STAND. COM. REP. NO.192-02

Honolulu, Hawaii

, 2002

RE: H.B. No. 2574

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Economic Development and Business Concerns, to which was referred H.B. No. 2574 entitled:

"A BILL FOR AN ACT RELATING TO AN EXTENSION OF THE RESIDENTIAL CONSTRUCTION AND REMODELING INCOME TAX CREDIT,"

begs leave to report as follows:

The purpose of this bill is to stimulate economic activity in the residential construction industry by:

(1) Extending the residential construction and remodeling income tax credit to include costs incurred up to December 31, 2005;

(2) Applying the credit to costs incurred on or after October 1, 2001, to target the credit for the period after the September 11, 2001, terrorist attacks;

(3) Clarifying the definition of "construction or remodeling cost"; and

(4) Clarifying the original credit provisions to give the Department of Taxation (DOTAX) clearer guidance on the administration of the credit.

Testimony in support of this measure was submitted by the American Institute of Architects Hawaii State Council, DOTAX, Hawaii Association of Realtors, Visitor Industry Coalition, and the General Contractors Association of Hawaii.

The Building Industry Association of Hawaii, Brookfield Homes-Hawaii Region, Armstrong Builders, Ltd., Subcontractors Association of Hawaii, and the Land Use Research Foundation of Hawaii supported the intent of this bill. The Tax Foundation of Hawaii offered comments.

Your Committee notes that concerns have been raised regarding construction or remodeling costs that qualify for the residential construction and remodeling income tax credit. Your Committee recognizes that certain items such as attached personal property do not qualify for the tax credit. In addition, DOTAX has offered revisions to the language defining construction or remodeling costs that qualify for the tax credit. Your Committee supports future legislative efforts to address these concerns.

As affirmed by the record of votes of the members of your Committee on Economic Development and Business Concerns that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2574 and recommends that it pass Second Reading and be referred to the Committee on Finance.

 

Respectfully submitted on behalf of the members of the Committee on Economic Development and Business Concerns,

 

____________________________

LEI AHU ISA, Chair