STAND. COM. REP. NO. 2847

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2607
                                        H.D. 2
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Economic Development, to which was
referred H.B. No. 2607, H.D. 2, entitled: 

     "A BILL FOR AN ACT RELATING TO HIGH TECHNOLOGY,"

begs leave to report as follows:

     The purpose of this measure is to expand and clarify high
technology business incentive provisions in the State tax law.

     Testimony in favor of this measure was submitted by the
Department of Taxation and High Technology Development
Corporation.  The Tax Foundation of Hawaii submitted comments.

     Your Committee finds that this measure would enhance the tax
benefits provided in Act 178, Session Laws of Hawaii (SLH) 1999,
for qualified high technology businesses, and that the proposed
changes are in response to industry recommendations to enhance
those incentives.

     Your Committee previously heard and passed the companion
measure, S.B. No. 2948, S.D. 1, and has amended this measure to
incorporate the changes made to the Senate bill, with technical
changes to conform the bill to the preferred drafting style.
These technical changes include splitting section 235-2.4, Hawaii
Revised Statutes (HRS), into two sections, 235-2.4 and 235-2.45.
Section 235-2.4, HRS, is often amended, has become unwieldy, and
the preferred drafting style requires that the entire section be

 
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                                   STAND. COM. REP. NO. 2847
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set out for any amendment.  As a precedent, Act 19, SLH 1985,
performed a similar split.

     In addition, your Committee has made amendments to conform
the language in the definition of "computer data" in section
235-9.5, and section 235-110.9, HRS, and to change the effective
date to apply to taxable years beginning after December 31, 1999.

     As affirmed by the record of votes of the members of your
Committee on Economic Development that is attached to this
report, your Committee is in accord with the intent and purpose
of H.B. No. 2607, H.D. 2, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B.
No. 2607, H.D. 2, S.D. 1, and be referred to the Committee on
Ways and Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Economic
                                   Development,



                                   ______________________________
                                   LORRAINE R. INOUYE, Chair

 
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