STAND. COM. REP. NO. 3340

Honolulu, Hawaii

RE: S.B. No. 2131

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2020

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 2131, S.D. 1, entitled:

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

begs leave to report as follows:

The purpose and intent of this measure is to promote the installation of residential fire sprinklers in homes throughout the State.

More specifically, this measure establishes an income tax credit to offset the cost of installing an automatic fire sprinkler system in any new one- or two-family dwelling of a building that is used only for residential purposes.

Your Committee received written comments in support of this measure from the Hawaii State Fire Council, Kauai Fire Department, and Maui Fire Department

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

Your Committee finds that automatic fire sprinkler systems have a proven record of significantly reducing loss of life, injury, and property damage caused by fires. However, residential fire sprinklers in one- and two-family dwellings are rare in Hawaii. One reason for the lack of residential fire sprinklers is the high cost of installation. Your Committee therefore finds that an incentive is needed to encourage the installation of fire sprinklers in new homes.

Your Committee has amended this measure by:

(1) Changing the amount of the tax credit to an unspecified percentage of a taxpayer's costs to install an automatic fire sprinkler system;

(2) Changing the cap amount of the tax credit from $5,000 to an unspecified amount;

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

(4) Making technical nonsubstantive amendments for 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 S.B. No. 2131, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2131, S.D. 2.

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

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DONOVAN M. DELA CRUZ, Chair