Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Agriculture, to which was referred S.B. No. 1264 entitled:

begs leave to report as follows:

The purpose of this measure is to include in the definition of "sales at wholesale" for purposes of the general excise tax laws, items needed for aquaculture production.

Your Committee received testimony in favor of this measure from the Department of Agriculture, CEATECH USA, and Hawaii Aquaculture Association. The Department of Taxation submitted testimony in opposition to this measure. The Tax Foundation of Hawaii submitted comments.

Your Committee finds that Hawaii's aquaculture industry is growing. However, more needs to be done to support and encourage development of this international multi-million dollar industry in the State. By applying the wholesale tax rate to items purchased for aquaculture, Hawaii's aquaculture industry will expand and be better able to compete worldwide.

Your Committee has amended this measure by:

As affirmed by the record of votes of the members of your Committee on Agriculture that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1264, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1264, S.D. 1, and be referred to the Committee on Ways and Means.