STAND. COM. REP. NO.  288-08

Honolulu, Hawaii

                , 2008

RE:   H.B. No. 2778

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Sir:

     Your Committee on Economic Development & Business Concerns, to which was referred H.B. No. 2778 entitled:

"A BILL FOR AN ACT RELATING TO TAX CREDITS,"

begs leave to report as follows:

     The purpose of this bill is to require the Department of Business, Economic Development, and Tourism (DBEDT) to conduct a comprehensive study to determine the social and economic benefits, if any, derived from state tax credits provided by the Legislature.

     DBEDT testified in support of the intent of this bill.  The Department of Taxation (DOTax), PacifiCap Group, and Hawaii Venture Capital Association opposed this measure.  The Hawaii Science & Technology Council and Tax Foundation of Hawaii offered comments.

     Your Committee understands that DOTax is looking into what information can be released for the study without compromising confidentiality.  Your Committee also notes that requiring the study to be completed prior to the 2009 Regular Session may be too short of a time, and defers to the Committee on Finance regarding the amount that should be appropriated for the study.

     Your Committee has amended this bill by:

     (1)  Changing the scope of the study to the social and economic impact of state tax credits, rather than just their benefits; 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 Economic Development & Business Concerns that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2778, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2778, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Economic Development & Business Concerns,

____________________________

KYLE T. YAMASHITA, Chair