STAND. COM. REP. NO. 1063

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 377
                                     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.
377, H.D. 1, entitled: 

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

begs leave to report as follows:

     The purpose of this bill is to spur economic development and
foster the growth of knowledge-based industries in Hawaii by:

     (1)  Requiring tourism market plans to target information
          industries and be integrated with existing and
          potential communications and information networks and
          services;

     (2)  Providing a technology-related job creation tax credit
          to offset the cost of technology-related job creation
          costs;

     (3)  Establishing the Hawaii Internet Exchange to serve as a
          catalyst for the development of internet-focused
          businesses;

     (4)  Providing for high-speed internet access for the
          University of Hawaii and the public schools;

     (5)  Accelerating work force development programs to create
          a pool of information technology professionals;


 
 
 
                                 STAND. COM. REP. NO. 1063
                                 Page 2

 
     (6)  Providing a tax credit for making increased
          expenditures in certain technological and scientific
          research and development; and

     (7)  Providing a tax credit for investing in high technology
          businesses.

     The Department of Education, the High Technology Development
Corporation, and the Evershine Group testified in support of this
bill.  The Department of Business, Economic Development, and
Tourism and the Hawaii Tourism Authority testified in support of
the intent of this bill.  The Department of Taxation, the
University of Hawaii, and the Tax Foundation of Hawaii commented
on this bill.

     Your Committee has amended this bill by:

     (1)  Deleting provisions which:

          (A)  Required tourism market plans to target
               information industries and be integrated with
               existing and potential communications and
               information networks and services; and

          (B)  Provided for high speed access to the internet for
               the University of Hawaii and the public schools;

          and

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

     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.
377, H.D. 1, as amended herein, and recommends that it pass Third
Reading in the form attached hereto as H.B. No. 377, H.D. 2.

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



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair