STAND. COM. REP. NO. 982-04

Honolulu, Hawaii

, 2004

RE: S.B. No. 2413

S.D. 1

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committees on Agriculture and Economic Development and Business Concerns, to which was referred S.B. No. 2413, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO STATE ENTERPRISE ZONES,"

beg leave to report as follows:

The purpose of this bill is to amend eligibility requirements of the Enterprise Zone Program (EZP) to allow more agricultural businesses to participate in the EZP, by:

(1) Allowing an agricultural business to maintain its EZP eligibility during the period of a force majeure event;

(2) Providing a revenue growth criteria option for an agricultural business that failed to meet the employment growth requirement of the EZP; and

(3) Extending the seven years of tax credits by an additional seven years.

The Hawaii Farm Bureau Federation, Hawaii Agriculture Research Center, Land Use Research Foundation of Hawaii, Pineapple Growers Association of Hawaii, Hawaii Cattlemen's Council, and Maui County Farm Bureau testified in support of this bill. The Department of Agriculture supported this measure with amendments. The Department of Business, Economic Development, and Tourism supported the intent of this measure with amendments. The Department of Taxation supported the intent of this measure but opposed it due to budgetary concerns.

Your Committees recognize that while agricultural businesses are confronted by challenges similar to those faced by other small businesses, agricultural businesses labor under circumstances beyond their control that make it more difficult to build a successful business, including the unpredictable activity of weather conditions and national and international markets. These circumstances make EZP eligibility more difficult to achieve. Your Committees believe this bill will provide the incentives needed for the growth and viability of agricultural businesses in the State.

Your Committees have amended this bill by:

(1) Extending the seven-year eligibility period by the number of months of the duration of a force majeure event, rather than seven years, to allow agricultural businesses to recover after such an event;

(2) Clarifying the revenue growth criteria option for an agricultural business that failed to meet the employment growth requirement of the EZP;

(3) Clarifying the description of a force majeure event; and

(4) Making technical, nonsubstantive amendments for clarity, consistency, and style.

As affirmed by the records of votes of the members of your Committees on Agriculture and Economic Development and Business Concerns that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2413, S.D. 1, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2413, S.D. 1, H.D. 1, and be referred to the Committee on Finance.

 

Respectfully submitted on behalf of the members of the Committees on Agriculture and Economic Development and Business Concerns,

 

____________________________

BRIAN SCHATZ, Chair

____________________________

FELIPE P. ABINSAY, JR., Chair