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 S.B. No. 1517, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to increase the conveyance tax to provide a stable funding mechanism for the natural area reserves system and address the problem of invasive species.

In particular, this measure provides for a conveyance tax allocation increase of 20 cents per $100 of full consideration for all transfers or conveyances of real property valued at $400,000 or greater. This measure also increases the allocation of conveyance tax revenues to the Rental Housing Trust Fund and the Natural Area Reserve Fund from the existing twenty-five per cent per fund allocation to a thirty-five per cent per fund allocation. Finally, this measure requires that funds in the Natural Area Reserve fund also be used for the management of natural area reserves and an early detection and rapid response program for invasive species.

Your Committee finds that despite the value of Hawaii's natural resources to its economy, culture, and quality of life, there are very limited resources available to protect our natural capital base. This bill provides much needed additional resources to protect state-managed natural area reserves. The conveyance tax is already used to fund the conservation of natural resources on private land by dedicating twenty-five per cent of the current assessment to the natural area partnership program and forest stewardship program, which assist private landowners in managing important natural resources on private land.

Your Committee finds that there is a need to increase the conveyance tax to provide a stable funding mechanism for the natural area reserves system and protect Hawaii's natural resources from the onslaught of invasive species.

Upon further consideration, your Committee has amended this measure by:

1. Increasing the new conveyance tax threshold to transfers or conveyances of realty with a value of $600,000 or greater, rather than $400,000 or greater;
2. Changing the effective date from upon approval to July 1, 2003; and
3. Making technical nonsubstantive changes for the purposes of clarity and consistency.

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. 1517, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1517, S.D. 2.