Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 1453, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to authorize the imposition of the public service company tax on private sewer companies and facilities.

Presently, all public utilities regulated by the Public Utilities Commission (Commission) under chapter 269, Hawaii Revised Statutes, are subject to the public service company tax. Private sewer companies or facilities are among the public utilities regulated by the Commission under chapter 269, Hawaii Revised Statutes. However, a recent decision by the state tax appeals court held that private sewer companies or facilities are not subject to the public service company tax since these companies and facilities are not listed in the definition of "gross income" in the public service tax law. This bill corrects the inequity by amending the public service tax law to include private sewer companies and facilities in the definition of "gross income."

Your Committee has amended the bill by making technical, nonsubstantive amendments for the purposes of clarity and style.

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 S.B. No. 1453, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1453, S.D. 2.