STAND. COM. REP. NO. 676

Honolulu, Hawaii

RE: S.B. No. 1274

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 1274 entitled:

"A BILL FOR AN ACT RELATING TO DEPARTMENT OF TAXATION FEES,"

begs leave to report as follows:

The purpose and intent of this measure is to authorize the Department of Taxation to establish by administrative rule the fee amounts for certain permits and licenses issued pursuant to the fuel tax, liquor tax, and cigarette tax and tobacco tax chapters of the Hawaii Revised Statutes.

Your Committee received testimony in support of this measure from the Department of Taxation and one individual.

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

Your Committee finds that changing the established fees for certain permits and licenses issued pursuant to the fuel tax, liquor tax, and cigarette tax and tobacco tax chapters of the Hawaii Revised Statutes to reasonable fees adopted by rule by the Department of Taxation will allow greater flexibility to adjust the fee amounts, when necessary, based on inflation or other economic or public interest reasons.

Your Committee has amended this measure by:

(1) Mandating, rather than authorizing, the Department of Taxation to establish certain fee amounts by administrative rule;

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

(3) Making technical nonsubstantive amendments for 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. 1274, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1274, S.D. 1, and be placed on the calendar for Third Reading.

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

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DONOVAN M. DELA CRUZ, Chair