STAND. COM. REP. NO. 699-26

Honolulu, Hawaii

, 2026

RE: H.B. No. 1937

H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

Your Committee on Education, to which was referred H.B. No. 1937, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXES,"

begs leave to report as follows:

The purpose of this measure is to:

(1) Exclude the sale of a motor vehicle to a lessor of rental motor vehicles for use as a rental motor vehicle as a sale at wholesale;

(2) Impose the maximum allowable excise tax on the use of tangible personal property in the State for the importation or purchase of a motor vehicle by a lessor of rental motor vehicles for use as a rental motor vehicle;

(3) Establish a Teacher Temporary Hazard Pay Special Fund to pay a temporary hazard pay bonus to certain eligible teachers; and

(4) Beginning July 1, 2026, through July 1, 2030, deposit the additional tax revenue generated by the additional excise tax imposed by this measure into the Teacher Temporary Hazard Pay Special Fund.

Your Committee received testimony in support of this measure from the Office of the Governor; Hawaiʻi State Teachers Association; Chamber of Progress; Democratic Party of Hawaiʻi Education Caucus; and numerous individuals. Your Committee received testimony in opposition to this measure from Avis Budget Car Rental, LLC; United Public Workers, AFSCME Local 646, AFL-CIO; Hertz Corporation; Enterprise Mobility; Hawaii Automobile Dealers Association; Servco; and Pasha Hawaii. Your Committee received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

Your Committee find that teachers did not receive hazard pay for working through the COVID-19 pandemic. This measure will create a source of funding to compensate eligible teachers for their frontline service during the pandemic.

Your Committee respectfully requests your Committee on Finance, should it deliberate on this measure, to examine the tax mechanics and the concerns raised about implementing this measure as discussed in the testimony.

As affirmed by the record of votes of the members of your Committee on Education that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1937, H.D. 1, and recommends that it be referred to your Committee on Finance.

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

____________________________

JUSTIN H. WOODSON, Chair