The state's controversial high-technology tax credits are the subject of at least half a dozen bills submitted to the legislature, including two from Gov. Linda Lingle's office that seek to limit the program.

Among other bills is one that would extend the program as it is until 2015, while another seeks to kill it along with other tax credits offered by the state.

The tax credits have come in for scrutiny this year as the state looks to close a projected $865 million budget shortfall in the coming two fiscal years. The program, commonly referred to as Act 221, provides a 100 percent tax credit to Hawai'i residents investing in local technology companies and another 20 percent tax research credit for companies.

"The cost is clearly one of the concerns we looked at," said Linda Smith, senior adviser to Lingle, in speaking about the bills yesterday at a legislative informational briefing. She said the state has difficulty planning since it does not know how much will be claimed from year to year.

The state Department of Taxation has estimated the investment credit cost the state $657.5 million for investments made between 1999 and 2007. In 2007, companies receiving investments employed about 4,500 employees and independent contractors.

The high-technology industry has rallied to defend the program, and yesterday dozens of company owners and workers turned out to express their support for keeping the credits as is. The group has challenged the state's estimate of tax credits, saying only $431.6 million have been claimed, and argues the program has been successful in attracting several times that amount of investment — $1.2 billion.

"The crucial thing here in these tough times is to grow our economy," said Shan Steinmark, an Act 221 investor.

Proponents also say cutting the program makes no sense at a time when the state is losing jobs and wants to increase the number of high-paying jobs in industries outside of tourism and construction. David Watumull, president of 'Aiea-based Cardax Pharmaceuticals, said cutting Act 221 could result in hundreds if not thousands of jobs being lost here.

One of the Lingle administration bills, HB1156, would tighten company requirements to qualify for the investment tax credit, while eliminating a feature that allowed local investors to double up on credits. It also would increase the the amount the state could seek back from investors in certain circumstances.

The other bill, HB1157, sets a cap on the tax credits at $160 million over the next 18 months, along with setting a $10 million maximum in credits that can be applied for each company annually.

Lowell Kalapa, head of the Tax Foundation of Hawaii, criticized the program at the hearing and said the state may have been better off looking at ways to improve the business climate for all companies than setting up the program.