STAND. COM. REP. NO.1259-02

Honolulu, Hawaii

, 2002

RE: S.B. No. 2907

S.D. 2

H.D. 2

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Finance, to which was referred S.B. No. 2907, S.D. 2, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose of this bill is to establish a nonrefundable tax credit of up to $100,000,000 for investment expenses incurred in the development of facilities for attractions and educational purposes at Ko Olina Resort and Marina made after June 30, 2002,

and no later than December 31, 2007.

Ko Olina Company, Ko Olina Community Association, Hawaii Government Employees Association, University of Hawaii at Manoa Athletic Department, Association of Apartment Owners at the Ko Olina Fairways, Armstrong Builders, Ltd., Brookfield Homes, 300 Corporation, Libertarian Party of Hawaii, and several concerned individuals testified in support of this measure. The Department of Business, Economic Development, and Tourism supported the intent of this measure.

The Department of Taxation opposed this measure. The Department of Budget and Finance, Tax Foundation of Hawaii, and the Hawaii Coalition Against Legalized Gambling submitted comments.

Your Committee has amended this bill by:

(1) Reducing the total tax credit amount to $50,000,000;

(2) Allowing a ten-year period for tax credits;

(3) Removing the ability to sell tax credits to other business entities;

(4) Clarifying that the tax credit is for qualified construction costs and not investments;

(5) Increasing the recapture provisions to one hundred percent of the current year value of tax credits received;

(6) Providing that if the tax credit is claimed, the business entity claiming the tax credit will not be allowed to claim any other credits under Title 14 or chapter 431;

(7) Requiring the construction of the aquarium and the mammal facility before other entities may claim the tax credit;

(8) Requiring fifty percent of the gross income from the aquarium, starting in its eleventh year, to be remitted to the State;

(9) Changing the effective date to December 31, 2020, to facilitate further discussion; and

(10) Making technical, nonsubstantive amendments for purposes of clarity 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 S.B. No. 2907, S.D. 2, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2907, S.D. 2, H.D. 2.

 

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

 

____________________________

DWIGHT Y. TAKAMINE, Chair