$3 car rental surcharge extended

The state House and Senate voted Thursday to extend by one year a $3 surcharge on rental cars.

The surcharge was set to decrease to $2 in August, but will now remain at $3 until August 2008. The surcharge will also apply to tour vans and buses, with the amount depending on the number of seats in the vehicle.

The bill also establishes a House-Senate task force to conduct a study on the state highway fund, which is funded largely by fuel taxes and the rental surcharge. For every $1 levied in the rental car surcharge, about $14 million is generated for the fund.

Legislators said they didn't want to cut the surcharge because the state's highways need so much repair work. They had considered raising the charge to $4.

The increase was opposed by tour and rental agencies and advocates for the tourism industry, who said the charge was another way in which Hawaii is getting too expensive for many vacationers.

The state Department of Transportation supported the $3 rental charge which indicates Gov. Linda Lingle will sign the bill into law.

Chad Blair