STAND. COM. REP. NO. 792

Honolulu, Hawaii

RE:    S.B. No. 1324

       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 S.B. No. 1324, S.D. 1, entitled:

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

begs leave to report as follows:

     The purpose and intent of this measure is to make permanent the amount of $3 a day as the rental motor vehicle surcharge tax.  This measure also appropriates moneys from the state highway fund for the state highways program.

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

     Your Committee finds that without this measure, the rental motor vehicle surcharge tax will revert to $2 per day after August 31, 2011.  A reversion to this tax rate will result in a loss of about seven per cent of the total revenues of the fund, which will adversely impact the state highway system by reducing funding for necessary repairs and maintenance.  Retaining the existing surcharge amount of $3 per day is needed to maintain the revenue stream to the state highway fund.

     Your Committee has amended this measure by:

(1)  Changing the surcharge tax to an unspecified amount; and

(2)  Changing the effective date to July 1, 2050, in order to facilitate continued discussion on the matter.

     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. 1324, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1324, S.D. 2.

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

____________________________

DAVID Y. IGE, Chair