STAND. COM. REP. 855

Honolulu, Hawaii

, 2003

RE: H.B. No. 1400

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Finance, to which was referred H.B. No. 1400 entitled:

"A BILL FOR AN ACT RELATING TO HOTEL CONSTRUCTION AND REMODELING TAX CREDIT,"

begs leave to report as follows:

The purpose of this bill is to assist Hawaii's tourism and construction industries. Specifically, this bill:

(1) Extends the Hotel Construction and Remodeling Tax Credit (Tax Credit) to June 30, 2008; and

(2) Makes this Tax Credit refundable to the taxpayer if the Tax Credit exceeds the taxpayer's income tax liability.

In addition, this bill:

(1) Repeals the provision that limits the availability of the Tax Credit to taxable years beginning after December 31, 1998, and before January 1, 2006;

(2) Repeals the requirement that the taxpayer be in compliance with all applicable federal, state, and county statutes, rules, and regulations to qualify for the Tax Credit; and

(3) Expands the applicability of the Tax Credit to commercial buildings and facilities located in areas designated for hotel use, resort use, or transient vacation rentals, pursuant to county zoning authority or county legislation.

The Hawaii Tourism Authority, Pacific Resource Partnership, Chamber of Commerce of Hawaii, Land Use Research Foundation of Hawaii, Laborers' International Union of North America Local 368, AFL-CIO, SAH-Subcontractors Association of Hawaii, Hawaii Business Roundtable, Waikiki Improvement Association, American Institute of Architects, Hawaii State Council, Ko Olina Resort and Marina, Cendant Corporation/Fairfield Resorts, and Outrigger Hotels and Resorts testified in support of this measure. The Department of Taxation (DOTAX) and Tax Foundation of Hawaii commented on this measure.

Your Committee has amended this bill by:

(1) Limiting the availability of the Tax Credit to taxable years beginning after July 1, 2003, for which the Governor issues a declaration allowing taxpayers to claim the credit;

(2) Authorizing the Governor to issue a declaration allowing taxpayers to claim this Tax Credit only when general fund tax collections at the close of each of two successive fiscal years exceed 7.5 percent of general fund tax collections for each of the prior two fiscal years;

(3) Leaving the amount of the Tax Credit to be claimed for taxable years beginning after July 1, 2003, an unspecified percent of the construction or renovation costs;

(4) Requiring the Director of DOTAX to notify the Governor of general fund tax collections at the close of every year;

(5) Extending the Tax Credit to January 1, 2008;

(6) Making the Tax Credit nonrefundable;

(7) Repealing the Residential Construction and Remodeling Tax Credit on January 1, 2008; and

(8) Making technical, nonsubstantive amendments for 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. 1400, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 1400, H.D. 1.

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

 

____________________________

DWIGHT Y. TAKAMINE, Chair