STAND. COM. REP. NO.  1092

Honolulu, Hawaii

                , 2007

RE:   H.B. No. 1923

      H.D. 2

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Sir:

     Your Committee on Finance, to which was referred H.B. No. 1923, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO STATE ENTERPRISE ZONES,"

begs leave to report as follows:

     The purpose of this bill is to build some flexibility into the State Enterprise Zone Program (Program) to recognize the unique circumstances of agricultural businesses and allow more of these businesses to survive and prosper under the Program by:

     (1)  Allowing agricultural businesses whose operations are affected by a "force majeure event," i.e., a damaging natural disaster beyond their control, to remain eligible for tax incentives under the Program;

     (2)  Extending the seven-year Program benefit period for the time that a business' operations are affected by a force majeure event;

     (3)  Providing businesses that are unable to meet the required increases in the number of annual full-time employees under the Program, the alternative of meeting annual gross revenue requirements; and

     (4)  Including leased employees and employees under a joint employer relationship within the definition of "full-time employee."

     The Department of Business, Economic Development, and Tourism, Office of Planning, Department of Agriculture, Maui County Farm Bureau, and Hawaii Aquaculture Association testified in support of this bill.  The Tax Foundation of Hawaii provided comments.

     Your Committee has amended this bill by:

     (1)  Changing the effective date to July 1, 2020, to encourage further discussion; and

     (2)  Making technical, nonsubstantive amendments for clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1923, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 1923, H.D. 2.

Respectfully submitted on behalf of the members of the Committee on Finance,

____________________________

MARCUS R. OSHIRO, Chair