STAND. COM. REP. NO. 226

Honolulu, Hawaii

RE:    S.B. No. 472

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sir:

     Your Committees on Housing and Commerce, Consumer Protection, and Health, to which was referred S.B. No. 472 entitled:

"A BILL FOR AN ACT RELATING TO FIRE PROTECTION,"

beg leave to report as follows:

     The purpose and intent of this measure is to establish a tax credit for owner/occupants of one- or two-family dwelling units who install an automatic fire sprinkler system.

     Your Committees received testimony in support of this measure from the Hawaii State Fire Council, Kauai Fire Department, and one individual.  Your Committees received comments on this measure from the Department of Taxation, Tax Foundation of Hawaii, and Building Industry Association of Hawaii.

     Your Committees find that automatic fire sprinkler systems are effective at reducing loss of life, injury, and property damage caused by fire.  Despite their effectiveness, few one- or two-family dwellings in Hawaii have automatic fire sprinkler systems.  Your Committees further find that one reason for the lack of sprinkler systems in residential dwellings is cost.  This measure will provide a tax credit to mitigate the cost involved in installing automatic fire sprinkler systems.

     Your Committees additionally find that this measure is appropriate because the installation of automatic fire sprinkler systems in residential units is not mandatory at this time.

     Your Committees have amended this measure by:

     (1)  Inserting language clarifying that the tax credit may be claimed only for automatic fire sprinklers that are installed and placed in service in one- or two-family dwelling units;

     (2)  Inserting language clarifying that only the owner/occupant of a dwelling unit may claim the tax credit;

     (3)  Inserting an effective date of July 1, 2050, to encourage further discussion; and

     (4)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the records of votes of the members of your Committees on Housing and Commerce, Consumer Protection, and Health that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 472, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 472, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Housing and Commerce, Consumer Protection, and Health,

________________________________ ROSALYN H. BAKER, Chair

________________________________ WILL ESPERO, Chair