STAND. COM. REP. NO.2
Honolulu, Hawaii
, 2001
RE: S.B. No. 8
S.D. 1
Honorable Robert Bunda
President of the Senate
Twenty-First State Legislature
Third Special Session of 2001
State of Hawaii
Sir:
Your Committee on Ways and Means, to which was referred S.B. No. 8 entitled:
"A BILL FOR AN ACT RELATING TO INCOME TAX CREDITS,"
begs leave to report as follows:
The purpose of this bill is to help revitalize the construction industry by:
(1) Providing a residential construction and remodeling tax credit amounting to four percent of the residential construction and remodeling costs incurred up to $250,000;
(2) Increasing the hotel construction and remodeling tax credit to six percent of the construction or renovations costs incurred by a qualified hotel facility located in Hawaii after the effective date of the bill and until June 30, 2002; and
(3) Authorizing a tax credit of four percent of hotel construction and remodeling costs incurred by a qualified hotel facility located in Hawaii starting June 30, 2002, and ending December 31, 2004.
The Department of Business, Economic Development, and Tourism, Hawaii Tourism Authority, Chamber of Commerce of Hawaii, Waikiki Improvement Association, Building Industry Association of Hawaii, Subcontractors Association of Hawaii, Maui Hotel Association, Hawaii Resort Developers Conference,
General Contractors Association of Hawaii, Architects Hawaii
Limited, and an individual testified in support of this measure. The Hawaii Business Roundtable, Land Use Research Foundation of Hawaii, Outrigger Enterprises, Hawaii Hotel Association, Visitor Industry Coalition, Marriott's Ko Olina Beach Club, Marriott International, and several concerned citizens supported the intent of this bill. The Department of Taxation, Tax Foundation of Hawaii, American Resort Development Association of Hawaii, and a concerned citizen submitted comments. Sierra Club, Hawaii Chapter and a concerned citizen offered testimony in opposition to this measure.
The events of September 11, 2001, have had a tremendous influence on both the national and state economies, unexpectedly affecting the livelihood of millions of citizens. Tourism, Hawaii's principal industry, accounts for nearly $10.9 billion in general revenues each year and was severely impacted by these attacks. The number of travelers to the State has decreased by between twenty and fifty percent, which has not only affected the tourism industry but the economy of the entire State. The housing and construction industry is also a critical component of Hawaii's economy and will be negatively impacted by any protracted economic downturn.
Dealing with this economic crisis is one reason the Governor has convened a special session. Your Committee feels that in order to avoid an economic catastrophe, the tourism industry, as well as the housing and construction industry, need to be revitalized through measures that aid these vital segments of our economy.
It is the intent of your Committee that the amount of the tax credit allowed for each residential construction or remodeling project shall be four percent of the costs incurred; provided that the aggregate costs applied do not exceed $250,000 per residential unit.
Your Committee has amended this bill by:
(1) Increasing the six percent hotel construction and remodeling tax credit to ten percent;
(2) Extending the deadline from June 30, 2002, to June 30, 2003, when qualified hotel construction and remodeling costs must be incurred;
(3) Extending the availability of the tax credit to December 31, 2005; and
(4) Extending the length of the ten percent tax credit from June 30, 2002, to June 30, 2003.
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. 8, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 8, S.D. 1, and be placed on the calendar for Third Reading.
Respectfully submitted on behalf of the members of the Committee on Ways and Means,
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____________________________ BRIAN T. TANIGUCHI, Chair |
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