STAND. COM. REP. NO. 769

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 1349

       S.D. 2

 

 

 

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii

 

Madam:

 

     Your Committee on Ways and Means, to which was referred S.B. No. 1349, S.D. 1, entitled:

 

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

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to provide support for scientific innovation in the State.

 

     More specifically, this measure:

 

     (1)  Reestablishes the income tax credit for qualified research activities that applies to taxable years beginning after December 31, 2010, through December 31, 2017; and

 

     (2)  Requires the Department of Business, Economic Development, and Tourism to conduct studies to measure the effectiveness of the tax credit and submit reports to the Legislature.

 

     Your Committee received written comments in support of this measure from The Chamber of Commerce of Hawaii; Navatek, Ltd.; Cardax Pharmaceuticals, Inc.; Enterprise Honolulu; NovaSol; Oceanit; and one concerned individual.

 

     Your Committee received written comments on this measure from the Department of Taxation, Hawaii Strategic Development Corporation, High Technology Development Corporation, Tax Foundation of Hawaii, and one concerned individual.

 

     Your Committee finds that the income tax credit for qualified research activities encourages job growth in research and development.  Your Committee also finds that this measure will contribute to the diversification of the State's economy by creating and maintaining science, technology, engineering, and mathematics jobs in the State.

 

     Your Committee has amended this measure by:

 

     (1)  Specifying that, in order to claim the state income tax credit, a taxpayer must also claim the corresponding federal tax credit under section 41 of the Internal Revenue Code;

 

     (2)  Providing that the Department of Business, Economic Development, and Tourism shall collaborate with the Department of Taxation in conducting its studies on the effectiveness of the tax credit;

 

     (3)  Providing that the tax credit shall apply to taxable years beginning after December 31, 2013, rather than December 31, 2010;

 

     (4)  Changing the effective date to July 1, 2050, to facilitate further discussion on the measure; and

 

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

 

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1349, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1349, S.D. 2.

 


Respectfully submitted on behalf of the members of the Committee on Ways and Means,

 

 

 

____________________________

DAVID Y. IGE, Chair