STAND. COM. REP. NO. 468________

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1027

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committees on Transportation and Economic Development
and Business Concerns, to which was referred H.B. No. 1027


beg leave to report as follows:
     The purpose of this bill is to encourage the development of
aviation training facilities in the State.

     Your Committees find that the geographic location and the
climate of Hawaii are ideal for developing an aviation training
program for the burgeoning Asia-Pacific aviation industry.  Your
Committees also find that an aviation training program will help
to spur the State's economy through the addition of a new
industry, provide challenging careers for Hawaii's youth, and
further enhance our relationships with Far East countries.  Your
Committees further find that Hawaii will be competing with other
sites on the Mainland, in Australia, and in Asia itself for
establishing this growing industry. Hawaii's aviation industry
must receive the State's support if it is to be successful.

     This bill proposes to provide an exemption from the general
excise tax (GET) for the construction and/or operation of
aviation training facilities in the State of Hawaii as an
incentive for its establishment.

                                 STAND. COM. REP. NO. 468________
                                 Page 2

     Testimonies in support of this bill were received from the
Office of the Lieutenant Governor, the Department of
Transportation, the Department of Taxation, and the University of
Hawaii. The Department of Business, Economic Development, and
Tourism submitted testimony in support of the bill.  The Tax
Foundation of Hawaii submitted comments.
     As affirmed by the record of votes of the members of your
Committees on Transportation and Economic Development and
Business Concerns that are attached to this report, your
Committees are in accord with the intent and purpose of H.B. No.
1027 and recommend that it pass Second Reading and be referred to
the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Transportation,

                                   KENNETH T. HIRAKI,
                                   Transportation Committee Chair

                                   ROBERT N. HERKES,
                                   Economic Development & Business 
                                   Concerns Committee Chair