STAND. COM. REP. NO. 3023

Honolulu, Hawaii

RE:    H.B. No. 2984

       H.D. 2

       S.D. 2

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2010

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred H.B. No. 2984, H.D. 2, S.D. 1, entitled:

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

begs leave to report as follows:

     The purpose of this measure is to extend the tax credit for research activities from December 31, 2010, to December 31, 2011.

     The measure also provides that the extension of the tax credit is contingent upon the passage of the final senate drafts of either House Bill No. 2877 or House Bill No. 2962, or both, by both houses of the Legislature.

     Your Committee received written comments in support of this measure from the Chamber of Commerce of Hawaii.  The Hawaii Science and Technology Council and the Tax Foundation of Hawaii submitted comments on the measure.  The written comments may be reviewed on the Legislature's website.

     Your Committee finds that questions have been raised as to whether the tax incentives provided by the technology infrastructure renovation tax credit and the high technology business investment tax credit have resulted in substantial new employment or on-going enterprises.  Your Committee also finds that, given the current economic downturn, these tax credits have caused a significant tax burden that has been shouldered by all taxpayers.

     Accordingly, your Committee has amended this measure by:

     (1)  Repealing the technology infrastructure renovation tax credit and the high technology business investment tax credit; and

     (2)  Deleting the contingency provisions and changing the effective date to July 1, 2050, to facilitate further discussion on the measure.

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2984, H.D. 2, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 2984, H.D. 2, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

DONNA MERCADO KIM, Chair