STAND. COM. REP. NO. 458

Honolulu, Hawaii

, 2005

RE: S.B. No. 1186

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committees on Tourism and Business and Economic Development, to which was referred S.B. No. 1186 entitled:

"A BILL FOR AN ACT RELATING TO HOTEL CONSTRUCTION AND REMODELING TAX CREDIT,"

beg leave to report as follows:

The purpose of this measure is to adjust the hotel construction and remodeling tax credit to eight percent on January 1, 2006, to four percent on July 1, 2009, and to repeal the tax credit on July 1, 2012.

Testimony in support of this measure was provided by Cendant Corporation/Fairfield Resorts, Hawaii Hotel and Lodging Association, Hawaii Resort Developers Conference, the Hawaii Tourism Authority, Outrigger Hotels, ARDA-Hawaii, and the Subcontractors Association of Hawaii. Testimony in opposition to this measure was provided by the Department of Taxation. Comments were submitted by the Department of Business, Economic Development, and Tourism and the Tax Foundation of Hawaii.

Your Committees find that a tax credit is an excellent means to boost Hawaii's tourism and construction industries, and that extension of this tax credit is warranted. This tax credit will not only provide an incentive to hotel owners and contractors to remodel or build new hotels, it will also provide a wide range of employment positions that offer other opportunities for economic growth. A targeted tax credit aimed at full service hotels offers an option to offset the financial incentive of a conversion. Your Committees believe that this measure will encourage improvement and enhancement of the tourism industry, which includes improving the physical infrastructure for the comfort and enjoyment of visitors.

Your Committees have amended this measure by:

(1) Targeting the tax credit to qualified full service hotel facilities only;

(2) Defining qualified full service hotel facility; and

(3) Sunsetting the hotel construction and remodeling tax credit on July 1, 2012.

As affirmed by the records of votes of the members of your Committees on Tourism and Business and Economic Development that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1186, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1186, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Tourism and Business and Economic Development,

____________________________

WILL ESPERO, Chair

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DONNA MERCADO KIM, Chair