STAND. COM. REP. NO. 1388-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 2945
                                     S.D. 1
                                     H.D. 3




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Finance, to which was referred S.B. No.
2945, S.D. 1, H.D. 2, entitled: 

     "A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

     The purpose of this bill is to:

     (1)  Impose the use tax on contracting imported for resale
          or use in Hawaii;

     (2)  Provide pyramiding relief from the general excise tax
          for the sale of amusements;

     (3)  Provide a lower public services company tax rates on
          telecommunications services and transportation services
          that are resold to contractors; and

     (4)  Make technical amendments to statutory provisions
          enacted under Acts 70 and 71, Session Laws of Hawaii
          1999.

     The Department of Taxation, the Hawaii Hotel Association,
the American Institute of Architects, and AT&T testified in
support of this measure.  The Tax Foundation of Hawaii, GTE,
Honolulu Freight Service, Emery Worldwide, and Con-Way
Transportation Services submitted comments.


 
 
                                 STAND. COM. REP. NO. 1388-00
                                 Page 2

 
     Your Committee has amended this measure by:

     (1)  Deleting contract carriers from the public service
          company tax relief;

     (2)  Making technical amendments relating to the effective
          date of the bill; and

     (3)  Making other technical, nonsubstantive amendments for
          purposes of clarity and style.

     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 S.B. No.
2945, S.D. 1, H.D. 2, as amended herein, and recommends that it
pass Third Reading in the form attached hereto as S.B. No. 2945,
S.D. 1, H.D. 3.

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



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair