STAND. COM. REP. NO. 1428

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: S.B. No. 744
                                     S.D. 1
                                     H.D. 1




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

Sir:

     Your Committees on Economic Development and Business
Concerns and Consumer Protection and Commerce, to which was
referred S.B. No. 744, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO TAXATION,"

beg leave to report as follows:

     The purpose of this bill is to exempt certain activities of
call centers from taxation.

     Testimony in support of this measure was submitted by the
Hawaiian Electric Company, the High Technology Development
Corporation, the Estate of James Campbell, and GTE Hawaiian Tel.
The Department of Taxation submitted testimony supporting the
intent of the bill and the Department of Business, Economic
Development, and Tourism submitted comments. 

     Your Committee has amended this measure by:

     (1)  Making technical, nonsubstantive amendments for
          purposes of clarity, consistency, and style;

     (2)  Clarifying the definition of a call center to require
          that there be the equivalent of five or more full-time
          customer or technical service representatives; and


 
 
 
 
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     (3)  Providing that this measure shall be repealed as of
          January 1, 2003 to allow the Legislature to examine
          whether this tax incentive has provided the expected
          economic stimulus. 

     As affirmed by the records of votes of the members of your
Committees on Economic Development and Business Concerns and
Consumer Protection and Commerce that are attached to this
report, your Committees are in accord with the intent and purpose
of S.B. No. 744, S.D. 1, as amended herein, and recommend that it
pass Second Reading in the form attached hereto as S.B. No. 744,
S.D. 1, H.D. 1, and be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Economic
                                   Development and Business
                                   Concerns and Consumer
                                   Protection and Commerce,

                                   
                                   
                                   
                                   
______________________________     ______________________________
RON MENOR, Chair                   ROBERT N. HERKES, Chair