Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 1264, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to expand the "wholesaler" definition under the general excise tax law to include sales to a commercial aquaculture producer or cooperative of materials, supplies, or commodities, or the rental or leasing of equipment, used by the commercial aquaculture producer or cooperative in the production of aquaculture.

Your Committee finds that Hawaii's aquaculture industry is growing. However, more needs to be done to support and encourage development of this international multimillion-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 amended this measure by including an appropriation of $5 million to provide financial assistance to aquaculture and agriculture enterprises on Kauai by depositing the funds into the agricultural loan revolving fund and the aquaculture loan revolving fund and earmarking the funds for this purpose.

Your Committee also amended this measure by defecting the effective date as a means to channel this measure to conference.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1264, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1264, S.D. 2.