STAND. COM. REP. NO.1168

Honolulu, Hawaii

, 2003

RE: H.B. No. 21

H.D. 1

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committees on Economic Development and Transportation, Military Affairs, and Government Operations, to which was referred H.B. No. 21, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO CORPORATE DISCLOSURE,"

beg leave to report as follows:

The purpose of this measure is to require:

(1) The Department of Taxation to report on tax benefits for development assistance programs;

(2) Counties to disclose real property tax reductions and abatements;

(3) Disclosure of development assistance by granting bodies; and

(4) The recapture of assistance from recipients who fail to achieve job, wage, and benefit goals.

Testimony in support of this measure was submitted by the Hawaii State AFL-CIO. Testimony in opposition to this measure was submitted by the Department of Taxation. The Tax Foundation of Hawaii submitted comments on this measure.

 

Your Committees find that government assistance to businesses has increased dramatically over the past twenty years. However, many companies that have received the benefits of development assistance from the State have not fulfilled their promises. Your Committees find that there is no mechanism to monitor the cost-effectiveness of tax credits and other forms of development assistance. This measure would require disclosure of the amount of government development assistance, in tax breaks, grants, or borrowed funds through a state entity, provided to businesses, thus ensuring that scarce taxpayer dollars will be used fairly and efficiently.

Your Committees have amended this measure by:

(1) Deleting the requirement that the counties disclose real property tax reductions and abatements;

(2) Making the provision by the Department of Taxation of a detailed tax expenditure budget to the Legislature discretionary rather than mandatory;

(3) Appropriating funds to the Department of Taxation for the purposes of this Act; and

(4) Changing the effective date to July 1, 2010, to facilitate further discussion of this issue.

As affirmed by the records of votes of the members of your Committees on Economic Development and Transportation, Military Affairs, and Government Operations that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 21, H.D. 1, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 21, H.D. 1, S.D. 1, and be referred to the Committee on Ways and Means.

 

Respectfully submitted on behalf of the members of the Committees on Economic Development and Transportation, Military Affairs, and Government Operations,

____________________________

CAL KAWAMOTO, Chair

____________________________

CAROL FUKUNAGA, Chair