STAND. COM. REP. NO. 1424-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 2303
                                     S.D. 2
                                     H.D. 2




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Finance, to which was referred S.B. No.
2303, S.D. 2, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO HARBORS,"

begs leave to report as follows:

     The purpose of this bill is to support the growing cruise
ship industry by allocating a portion of Public Service Company
(PSC) tax revenues to the Harbor Special Fund and the Boating
Special Fund for the construction and improvement of cruise ship
facilities in the State.

     The Mayor of Maui County, the Hawaii State Association of
Counties, the Maui County Council, the Maritime Committee of the
Chamber of Commerce of Hawaii, Hawaii Stevedores, Paradise
Cruise, Ltd., American Hawaii Cruises, United States Lines,
American Classic Voyages Co., Matson Navigation Company, CSX
Lines, Aloha Tower Marketplace, Retail Merchants of Hawaii, the
Big Island Business Council, and the Hawaii Boaters Political
Action Association testified in support of this measure.

     The Departments of Transportation and Land and Natural
Resources (DLNR) and the Visitor Industry Coalition testified in
support of the intent of this measure.  

     The Department of Budget and Finance and the Tax Foundation
of Hawaii submitted comments.


 
 
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     Your Committee has amended this measure by:

     (1)  Changing the allocation of PSC taxes so that all
          revenues, instead of the first $3,000,000, will be
          deposited into the general fund, except those deposited
          into the Harbor and Boating Special Funds;

     (2)  Changing the amount of PSC tax revenues to be deposited
          into the Harbor Special Fund as follows:

          (A)  For fiscal year 2001: $175,000;

          (B)  For fiscal year 2002: $450,000;

          (C)  For fiscal year 2003: $600,000;

          (D)  For fiscal year 2004: $750,000;

          (E)  For fiscal year 2005: $900,000;

          (F)  For fiscal year 2006: $1,100,000;

          (G)  For fiscal year 2007: $3,000,000; and

          (H)  For fiscal years 2008 through 2025: $2,900,000 in
               each year;

     (3)  Changing the amount of PSC tax revenues to be deposited
          into the Boating Special Fund as follows:

          (A)  For fiscal year 2001: $325,000;

          (B)  For fiscal year 2002: $450,000;

          (C)  For fiscal year 2003: $500,000;

          (D)  For fiscal year 2004: $575,000;

          (E)  For fiscal year 2005: $625,000;

          (F)  For fiscal year 2006: $700,000;

          (G)  For fiscal year 2007: 665,000;

          (H)  For fiscal years 2008 through 2020: $620,000 in
               each year;

          (I)  For fiscal year 2021: $370,000; and


 
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          (J)  For fiscal year 2022: $100,000;

     (4)  Deleting provisions providing that if the maximum
          amount is reached for deposits to either the Harbor or
          Boating Special Funds, the full amount of the tax
          revenue from the gross income of contract carriers
          received from passenger ticket revenue from all vessels
          in service in Hawaii in any year in excess of
          $3,000,000 will be deposited into the other special
          fund until the maximum amount for that special fund is
          reached;

     (5)  Deleting the provision that if the maximum amount is
          reached for deposits to both the Harbor and Boating
          Special Funds, any excess amounts from tax revenue,
          from the gross income of contract carriers received
          from passenger ticket revenue from all vessels in
          service in Hawaii in any year, will be deposited into
          the general fund; and

     (6)  Making technical, nonsubstantive amendments for
          purposes of clarity and style.

     As affirmed by the record of votes of the members of your
Committee on Finance that is attached to this report, your
Committee is in accord with the intent and purpose of S.B. No.
2303, S.D. 2, H.D. 1, as amended herein, and recommends that it
pass Third Reading in the form attached hereto as S.B. No. 2303,
S.D. 2, H.D. 2.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Finance,



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair