Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Economic Development and Business Concerns, to which was referred H.B. No. 2220 entitled:

begs leave to report as follows:

The purpose of this bill is to remove tax barriers to the reorganization of the business structure of firms that wish to establish an employee stock ownership plan.

The Legislative Information Services of Hawaii, Clinical Laboratories of Hawaii, LLP, and a concerned individual submitted testimony in support of this measure. The Department of Taxation opposed this measure. The Tax Foundation of Hawaii commented on this measure.

Your Committee respectfully requests that your Committee on Finance address the impact of this measure on the General Fund.

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 is in accord with the intent and purpose of H.B. No. 2220 and recommends that it pass Second Reading and be referred to the Committee on Finance.