CONFERENCE COMMITTEE REP. NO.147
Honolulu, Hawaii
, 2005
RE: H.B. No. 1554
H.D. 2
S.D. 2
C.D. 1
Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twenty-Third State Legislature
Regular Session of 2005
State of Hawaii
Honorable Robert Bunda
President of the Senate
Twenty-Third State Legislature
Regular Session of 2005
State of Hawaii
Sir:
Your Committee on Conference on the disagreeing vote of the House of Representatives to the amendments proposed by the Senate in H.B. No. 1554, H.D. 2, S.D. 2, entitled:
"A BILL FOR AN ACT RELATING TO LEASEHOLD CONVERSION,"
having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.
The purpose of this measure is to provide fee owners of single family and multi-family residential leasehold property with an exclusion from their taxable income of fifty per cent of any proceeds from the sale of the leased fee interest to the lessee.
Your Committee on Conference finds that mandatory leasehold reform for single family residences has successfully reduced the number of single family leasehold residences, allowing homeowners to own the fee interest in their residential lots. Your Committee on Conference further notes that similar efforts to allow the mandatory leasehold conversion of multi-family residences has met with much resistance from the fee owners who were not inclined to part with their fee interest. This resistance has led to the acrimonious repeal of a mandatory leasehold conversion law for multi-family residences in the City and County of Honolulu.
Your Committee on Conference believes that, rather than perpetuating a process that polarizes members of the community, an incentive-based approach to the issue should be pursued. Accordingly, this measure would provide that incentive by allowing a fee owner of residential leasehold properties to exclude, from the fee owner's taxable income, up to fifty per cent of the proceeds the fee owner receives from the sale of the leased fee interest to the lessee.
Your Committee on Conference has amended this measure by:
(1) Limiting the total amount of income excluded by this measure to a maximum of $75,000 in the aggregate for all taxpayers in the State in any tax year; and
(2) Allowing this exclusion to be taken in the tax year beginning after December 31, 2005 and ending prior to January 1, 2007.
As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of H.B. No. 1554, H.D. 2, S.D. 2, as amended herein, and recommends that it pass Final Reading in the form attached hereto as H.B. No. 1554, H.D. 2, S.D. 2, C.D. 1.
Respectfully submitted on behalf of the managers:
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ON THE PART OF THE SENATE |
ON THE PART OF THE HOUSE |
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____________________________ RON MENOR, Chair |
____________________________ EZRA R. KANOHO, Co-Chair |
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____________________________ BRIAN T. TANIGUCHI, Co-Chair |
____________________________ MICHAEL P. KAHIKINA, Co-Chair |
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____________________________ KENNETH HIRAKI, Co-Chair |
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____________________________ SCOTT NISHIMOTO, Co-Chair |