STAND. COM. REP. NO. 2936

 

Honolulu, Hawaii

                  

 

RE:    H.B. No. 2540

       H.D. 1

 

 

 

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

 

Madam:

 

     Your Committee on Health, to which was referred H.B. No. 2540, H.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO TAXATION,"

 

begs leave to report as follows:

 

     The purpose of this measure is to ensure the continuous availability of drinkable water in rural communities by authorizing income and general excise tax exemptions for 501(c)(12) companies that provide potable water.

 

     Your Committee received testimony in support of this measure from Horwath Kam and Company, Napuu Water, Inc., and eight individuals.  The Department of Taxation and the Tax Foundation of Hawaii submitted comments on this measure.

 

     Your Committee finds that cooperatives that are organized under 26 U.S.C. 501(c)(12) that qualify for federal income tax exemptions should also qualify for state income and general excise tax exemptions because of the purpose for which the cooperative is being operated.  Further investigation into the types of exemptions that similar organizations, such as the County Board of Water Supply, receive is in progress.

 

     As affirmed by the record of votes of the members of your Committee on Health that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2540, H.D. 1, and recommends that it pass Second Reading and be referred to the Committee on Economic Development and Taxation.

 

Respectfully submitted on behalf of the members of the Committee on Health,

 

 

 

____________________________

DAVID Y. IGE, Chair