Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committee on Transportation and Government Operations, to which was referred S.B. No. 2488 entitled:

begs leave to report as follows:

The purpose of this measure is to establish an income tax credit for the purchase of a hybrid motor vehicle.

Your Committee received comments on this measure from the Department of Taxation, Attorney General, and Tax Foundation of Hawaii.

Your Committee finds that this measure provides an incentive in the form of an income tax credit to encourage taxpayers to purchase hybrid (electric and traditional fuel) motor vehicles. The spiraling price of gasoline is spurring the demand for hybrids. There is also a significant environmental conservation benefit derived from hybrids.

As affirmed by the record of votes of the members of your Committee on Transportation and Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2488 and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.