Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committees on Tourism and Commerce, Consumer Protection and Housing, to which was referred S.B. No. 1533 entitled:

beg leave to report as follows:

The purpose of this measure is to provide a general excise tax (GET) exemption on assessments paid by an association of homeowners for a time sharing plan to the manager or board of directors for reimbursement of sums paid for common expenses.

Testimony in support of this measure was received from the American Residential Development Association, McCorriston Miller Mukai MacKinnon LLP, Pahio Resorts, Hawaii Escrow & Title, Inc., Shell Vacations Club, Embassy Vacation Resorts, and one individual. Comments were received from the Department of Taxation (DTAX) and Tax Foundation of Hawaii.

This measure applies to time sharing plans subject to chapter 514E, Hawaii Revised Statutes (HRS), relating to time sharing plans. Existing law provides a GET exemption for amounts received from an association of apartment owners of a condominium property regime and a nonprofit homeowners or community association. This measure places time sharing plans on equal footing with these entities enjoying a GET exemption.

Your Committees note the comments of DTAX that it takes no position on this measure and does not have a revenue estimate at this time. Your Committees find that time shares are a common arrangement in condominium living. This measure recognizes that fact.

Your Committees have amended the measure by rearranging existing statutory language to clarify the law's intent.

As affirmed by the records of votes of the members of your Committees on Tourism and Commerce, Consumer Protection and Housing that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1533, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1533, S.D. 1, and be referred to the Committee on Ways and Means.