STAND. COM. REP. 854

Honolulu, Hawaii

, 2003

RE: H.B. No. 1394

H.D. 2

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Finance, to which was referred H.B. No. 1394, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION TO STIMULATE THE ECONOMY,"

begs leave to report as follows:

The purpose of this bill is to provide tax incentives for the development of commercial construction projects, with enhanced tax credits for large-scale projects, and additional tax exemptions for certain projects.

The Pacific Resource Partnership, PLA Incorporated, Retail Merchants of Hawaii, Land Use Research Foundation of Hawaii, Chamber of Commerce of Hawaii, Laborers' Union Local 368, and American Institute of Architects submitted testimony in support of this measure. Cendant Corporation/Fairfield Resorts, the Waikiki Improvement Association, Outrigger Hotels & Resorts, Hawaii Construction Industry Association, Hawaii Business Roundtable, and Hawaii Hotel Association supported this bill, but recommended amendments. The Department of Taxation and Tax Foundation of Hawaii submitted comments.

Your Committee has amended this bill by:

(1) Leaving the percentages of the tax credits blank to promote further discussion;

(2) Providing that the large-scale tax credit may only be claimed upon a declaration by the Governor when revenue collections at the close of each of two successive fiscal years exceed 7.5 percent of the general fund revenues for each of the two fiscal years;

(3) Requiring "qualified construction project costs" to be incurred before January 1, 2006;

(4) Amending the effective date so that the Act will:

(A) Apply to taxable years beginning after December, 2002; and

(B) Be repealed on January 1, 2007.

(5) Removing the provisions for additional tax exemptions; and

(6) Making technical, nonsubstantive amendments for clarity, consistency, and style.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1394, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 1394, H.D. 2.

Respectfully submitted on behalf of the members of the Committee on Finance,

 

____________________________

DWIGHT Y. TAKAMINE, Chair