Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Agriculture, to which was referred S.B. No. 369, S.D. 3, entitled:

begs leave to report as follows:

The purpose of this bill is to provide an agricultural infrastructure improvement tax credit for the cost of agriculture infrastructure improvements made by the taxpayer for the taxable year in which the improvements were made.

The Department of Agriculture and Hawaii Farm Bureau Federation testified in support of the intent of this bill. The Tax Foundation of Hawaii and Pineapple Growers Association of Hawaii submitted comments on this bill. The Department of Taxation opposed this bill.

Your Committee finds that the devastating effects of extended periods of a drought on farmers can be minimized by the construction and restoration of water storage facilities and alleviate shortage of water problems.

Upon further consideration your Committee has amended this bill by deleting its contents and inserting section 1 of H.B. 1074, H.D. 2 and making additional amendments. As amended, this bill establishes an income tax credit for the construction of drought irrigating water storage facilities.

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. 369, S.D. 3, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 369, S.D. 3, H.D. 1, and be referred to the Committee on Finance.