STAND. COM. REP. NO.692

Honolulu, Hawaii

, 2003

RE: S.B. No. 1172

S.D. 2

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 1172, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO AIRLINES,"

begs leave to report as follows:

The purpose of this measure is to provide a tax credit for landing fees incurred by commercial airlines with Honolulu-based fleets.

Your Committee finds that many commercial airlines have been forced to close fleets in Hawaii as a money-saving alternative due to the high costs of maintaining such an operation in Hawaii. The State's airline industry also faces unprecedented financial challenges arising from international events and the local and national economic climate. Currently, only two major commercial airlines have Honolulu-based fleets.

Your Committee further finds that providing an income tax credit to commercial airlines will encourage Honolulu-based fleets to remain in Hawaii and encourage other airlines to start up Honolulu-based fleets, which will in turn bolster the State's economy. Because of the State's heavy reliance on air transportation in all facets of the economy, combined with the financial challenges facing the airline industry, your Committee believes that the State should make every effort to ensure the sustainability and promote the growth of Hawaii's air transportation industry.

Your Committee has amended this measure by:

(1) Correcting the ending date of the new credit to taxable years beginning after December 31, 2005 rather than January 1, 2006; and

(2) Making a few technical nonsubstantive changes.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1172, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1172, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

BRIAN T. TANIGUCHI, Chair