STAND. COM. REP. NO. 379

Honolulu, Hawaii

, 2005

RE: H.B. No. 1200

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committees on Agriculture and Economic Development & Business Concerns, to which was referred H.B. No. 1200 entitled:

"A BILL FOR AN ACT RELATING TO STATE ENTERPRISE ZONES,"

beg leave to report as follows:

The purpose of this bill is to address specific concerns of agricultural businesses operating under the State Enterprise Zone (EZ) Program by establishing that agricultural businesses shall remain eligible for all EZ tax incentives during any period caused by a force majeure event, such as pest outbreaks or damaging weather. In addition, this bill:

(1) Extends the eligibility period for agricultural businesses under the EZ Program by the duration, in months, of the force majeure event; and

(2) Allows agricultural businesses to meet annual gross revenue requirements if the businesses are unable to meet annual full-time employee requirements of the EZ Program.

The Big Island Farm Bureau and Hawaii Agriculture Research Center supported this bill. The Department of Taxation, Department of Agriculture, and Department of Business, Economic Development, and Tourism supported the intent of this measure.

Your Committees have amended this measure by:

(1) Specifically allowing DBEDT to extend all EZ tax incentives to existing qualified agricultural businesses for no more than the number of months of the duration of the force majeure event;

(2) Expanding the definition of "force majeure event" to include any other causes similar or dissimilar to the list of events already included in the definition;

(3) Deleting the unnecessary provision that includes agricultural growth as part of the purpose of the EZ Program, since agricultural businesses are already included as businesses in the EZ Program;

(4) Including leased employees and employees under a joint employer relationship in the definition of "full-time employee";

(5) Repealing obsolete provisions relating to the eligibility of certain areas on Kauai and the Waialua district on Oahu for designation as an EZ;

(6) Repealing the prohibition on duplication of existing state tax incentives to qualified business firms which locate in an EZ;

(7) Establishing that if any tax credit or exemption is claimed under the EZ Program, then no taxpayer shall claim a credit or exemption for the same taxes under any other provision of law; and

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

As affirmed by the records of votes of the members of your Committees on Agriculture and Economic Development & Business Concerns that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1200, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 1200, H.D. 1, and be referred to the Committee on Finance.

 

 

Respectfully submitted on behalf of the members of the Committees on Agriculture and Economic Development & Business Concerns,

 

____________________________

ROBERT N. HERKES, Chair

____________________________

FELIPE P. ABINSAY, JR., Chair