Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committees on Business and Economic Development and Water, Land, and Agriculture, to which was referred S.B. No. 2150 entitled:

beg leave to report as follows:

The purpose of this measure is to require the Department of Taxation to deposit an amount equivalent to ten percent of the general excise tax revenues received from the direct revenues generated by the ocean recreation industry during the preceding fiscal year into the boating special fund.

Your Committees received testimony in support of this measure from the Hawaii Government Employees Association, the Ala Wai Marina Community Association, the Hawaii Boaters Political Action Association, and two private individuals. Testimony in opposition of this measure was received by the Department of Land and Natural Resources and the Department of Taxation. The Tax Foundation of Hawaii submitted comments.

The dilapidated condition of the small boat harbors in the State can be attributed in large part to an inadequate revenue stream to fund repair and maintenance projects. The ocean recreation industry benefits from the small boat harbors. The small boat harbors will gain financial assistance for repair and maintenance projects by requiring the Department of Taxation to deposit a portion of the general excise tax revenues the ocean recreation industry generates into the boating special fund. Your Committees have heard the concerns regarding establishing a boating special fund and are reporting this measure out to facilitate further discussion by the Committee on Ways and Means.

As affirmed by the records of votes of the members of your Committees on Business and Economic Development and Water, Land, and Agriculture that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2150 and recommend that it pass Second Reading and be referred to the Committee on Ways and Means.