STAND. COM. REP. NO. 801-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2023
                                     H.D. 2




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Finance, to which was referred H.B. No.
2023, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO AGRICULTURAL INFRASTRUCTURE,"

begs leave to report as follows:

     The purpose of this bill is to support new agricultural
ventures by creating incentives for private investment to
preserve existing infrastructure.  This bill provides a tax
credit of ten percent of the cost of improvements over $20,000
made to agricultural infrastructure.

     The Hawaii Farm Bureau Federation, the Hawaii Island
Economic Development Board, the Pineapple Growers Association of
Hawaii, and an individual testified in support of this measure.
The Department of Taxation opposed passage of this bill, and the
Tax Foundation of Hawaii offered comments.

     Your Committee has amended this bill by:

     (1)  Specifying that the definition of "agricultural
          infrastructure improvement" applies only to irrigation
          systems and drainage systems;

     (2)  Deleting the definition of "roads";

     (3)  Specifying that in the definition of "drainage
          systems", a land area must be larger than twenty acres
          instead of two thousand acres;

 
 
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     (4)  Changing the percentage to an unspecified amount that
          the tax credit must be equal to, of the cost of
          improvements over $20,000 made to agricultural
          infrastructure;

     (5)  Repealing the provisions of this bill on January 1,
          2005; and

     (6)  Making technical, nonsubstantive amendments for the
          purpose of consistency.

     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.
2023, H.D. 1, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as H.B. No. 2023, H.D.
2.

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



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair