Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committees on Tourism and Intergovernmental Affairs and Commerce, Consumer Protection and Housing, to which was referred H.B. No. 723 entitled:

beg leave to report as follows:

The purpose of this measure is to allocate a share of the public service tax to the counties.

Your Committees received testimony in support of this measure from the Department of Taxation, County of Hawaii, Hawaii County Council, City and County of Honolulu, County of Kauai, Maui County Council, Verizon Hawaii Inc., Hawaiian Electric Company, Inc., and Kauai Electric and The Gas Company. The Tax Foundation of Hawaii submitted comments.

Your Committees find that this measure would provide for a sharing of the public service company tax revenues with those counties that establish by ordinance an exemption from real property tax for public service companies. Your Committees have heard that this measure is part of the resolution of a legal dispute involving the taxation of public service companies through the county real property tax and the State's public service company tax, and that the parties involved have agreed to the proposed resolution.

Your Committees are supportive of the cooperative efforts that have produced this legislation.

As affirmed by the records of votes of the members of your Committees on Tourism and Intergovernmental Affairs and Commerce, Consumer Protection and Housing that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 723 and recommend that it pass Second Reading and be referred to the Committee on Ways and Means.