STAND. COM. REP. NO. 2686

Honolulu, Hawaii

RE:    S.B. No. 2501

       S.D. 2

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 2501, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO THE RENTAL MOTOR VEHICLE SURCHARGE TAX,"

begs leave to report as follows:

     The purpose of this measure is to set a new daily rate for the rental motor vehicle surcharge tax.

Specifically, this measure repeals the $3 a day rate in effect from September 1, 1999, to August 31, 2008, and the $2 a day rate applicable thereafter for the rental motor vehicle surcharge tax, and sets an unspecified daily rate.

     Your Committee received testimony in support of this measure from the Departments of Transportation and Taxation, Catrala Hawaii, and Dollar Thrifty Group.  The Tax Foundation of Hawaii offered comments.

     Your Committee finds that the $3 a day rate will drop back to $2 a day after August 31, 2008, unless the current law is amended.  Your Committee finds that maintaining a consistently sufficient revenue stream available for the state highway fund is critical to maintaining the State's highway infrastructure.  Increasing the rental motor vehicle surcharge tax will contribute greatly to building reserves in the state highway fund.

     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. 2501, S.D. 2, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

ROSALYN H. BAKER, Chair