CONFERENCE COMMITTEE REPORT NO. 98

                            Honolulu, Hawaii
                                            , 1999

                            RE:   H.B. No. 377
                                  H.D. 2
                                  S.D. 2
                                  C.D. 1




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

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

Sir:

     Your Committee on Conference on the disagreeing vote of the
House of Representatives to the amendments proposed by the Senate
in H.B. No. 377, H.D. 2, S.D. 2, entitled:

    "A BILL FOR AN ACT RELATING TO ECONOMIC DEVELOPMENT,"

having met, and after full and free discussion, has agreed to
recommend and does recommend to the respective Houses the final
passage of this bill in an amended form.


     The purpose of this bill is to encourage the growth of
Hawaii's high technology industry to stimulate economic
development.

     In particular, this bill:

     (1)  Consolidates the State's high technology agencies,
          divisions, and offices, under the coordination of a
          special advisor for technology development, and creates

 
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          a Governor's special advisory council for technology
          development to assist the advisor;

     (2)  Offers tax incentives for technology training or job
          creation, investments in qualified high technology
          businesses, and investments in high technology
          research;

     (3)  Exempts from the general excise tax and income tax
          amounts received as royalty income from the sale or
          licensing of intellectual property developed for use in
          a qualified high technology business;

     (4)  Authorizes the issuance of special purpose revenue
          bonds to the Ohana Foundation for the construction of
          facilities for research, development, technology
          development, and technology support;

     (5)  Integrates high technology with Hawaii's tourism and
          marketing industries;

     (6)  Prohibits the imposition of taxes on internet access
          and commerce;

     (7)  Establishes the Hawaii internet exchange to serve as a
          catalyst for the development of internet-focused
          businesses;

     (8)  Focuses work force development programs to ensure a
          pool of technology professionals; and

     (9)  Accelerates high speed access to the internet for the
          University of Hawaii and the public schools, and
          establishes educational technology programs within
          public schools.

     Your Committee finds that there is a need to support the
growth and development of high technology industries in Hawaii.
Recent advances in information technology and telecommunications,
combined with the explosive growth of the internet, have opened
significant new opportunities for the diversification of the
State's economy.  Your Committee believes that the State must
take advantage of its unique geographic location and encourage
the development of Hawaii's high technology industry to help to
rebuild Hawaii's economy for the twenty-first century.


 
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     Your Committee on Conference has amended this bill by
deleting its contents except for part IV of the bill, which
authorizes the issuance of special purpose revenue bonds in an
amount not exceeding $100,000,000, to the Ohana Foundation, a
Hawaii not-for-profit corporation, for the construction of
facilities to assist the high technology industry including
facilities for research, development, technology development, and
technology support.

     Your Committee on Conference is in accord with the intent
and purpose of H.B. No. 377, H.D. 2, S.D. 2, as amended herein,
and recommends that it pass Final Reading in the form attached
hereto as H.B. No. 377, H.D. 2, S.D. 2, C.D. 1.

                                   Respectfully submitted,

MANAGERS ON THE PART OF THE        MANAGERS ON THE PART OF THE
           SENATE                              HOUSE
                                   
                                   
                                   
______________________________     ______________________________
DAVID IGE, Co-Chair                DAVID MORIHARA, Co-Chair
                                   
                                   
                                   
______________________________     ______________________________
LORRAINE INOUYE, Co-Chair          DWIGHT Y. TAKAMINE, Co-Chair
                                   
                                   
                                   
______________________________     ______________________________
CAROL FUKUNAGA, Co-Chair           JERRY L. CHANG, Co-Chair
                                   
                                   
                                   
______________________________     ______________________________
ANDREW LEVIN, Co-Chair             SYLVIA LUKE, Co-Chair
                                   
                                   
                                   
______________________________     ______________________________
NORMAN SAKAMOTO, Member            KEN ITO, Co-Chair

 
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______________________________     ______________________________
ROD TAM, Member                    BOB NAKASONE, Member
                                   
                                   
                                   
______________________________     ______________________________
SAM SLOM, Member                   NATHAN SUZUKI, Member
                                   
                                   
                                   
                                   ______________________________
                                   CHRIS HALFORD, Member
                                   
                                   
                                   
                                   ______________________________
                                   COLLEEN MEYER, Member

 
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