STAND. COM. REP. NO. 241-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2212
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Transportation, to which was referred H.B.
No. 2212 entitled: 

     "A BILL FOR AN ACT RELATING TO HARBORS,"

begs leave to report as follows:

     The purpose of this bill is to allocate a portion of the
Public Service Company(PSC) taxes collected from American Hawaii
Cruises over a nine-year period to be directed to repairing
harbors on the islands of Kauai, Oahu, Maui, and Hawaii, as
identified by the Leo A. Daly Statewide Passenger Cruise Facility
Study(Daly Study).

     Your Committee finds that many of the harbors in the state
of Hawaii suffer from disrepair.  Your Committee also finds that
the cruise industry is a burgeoning source of income for Hawaii's
tourism industry.

     Testimonies in support of this bill were received from the
Department of Transportation, Hawaii Tourism Authority, the Mayor
of the County of Hawaii, the Mayor of the County of Maui, the
Maui County Council, the Big Island Visitors Bureau, Matson
Navigation Company, American Hawaii Cruises, Hawaii Boaters
Political Action Association, Pacific Diving Industries, Inc.,

 
 
 
 
 
 
 
                                 STAND. COM. REP. NO. 241-00
                                 Page 2

 
Seafarers International Union, Maui Divers of Hawaii, Kona-Kohala
Chamber of Commerce, Kona Historical Society, Daughters of
Hawaii, Big Island Business Council, Hawaii Attractions
Association, Visitor Industry Coalition, Kahua Na'au A'o ma
Pu'uhonua o Honaunau NHP, Inc., Young Brothers, Ltd., Hawaii
State Association of Counties, Charley's Taxi, Retail Merchants
of Hawaii, Hawaii Island Economic Development Board, CSX Lines,
the Chamber of Commerce of Hawaii, and a concerned citizen.
Testimony in opposition to this bill was received from the
Department of Budget and Finance. 

     Your Committee has amended this bill by:

     (1)  Changing the PSC tax allocation so that:

          (A)  The first $3,000,000 in tax revenues from the
               gross income of contract carriers received from
               passenger ticket revenue from domestic interisland
               cruises in service in Hawaii will be deposited
               into the general fund; and 

          (B)  All revenues in excess of $3,000,000 will be
               deposited into the Harbor Special Fund for making
               improvements and additions to passenger cruise
               facilities as identified in the Daly Study, or for
               reimbursing the Harbor Special Fund for such
               expenditures, until the necessary improvements are
               made or deposits reach $97,200,000, whichever is
               lesser;

     (2)  Deleting the requirement that the Director of Taxation
          require forms and information to administer the
          allocation of PSC tax;

     (3)  Specifying that moneys received from passenger head tax
          assessments and other passenger vessel contributions to
          the Harbor Special Fund may be used for financing
          cruise ship facilities as identified in the Daly Study;

     (4)  Changing the effective date to July 1, 2025; and

     (5)  Making technical, nonsubstantive amendments for style
          and clarity.
 

 
 
 
 
 
                                 STAND. COM. REP. NO. 241-00
                                 Page 3

 
     As affirmed by the record of votes of the members of your
Committee on Transportation that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
2212, as amended herein, and recommends that it pass Second
Reading in the form attached hereto as H.B. No. 2212, H.D. 1, and
be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Transportation,



                                   ______________________________
                                   KENNETH T. HIRAKI, Chair