STAND. COM. REP. NO. 613

Honolulu, Hawaii

RE:    S.B. No. 1213

       S.D. 2

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 1213, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO UTILITY FRANCHISES,"

begs leave to report as follows:

     The purpose and intent of this measure is to provide that one-half of the franchise tax paid by electric light and power public utilities be allocated to the Department of Transportation Highways Division to fund the operation and maintenance of state highway facilities.

     Your Committee received written comments in opposition to this measure from the City and County of Honolulu and the Hawaii Council of Mayors.

Your Committee finds that electric utilities in Hawaii have long benefited from the free use of public rights-of-way along state highways.  The 1954 joint pole agreement between the Territory of Hawaii and the counties allowed for free leases of public rights-of-way to the franchise utilities for placement of power poles and other utility facilities.  Your Committee notes that public utilities historically have charged cable and communications companies for the use of their utility poles located in these rights-of-way, but have remitted none of these profits to the State, which owns the rights-of-way.  The Department of Transportation Highways Division is responsible for the repair, removal, relocation, or replacement of public utility company infrastructure that impacts public highway projects.  However, none of the franchise tax paid by public utility companies under section 240-1, Hawaii Revised Statutes, is paid to the State.  Your Committee further finds that payment of a percentage of the utility franchise tax to the Department of Transportation, for deposit into the state highway fund, would compensate the State for the public utility's use of the public rights-of-way and provide a financial resource for the State to maintain and operate its highways, including the public rights-of-way and utility systems located along the highways.

     Your Committee has amended this measure by:

(1)  Changing the effective date to July 1, 2050, to encourage further discussion on the measure; and

(2)  Making technical nonsubstantive amendments for the purposes of clarity, consistency, and style.

     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. 1213, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1213, S.D. 2.

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

____________________________

DAVID Y. IGE, Chair