STAND. COM. REP. NO. 309

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1323
                                        S.D. 1




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

Sir:

     Your Committees on Economic Development and Education and
Technology, to which was referred S.B. No. 1323 entitled: 

     "A BILL FOR AN ACT RELATING TO THE HIGH TECHNOLOGY BUSINESS
     INVESTMENT TAX CREDIT,"

beg leave to report as follows:

     The purpose of this measure is to provide an investment tax
credit for high technology business ventures.

     Testimony in support of this measure was received from the
Department of Business, Economic Development, and Tourism, the
Department of Taxation, the University of Hawaii, the High
Technology Development Corporation, the Kauai Economic
Development Board, and the Estate of James Campbell.  The Tax
Foundation of Hawaii commented on the measure.

     Your Committees find that an especially critical problem for
high technology industries is access to capital.  These
technology intensive companies have unique requirements for
research and development expenditures though there may be little
or no revenue for years.  This measure encourages a wide range of
taxpayers, including individuals and venture capital firms, to
invest in companies which have economic activity in Hawaii.  Thus
contributing to the diversification of Hawaii's economy through
the development of emerging industries.


 
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                                   STAND. COM. REP. NO. 309
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     Your Committees have made technical, nonsubstantive
amendments to clarify Internal Revenue Code references and to
change formatting to reflect preferred drafting style.

     As affirmed by the records of votes of the members of your
Committees on Economic Development and Education and Technology
that are attached to this report, your Committees are in accord
with the intent and purpose of S.B. No. 1323, as amended herein,
and recommend that it pass Second Reading in the form attached
hereto as S.B. No. 1323, S.D. 1, and be referred to the Committee
on Ways and Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Economic
                                   Development and Education and
                                   Technology,



____________________________       ______________________________
DAVID Y. IGE, Chair                LORRAINE R. INOUYE, Chair

 
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