Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Finance, to which was referred H.B. No. 1554, H.D. 2, entitled:

begs leave to report as follows:

The purpose of this bill is to promote homeownership by providing an incentive for leasehold fee owners to sell their fee interest. Specifically, this bill exempts, from state income taxes, 75 percent of the income derived by a fee simple owner from the sale of a leased fee interest in a residential house lot or multi-family residential leasehold property to:

The Hawaii Independent Condominium & Cooperative Owners and Monarch Properties, Inc., supported this bill with amendments. The Department of Taxation opposed this measure. The Tax Foundation of Hawaii and Hawaii Association of Realtors offered comments.

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 H.B. No. 1554, H.D. 2, and recommends that it pass Third Reading.