Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 377
                                        H.D. 2
                                        S.D. 2

Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Ways and Means, to which was referred H.B.
No. 377, H.D. 2, S.D. 1, entitled: 


begs leave to report as follows:

     The purpose of this bill is to foster the growth of the high
technology industry in Hawaii.

     Specifically this measure:

     (1)  Consolidates the State's high technology agencies,
          divisions, and offices, under the coordination of a
          special advisor for technology development, and creates
          a Governor's special advisory council for technology
          development to assist the advisor;

     (2)  Offers a tax incentive for technology training or job

     (3)  Offers a tax incentive for investments in qualified
          high technology businesses;

     (4)  Offers a tax incentive for investments in high
          technology research;

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     (5)  Exempts from excise tax and income tax, royalties due
          to high technology inventions;

     (6)  Authorizes the issuance of special purpose revenue
          bonds to the Ohana Foundation for the construction of
          facilities for research, development, technology
          development, and technology support;

     (7)  Integrates high technology with Hawaii's tourism and
          marketing industries;

     (8)  Prohibits the imposition of taxes on Internet access
          and commerce;

     (9)  Establishes the Hawaii Internet Exchange to serve as a
          catalyst for the development of Internet focused

    (10)  Focuses work force development programs to ensure a
          pool of technology professionals; and

    (11)  Accelerates high speed access to the Internet for the
          University of Hawaii and the public schools, and
          establishes educational technology programs within
          public schools.

     Your Committee believes if Hawaii is to overcome its
economic hardship it must develop and diversify its economy.
This measure will assist Hawaii in taking full advantage of the
technological advances in telecommunications and Hawaii's unique
geographical location to promote a strong, local, high technology

     Your Committee has amended this measure by:

     (1)  Correcting certain discrepancies between the text of
          sections of this bill and the printed version of the
          Hawaii Revised Statutes; and

     (2)  Making technical non-substantive amendments for
          purposes of clarity.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
377, H.D. 2, S.D. 1, as amended herein, and recommends that it

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pass Third Reading in the form attached hereto as H.B. No. 377,
H.D. 2, S.D. 2.

                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,

                                 CAROL FUKUNAGA, Co-Chair

                                 ANDREW LEVIN, Co-Chair

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