After a long bout with those who wanted to kill it, Act 221 as we knew it died this week. The weapon they used was Senate Bill 199, which took so many pieces out of the old girl that there's not much left to interest tech investors.

There were last-minute attempts to amend SB 199 and to kill SB 199 and thus save 221, but all of these were futile. Leadership had asked the rank and file to pass SB 199, and they did.

It's frankly the worst of times for tech in Hawai'i. The bell has rung on 221 and it is the painful end of an era that could have been infinitely better. What does this mean for the tech industry, and what does it mean for the rest of us?

WHO'S TO BLAME

Who do we blame for this deadly blow to the tech community? Their names are well known — Rep. Pono Chong, elected by the people of Kailua; Rep. Kyle Yamashita, elected by the people of Kula; and Rep. Isaac Choy, appointed to represent the people of Manoa. These three legislators worked hardest to gratuitously butcher the one piece of legislation dedicated to developing the tech industry.

The good guys who tried to stop SB 199 included Sen. Carol Fukunaga, Rep. Angus McKelvey and their supporters. Regrettably, the bad guys prevailed.

What happened was not just bad policy, it was bad temperament — some legislators weren't so interested in balancing the budget as they were in killing 221 — out of jealousy, ignorance, class war or other bad intentions not fit to print. You can imagine how divisive this was. A number of members were visibly disappointed in what their colleagues had done. Now it's on Gov. Linda Lingle's desk for signature. She has attacked 221 all along, so if she vetoes SB 199, we'll all be surprised.

Chong is famous for saying that tech is bad for Hawai'i because it would raise salaries and thus make housing too expensive. Yamashita has had a number of state tax liens filed against him. He's hardly suited to make tax policy. Choy is a CPA who insists that 221 is "a black hole," but why does he represent and invest in 221 companies? Say was quoted to have said that "tech has had a free ride, but now its time is over." Truly, it's time for a change at the Legislature.

VOTE 'EM OUT

The angry reaction on Bishop Street is not the end of it. Perhaps it's rather the beginning, since the cold-blooded killing of the act has taken us over a tipping point and set new forces in motion. Where the tech community was not united on how Hawai'i's lack of investment capital should be handled, now, after SB 199, perhaps it will see it has to be united — there's no other workable choice.

Where in the past the tech community felt it could find sufficient friends in the Legislature to preserve its interests, now after SB 199 it knows that isn't true, and that it will have to replace those who are so hostile to its interests with those more sympathetic to the future of tech in our state. The first order of business is to recruit new candidates to run for their seats.

In the past, the tech community had assumed that most legislators did not harbor an anti-tech agenda and were fair and open-minded enough to consider the views of the industry. Now, after SB 199, the tech community knows better — they know they must put out a tech scorecard on every legislator and that they must never support or tolerate any public official who has an anti-tech agenda.

A DEFEAT FOR PROGRESS

SB 199 is draconian in the fullest sense. It clipped off the 2:1 leverage settled in earlier years, withdrew the conventional carryover, and after all that chopped the benefits down by another 20 percent, all deadly blows. Some say these changes brutalized the act to the point where the tax credits left will no longer appeal to investors. Others say that 221 is not dead but only maimed and that some investors might continue to invest.

It's hard to be optimistic. SB 199 sends a grave message about Hawai'i — it tells them that while we were tentative in our unwillingness to accept 221 in the Lingle years, we have now reached certainty — we hate the act and we hate tax incentive credits that will benefit startups. From the tenor of the hearings and the changes in SB 199, which roundly ignored the suggestions, protestations and supplications of the tech industry, the Legislature seems for its own reasons to be furious with the tech industry and intent on punishing it.

We just had the Superferry debacle, now here we are again — showing that we are anti-tech, anti-science, anti-business and anti-progress. In the twilight of a more-than-slightly-faded tourism economy, we can't achieve the most modest goals of planning for the future. We seem to have given up competing in the real world, working ourselves into a second-class economy on the way to backwater. And while we fiddle around, our kids are leaving town.

BUCK UP AND REGROUP

Where we could have grown the economy with more investment, now we will lose it. Some investors are already swearing off. There is one deal that would have invested $25 million into Hawai'i's economy by this July, but now that's dead. The tech industry will have to find other ways to raise venture capital. The real tragedy is that local institutions, including the state Employees' Retirement System and Kamehameha Schools, won't invest in Hawai'i.

By next year, we will begin to see the scope of the damage to the industry. Perhaps the industry will get together and propose a cohesive Son-of-221 proposal to the Legislature, but unless there are some drastic changes in the people who run the place, it is likely to be met with the same intransigence.

As a result of this mean and thoughtless legislation, some companies that depend on 221 will go out of business. To recover from what happened, the tech industry will need to capitalize on shifting global investment priorities and change the "one size fits all" aspect of 221 — movies are different from biotech and energy is different from ocean science. So let's buck up and get back to work. There's a lot to do once you get over your anger.