STAND. COM. REP. NO. 697-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2252
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Finance, to which was referred H.B. No.
2252 entitled: 

     "A BILL FOR AN ACT RELATING TO THE CONVEYANCE TAX,"

begs leave to report as follows:

     The purpose of this bill is to exempt from the conveyance
tax:

     (1)  Transfers merely changing the form of ownership of real
          property without changing the beneficial ownership or
          interest; and

     (2)  Transfers of real property to a corporation or
          partnership wholly owned by the transferor,
          transferor's spouse, or transferor's children. 

     The Department of Taxation and the Tax Foundation of Hawaii
submitted comments.

     Your Committee has amended this bill by:

     (1)  Clarifying those transfers that will be exempt from the
          conveyance tax as follows:


 
 
 
 
 
 
                                 STAND. COM. REP. NO. 697-00
                                 Page 2

 
          (A)  Real property transfers from a parent corporation
               to a wholly-owned subsidiary of that corporation
               or from a wholly-owned subsidiary to its parent
               corporation;

          (B)  Real property transfers pursuant to a conversion
               of a general partnership or limited partnership to
               a limited liability corporation, or vice versa;

          (C)  Real property transfer to a corporation or limited
               liability corporation wholly owned by the:
               individual transferor; transferor's spouse;
               individual transferor and transferor's children;
               and individual transferor, transferor's spouse,
               and transferor's children; and

          (D)  Real property transfer to a partnership or limited
               liability partnership composed of the transferor's
               spouse or children; 

          and

     (2)  Making technical, nonsubstantive changes for purposes
          of 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.
2252, as amended herein, and recommends that it pass Third
Reading in the form attached hereto as H.B. No. 2252, H.D. 1.

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



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair