STAND. COM. REP. NO.1153

Honolulu, Hawaii

, 2003

RE: H.B. No. 146

H.D. 2

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committees on Water, Land, and Agriculture and Economic Development, to which was referred H.B. No. 146, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO ECONOMIC DEVELOPMENT,"

beg leave to report as follows:

The purpose of this measure is to authorize the designation of two renaissance zones in the State, establish a renaissance zone review board, and exempt a renaissance zone developer from up to one hundred percent of the developer's income and general excise taxes.

Testimony in support of the measure was submitted by MacFarms of Hawaii. Testimony in opposition to the measure was submitted by the Department of Business, Economic Development, and Tourism. The Department of Taxation and the Tax Foundation of Hawaii submitted comments on the measure.

Your Committees find that although the Enterprise Zone law already provides similar incentives for businesses in distressed areas, more must be done to create opportunities in rural areas where there are high unemployment rates and attendant social problems.

Your Committees note that it may be appropriate to include other regions in the State, such as Turtle Bay and the sugar mill areas of the Windward District, for example. Your Committees believe that this measure should continue in the legislative process to promote further discussion.

Your Committees have amended the measure by:

(1) Removing the limitation of two renaissance zones;

(2) Including additional areas for consideration for designation as renaissance zones;

(3) Clarifying that the income tax and general excise tax exemptions shall be as provided in section    -6 of the new chapter for consistency; and

(4) Deleting the requirement for a governor's declaration, and specifying that the renaissance zone and the tax exemptions shall not be available after December 31, 2006.

As affirmed by the records of votes of the members of your Committees on Water, Land, and Agriculture and Economic Development that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 146, H.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 146, H.D. 2, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Water, Land, and Agriculture and Economic Development,

____________________________

CAROL FUKUNAGA, Chair

____________________________

LORRAINE R. INOUYE, Chair