STAND. COM. REP. NO. 1190

Honolulu, Hawaii

RE: S.B. No. 162

S.D. 2

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. 162, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose and intent of this measure is to establish a refundable tax credit for taxpayers who hire an elderly individual.

Prior to a public hearing on the measure, a proposed Senate Draft No. 2 (Proposed Draft) was circulated for public review and comment.

The Proposed Draft deleted the contents of the measure as received by your Committee and inserted provisions that:

(1) Increase the rental motor vehicle surcharge tax for lessees from $3 to $5 for each day, or portion of a day, that a rental motor vehicle is rented;

(2) Repeal the additional surcharge tax of $2 for each day, or portion of a day, for lessees who do not possess a valid Hawaii driver's license; and

(3) Deposit revenue collected from the $5 surcharge tax into the county subaccount of the state highway fund for the purposes of section 248-9(c), Hawaii Revised Statutes.

Your Committee received testimony in support of the Proposed Draft from the Department of the Attorney General, Department of Taxation, and Department of Transportation.

Your Committee received comments on the Proposed Draft from the Avis Budget Group, Enterprise Holdings, and Tax Foundation of Hawaii.

Your Committee finds that an increase in the rental motor vehicle surcharge tax is necessary to supplement the state highway fund, because revenues from the fuel tax are unstable as consumers switch to the use of alternative fuel vehicles, electric vehicles, and hybrid vehicles.

Your Committee has amended this measure by adopting the Proposed Draft and amending the Proposed Draft further by providing that, of each $5 collected pursuant to the surcharge tax:

(1) $2 shall be deposited into the respective county subaccount of the state highway fund for state highway road capacity projects in the county that generated the surcharge tax; and

(2) $3 shall be deposited into the state highway fund for statewide use.

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. 162, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 162, S.D. 2.

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

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DONOVAN M. DELA CRUZ, Chair