STAND. COM. REP. NO. 650

Honolulu, Hawaii

RE:    S.B. No. 678

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committees on Economic Development and Taxation and Ways and Means, to which was referred S.B. No. 678, S.D. 1, entitled:

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

beg leave to report as follows:

     The purpose of this measure is to exempt from the general excise tax amounts received by the operator of the Hawaii Convention Center for reimbursement of costs or advances made pursuant to a contract with the Hawai‘i Tourism Authority.

     Written testimony in support of this measure was received from the Department of Taxation; Department of Business, Economic Development, and Tourism; and Hawai‘i Tourism Authority.  The Tax Foundation of Hawaii submitted written comments.

     Your Committees received a fiscal impact statement from the Department of Taxation (Department) that the revenue loss would be approximately $700,000.  The Department did not submit a statement of methodology or information as to whether the loss was calculated as a one-time or annual amount.

     Your Committees find that this measure will enable the use of the Hawaii Convention Center Special Fund for the operation and marketing of the Center and not to cover general excise tax liabilities of the operator.

     As affirmed by the records of votes of the members of your Committees on Economic Development and Taxation and Ways and Means that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 678, S.D. 1, and recommend that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committees on Economic Development and Taxation and Ways and Means,

____________________________ ROSALYN H. BAKER, Chair

____________________________ CAROL FUKUNAGA, Chair