Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committees on Economic Development and Science, Arts, and Technology, to which was referred H.B. No. 2191, H.D. 1, entitled:

beg leave to report as follows:

The purpose of this measure is to remove provisions that restrict telecommunication service providers from being designated a qualified business in an enterprise zone.

Testimony in support of the measure was received from the Department of Business, Economic Development, and Tourism; the Department of Hawaiian Home Lands; Sandwich Isles Communications Inc.; Hawaii Reserves, Inc.; Nanakuli Housing Corporation; and Hawaiian Homestead Technology, Inc. The Department of Taxation offered comments on the measure.

Your Committees find that this measure enables a telecommunication service provider to be designated as a qualified business for enterprise zone purposes provided that these providers are engaged in telecommunication-related business within an enterprise zone and also deliver a majority of telecommunication-related services in that same enterprise zone or in another enterprise zone. Moreover, this measure also designates services provided by broad band distributed switching networks as an eligible business for enterprise zone purposes. This measure will not only increase access to critical telecommunication services for communities residing in these enterprise zones, such as Native Hawaiian homesteaders, but also stimulate much-needed economic growth and activity in these communities.

As affirmed by the records of votes of the members of your Committees on Economic Development and Science, Arts, and Technology that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 2191, H.D. 1, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 2191, H.D. 1, S.D. 1, and be referred to the Committee on Ways and Means.