STAND. COM. REP. NO. 1038_______

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1027
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Finance, to which was referred H.B. No.
1027 entitled: 

     "A BILL FOR AN ACT RELATING TO TAX EXEMPTIONS FOR AVIATION
     TRAINING FACILITIES,"

begs leave to report as follows:

     The purpose of this bill is to support the State's efforts
to become an aviation training center for the Asia-Pacific region
by:

     (1)  Exempting from the general excise tax amounts received
          by an aviation training facility (facility) from the
          construction of a facility or for a certified training
          program; and

     (2)  Exempting from the use tax the use of materials, parts,
          or tools imported or purchased that are used by a
          facility for a certified training program or the
          construction of a facility.

     The Office of the Lieutenant Governor, the Department of
Taxation, the Department of Transportation, and the University of
Hawaii testified in support of this measure.  The Department of
Business, Economic Development, and Tourism supported the intent
of this bill.  The Tax Foundation of Hawaii offered comments.


 
 
 
 
                                 STAND. COM. REP. NO. 1038_______
                                 Page 2

 
     Your Committee has amended this bill by:

     (1)  Repealing the provisions of this bill on July 1, 2001;
          and

     (2)  Making technical, nonsubstantive amendments to the bill
          to conform to correct drafting 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.
1027, as amended herein, and recommends that it pass Third
Reading in the form attached hereto as H.B. No. 1027, H.D. 1.

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



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair