STAND. COM. REP. NO. 335

Honolulu, Hawaii

RE:    S.B. No. 436

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

Madam:

     Your Committees on Health and Economic Development and Technology, to which was referred S.B. No. 436 entitled:

"A BILL FOR AN ACT RELATING TO LIFE SCIENCES,"

beg leave to report as follows:

     The purpose of this measure is to provide a tax incentive for life sciences companies to conduct clinical trials in Hawaii.

     Your Committees received testimony in support of this measure from the American Cancer Society.  Your Committees received comments on this measure from the Department of Taxation.

     Written testimony presented to the Committee may be reviewed on the Legislature's website.

     This measure provides an income tax credit of fifteen per cent of qualified clinical trial costs concluded in counties of the State with a population greater than 700,000 residents.  If the clinical trial costs are incurred in a county of the State with a population equal to or less than 700,000, the percentage of the tax credit would be increased to twenty per cent.

     Your Committees find that life sciences companies that conduct clinical trials often create more and higher paying jobs that will help to keep our local graduates employed in the State.  Your Committees further find that clinical trials play an invaluable part in the battle against cancer.

     Your Committees have amended this measure by adopting recommendations submitted by the Department of Taxation by:

     (1)  Replacing the Department of Taxation with the Department of Business, Economic Development, and Tourism for the pre-qualification registration and administrative provisions; and

     (2)  Including a waiver for the research and development tax credits for any qualified clinical trial cost that has been financed by investments for which a credit was claimed under section 235-110.91, Hawaii Revised Statutes.

     As affirmed by the records of votes of the members of your Committees on Health and Economic Development and Technology that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 436, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 436, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Health and Economic Development and Technology,

____________________________ CAROL FUKUNAGA, Chair

____________________________ DAVID Y. IGE, Chair