STAND. COM. REP. NO. 985________

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 375
                                     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 Finance, to which was referred H.B. No.
375, H.D. 1, entitled: 


begs leave to report as follows:

     The purpose of this bill is to foster Hawaii's economic
growth by:

     (1)  Exempting exported services from the general excise tax
          (GET); and

     (2)  Imposing a use tax on imported services to not only
          level the playing field between the local service
          providers and out-of-state providers, but compensating
          for the revenue loss caused by the GET exemption.

     The Hawaii Association of Realtors and the American
Institute of Architects Hawaii State Council testified in support
of this measure.

     As affirmed by the record of votes of the members of your
Committee on Finance that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
375, H.D. 1, and recommends that it pass Third Reading.

                                 STAND. COM. REP. NO. 985________
                                 Page 2

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

                                   DWIGHT Y. TAKAMINE, Chair