STAND. COM. REP. NO. 355

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 1506

       S.D. 1

 

 

 

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

 

Madam:

 

     Your Committee on Economic Development and Taxation, to which was referred S.B. No. 1506, S.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO RENTAL MOTOR VEHICLE SURCHARGE TAX,"

 

begs leave to report as follows:

 

     The purpose of this measure is to maintain the rental motor vehicle surcharge at $3 a day and to appropriate funds out of the State Highway Fund for operational costs, maintenance, and capital improvements on the State highway system.

 

     Your Committee received testimony in support of this measure from the Department of Taxation and the Department of Transportation.  Catrala Hawaii, Avis Rent A Car, Budget Rent A Car, Dollar Rent A Car, Enterprise Rent-A-Car, and Thrifty Car Rental submitted testimony in opposition to this measure.  The Tax Foundation of Hawaii submitted comments.

 

     Your Committee finds that the rental vehicle surcharge tax is a major revenue source for the State Highway Fund, contributing approximately $14,000,000 annually into the fund for each $1 of the daily surcharge.  Originally enacted as a temporary measure, the additional $1 surcharge has contributed significantly to highway repair and maintenance throughout the State since it was enacted in 1999.  Reverting to the $2 per day surcharge on September 1, 2007, will represent a loss of about $14,000,000 in 2008, and $16,000,000 annually in coming years.

 

     Your Committee has heard the recommendation from the rental motor vehicle industry that this surcharge should be assessed on all vehicles.  However, the title of this measure, Relating to Rental Motor Vehicle Surcharge Tax, does not allow for any amendments regarding other vehicles.

 

     It is the intent of your Committee to continue discussion on this measure by the Legislature, and to note that other measures may provide options for additional resources for the Department of Transportation's highway projects.

 

     As affirmed by the record of votes of the members of your Committee on Economic Development and Taxation that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1506, S.D. 1, and recommends that it be referred to the Committee on Ways and Means.

 

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

 

 

 

____________________________

CAROL FUKUNAGA, Chair