STAND. COM. REP. 1066

Honolulu, Hawaii

, 2003

RE: S.B. No. 1172

S.D. 2

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Economic Development and Business Concerns, to which was referred S.B. No. 1172, S.D. 2, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO AIRLINES,"

begs leave to report as follows:

The purpose of the bill is to support commercial airlines by:

(1) Establishing an income tax credit for landing fees paid by a principle operator of a commercial airline;

(2) Defining "principle operator" as an individual or corporate taxpayer who derives at least 51 percent of the taxpayer's gross annual income from commercial airlines operations;

(3) Requiring the Department of Taxation (DOT) to submit a yearly report to the Legislature containing certain data, analysis, and recommendations relating to the tax credit;

(4) Authorizing the Director of Transportation (Director) to waive airport landing fees, joint use charge fees, and exclusive use terminal rental fees payable by qualifying air carriers for a 30-day period; and

(5) Authorizing the Director to defer payment of airport landing fees, joint use charge fees, and exclusive use terminal rental fees payable by qualifying air carriers for two subsequent 30-day periods.

Testimony in support of the measure was received from two concerned citizens. Hawaiian Airlines, Airlines Committee of Hawaii, The Chamber of Commerce of Hawaii, and a concerned citizen supported the intent of this bill. DOT submitted testimony in opposition to this bill. The Tax Foundation of Hawaii submitted comments.

Your Committee believes that the tax incentives contained in this bill are essential in supporting commercial airliners, especially in light of the current conflict in Iraq. Your Committee recognizes, however, that several concerns were raised regarding certain provisions of the bill, including:

(1) Conditions and requirements to qualify for the tax credit, waivers, or deferrals;

(2) The limited time period for waivers and deferrals; and

(3) Potential conflict with existing laws that grant the Governor the power to waive fees and provide assistance.

Your Committee recommends that these concerns continue to be addressed throughout the rest of the legislative process. While the intent of this measure is to provide immediate relief, your Committee does not intend for this bill to limit the flexibility of DOT and the administration in waiving fees, as necessary, during unforeseen economic conditions.

As affirmed by the record of votes of the members of your Committee on Economic Development and Business Concerns that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1172, S.D. 2, H.D. 1, and recommends that it be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Economic Development and Business Concerns,

 

____________________________

BRIAN SCHATZ, Chair