STAND. COM. REP. NO. 1021-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 2779
                                     S.D. 1
                                     H.D. 1




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

Sir:

     Your Committee on Economic Development and Business
Concerns, to which was referred S.B. No. 2779, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO STATE ENTERPRISE ZONES,"

begs leave to report as follows:

     The purpose of this bill is to enhance the effectiveness of,
and clarify the administration of, the State Enterprise Zones
(Law), by:

     (1)  Allowing the following businesses to qualify for
          enterprise zone (EZ) benefits:

          (a)  Businesses engaged in research, development, sale,
               or production for all types of genetically-
               engineering medical, agricultural, or maritime
               biotechnology products;

          (b)  Call centers; and

          (c)  Businesses that repair assisted technology
               equipment;

          and

     (2)  Specifying administrative procedures for obtaining EZ
          approval.


 
 
                                 STAND. COM. REP. NO. 1021-00
                                 Page 2

 
     The Department of Business, Economic Development, and
Tourism (DBEDT), the Department of Taxation, Hawaii Agriculture
Research Center, and Hawaii Technology Trade Association
testified in support of this measure.  The Chamber of Commerce of
Hawaii and High Technology Development Corporation testified in
support of the intent of this measure.

     Your Committee notes that this bill is similar to H.B. No.
2438, H.D. 2, which passed the House of Representatives earlier
this session after public hearings before this Committee and the
Committee on Finance.

     Your Committee has made amendments to conform this bill to
H.B. No. 2438, H.D. 2, by:

     (1   Deleting the requirement that qualified businesses in
          the EZs submit to DBEDT an approved form on an annual
          basis;

     (2)  Deleting other specifications regarding administrative
          procedures for obtaining EZ approval; and

     (3)  Making technical, nonsubstantive amendments for
          clarity, consistency, and style.

     As affirmed by the record of votes of the members of your
Committee on Economic Development and Business Concerns that is
attached to this report, your Committee is in accord with the
intent and purpose of S.B. No. 2779, S.D. 1, as amended herein,
and recommends that it pass Second Reading in the form attached
hereto as S.B. No. 2779, S.D. 1, H.D. 1, and be referred to the
Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Economic
                                   Development and Business
                                   Concerns,



                                   ______________________________
                                   ROBERT N. HERKES, Chair