STAND. COM. REP. NO. 1243

Honolulu, Hawaii

RE:    H.B. No. 1039

       H.D. 1

       S.D. 2

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.B. No. 1039, H.D. 1, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TRANSPORTATION,"

begs leave to report as follows:

     The purpose and intent of this measure is to mitigate the impact of sudden and severe economic events by amending the authority granted to the Governor by Act 33, First Special Session Laws of Hawaii 2009, to provide rent relief to certain airport concessionaires to include providing rent relief to those concessionaires that do not have a self-adjusting rent formula.

This measure would also extend the sunset date of Act 33, First Special Session Laws of Hawaii 2009, from July 1, 2011, to July 1, 2012.

     Your Committee deferred decision-making on this measure and conducted a public hearing on a proposed S.D. 2 that was prepared and made available for public review.  The proposed S.D. 2 deleted the substantive contents of the S.D. 1 and inserted new provisions, the purposes of which are to:

(1)  Increase the motor vehicle rental surcharge tax levied under section 251-2, Hawaii Revised Statutes, from $2.00 per day to $7.00 per day until June 30, 2013;

(2)  Deposit $4.50 of the motor vehicle rental surcharge tax levied into the general fund until June 30, 2013; and

(3)  Suspend until June 30, 2013, the $4.50 per day rental motor vehicle customer facility charge authorized by section 261-7, Hawaii Revised Statutes.

     Your Committee received comments in opposition to the proposed S.D. 2 from the Department of Transportation; Garrick Higuchi, Hawaii Area Director, Dollar Thrifty Automotive Group; Donald Fonte, Director, Government Relations, The Hertz Corporation; and Maurice Morita, Assistant Director, Hawaii Laborers Employers Corporation and Education Trust.

     Your Committee received comments on the proposed measure from the Tax Foundation of Hawaii.

     Your Committee finds that due to sudden, extraordinary, and severe economic events, the Legislature granted the Governor the authority to provide relief to various airport concessionaires pursuant to Act 33, Special Session Laws of 2009.  That relief, however, was inequitable, because it applied only to those concessionaires that had a self-adjusting eighty-five per cent guaranteed rent formula that provided relief in the event of adverse economic occurances.  This measure equitably assists all airport concessionaires by providing rent relief to those concessionaires that have a guaranteed rent formula under their lease with the State.

     Your Committee has amended this measure by:

     (1)  Retaining the contents of the proposed S.D. 2 and designating those provisions as part II of the measure;

     (2)  Reinserting the contents of House Bill No. 1039, H.D. 1, S.D. 1 as part I of the measure;

     (3)  Amending the rent relief provisions by extending the repeal date of Act 33, Special Session Laws of Hawaii 2009, to July 1, 2013, rather than to July 1, 2012; and

     (4)  Inserting provisions that authorize the issuance of general obligation bonds for the purpose of constructing car rental facilities at various airports throughout the State.

     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 H.B. No. 1039, H.D. 1, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 1039, H.D. 1, S.D. 2.

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

____________________________

DAVID Y. IGE, Chair