STAND. COM. REP. NO. 2615

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 2781
                                        S.D. 2




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred
S.B. No. 2781, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

     The purpose of this measure is to provide a four per cent
tax credit for hotel construction and remodeling for taxable
years beginning after December 31, 1998, and before January 1,
2007.

     Your Committee finds that Act 306, Session Laws of Hawaii
1999, established a tax credit for improvements to visitor
facilities, but without a specified credit percentage.  The
purpose of this measure is to provide the appropriate credit.

     Your Committee has amended this measure as follows:

     (1)  By deleting the purpose section and adding a repeal of
          Act 306, Session Laws of Hawaii 1999;

     (2)  By rewriting the tax credit provisions for clarity and
          including time share owners associations, providing
          that the construction and renovation costs are those
          occurring after June 30, 1999, and that those costs
          must exceed $1,000,000;

     (3)  By providing that the credit is not refundable but
          instead is to be carried over until exhausted; and

 
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     (4)  By reducing the time period to claim the credit from
          before January 1, 2007, to before January 1, 2002.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of
S.B. No. 2781, S.D. 1, as amended herein, and recommends that it
pass Third Reading in the form attached hereto as S.B. No. 2781,
S.D. 2.

                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
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