STAND

STAND. COM. REP. NO. 953

Honolulu, Hawaii

, 2005

RE: H.B. No. 1309

H.D. 2

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Finance, to which was referred H.B. No. 1309, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose of this bill is to improve public transportation by allowing the counties to, temporarily, levy a limited county surcharge on state general excise and use taxes to fund operating or capital costs for public transportation systems. Specifically, this bill, among other things:

(1) Requires counties, that choose to establish a county surcharge, to do so by ordinance, adopted after a duly-noticed public hearing;

(2) Prohibits the counties from setting the county surcharge at a rate greater than one percent of:

(A) The value of property taxable under the use tax;

(B) All gross proceeds and gross income taxable under the general excise tax; and

(3) Repeals the county authority to levy county surcharges on June 30, 2015.

The Congressional Representative of the First District of Hawaii, two members of the City Council of the City and County (C&C) of Honolulu, the Transportation Commission of the C&C Honolulu, the Department of Transportation Services of the C&C Honolulu, Mililani Neighborhood Board No. 25, Hawaii Government Employees Association, AFSCME Local 152, AFL-CIO, Hawaii Building and Construction Trades Council, Weslin Consulting Services, Inc., and several concerned individuals supported this bill. The Department of Transportation and The Chamber of Commerce of Hawaii supported the intent of this bill. The Department of Taxation, National Federation of Independent Business-HAWAII, Hawaii Association of REALTORS, Life of the Land, Retail Merchants of Hawaii, and several concerned individuals opposed this bill. Tax Foundation of Hawaii and Hawaii Business League offered comments.

Your Committee has amended this bill by:

(1) Changing the effective date to July 1, 2010, to promote further discussion; and

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

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1309, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 1309, H.D. 2.

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

		____________________________ DWIGHT TAKAMINE, Chair