Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committees on Business and Economic Development and Water, Land, and Agriculture, to which was referred S.B. No. 1377 entitled:

beg leave to report as follows:

The purpose of this measure is to establish a tax credit for qualified costs in the development of private marina facilities.

Your Committees received testimony in support of this measure from the Hawaii Resort Developers Conference. Your Committees received testimony in opposition from the Department of Taxation and comments from the Tax Foundation of Hawaii.

Your Committees find that offering tax credits to developers for private marina development will provide ocean- and marine-related businesses and enthusiasts with more opportunities to succeed in business and enjoy Hawaii's natural environment. The development of private marina facilities will attract visitors from local, national, and international markets and complement the tourist markets of each island by creating a broad-based tourist destination.

Upon discussion of the appropriate limitations per project and annual aggregates, your Committees have amended the aggregate cap to $2,000,000 annually and to allow tax credits for not more than five projects per year. Your Committees have also amended this measure by making technical, nonsubstantive amendments for the purposes of style and clarity. Your Committees also have clarified that this measure includes tax credits for renovating publicly-owned small boat harbors in addition to the tax credits proposed for developers of private marinas.

As affirmed by the records of votes of the members of your Committees on Business and Economic Development and Water, Land, and Agriculture that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1377, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1377, S.D. 1, and be referred to the Committee on Ways and Means.