STAND. COM. REP. NO. 1272

Honolulu, Hawaii

RE: H.B. No. 74

H.D. 1

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Transportation and Culture and the Arts, to which was referred H.B. No. 74, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE GENERAL EXCISE TAX,"

begs leave to report as follows:

The purpose and intent of this measure is to establish a five-year general excise tax exemption beginning January 1, 2024, for amounts received from the servicing and maintenance of helicopters in an aircraft service and maintenance facility or from the construction of a facility that services and maintains helicopters where at least seventy-five percent of the helicopters serviced and maintained annually in the facility are equipped with quiet technology.

Your Committee received testimony in support of this measure from the Department of Transportation, Aircraft Owners and Pilots Association, and Blue Hawaiian. Your Committee received testimony in opposition to this measure from Jack Harter Helicopters. Your Committee received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

Your Committee finds that the aviation industry is a major stakeholder in the State's transportation sector and economy. The State's remote geography requires a reliance on a variety of air transportation, including medical operations, air tours, and disaster relief. Your Committee further finds that, with the prevalence of daily air transportation operations, certain communities are affected by noise pollution. Incentivizing aircraft service and maintenance facilities to service and maintain more helicopters that are equipped with quiet technology may provide timely, continued air transportation service while also prioritizing public health needs. This measure modernizes existing law to provide parity for smaller aviation operators while also addressing public health concerns arising from noise pollution.

Your Committee has amended this measure by:

(1) Clarifying the definition of "quiet technology" to specify the usage of a shrouded tail rotor or removal of the tail rotor to achieve a reduction or redirection of sound; and

(2) Making a technical, nonsubstantive amendment for the purposes of clarity and consistency.

As affirmed by the record of votes of the members of your Committee on Transportation and Culture and the Arts that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 74, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 74, H.D. 1, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Transportation and Culture and the Arts,

________________________________

CHRIS LEE, Chair