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 Transportation, Military Affairs, and Government Operations, to which was referred H.B. No. 2661, H.D. 1, entitled:

beg leave to report as follows:

The purpose of this measure as received is to assist individuals and businesses surrounding military installations in obtaining financing for economic development projects that address future realignment or the closure of a military installation.

Prior to the hearing, your Committees circulated a Proposed SD1 on this measure. As proposed, this measure renames and amends the Hawaii 3Rs school repair and maintenance fund and related tax credits for the expansion of the Project EAST (environmental and spatial technology) initiative in Hawaii's public schools.

Testimony in support of the proposed measure was received from the Department of Taxation, the Hawaii State Teachers Association, and one individual. Hawaii 3Rs testified in opposition to the measure. The Tax Foundation of Hawaii offered comments on the measure.

Your Committees find that this proposed bill is modeled after the highly successful Hawaii 3Rs program, which was established in 2001 to address the growing backlog of public school repair and maintenance. This measure would expand that public-private initiative to include the expansion of technology laboratories, such as those in Project EAST.

Your Committees have heard a number of concerns expressed by Hawaii 3Rs, regarding the difference in scope of the two components, funding restrictions, and agency designations. Your Committees believe these concerns are important considerations and have amended the proposed language to reflect these concerns.

Your Committees have amended this measure by:

As affirmed by the records of votes of the members of your Committees on Economic Development and Transportation, Military Affairs, and Government Operations that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 2661, H.D. 1, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 2661, H.D. 1, S.D. 1, and be referred to the Committee on Ways and Means.