Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 998, H.D. 2, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to provide for a temporary increase in the hotel construction and remodeling tax credit.

Specifically, this measure raises the four per cent hotel and construction and remodeling tax credit to eight per cent temporarily, from January 1, 2008 through December 31, 2010, then repeals the tax credit altogether on December 31, 2010.

Your Committee finds that the hotel construction and remodeling tax credit has been successful since its inception in 2001. The tax credit has spurred construction to reduce unemployment, boost the economy, and provide quality hotel facilities for the State's visitor industry.

Your Committee has amended the bill by amending the definition of "qualified full service hotel facility" to allow the tax credit for construction and renovation to hotels in which the guest rooms are not subdivided into individual condominium apartments. Your Committee has also amended the bill by making technical amendments for purposes of clarity and style.

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 H.B. No. 998, H.D. 2, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 998, H.D. 2, S.D. 2.