STAND. COM. REP. NO. 245

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 678

       S.D. 1

 

 

 

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

 

Sir:

 

     Your Committee on Transportation and Energy, to which was referred S.B. No. 678 entitled:

 

"A BILL FOR AN ACT RELATING TO THE CAPITAL INFRASTRUCTURE TAX CREDIT,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to:

 

     (1)  Include structures, machinery, equipment, and capital assets in the definition of capital infrastructure costs for purposes of the capital infrastructure tax credit;

 

     (2)  Set a new maximum amount of capital infrastructure tax credits that may be issued in any taxable year per qualified infrastructure tenant;

 

     (3)  Specify that excess tax credits may be carried forward; and

 

     (4)  Specify that special purpose entities may qualify as a qualified infrastructure tenant.

 

     Your Committee received testimony in support of this measure from the Chamber of Commerce Hawaii, Pacific Shipyards, and five individuals.  Your Committee received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

 

     Your Committee finds that this measure supports the growth of commerce in the State and supports maritime jobs by helping displaced waterfront tenants at Honolulu Harbor raise financing and improve state-owned lands, from which the State will also receive significant lease rents.

 

     Your Committee has amended this measure on the recommendation of the Department of Taxation by:

 

     (1)  Clarifying that the qualified infrastructure tenant, together with all special purpose entities, is limited for purposes of claiming the tax credit, to capital infrastructure costs of $5,000,000 per taxable year and shall not claim any credit in any one year that exceeds $2,500,000;

 

     (2)  Providing a penalty for failure to submit the required information to the Department of Taxation; and

 

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

 

     As affirmed by the record of votes of the members of your Committee on Transportation and Energy that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 678, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 678, S.D. 1, and be referred to your Committee on Ways and Means.

 

Respectfully submitted on behalf of the members of the Committee on Transportation and Energy,

 

 

 

________________________________

LORRAINE R. INOUYE, Chair