STAND. COM. REP. NO. 849

Honolulu, Hawaii

RE:    S.B. No. 1150

       S.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2015

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 1150 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

     The purpose and intent of this measure is to make permanent the fuel license tax on naphtha fuels sold for use in a power generating facility by amending session law to repeal the sunset provision related to the tax.

     Your Committee received written comments in support of this measure from the Kauai Island Utility Cooperative.  Your Committee received comments on this measure from the Department of Taxation and the Tax Foundation of Hawaii.

     Your Committee finds that, in 2007, the Legislature enacted a fuel license tax on naphtha fuels sold to a power generating facility.  The tax is currently set at a rate of two cents per gallon.  Pursuant to Act 103, Session Laws of Hawaii 2007, as amended by Act 198, Session Laws of Hawaii 2009, as amended by Act 188, Session Laws of Hawaii 2012, this tax is scheduled to be repealed on December 31, 2015.  Your Committee further finds that it is the intent of this measure to maintain the current fuel license tax of two cents per gallon for naphtha fuels sold to a power generating facility.  No other tax rates are intended to be increased by the measure.

     Your Committee has amended this measure by:

     (1)  Adding a section to explain the purpose of the measure; and

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

     Your Committee notes that the Department of Taxation proposed clarifying amendments to the measure.  Your Committee believes that the measure, as amended, achieves the purpose of these proposed amendments.

     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. 1150, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1150, S.D. 1.

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

________________________________

JILL N. TOKUDA, Chair