STAND. COM. REP. NO. 1606

Honolulu, Hawaii

, 2019

RE: S.B. No. 965

S.D. 1

H.D. 1

Honorable Scott K. Saiki

Speaker, House of Representatives

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committee on Economic Development & Business, to which was referred S.B. No. 965, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose of this measure is to:

(1) Increase the state tax credit for research activities to an unspecified portion of the allowable federal tax credit;

(2) Allow for the recapturing of the credit if the business no longer qualifies within a five-year period after the credit was first claimed; and

(3) Amend the qualifying tax years.

The O‘ahu County Committee on Legislative Priorities of the Democratic Party of Hawai‘i, Makai Ocean Engineering, Inc., Maui Chamber of Commerce, The Chamber of Commerce Hawaii, and a concerned individual testified in support of this measure. The Department of Taxation, Hawaii Technology Development Corporation, and Tax Foundation of Hawaii provided comments on this measure.

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

As affirmed by the record of votes of the members of your Committee on Economic Development & Business that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 965, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 965, S.D. 1, H.D. 1, and be referred to your Committee on Finance.

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

____________________________

ANGUS L.K. McKELVEY, Chair