Honolulu, Hawaii

, 2002

RE: H.B. No. 2454

S.D. 1



Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii


Your Committee on Economic Development and Technology, to which was referred H.B. No. 2454 entitled:


begs leave to report as follows:

The purposes of this measure are to:

(1) Change the method of calculating the number of employees needed to meet the annual hiring requirements of the Hawaii Enterprise Zone Program (EZ) in response to unanticipated layoffs or terminations caused by the September 11, 2001, incidents; and

(2) Eliminate the use tax exemption for EZ-qualified firms.

Your Committee received testimony in support of the measure from the Department of Business, Economic Development, and Tourism.

Your Committee finds that proactive measures need to be taken to support Hawaii's economy in the wake of the September 11, 2001, terrorist attacks. This measure would minimize business failures and lay-offs in Hawaii by making it easier for EZ firms to qualify for EZ hiring requirements. This measure would also eliminate the EZ exemption from the use tax. This is desirable because this incentive encourages participating EZ firms to purchase supplies and equipment subject to the use tax from out-of-state rather than local vendors.

Your Committee has amended this measure by:

(1) Inserting a defective date of July 1, 2050, to ensure continued discussion on this important issue; and

(2) Making technical nonsubstantive amendments to reflect preferred drafting style.

As affirmed by the record of votes of the members of your Committee on Economic Development and Technology that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2454, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2454, S.D. 1, and be referred to the Committee on Ways and Means.

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


ROD TAM, Chair