STAND. COM. REP. NO. 2812

Honolulu, Hawaii

RE:    S.B. No. 3167

       S.D. 2

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 3167, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO KAKAAKO,"

begs leave to report as follows:

     The purpose of this measure is to provide a tax credit to certain small and light industrial businesses in the Kakaako community development district.

Specifically, this measure provides a tax credit equal to an unspecified percentage of the county industrial real property tax assessed on businesses located on property in the Kakaako community development district zoned I-1 and I-2; provided that the real property is in use for light industrial, wholesaling, or service and commercial operations in the tax year in which the tax credit is claimed and retains the industrial district designation in the year following the tax year in which the tax credit is claimed.

     This measure also clarifies that the Hawaii Community Development Authority may, not shall, affix assessments against real property for district-wide improvements.

     Your Committee received testimony in support of this measure from the University of Hawaii at Manoa College of Social Sciences Public Policy Center, Hawaii Alliance for Community-Based Economic Development, and Environmental Planning Solutions, LLC.  The Department of Taxation submitted testimony in opposition to this measure and the Hawaii Community Development Authority offered comments.

     Upon further consideration, your Committee has amended this measure to replace the tax credit based on an unspecified percentage of the county's industrial real property tax assessment, with a tax credit of an unspecified percentage of a taxpayer's general excise tax liability for a business within the Kakaako community development district that is located on real property designated by the county as an industrial district.

     Your Committee has also amended this measure to allow the tax credit to be claimed for two years for taxable years beginning after December 31, 2007, and before January 1, 2010 and by repealing the tax credit on January 1, 2010.  Finally, your Committee made technical nonsubstantive amendments for the 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 S.B. No. 3167, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 3167, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

ROSALYN H. BAKER, Chair