STAND. COM. REP. NO. 777

Honolulu, Hawaii

RE:    S.B. No. 1166

       S.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 1166 entitled:

"A BILL FOR AN ACT RELATING TO THE CONVEYANCE TAX,"

begs leave to report as follows:

     The purpose and intent of this measure is to increase the amount of the conveyance tax on certain real estate transactions and the portion of the conveyance tax revenues directed toward watershed protection and invasive species control.

     Your Committee received written comments in support of this measure from the Department of Land and Natural Resources, Department of Taxation, Office of Hawaiian Affairs, Hawaii Invasive Species Council, Catholic Charities Hawaii, Coordinating Group on Alien Pest Species, Dole Food Company Hawaii, Hawaii Appleseed Center for Law and Economic Justice, Hawaii Association of Realtors, Hawaii Catholic Conference, Hawaii Green Growth Initiative, Kauai Watershed Alliance, National Tropical Botanical Garden, Partners In Care, The Nature Conservancy of Hawaii, The Trust for Public Land, and twelve individuals.

     Your Committee received written comments in opposition to this measure from The Chamber of Commerce of Hawaii.

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

     Your Committee finds that ensuring the State's water supply is essential and that protecting forest watersheds is a cost-effective and efficient way to absorb rainwater and replenish ground water.  Watersheds also reduce impacts from climate change by absorbing greenhouse gases.  Additionally, forests ensure sustainability of irreplaceable cultural values and natural resources.  However, hot and dry conditions, as well as damage caused by invasive species, have led to the loss of half of Hawaii's forests.

     Your Committee further finds that protection of the State's watersheds is one of the purposes of the natural area reserve fund.  This measure provides an additional source of funding for the natural area reserve fund, to be used for watershed protection and invasive species control.

     Your Committee has amended this measure by:

     (1)  Changing the amount of the conveyance tax on certain real estate transactions and the portion of the conveyance tax revenues allocated for deposit into the natural area reserve fund to unspecified amounts;

     (2)  Clarifying that one of the authorized uses of the portion of the conveyance tax revenues paid into the natural area reserve fund is to support projects undertaken in accordance with departmental watershed management plans to protect and restore the health and functionality of watersheds in the State;

     (3)  Changing the effective date to July 1, 2050, to facilitate further discussion on the measure; and

     (4)  Making technical nonsubstantive amendments for the purposes of consistency, 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. 1166, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1166, S.D. 1.

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

____________________________

DAVID Y. IGE, Chair