STAND. COM. REP. NO. 2172

Honolulu, Hawaii

RE:    S.B. No. 2973

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii

Sir:

     Your Committees on Hawaiian Affairs and Water, Land, and Agriculture, to which was referred S.B. No. 2973 entitled:

"A BILL FOR AN ACT RELATING TO THE GENERAL EXCISE TAX,"

beg leave to report as follows:

     The purpose and intent of this measure is to establish a general excise tax at the wholesale rate of one-half of one percent for the gross proceeds or income from the sale of all products produced by Hawaiian loko i‘a.

     Your Committees received testimony in support of this measure from the Office of Hawaiian Affairs, Pacific American Foundation, and four individuals.  Your Committees received testimony in opposition to this measure from one individual.  Your Committees received comments on this measure from the Department of Taxation, Department of the Attorney General, and Tax Foundation of Hawaii.

     Your Committees note the testimony of the Department of Taxation expressing concerns that the Department of Taxation does not have the expertise to differentiate the products produced by Hawaiian loko i‘a from other similar products that may be produced and sold by other aquaculture systems.

     Accordingly, your Committees have amended this measure by:

     (1)  Inserting an effective date of July 1, 2050, to encourage further discussion; and

     (2)  Making a technical, nonsubstantive amendment for the purposes of clarity and consistency.

     As affirmed by the records of votes of the members of your Committees on Hawaiian Affairs and Water, Land, and Agriculture that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2973, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2973, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Hawaiian Affairs and Water, Land, and Agriculture,

________________________________ MIKE GABBARD, Chair

________________________________ MAILE S.L. SHIMABUKURO, Chair