Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Transportation, to which was referred H.B. No. 2028 entitled:

begs leave to report as follows:

The purpose of this bill is to allow the counties to assess a county rental motor vehicle surcharge of up to $5 per day on all rental motor vehicles rented or leased.

The Mayor of the County of Maui and the Maui Hotel Association submitted testimony in support of this measure. The Department of Taxation, Avis Rent-a-Car Systems, Inc., The Hertz Corporation, Enterprise Rent-a-Car, and Dollar Rent A Car Systems, Inc. testified in opposition to this measure. The Department of Transportation and The Tax Foundation of Hawaii submitted comments on the measure.

Your Committee understands that roads throughout our state, especially some of the roads on the Neighbor Islands, are in dire need of repairs. In fact, some of these roads become treacherous and impassable during heavy rainfalls, storms, and brush fires, oftentimes stranding motorists. This measure attempts to address this situation through an innovative solution of placing an additional surcharge on rental vehicles, which at times, make up to 40 percent of the cars on our roadways, especially on the Neighbor Islands. Your Committee feels that through the revenues generated by this surcharge, road repairs and maintenance can be accomplished in a more timely manner.

Although there were some concerns regarding the impact this measure may have on the tourism industry and questions of equity among all users of the roadways, your Committee feels that further discussion is warranted and that the measure should continue to move through the legislative process.

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. 2028 and recommends that it pass Second Reading and be referred to the Committee on Consumer Protection and Commerce.