You may have read by now that the Lingle Administration has chosen to cripple Act 221 in a short sighted attempt to balance the budget.

The administration intends to eliminate the research and development tax credit component of the act and materially change the intent of Act 221 in order to stem future tax revenues losses.

HVCA continues to assert that any changes to Act 221 will seriously affect Hawaii’s credibility with investors both here and on the mainland, ultimately setting back the clock on our attempts to diversify the economy with a viable tech sector.

We are in this budget crisis not because of Act 221 tax credits, but because of the lack of investment in diversifying the economy.

The state budget must be finalized by the Legislature by April 10. Tomorrow, (Friday, March 28, at 5 p.m., Room 308) the House Finance Committee is holding a critical decision making session regarding SB 1394 and SB1396.

These two bills are being used by the administration as vehicles to eliminate the current Act 221 related research and development tax credit and significantly change Act 221. I strongly encourage you to submit formal testimony today that underscores “no changes to Act 221.”

You should also contact your own legislator as well as all the members of the House Finance Committee who’s email addresses are listed below.

Although support in the legislature for Act 221 remains strong, we must continue to show legislators that we appreciate their vision and want them to stay united in allowing Act 221 to do the job it was intended to do.

I also encourage you to communicate with Governor Lingle and express your concern about her going back on her promise to let Act 221 run its course. The governor’s contact information is as follows:

*Email: gov@gov.state.hi.us

*Fax: 586-0006

*Phone: 586-0034

Please take these small steps to help preserve Act 221 and submit testimony today. Hawaii’s economic future depends on you.

”’Bill Spencer is the president of the Hawaii Venture Capital Association. He can be reached via email at spencer@mdster.com”’

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