STAND. COM. REP. NO. 2006

Honolulu, Hawaii

RE:    S.B. No. 2448

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Madam:

     Your Committee on Intergovernmental and Military Affairs, to which was referred S.B. No. 2448 entitled:

"A BILL FOR AN ACT RELATING TO THE ARMED SERVICES,"

begs leave to report as follows:

     The purpose of this measure is to exempt noncommercial motor vehicles registered to a member of the National Guard, military reserve, or armed service, including the U.S. Coast Guard, from the vehicle tax and registration fee if the member is assigned to a unit in the State and is a member in good standing.

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

     Your Committee finds that this measure provides for a much deserved exemption from the vehicle tax and registration fees associated with licensing a motor vehicle.  Members of the various armed services that protect this country should be exempt from taxation on their vehicle, especially during their absence when called to active duty.

     This measure is consistent with federal law under the Servicemembers Civil Relief Act of 2003, which replaced the Soldiers' and Sailors' Civil Relief Act of 1940.

     Your Committee has amended this measure by:

     (1)  Correcting a federal law cross-reference;

     (2)  Amending the sections of the Hawaii Revised Statutes pertaining to vehicle taxes and registration fees, rather than adding a new section to Hawaii law; and

     (3)  Clarifying that active duty members of the armed services are also eligible for the exemption.

     As affirmed by the record of votes of the members of your Committee on Intergovernmental and Military Affairs that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2448, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2448, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Intergovernmental and Military Affairs,

____________________________

LORRAINE R. INOUYE, Chair