Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1332
                                     H.D. 1

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


     Your Committee on Water and Land Use, to which was referred
H.B. No. 1332 entitled: 


begs leave to report as follows:

     The purpose of this bill is to direct the Barbers Point
Naval Air Station redevelopment commission to identify lands in
Barber's Point for use as a high technology park.  

     Your Committee received testimony in support of this bill
from the Office of Planning of the Department of Business,
Economic Development, and Tourism, and comments on the bill from
the Estate of James Campbell.  

     Your Committee finds that the high technology industry
offers tremendous opportunities for job creation and synergy with
existing information infrastructure.  Establishment of a high
technology park at Barbers Point with appropriate incentives
would help Hawaii to capitalize on this burgeoning sector, but
the Committee on Finance might also consider offering the same
incentives to existing high tech parks and businesses, in order
to address the issue of equity.  

     Your Committee revised the bill by:  

     1.   Adding definitions for "qualified high technology
          business" and "qualified research expenses"; 

     2.   Removing the provisions for reductions in lease rents; 

                                 STAND. COM. REP. NO. 568
                                 Page 2

     3.   Changing the excise tax exemption for construction to
          apply only to the income received by a contractor for
          construction in the Kalaeloa high technology park; 

     4.   Adding a five-year exemption for general excise taxes
          for qualified high technology businesses in the park,
          as certified by the Director of Taxation; 

     5.   Changing the ten-year state corporate income tax
          exemption to a five-year income tax exemption,
          requiring certification by the Director of Taxation; 

     6.   Providing that after taking effect, the provisions
          shall apply to taxable years beginning after December
          30, 1999 and before January 1, 2009; and

     7.   Making technical, non-substantive changes for the
          purposes of style and clarity.  

     As affirmed by the record of votes of the members of your
Committee on Water and Land Use that is attached to this report,
your Committee is in accord with the intent and purpose of H.B.
No. 1332, as amended herein, and recommends that it pass Second
Reading in the form attached hereto as H.B. No. 1332, H.D. 1, and
be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Water and Land

                                   Romy M. Cachola, Chair