Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 1400, H.D. 1, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to extend the hotel construction and remodeling tax credit for two years.

Your Committee finds that since the enactment of the hotel construction and remodeling tax credit in 2001, the State has moved forward economically in several ways. First, the tax credit has provided a boost to the construction industry and the economy in general, resulting in an economic multiplier effect locally. Second, the tax credit has provided an incentive for hotels to refurbish and renovate their establishments so that they can more effectively compete with other tourist destination areas. Third, the tax credit has promoted foreign investment in the State and has added needed capital into Hawaii's economy. Finally, the tax credit has sent a positive economic message to the world that Hawaii is ready to do business and is willing to provide substantial tax incentives in that regard.

Based on these findings, your Committee concurs with your Committees on Tourism and Economic Development that the hotel construction and remodeling tax credit should be continued.

Your Committee has amended the bill by:

(1) Limiting the tax credit extension to one year;

(3) Making other technical amendments.

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 H.B. No. 1400, H.D. 1, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 1400, H.D. 1, S.D. 2.