Honolulu, Hawaii
                                                   , 1999

                                 RE: S.B. No. 44
                                     S.D. 1
                                     H.D. 2

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 S.B. No.
44, S.D. 1, 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 contracting work or services from
          the general excise tax; and

     (2)  Imposing a use tax on imported services.

     The Department of Taxation, the American Society of Civil
Engineers, the Building Industry Association of Hawaii, the
Hawaii Association of Realtors, the Big Island Business Council,
Hidano Construction, Inc., the Kona-Kohala Chamber of Commerce,
and the Small-Business Economic Revival Force submitted testimony
in support of this measure.  The Department of Business, Economic
Development, and Tourism supported the intent of this bill.  The
Tax Foundation of Hawaii offered comments.

     Your Committee has made technical, nonsubstantive amendments
to the bill to conform to correct drafting style.

                                 STAND. COM. REP. NO. 1811
                                 Page 2

     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 S.B. No.
44, S.D. 1, H.D. 1, as amended herein, and recommends that it
pass Third Reading in the form attached hereto as S.B. No. 44,
S.D. 1, H.D. 2.

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

                                   DWIGHT Y. TAKAMINE, Chair