STAND. COM. REP. NO.  1071


Honolulu, Hawaii

                , 2009


RE:   S.B. No. 1248

      S.D. 1

      H.D. 1





Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii




     Your Committees on Economic Revitalization, Business, & Military Affairs and Agriculture, to which was referred S.B. No. 1248, S.D. 1, entitled:




beg leave to report as follows:


     The purpose of this bill is to help agricultural and manufacturing businesses in the State Enterprise Zones Program (Program) survive and grow during these difficult economic times by:


     (1)  Allowing limited liability companies to qualify for the Program;


     (2)  Allowing the receipts, sales, and employees of a business's establishments in all enterprise zones located within a single county to count toward qualification requirements;


     (3)  Extending Program tax credits for seven additional years for qualified businesses engaged in manufacturing tangible personal property, or producing or processing agricultural products; and


     (4)  Extending the general excise tax exemption to a contractor's gross proceeds for construction in an enterprise zone for a business approved to enroll in the Program.


     The County of Hawaii Department of Research and Development, Hawaiian Electric Company, Maui Electric Company, Hawaii Electric Light Company, DataHouse Consulting, Inc., Island Princess, Hawaii Aquaculture Association, Oils of Aloha, Hawaii Agriculture Research Center, and Tradewinds Forest Products testified in support of this bill.  The Department of Taxation opposed this measure.  The Department of Business, Economic Development, and Tourism, Department of Agriculture, Hawaii Crop Improvement Association, and Tax Foundation of Hawaii offered comments.


     Your Committees have amended this bill by:


     (1)  Deleting references to genetically-engineered products, including genetically-engineered agricultural products  from the Program;


     (2)  Changing the effective date to July 1, 2112, to encourage further discussion; and


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


     As affirmed by the records of votes of the members of your Committees on Economic Revitalization, Business, & Military Affairs and Agriculture that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1248, S.D. 1, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1248, S.D. 1, H.D. 1, and be referred to the Committee on Energy & Environmental Protection.


Respectfully submitted on behalf of the members of the Committees on Economic Revitalization, Business, & Military Affairs and Agriculture,