STAND. COM. REP. NO. 1013

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 119
                                     H.D. 2




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.
119, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO INCOME TAXATION,"

begs leave to report as follows:

     The purpose of this bill is to encourage investment in
Hawaii businesses by increasing the four percent tax credit for
the purchase of capital goods as follows:

     (1)  10 percent for taxable years beginning after December
          31, 1998;

     (2)  8 percent for taxable years beginning after December
          31, 2001; and

     (3)  4.5 percent for taxable years beginning after December
          31, 2003, and thereafter.

     The Department of Taxation testified in support of the
intent of this measure.

     Your Committee has amended this measure by:

     (1)  Deleting the specified percentages; and

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


 
 
                                 STAND. COM. REP. NO. 1013
                                 Page 2

 
     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.
119, H.D. 1, as amended herein, and recommends that it pass Third
Reading in the form attached hereto as H.B. No. 119, H.D. 2.

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



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair