STAND. COM. REP. NO. 466

Honolulu, Hawaii

, 2005

RE: S.B. No. 1734

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committees on Business and Economic Development and Transportation and Government Operations, to which was referred S.B. No. 1734 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

beg leave to report as follows:

The purpose of this measure is to establish investment tax credits for Hawaii taxpayers who invest in the private development of the motor sports recreation and public safety training and educational facility at Kalaeloa, Parcel 9.

Your Committees received testimony in support of this measure from Pacific Karting Club, Hawaii Motor Sports Center, Acquisition Research Corporation, and eleven individuals. Your Committees received testimony in opposition from the Department of Taxation and the Chamber of Commerce of Hawaii, and comments from the Hawaii Community Development Authority.

Your Committees recognize the importance of a motor sports facility for racing events, keeping street racers off of public highways, and police and safety training programs. Your Committees further recognize the growing popularity of motor sports racing throughout the world, and its potential for revenue generation. During the closure process of Naval Air Station, Barbers Point, the State and the City and County of Honolulu recognized the need to replace the existing motor sports facility at Campbell Industrial Park with a state of the art motor sports recreation and public safety training and educational facility and set aside a parcel of land for this purpose.

Your Committees believe that creating a tax credit for qualified investments in a new motor sports facility will continue to reduce street racing and its inherent dangers, provide a safe environment for racing, create jobs during the design, planning, and construction of the facility, and provide a facility for safety training programs for state and county law enforcement officials.

Your Committees have amended this measure to prohibit a taxpayer from claiming more than one tax benefit for the same construction costs. Your Committees further have amended this measure by incorporating certain provisions of House Bill No. 994 that:

(1) Limit the availability of the tax credit to the general excise tax and transient accommodation tax generated by the construction and operation of the motor sports recreation and public safety training and educational facility; and

(2) Direct the Department of Business, Economic Development, and Tourism to calculate the amount of tax credit to be allowed in any one year using existing models to determine the rate of general excise tax and transient accommodations tax earned as a percentage of construction and operation of the motor sports recreation and public safety training and educational facility.

As affirmed by the records of votes of the members of your Committees on Business and Economic Development and Transportation and Government Operations that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1734, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1734, S.D. 1, and be referred to the Committee on Ways and Means.

 

Respectfully submitted on behalf of the members of the Committees on Business and Economic Development and Transportation and Government Operations,

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LORRAINE R. INOUYE, Chair

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WILL ESPERO, Chair