STAND. COM. REP. NO. 2577

Honolulu, Hawaii

RE:    S.B. No. 2112

       S.D. 1

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2012

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B. No. 2112 entitled:

"A BILL FOR AN ACT RELATING TO LEASEHOLD CONVERSION,"

begs leave to report as follows:

     The purpose and intent of this measure is to extend, through 2017, the exemption from taxation on capital gains realized from the sale to associations of apartment owners or residential cooperative corporations of leased fee interest in condominium units.

     Your Committee received written comments in support of this measure from the Hawaii Association of Realtors and Monarch Properties, Inc.

     Your Committee finds that the extension of the tax exemption in this measure will encourage landowners to sell condominium lessees the fee interest in their units, thereby promoting the long-term stability in Hawaii's condominium housing market and encouraging home ownership.

     Your Committee has amended this measure by changing the effective date to July 1, 2050, to facilitate further discussion on the measure.

     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. 2112, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2112, S.D. 1.

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

____________________________

DAVID Y. IGE, Chair