STAND. COM. REP. NO. 20

Honolulu, Hawaii

, 2001

RE: S.B. No. 751

 

 

Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Transportation, Military Affairs and Government Operations, to which was referred S.B. No. 751 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose of this measure is to allow interisland air carriers using certified quieter aircraft under an operating lease to claim a tax credit of two per cent of the lease rent paid to the lessor.

Your Committee received testimony from Hawaiian Airlines supporting this measure, and the Tax Foundation of Hawaii provided comments. The Department of Taxation submitted testimony opposing this measure.

Your Committee finds that an investment tax credit is an appropriate mechanism to encourage airlines offering interisland service to use planes that operate as quietly as possible. Due to the frequency of interisland flights and the proximity of our airports to residential neighborhoods, your Committee finds that the State has a compelling interest in encouraging interisland carriers to use quieter planes.

In March, Hawaiian Airlines will introduce a fleet of thirteen new Boeing 717-200 aircraft that meet the operating noise reduction criteria established by this measure. Your Committee finds that this tax credit will support such a fleet replacement without having consumers bear the entire cost in terms of higher fares.

As affirmed by the record of votes of the members of your Committee on Transportation, Military Affairs and Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 751 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 Transportation, Military Affairs and Government Operations,

____________________________

CAL KAWAMOTO, Chair