STAND

STAND. COM. REP. 1493

Honolulu, Hawaii

, 2003

RE: S.B. No. 1629

S.D. 1

H.D. 2

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 S.B. No. 1629, S.D. 1, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE GENERAL EXCISE TAX,"

begs leave to report as follows:

The purpose of this bill is to exempt from the general excise tax (GET) amounts received by:

(1) A submanager of an association of apartment owners of a condominium property regime or a nonprofit homeowners or community association in reimbursement of sums paid for common expenses;

(2) An operator of a hotel from a timeshare association equal to and which are disbursed by the operator for employee wages, salaries, payroll taxes, insurance premiums, and benefits; and

(3) A suboperator of a hotel from the owner of the hotel, operator of the hotel, or a timeshare association, equal to and which are disbursed by the suboperator for employee wages, salaries, payroll taxes, insurance premiums, and benefits.

Outrigger Hotels supported this bill. The Department of Taxation opposed this bill. The Tax Foundation of Hawaii offered comments.

Your Committee has amended this measure by:

(1) Allowing taxpayers to claim the exemption provided for in this bill only upon declaration by the Governor;

(2) Requiring the Governor to issue a declaration allowing taxpayers to claim the GET exemption when general fund tax collections at the close of each of two successive fiscal years exceed seven and a half percent of general fund tax collections for each of the prior two fiscal years;

(3) Requiring the Director of Taxation to notify the Governor of general fund tax collections at the close of every year; and

(4) Inserting a repeal date of January 1, 2008, for this measure.

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. 1629, S.D. 1, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1629, S.D. 1, H.D. 2.

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

		____________________________ DWIGHT Y. TAKAMINE, Chair