STAND. COM. REP. NO.557

Honolulu, Hawaii

, 2003

RE: S.B. No. 1253

S.D. 1

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Economic Development, to which was referred S.B. No. 1253 entitled:

"A BILL FOR AN ACT RELATING TO ECONOMIC DATA,"

begs leave to report as follows:

The purpose of this measure is to require the Department of Business, Economic Development, and Tourism (DBEDT) to establish an industry tracking program and provide a tax credit for businesses that participate in the program.

DBEDT submitted testimony supporting the intent of this measure and deferred to the Department of Taxation (DOT) with respect to the budgetary impact. DOT took no position on this measure, but submitted comments regarding the tax credit portion of the bill. Additional comments were received from the Tax Foundation of Hawaii.

Your Committee finds that repositioning Hawaii to compete in today's new economy requires a new public-private agenda. As articulated by the various neighbor island economic development boards and Enterprise Honolulu, Hawaii must develop its economic strategy in a new way. In order to create high-skill, high wage jobs and globally competitive businesses, policymakers and business leaders need to know what Hawaii's strengths and weaknesses are.

In 2000, the State Legislature recognized the value of good benchmarks against which to measure Hawaii's progress in becoming a new economy and funded A New Economy in Hawaii: Benchmarking Hawaii's Progress in the New Economy (2002). Advance copies of the report benchmark Hawaii's strengths and weaknesses, and identify areas in which inadequate data exists to monitor future progress.

Your Committee has amended this measure by:

(1) Deleting the provisions that establish a tax credit for businesses that participate in the industry tracking program;

(2) Requiring DBEDT to track and annually report on new economy indicators;

(3) Requiring DBEDT to collaborate with higher education institutions, economists, and other public-private partners to make its new economy indicators available to the widest extent possible using Internet, educational and economic forums, and other media distribution channels; and

(4) Changing the effective date section to remove the provision regarding applicability to tax years, and to provide that the measure takes effect upon its approval.

As affirmed by the record of votes of the members of your Committee on Economic Development that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1253, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1253, 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,

____________________________

CAROL FUKUNAGA, Chair