STAND. COM. REP. NO. 3333

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2760
                                        H.D. 2
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.B.
No. 2760, H.D. 2, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO THE COLLEGE SAVINGS PROGRAM,"

begs leave to report as follows:

     The purpose of this measure is to amend chapter 256, Hawaii
Revised Statutes, to provide clear guidance for the
implementation of the college savings program and to bring the
statute within the safe harbor provision of the federal tax code.

     The college savings program was established by Act 81,
Session Laws of Hawaii 1999, to enable families to benefit from
tax incentives provided for qualified state tuition programs
under the Internal Revenue Code.  Under this program, money can
be placed in a savings account for the purpose of meeting college
expenses of a designated beneficiary.  The tax benefit is that
earnings in these accounts are not subject to either federal or
state taxes until withdrawal for education expenses.  When
withdrawn, the income tax rate of the student applies, which is
normally lower than the parents' tax rate.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of H.B.
No. 2760, H.D. 2, S.D. 1, and recommends that it pass Third
Reading.


 
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                                   STAND. COM. REP. NO. 3333
                                   Page 2


                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
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