Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 1685, H.D. 1, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to provide an income tax credit to lessees of "stage 3" aircraft or the individual components thereof.

"Stage 3" generally refers to aircraft that operate under reduced noise levels as defined by federal regulation.

Your Committee finds that dependable interisland transportation service is of critical importance to the State. Residents, as well as the millions of tourists who visit Hawaii annually depend on these services to travel between the islands for recreational, personal, and business purposes. The primary and almost exclusive mode of interisland transportation is provided by the major interisland airlines. As such, it is in the public interest that the State assist interisland airline providers by providing an aircraft operating income tax credit to maintain the level of their services and to also reduce the noise level produced by the aircraft in their fleets.

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 H.B. No. 1685, H.D. 1, S.D. 1, and recommends that it pass Third Reading.