STAND. COM. REP. NO. 1056

Honolulu, Hawaii

RE:    H.B. No. 966

       H.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2015

State of Hawaii

Madam:

     Your Committee on Judiciary and Labor, to which was referred H.B. No. 966, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO SECTION 237-23, HAWAII REVISED STATUTES,"

begs leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Correct an inadvertent repeal of wording from section 237-23, Hawaii Revised Statutes (HRS); and

     (2)  Provide a retroactive effective date that applies to taxable years beginning after December 31, 2011.

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

     Your Committee finds that Act 184, Session Laws of Hawaii 2012 (Act 184), amended section 237-23, HRS, to add potable water companies to the existing exemption provided to certain nonprofit organizations.  In the process, the words, "as such" were inadvertently deleted from that section.  According to the testimony submitted by the Department of Taxation, these words have been important for courts in the past and should be reinstated in statute to ensure consistent treatment of nonprofit organizations entitled to this exemption.

     As affirmed by the record of votes of the members of your Committee on Judiciary and Labor that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 966, H.D. 1, and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Judiciary and Labor,

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GILBERT S.C. KEITH-AGARAN, Chair