Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Economic Development and Business Concerns, to which was referred S.C.R. No. 6, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to request the University of Hawaii at Manoa Department of Urban and Regional Planning to conduct a study on the effects of big box retailers on local small and medium retail businesses.

Your Committee received testimony in favor of this measure from the Hawaii Food Industry Association, Citizens Against Reckless Development (oral testimony only), and one individual. Testimony in opposition to this measure was received from Wal-Mart. Your Committee also received comments on this measure from the Department of Business, Economic Development, and Tourism and the Legislative Reference Bureau.

Your Committee finds that, in the past few years, a number of "big box" retailers – those which typically sell in volume at discounted prices from warehouse-type operations – have established themselves in Hawaii, particularly on Oahu. Your Committee further finds that the activities of these retailers may have an adverse impact on small and medium sized locally owned businesses and that there is a need to obtain reliable data regarding the full economic impact on the State from big box retailers.

Upon further consideration, your Committee has amended this measure by:

1. Requesting the Legislative Reference Bureau, rather than the University of Hawaii at Manoa Department of Urban and Regional Planning, to conduct the study and giving the Bureau more of a coordinating role in collecting information from other state agencies to include in the study;
2. Requesting the Bureau to study not only the effects of big box retailers on local small and medium retail businesses, but also the positive impacts of those retailers on the local community, including benefits to consumers and economic revitalization;
3. Requesting the Department of Labor and Industrial Relations, the Department of Taxation, and the Department of Business, Economic Development, and Tourism to provide relevant information and data to the Bureau by August 31, 2003, and expanding the scope of the data and information that they are requested to obtain;
4. Requesting the Department of Labor and Industrial Relations to determine the number of employees employed by each of the various big box retailers in each location;
5. Requesting the Department of Taxation to determine the aggregate amounts of excise, income withholding, and property tax revenues generated by big box retailers in Hawaii;
6. Requesting the Department of Business, Economic Development, and Tourism, the Department of Taxation, and the Department of Labor and Industrial Relations to determine the aggregate number and types of small and medium locally owned retail businesses that are in competition with the big box retailers in any type of merchandise, and the estimated number of employees of these businesses, and amounts of excise, income withholding, and property tax revenues generated by these retail businesses;
7. Requesting the Department of Business, Economic Development, and Tourism to:

1. Determine the number, types, and locations of big box retailers in Hawaii;
2. Determine the estimated number and types of small and medium locally owned retail businesses that have closed due to adverse competition from big box retailers;
3. Determine whether, and if so the extent to which, big box retailers are able to negotiate preferential shipping rates compared to their smaller competitors for goods shipped to Hawaii;
4. Determine the comparative economic impact of big box retailers on Hawaii's economy by obtaining requisite data from big box retailers in Hawaii; developing such economic models as may be necessary; and analyzing and organizing the results produced from applying the economic models to the data obtained;
5. Obtain and develop data concerning any positive impacts of big box retailers on the local community, including benefits to consumers and economic revitalization;

1. Requesting the Senate Standing Committee on Economic Development and the House of Representatives Standing Committee on Economic Development and Business Concerns to hold public hearings, beginning in June 2003, to obtain additional information to assist the completion of this study and to monitor the progress of the designated agencies in obtaining and developing relevant information and data to be provided to the Legislative Reference Bureau; and
2. Requesting the Legislative Reference Bureau to report its findings and recommendations to the Legislature not later than twenty days prior to the convening of the Regular Session of 2004.

As affirmed by the record of votes of the members of your Committee on Economic Development and Business Concerns that is attached to this report, your Committee concurs with the intent and purpose of S.C.R. No. 6, S.D. 1, as amended herein, and recommends its adoption in the form attached hereto as S.C.R. No. 6, S.D. 1, H.D. 1.