STAND. COM. REP. NO. 2934

 

Honolulu, Hawaii

                  

 

RE:    H.B. No. 2985

       H.D. 1

 

 

 

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

 

Madam:

 

     Your Committee on Tourism and Government Operations, to which was referred H.B. No. 2985, H.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO TAXATION,"

 

begs leave to report as follows:

 

     The purpose of this measure is to establish a hotel renovation tax credit.

 

     Specifically, the measure establishes a fifteen per cent income tax credit for hotel renovation costs.

 

     Your Committee received testimony in support of this measure from the Hawaii Tourism Authority, Hawaii Hotel & Lodging Association, and Outrigger Hotels.  Testimony in opposition was received from the Tourism Liaison and Unite Here! Local 5 Hawaii.  Comments were received from Department of Taxation and Tax Foundation of Hawaii.

 

     Your Committee notes that a similar hotel construction and remodeling tax credit was enacted by Act 195, Session Laws of Hawaii 2000, and was repealed by Act 9, Special Session Laws of Hawaii 2007, in accordance with a provision that did not extend the tax credit beyond December 31, 2005 (Act 10, Third Special Session 2001).  The December 31, 2005 expiration date was an extension of the original December 31, 2002 expiration on the basis of the need to provide an economic stimulus from the ramifications of the events of 9/11 (Senate Committee Report No. 2, Committee on Ways and Means, Third Special Session of 2001).

 

     Your Committee finds that the current economic condition of the State forebodes a downturn in construction.  Therefore, your Committee believes that this measure would provide an incentive for hotels to undertake renovations and thereby stimulate the construction industry.

 

     As affirmed by the record of votes of the members of your Committee on Tourism and Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2985, H.D. 1, and recommends that it pass Second Reading and be referred to the Committee on Economic Development and Taxation.

 

Respectfully submitted on behalf of the members of the Committee on Tourism and Government Operations,

 

 

 

____________________________

CLARENCE K. NISHIHARA, Chair