STAND. COM. REP. NO. 2432

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 2056
                                        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
S.B. No. 2056 entitled: 

     "A BILL FOR AN ACT RELATING TO INDIVIDUAL DEVELOPMENT
     ACCOUNT CONTRIBUTION TAX CREDITS,"

begs leave to report as follows:

     The purpose of this measure is to establish an Individual
Development Account Contribution tax credit equal to fifty per
cent of a contribution.

     This measure establishes the Individual Development Account
Contribution tax credit which is a nonrefundable income tax
credit of fifty per cent of the amount contributed by
individuals, organizations, and businesses to fiduciary
organizations.  Excess credits may be carried over to subsequent
years until exhausted.  The credit is allowed for tax years 2000
to 2004, and claims for the credit must be certified by the
Department of Human Services to ensure that credit amounts do not
exceed a total of $1,000,000 for the five-year period.

     Testimony in support of this measure was received from the
Department of Taxation, the Department of Human Services, the
Office of Hawaiian Affairs, the Hawaii State Commission on the
Status of Women, American Friends Service Committee, Bank of
Hawaii, the Hawaii Alliance for Community Based Economic
Development, the Mutual Housing Association of Hawaii, and an
individual.  Comments were received from the Tax Foundation of
Hawaii.

 
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                                   STAND. COM. REP. NO. 2432
                                   Page 2



     Your Committee has:

     (1)  Made it clear that the $1 million in aggregate tax
          credits is $1 million over a five year period;

     (2)  Ensured that fiduciary organizations will not receive
          both a charitable deduction and a credit for the same
          contribution amount; and

     (3)  Made technical amendments to this measure for
          clarification.

     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
S.B. No. 2056, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as S.B. No. 2056,
S.D. 1, and be placed on the calendar for Third Reading.

                                 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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