STAND

STAND. COM. REP. NO. 193

Honolulu, Hawaii

, 2005

RE: H.B. No. 955

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committees on Water, Land, & Ocean Resources and Agriculture, to which was referred H.B. No. 955 entitled:

"A BILL FOR AN ACT RELATING TO DROUGHT MITIGATING FACILITIES,"

beg leave to report as follows:

The purpose of this bill is to promote the construction of drought mitigation water storage facilities by:

(1) Increasing the amount of the Drought Mitigating Water Storage Facilities Tax Credit from four to 20 percent;

(2) Making the Tax Credit permanent; and

(3) Including costs for ancillary structures as qualifying costs for the Tax Credit.

The Department of Agriculture, Big Island Farm Bureau, Maui County Farm Bureau, Pineapple Growers Association of Hawaii, Hawaii Cattlemen's Council, Hawaii Agriculture Research Center, Hawaii Farm Bureau, Kaupo Ranch, Inc., C & H Farms, and other concerned individuals testified in support of this bill. The Tax Foundation of Hawaii provided comments on this bill. The Department of Taxation testified in opposition to this bill.

Your Committees find that this bill will assist agricultural related businesses by granting tax credits to upgrade facilities and structures designed to better use precious water resources.

As affirmed by the records of votes of the members of your Committees on Water, Land, & Ocean Resources and Agriculture that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 955 and recommend that it pass Second Reading and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committees on Water, Land, & Ocean Resources and Agriculture,

____________________________ FELIPE P. ABINSAY, JR., Chair		____________________________ EZRA R. KANOHO, Chair