STAND. COM. REP. NO. 73

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1427
                                        




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Economic Development, to which was
referred S.B. No. 1427 entitled: 

     "A BILL FOR AN ACT RELATING TO AQUACULTURE,"

begs leave to report as follows:

     The purpose of this measure is to expand the definition of
"wholesaler" in the general excise tax law to include
transactions carried on in the business of aquaculture
production.

     Your Committee received testimony in support of this measure
from the Department of Agriculture, Boat Owners Association of
The State of Hawaii, and the Hawaii Aquaculture Association.  The
Department of Taxation submitted testimony in opposition.  The
Tax Foundation of Hawaii submitted comments.

     Your Committee finds that under current law, many of the
items aquaculture farmers purchase to use in aquaculture
production, including equipment, feed, and materials are subject
to the retail general excise tax rate.

     Your Committee is in support of this measure and believes it
will provide the aquaculture industry with the same tax benefits
provided to other wholesalers and individuals in agriculture.

     As affirmed by the record of votes of the members of your
Committee on Economic Development that is attached to this
report, your Committee is in accord with the intent and purpose

 
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                                   STAND. COM. REP. NO. 73
                                   Page 2


of S.B. No. 1427 and recommends that it pass Second Reading and
be referred to the Committee on Ways and Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Economic
                                   Development,



                                   ______________________________
                                   LORRAINE R. INOUYE, Chair

 
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