STAND. COM. REP. NO.  1122

Honolulu, Hawaii

                , 2007

RE:   H.B. No. 902

      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. 902, H.D. 1, entitled:

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

begs leave to report as follows:

     The purpose of this bill is to provide financial incentives for agricultural development by establishing an important agricultural land agricultural business tax credit (Tax Credit) amounting to 100 percent of the qualified agricultural costs incurred by an agricultural business. 

     The Hawaii Farm Bureau Federation, Maui County Farm Bureau, Land Use Research Foundation of Hawaii, Alexander & Baldwin, Inc., Hawaiian Commercial & Sugar Company, and Kauai Coffee Company, Inc., supported this bill.  The Department of Agriculture (DOA) and the Hawaii Agriculture Research Center supported the intent of this bill.  The Department of Taxation (DOTAX), Agribusiness Development Corporation (ADC), and the Tax Foundation of Hawaii submitted comments.

     Your Committee has amended this measure by:

     (1)  Appropriating funds to DOA, instead of ADC, for administrative costs of the Tax Credit;

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

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

     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. 902, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 902, H.D. 2.

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

____________________________

MARCUS R. OSHIRO, Chair