STAND. COM. REP. 392

Honolulu, Hawaii

, 2003

RE: H.B. No. 897

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Transportation, to which was referred H.B. No. 897 entitled:

"A BILL FOR AN ACT RELATING TO AIRLINES,"

begs leave to report as follows:

The purpose of this bill is to provide a tax credit for landing fees for airlines that have Honolulu-based fleets.

Hawaiian Airlines and several airline pilots testified in support of this measure. The Airlines Committee of Hawaii and airport concessionaires testified in support of the intent of the measure. The Department of Taxation and Tax Foundation of Hawaii commented on this measure.

Currently, airlines, and those who support airline operations, are feeling the pinch of a shrinking economy, reduced demand for air transportation as a result of the terrorist attacks of September 11, 2001, and an uncertain future due to current geopolitical events. Because of the high costs of maintaining airline operations, many commercial carriers have been forced to close fleets in Hawaii as a quick money-saving alternative.

Your Committee finds that airline crews based in Hawaii have provided an economic stimulus to many local businesses and that providing assistance to commercial airlines to maintain these Hawaii-based fleets will continue to bolster the State's economy.

However, your Committee notes that there were concerns regarding the fact that the tax credit in this measure was only applicable to Honolulu-based fleets and that the principal operator of the airline could elect to either receive a tax credit refund or carry the credit forward to subsequent years.

Accordingly, this measure has been amended by:

(1) Clarifying that the landing fee tax credit is applicable to any principal operator of a commercial airline that has a fleet in Hawaii;

(2) Eliminating the ability for a principal operator of an airline to use the excess of credit over payments due as a credit against the principal operator's income tax liability in subsequent years until exhausted; and

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

As affirmed by the record of votes of the members of your Committee on Transportation that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 897, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 897, H.D. 1, and be referred to the Committee on Finance.

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

 

____________________________

JOSEPH M. SOUKI, Chair