STAND. COM. REP. NO. 1244

Honolulu, Hawaii

RE:    H.B. No. 306

       H.D. 1

       S.D. 2

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.B. No. 306, H.D. 1, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

     The purpose and intent of this measure is to amend the method of computing the estate and transfer tax, generation-skipping transfer tax, and the estate tax of nonresidents who were not citizens at the time of death.

     Your Committee received written comments in support of this measure from Frederick D. Pablo, Director, Department of Taxation; and Craig Hirai, Member, Subcommittee on Taxation and Finance, Hawaii Association of REALTORS.

     Your Committee received comments on this measure from the Tax Foundation of Hawaii.

     Your Committee finds that the measure makes clarifying amendments to the estate and transfer tax, the generation-skipping transfer tax, and the estate tax.  These clarifying amendments will assist tax practitioners and taxpayers in computing the aforementioned taxes.

     Your Committee also finds that extending enterprise zone tax benefits to the solar energy industry will provide a significant positive result for the State.  Such tax benefits will stimulate the growth of the energy technology sector, create new construction and jobs, and promote research and development in the solar energy technologies field.

     Your Committee has amended this measure by:

     (1)  Inserting the contents of S.B. No. 1164, S.D. 2, which amends the definition of "eligible business activity" in the enterprise zone program to include the production of certain electric power from renewable energy and owning, controlling, operating, or managing a seawater air conditioning district cooling project; and

     (2)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, 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. 306, H.D. 1, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 306, H.D. 1, S.D. 2.

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

____________________________

DAVID Y. IGE, Chair