Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Agriculture, to which was referred H.B. No. 1976 entitled:

begs leave to report as follows:

The purpose of this bill is to authorize up to $2,300,000 in special purpose revenue bonds (SPRBs) for the purpose of assisting Gay & Robinson, Inc., in purchasing a sugar and molasses terminal facility at Nawiliwili on the island of Kauai.

Testimony in support of this bill was submitted by the Mayor of the County of Kauai, Chair of the Kauai County Council, Kauai Chamber of Commerce, Agribusiness Development Corporation, Kauai County Farm Bureau, BEI Hawaii, Hawaiian Sugar and Transportation Cooperative, Kauai Veterans' Express Co., Ltd., Marsh USA, Inc., Gay & Robinson, Inc., a representative of Pacific Service and Development Corporation on Kauai, West Kauai Irrigation Cooperative, a representative from Syngenta Seeds, Inc., Hawaii Farm Bureau Federation, Hawaiian Commercial and Sugar Company, and two concerned citizens. The Department of Budget and Finance (B&F) offered comments.

Your Committee recognizes that B&F has voiced concerns with respect to this measure. The sugar and molasses facility to be purchased under this bill may not qualify under federal law as a processing enterprise. Furthermore, federal law does not permit refinancing for the purpose of converting taxable debt to tax-exempt debt.

Despite these concerns, your Committee recognizes the importance of this measure in providing jobs and economic stability for the people of Kauai and believes that the economic benefits of this bill outweigh the concerns raised. Your Committee strongly recommends that Gay & Robinson, Inc., address these issues as this bill makes its way through the legislative process.

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 H.B. No. 1976 and recommends that it pass Second Reading and be referred to the Committee on Finance.