STAND. COM. REP. NO. 680-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 1830
                                     H.D. 1




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 H.B. No.
1830 entitled: 

     "A BILL FOR AN ACT RELATING TO INCOME TAX CREDITS,"

begs leave to report as follows:

     The purpose of this bill is to establish a refundable earned
income tax credit.

     The National Federation of Independent Business, the Hawaii
Area Program of the American Friends Service Committee, the
Hawaii State Commission on the Status of Women, and an individual
testified in support of this bill.  The Department of Taxation
supported the intent of this bill but advised the Committee of
the administrative and compliance burdens associated with this
credit.  The Tax Foundation of Hawaii offered comments.

     Your Committee has amended this bill by:

     (1)  Deleting section 1 which kept in force the federal
          statute covering the earned income credit;

     (2)  Specifying that the credit amount is calculated as a
          percentage of the federal earned income credit;

     (3)  Establishing rules for calculating the credit for part-
          year residents;


 
 
 
                                 STAND. COM. REP. NO. 680-00
                                 Page 2

 
     (4)  Requiring that taxpayers claiming the credit use the
          same filing status as on their federal return; and

     (5)  Making technical, nonsubstantive amendments for
          clarity, consistency, 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 H.B. No.
1830, as amended herein, and recommends that it pass Second
Reading in the form attached hereto as H.B. No. 1830, H.D. 1, and
be placed on the calendar for Third Reading.

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



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair