Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committees on Tourism and Intergovernmental Affairs and Transportation, Military Affairs and Government Operations, to which was referred S.B. No. 2907 entitled:

beg leave to report as follows:

The purpose of this measure is to establish a tax credit for qualified investment at Ko Olina Resort and Marina.

Testimony in support of this measure was received from Ko Olina Resort and Marina, Kewalo Basin Marine Mammal Laboratory, The Estate of James Campbell, Libertarian Party of Hawaii, and one individual. The Tax Department testified in opposition. The Tax Foundation of Hawaii submitted comments.

Your Committees find that Ko Olina Resort and Marina is well placed for the development of a centralized visitor attraction. The 652-acre resort is master planned, zoned, and approved for hotel, timeshare, commercial, and recreational development. The addition of educational activities that take advantage of Hawaii's location and resources, such as an aquarium and marine science center, would add considerably to the attraction.

Your Committees further find that the investments attracted by the tax credit proposed in this measure would have significant benefits to residents in the form of new jobs and leisure activities.

Your Committees have also heard concerns regarding several of the specific tax provisions of this measure. Your Committees find these concerns to be well considered and have amended this measure to:

As affirmed by the records of votes of the members of your Committees on Tourism and Intergovernmental Affairs and Transportation, Military Affairs and Government Operations that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2907, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2907, S.D. 1, and be referred to the Committee on Ways and Means.