute sufficient evidence of technical and business merit.

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(c)
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The Hawaii small business innovation research matching program shall
match funds equal to fifty per cent of the federal Small Business Innovation
Research or Small Business Technology Transfer program award amount.

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(d)
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Companies seeking to participate in the Hawaii small business innovation
research matching program shall submit an application to the development
corporation within ninety days of receiving the Small Business Innovation
Research or Small Business Technology Transfer program award notification.
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The application shall include:

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(1)
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A
copy of federal award notice;

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(2)
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Documentation
of the company's principal place of business in the State;

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(3)
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A
brief description of how state matching funds will be used to advance the
project; and

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(4)
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An
acknowledgement of the Hawaii small business innovation research matching
program's reporting requirements.

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(e)
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The development corporation shall approve or deny applications within
thirty days of receipt.
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Applications
meeting the requirements of subsection (b) shall be automatically approved
unless insufficient funds remain.

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(f)
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The development corporation shall establish an annual application period
for matching fund requests.
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If
applications for matching funds exceed available funding, the corporation shall
distribute funds as follows:

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(1)
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All
eligible applications received within the application period shall be
considered together; and

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(2)
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If
the total requested matching funds exceed available funds, the development corporation
shall distribute the available funds on a pro-rata basis to all eligible
applicants, calculated proportionally based on each applicant's requested
matching amount relative to the total requested matching funds.

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Any unallocated funds remaining at the
end of each fiscal year shall carry forward to the next fiscal year, subject to
any applicable appropriations law.

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(g)
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The development corporation shall submit an annual report to the
legislature no later than twenty days prior to the convening of each regular
session containing:

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(1)
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The
total state matching funds provided under the Hawaii small business innovation
research matching program and the total federal Small Business Innovation
Research or Small Business Technology Transfer program awards leveraged;

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(2)
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The
number of applications received, approved, and denied, including reasons for
denial;

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(3)
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The
average time each approved application took for approval;

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(4)
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The
distribution of awards by company;

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(5)
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Any
instances where insufficient funds required equitable distribution measures
pursuant to subsection (f);

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(6)
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Any
follow-on federal research and development contracts and procurement awards
received by a company that received matching funding under the Hawaii small
business innovation research matching program;

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(7)
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The
number of phase I to phase II Small Business Innovation Research or Small
Business Technology Transfer programs award transitions;

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(8)
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The
number of patents filed and awarded by companies received matching funding
under the Hawaii small business innovation research matching program;

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(9)
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Any
private sector investment attracted due to the program;

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(10)
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The
number of jobs created and retained in the State as a result of the program,
including the annual salary ranges reported in the following ranges:

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(A)
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Under $50,000;

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(B)
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$50,000 to $79,999;

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(C)
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$80,000 to $99,999;

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(D)
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$100,000 to $124,999;

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(E)
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$125,000 to $149,999;

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(F)
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$150,000 to 199,999; and

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(G)
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$200,000 or more;

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(11)
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Any
technologies transitioned into defense or commercial use;

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(12)
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Any
partnerships established with defense prime contractors and federal facilities;

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(13)
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The
geographic distribution of supported companies across the State's counties;

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(14)
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The
total payroll dollars generated by companies supported by the Hawaii small
business innovation research matching program;

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(15)
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Participating
company revenue growth, including total annual revenues and percentage change
from the prior year;

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(16)
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The
number of science, technology, education, and mathematics education
presentations delivered to public school students in the State under the
science, technology, engineering, and mathematics outreach program established
under section 206M-B;

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(17)
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The
technology sector and industry classifications of supported companies; and

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(18)
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The
return on investment ratio, calculated as total federal funding secured per
state dollar invested.

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206M-B
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Science, technology, engineering, and
mathematics outreach program; established.
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There is established within the development corporation the science,
technology, engineering, and mathematics outreach program to promote science,
technology, engineering, and mathematics education and career awareness in the
State.
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The development corporation shall
collaborate with the department of education to administer the program.
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Under the program:

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(1)
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Each
company receiving matching funds from the Hawaii small business innovation
research matching program established under section 206M-A shall deliver a
minimum of two presentations to public school students in the State within one
year of receiving the matching funds.
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The presentations shall:

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(A)
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Showcase innovation and technology development occurring in the
State;

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(B)
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Describe career pathways in science and technology fields; and

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(C)
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Encourage students to pursue education and careers in science,
technology, engineering, and mathematics; and

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(2)
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The
development corporation shall coordinate with the department of education to
schedule the presentations required pursuant to paragraph (1) and identify
appropriate grade levels and schools, with priority being given to schools in
underserved communities.
"

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SECTION 3.
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There is appropriated out of the general revenues of the State of Hawaii
the sum of $ or so
much thereof as may be necessary for fiscal year 2026-2027 to support the
economic diversification of, and the development of a defense innovation
ecosystem in the State, to be allocated as follows:

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(1)
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$
for the Hawaii small business innovation research matching program established
by section 2 of this Act;

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(2)
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$
for the manufacturing development program established by section 206M-15.1,
Hawaii Revised Statutes, to help Hawaii-based manufacturers become globally
competitive and support the scale-up and transition of Small Business
Innovation Research or Small Business Technology Transfer program-developed
technologies into production; and

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(3)
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$
for commercialization and technology transition support, including:

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(A)
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Accelerator
and small business training programs to help develop companies that are solving
large-scale problems in the community using innovative, advanced manufacturing,
and technology-based solutions;

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(B)
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Support
for intellectual property protection, market research, and business development
activities identified by the National Academies of Science, Engineering, and
Medicine as critical success factors for Small Business Innovation Research or
Small Business Technology Transfer program commercialization;

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(C)
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Facilitation
of partnerships between the Small Business Innovation Research or Small
Business Technology Transfer companies in the State and defense prime
contractors, acquisition program offices, and research institutions to support
technology transition; and

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(D)
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Assistance
in navigating federal procurement processes and transitioning technologies into
programs of record.

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The sum appropriated shall be expended by
the Hawaii technology development corporation for the purposes of this Act.

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SECTION 4.
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In codifying the new sections added by section 2 of this Act, the
revisor of statutes shall substitute appropriate section numbers for the
letters used in designating the new sections in this Act.

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SECTION 5.
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New statutory material is underscored.

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SECTION 6.
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This Act shall take effect on July 1, 2026.

INTRODUCED BY:

_____________________________

Report Title:

HTDC;
DOE; Hawaii Small Business Innovation Research Matching Program; Science,
Technology, Engineering, and Mathematics Education Outreach Program;
Establishment; Reports; Appropriation

Description:

Establishes the Hawaii Small Business Innovation Research Matching
Program within the Hawaii Technology Development Corporation to provide
matching grants to Hawaii-based companies that have received federal Small Business
Innovation Research or Small Business Technology Transfer awards.
�
Establishes the
Science, Technology, Engineering, and Mathematics Education
Outreach Program within HTDC to be administered in collaboration with the
Department of Education to require participants in the
Hawaii Small Business
Innovation Research Matching Program to deliver presentations to public school
students in the State.
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Requires HTDC to
submit annual reports to the Legislature.
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Appropriates funds.

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not legislation or evidence of legislative intent.