Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committees on Education and Military Affairs and Intergovernmental Affairs, to which was referred S.B. No. 2650 entitled:

beg leave to report as follows:

The purpose of this measure is to exempt members of the national guard and reserves from county vehicular taxes and fees for noncommercial motor vehicles.

Your Committees received testimony in support of this measure from the Department of Transportation, the Armed Services Committee of the Chamber of Commerce of Hawaii, the Hawaii National Guard Association, and the Hawaii National Guard Enlisted Association. Comments to this measure were received from the State Department of Defense and the Tax Foundation of Hawaii.

Your Committees find that this measure supports the members of the Guard and Reserves in the service of their country. Your Committees note that in the future, it may be considered whether the lost state tax revenues should be added as a line item in the Department of Defense budget. Your Committees request that the Committee on Ways and Means review the exemption language contained in the measure to ensure that it comports with the stated purpose.

Your Committees have amended this measure by making technical, nonsubstantive amendments.

As affirmed by the records of votes of the members of your Committees on Education and Military Affairs and Intergovernmental Affairs that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2650, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2650, S.D. 1, and be referred to the Committee on Ways and Means.