STAND. COM. REP. NO.  1284

Honolulu, Hawaii

                , 2009

RE:   S.B. No. 1248

      S.D. 1

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

Sir:

     Your Committee on Energy & Environmental Protection, to which was referred S.B. No. 1248, S.D. 1, 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 assist agricultural and manufacturing businesses in the State Enterprise Zones Program (Program) survive and grow in a responsible manner during this difficult fiscal climate by:

     (1)  Allowing limited liability companies to qualify for the Program;

     (2)  Allowing the receipts, sales, and employees of a business's establishments in all enterprise zones located within a single county to count toward qualification requirements;

     (3)  Extending Program tax credits for seven additional years for qualified businesses engaged in manufacturing tangible personal property, or producing or processing agricultural products; and

     (4)  Removing the research, development, sale, or production of genetically-engineered medical, agricultural, and maritime biotechnology products as an eligible business activity.

     The Hawaii County Department of Research and Development supported this bill.  The Hawaiian Electric Company, Maui Electric Company, and Hawaii Electric Light Company supported this measure with amendments.  The Department of Taxation, Department of Business, Economic Development, & Tourism, and Hawaii Crop Improvement Association opposed this bill.  The Department of Agriculture and Tax Foundation of Hawaii provided comments.

     Your Committee received testimony suggesting revisions to  include other renewable energy sources in addition to wind energy for the production of electric power, and to restore the research, development, sale, or production of genetically-engineered agricultural, medical, and maritime biotechnology products, as eligible business activities within Enterprise Zones.

     Your Committee finds that the focus and essence of these revisions, as well as their implications, are outside the purview of the subject matter covered by this Committee.  Currently, wind energy facilities are a permitted use of land in an agricultural district based on their compatibility with agricultural activities, however, your Committee is hesitant to include other renewable energy technologies without further analysis of their impact.  As with the deletion of genetically-engineered agricultural, medical, and maritime biotechnology products, your Committee respectfully defers to the subsequent Committee to address the possibility of these revisions as this measure moves through the legislative process.  

     As affirmed by the record of votes of the members of your Committee on Energy & Environmental Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1248, S.D. 1, H.D. 1, and recommends that it be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Energy & Environmental Protection,

____________________________

HERMINA MORITA, Chair