STAND. COM. REP. NO.  627

 

Honolulu, Hawaii

                , 2015

 

RE:   H.B. No. 1167

      H.D. 1

 

 

 

 

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Eighth State Legislature

Regular Session of 2015

State of Hawaii

 

Sir:

 

     Your Committee on Finance, to which was referred H.B. No. 1167 entitled:

 

"A BILL FOR AN ACT RELATING TO THE CAPITAL INFRASTRUCTURE TAX CREDIT,"

 

begs leave to report as follows:

 

     The purpose of this measure is to amend the capital infrastructure income tax credit by:

 

     (1)  Increasing the tax credit cap amount from $2,500,000 to $5,000,000;

 

     (2)  Specifying that claimable capital infrastructure costs include capital expenditures deductible under section 263 of the Internal Revenue Code, as well as expenditures for real property and fixtures incurred in connection with a displaced tenant's relocation; and

 

     (3)  Specifying that tax credits in excess of $5,000,000, may be carried over and applied in subsequent taxable years, until exhausted.

 

     The Chamber of Commerce Hawaii; Navatek, Ltd.; and numerous individuals testified in support of this measure.  The Department of Taxation; Department of Transportation; Tax Foundation of Hawaii; Robert's Hawaii, Inc.; and Pacific Shipyards International provided comments.

 

     Your Committee has amended this measure by:

 

     (1)  Amending the definition of claimable "capital infrastructure costs" to include expenditures for structures, machinery, equipment, ship repair-specific capital assets, and financing costs made in connection with a tenant's move of its active trade or business to a new location within Honolulu Harbor;

 

     (2)  Amending the definition of "qualified infrastructure tenant" to include special purpose entities formed for the purposes of raising investor capital for the purposes of claiming the capital infrastructure tax credit;

 

     (3)  Specifying that capital infrastructure costs may include certain costs, incurred in connection with a displaced tenant's move to a new location within Honolulu Harbor;

 

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

 

     (5)  Making technical, nonsubstantive amendments for clarity, consistency, and style.

 

     As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1167, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1167, H.D. 1, and be placed on the calendar for Third Reading.

 

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

 

 

 

 

____________________________

SYLVIA LUKE, Chair