STAND. COM. REP. NO.  273

 

Honolulu, Hawaii

                , 2007

 

RE:   H.B. No. 1923

      H.D. 1

 

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

 

Sir:

 

     Your Committees on Economic Development & Business Concerns and Agriculture, to which was referred H.B. No. 1923 entitled:

 

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

 

beg leave to report as follows:

 

     The purpose of this bill is to build some flexibility into the State Enterprise Zone Program (Program) to recognize the unique circumstances of agricultural businesses and allow more of these businesses to survive and prosper under the Program by:

 

(1)  Allowing agricultural businesses whose operations are affected by a "force majeure event," i.e., a damaging natural disaster beyond their control, to remain eligible for tax incentives under the Program;

 

(2)  Extending the seven year Program benefit period for the time that a business' operations are affected by a force majeure event;

 

(3)  Providing businesses unable to meet the required increases in the number of annual full-time employees, under the Program, the alternative of meeting annual gross revenue requirements; and

 

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

 

The Department of Agriculture, Department of Business, Economic Development, Hawaii Farm Bureau Federation, Hawaii Aquaculture Association, Enterprise Honolulu, Hawaii Agriculture Research Center, Hawaii Crop Improvement Association, and several concerned individuals provided testimony supporting this bill.

 

This bill recognizes that agricultural business are uniquely subject to factors beyond their control.  Farming is vulnerable to the unpredictable forces of nature, and seasonal crops and offshore volume pricing pressures make minimum employment requirements impossible to meet, particularly for small family farms.  By providing farmers alternatives to Program requirements that recognize agriculture's unique circumstances, this measure will support the growth and development of the agricultural industry, and thereby diversify our economy and increase our self-sufficiency.

 

Your Committees have amended this bill by:

 

(1)  Adding earthquakes to the list of possible force majeure events;

 

(2)  Making the provisions establishing new agricultural business qualifications for the Program effective retroactive to taxable years beginning after December 31, 2006, to make Program qualifying criteria uniform for the year; and

 

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

 

     As affirmed by the records of votes of the members of your Committees on Economic Development & Business Concerns and Agriculture that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1923, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 1923, H.D. 1, and be referred to the Committee on Finance.

 

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

 

 

____________________________

CLIFT TSUJI, Chair

 

____________________________

KYLE T. YAMASHITA, Chair