STAND. COM. REP. NO. 3368

Honolulu, Hawaii

RE: S.B. No. 3035

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2020

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 3035, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose and intent of this measure is to establish an income tax credit to foster research and development in ocean and marine sciences.

Your Committee received written comments in support of this measure from Makai Ocean Engineering, Inc.

Your Committee received written comments on this measure from the Department of the Attorney General, Department of Taxation, Natural Energy Laboratory of Hawaii Authority, and Tax Foundation of Hawaii.

Your Committee finds that research and development in ocean sciences is an intrinsic and essential part of Hawaii's future sustainability. Your Committee believes that supporting and encouraging more research and development in ocean and marine sciences will foster and fuel innovative ideas and promote entrepreneurship that will better position Hawaii for future economic growth and expansion.

Your Committee has amended this measure by:

(1) Expanding the definition of "small business" to include businesses that employ no more than fifty employees and have revenues of less than $5,000,000 per year;

(2) Changing the effective date to July 1, 2050, to facilitate further discussion on the measure; and

(3) Making technical nonsubstantive amendments for purposes of clarity, consistency, and style.

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 S.B. No. 3035, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 3035, S.D. 2.

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

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DONOVAN M. DELA CRUZ, Chair