STAND. COM. REP. NO. 851-04

Honolulu, Hawaii

, 2004

RE: S.B. No. 2563

S.D. 2

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Higher Education, to which was referred S.B. No. 2563, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO SMALL BUSINESS DEVELOPMENT,"

begs leave to report as follows:

The purpose of this bill is to promote sustainable economic development in the state by:

(1) Exempting leveraged small business investment companies (SBICs) licensed by the United States Small Business Administration from the franchise tax; and

(2) Appropriating funds for various programs of the Small Business Development Center (SBDC) relating to consulting and training services, as well as the Hawaii business research library.

The Hawaii SBDC Network testified in support of this measure. The Department of Business, Economic Development, and Tourism (DBEDT) supported the intent of this bill. The Tax Foundation of Hawaii offered comments.

According to DBEDT, part of the reason why there are no leveraged SBICs in Hawaii is due to the franchise tax that SBICs are required to pay.

Upon further consideration, your Committee has amended this bill by deleting its substance and inserting the substance of H.B. No. 2044, H.D. 1, the companion bill which was reported out earlier this session by your Committee. As amended, the net changes to the bill include:

(1) Earmarking funds for SBDC to establish consulting and training centers in both Leeward and Windward Oahu;

(2) Appropriating funds for a new, second research position at the Hawaii Business Research Library;

(3) Appropriating funds to establish a Hawaii award of excellence center to promote sustainability by training businesses statewide in continuous quality improvement;

(4) Replacing references to "a leveraged SBIC" with "a SBIC licensed ... to issue leverage";

(5) Inserting $1 appropriations to promote continued discussion on this measure;

(6) Inserting additional provisions to the purpose section; and

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

As affirmed by the record of votes of the members of your Committee on Higher Education that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2563, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2563, S.D. 2, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Higher Education,

 

____________________________

K. MARK TAKAI, Chair