Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Economic Development and Technology, to which was referred S.B. No. 540 entitled:

begs leave to report as follows:

The purpose of this measure is to establish a tax credit for revitalization of older commercial facilities, including retail, hotel, warehouse, and industrial facilities, provide that either the facility or the commercial district where the facility is located is at least twenty-five years old, and projects over $2,500,000 are required to pay prevailing wages under chapter 104, Hawaii Revised Statutes.

Your Committee received testimony in favor of this measure from American Land Company, Ltd., Hawaii Construction Industry Association, Bendet, Fidell, Sakai & Lee, General Contractors Association of Hawaii, Hawaii Tourism Authority, Hawaii CCIM Chapter, Department of Taxation, A&B Properties, Waikiki Improvement Association, National Association of Industrial and Office Properties, Hawaii Hotel Association, Consulting Engineers Council of Hawaii, American Institute of Architects, Paul, Louie & Associates, Inc., IREM Hawaii Chapter, and Building Industry Association. Your Committee received comments on this measure from the Tax Foundation of Hawaii.

Your Committee finds that one of the lingering effects of Hawaii's recent stagnation is the deterioration of many of the State's older commercial districts. Providing an incentive to encourage tenants and building owners to redevelop and improve older established commercial districts in need of new buildings, reconstruction, and investment would be an economic benefit to the State, as well as to older commercial districts. Your Committee further finds that providing an incentive to encourage tenants and building owners to redevelop and improve older established commercial districts in need of new building, reconstruction, and investment would be an economic benefit to the State, as well as to these older commercial districts.

Your Committee amended this measure by leaving the amount of the tax credit blank for the Committee on Ways and Means to determine.

Your Committee has also amended this measure by making technical, nonsubstantive amendments to this measure for clarity.

As affirmed by the record of votes of the members of your Committee on Economic Development and Technology that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 540, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 540, S.D. 1, and be referred to the Committee on Ways and Means.