STAND. COM. REP. 850

Honolulu, Hawaii

, 2003

RE: H.B. No. 146

H.D. 2

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Finance, to which was referred H.B. No. 146, H.D. 1, entitled:

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

begs leave to report as follows:

The purpose of this bill is to help stimulate economic growth, especially in Hawaii's rural areas, by:

(1) Authorizing the Governor to designate up to eight renaissance zones in the State with the size of each renaissance zone not to exceed 10 acres and the duration of each renaissance zone status not to exceed 15 years;

(2) Establishing the Renaissance Review Board to recommend the selection of renaissance zones;

(3) Exempting persons located and operating within renaissance zones from up to 100 percent of the person's income and general excise taxes; and

(4) Requiring the Department of Business, Economic Development, and Tourism (DBEDT) to submit an annual report on the economic effects of renaissance zones to the Legislature.

MacFarms of Hawaii testified in support of this measure. DBEDT testified in opposition to this measure. The Department of Taxation (DOTAX) and Tax Foundation of Hawaii commented on this measure.

Your Committee has amended this measure by:

(1) Authorizing the Governor to designate two, rather than eight, renaissance zones in this State, based on the recommendations of the Renaissance Zone Review Board, and on certain criteria established by this measure;

(2) Deleting the definition of "person";

(3) Adding the definition of "developer";

(4) Clarifying that a developer of a renaissance zone, and not a person who is located and operates within a renaissance zone, shall be eligible for the income and general excise tax exemptions provided by this measure;

(5) Eliminating the DBEDT annual reporting requirement;

(6) Requiring that the exemption from income tax and general excise tax may only be claimed upon a declaration by the Governor;

(7) Requiring that the Governor can only issue a declaration allowing taxpayers to claim the income tax and general excise tax exemption when the general fund revenue collections at the close of each two successive fiscal years exceed 7.5 per cent of the general fund revenues for each of the fiscal years;

(8) Requiring the Director of DOTAX to notify the Governor of the general fund revenue balance at the close of every year; and

(9) Making technical, nonsubstantive amendments for purposes of clarity, consistency, and style.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 146, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 146, H.D. 2.

Respectfully submitted on behalf of the members of the Committee on Finance,

 

____________________________

DWIGHT Y. TAKAMINE, Chair