STAND. COM. REP. NO.427

Honolulu, Hawaii

, 2003

RE: S.B. No. 1172

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committees on Economic Development and Transportation, Military Affairs, and Government Operations, to which was referred S.B. No. 1172 entitled:

"A BILL FOR AN ACT RELATING TO AIRLINES,"

beg leave to report as follows:

The purpose of this measure is to provide a tax credit for landing fees incurred by commercial airlines with Honolulu-based fleets.

Testimony supporting this measure was received from Hawaiian Airlines. Testimony supporting the intent of this measure and proposing amendments was received from Airline Committee of Hawaii, United Airlines Airline Pilots Association Council 5, and Pacific Wings Airlines. Opposing testimony was received from one individual. The Department of Taxation took no position on this measure but provided comments. Additional comments were received from the Tax Foundation of Hawaii.

Your Committees find that Hawaii's airline industry faces unprecedented financial challenges stemming from international events and the local and national economic climate. This situation does not bode well for Hawaii's economy, which depends heavily on air transportation in all facets of the economy and daily life. Therefore, in this time of economic uncertainty, the State should make every effort to ensure the sustainability and promote the growth of Hawaii's air transportation industry. Your Committees believe this measure provides appropriate tax relief and effective economic stimulus for Hawaii's airline industry, and economy as a whole.

Your Committees have amended this measure by:

(1) Specifying that the tax credit applies to commercial airlines that have a domicile based in Hawaii" rather than a "Honolulu based fleet" to clarify that the application is to airlines that base pilots and other personnel in Hawaii;

(2) Providing that the tax credit shall not apply to taxable years beginning after December 31, 2005; and

(3) Making technical, nonsubstantive changes to reflect proper drafting style.

As affirmed by the records of votes of the members of your Committees on Economic Development and Transportation, Military Affairs, and Government Operations that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1172, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1172, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Economic Development and Transportation, Military Affairs, and Government Operations,

____________________________

CAL KAWAMOTO, Chair

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CAROL FUKUNAGA, Chair