STAND. COM. REP. NO.  1146

Honolulu, Hawaii

                , 2011

RE:   S.B. No. 1496

      S.D. 1

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

Sir:

     Your Committee on Economic Revitalization & Business, to which was referred S.B. No. 1496, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO ENTERPRISE ZONES,"

begs leave to report as follows:

     The purpose of this bill is to support the aerospace industry in Hawaii by including the development and operation of space exploration and lunar research related activities within the definition of "eligible business activity" under the State's Enterprise Zone program.

     The University of Hawaii at Hilo, Mars Institute, Real World Design, Challenge, Pacific International Space Center for Exploration Systems, The Aerospace States Association, Pacific International Space Alliance, Onizuka Space Center, Hawaii State Aerospace Advisory Committee, Pacific Aviation Museum Pearl Harbor, Hawaii Academy of Science, Enterprise Honolulu, and several concerned individuals supported this bill.  The Department of Business, Economic Development, and Tourism and Department of Taxation supported the intent of this measure.  The Tax Foundation of Hawaii submitted comments.

     Your Committee notes that incentives provided by this measure will help to stimulate economic growth for Hawaii and for our international partners such as Japan, which is particularly important in light of the current economic hardships experienced by Japan and Hawaii as a result of the devastating earthquake and tsunami of March 11, 2011.

     Your Committee has amended this measure by changing its effective date to July 1, 2112, to encourage further discussion.

     As affirmed by the record of votes of the members of your Committee on Economic Revitalization & Business that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1496, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1496, S.D. 1, H.D. 1, and be referred to the Committee on Finance.

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

____________________________

ANGUS L.K. McKELVEY, Chair