Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 1191 entitled:

begs leave to report as follows:

The purpose of this measure is to provide income tax relief to individual taxpayers by incrementally raising the standard deduction amount over a three-year period.

Testimony in support of the measure was received from the Department of Taxation. The Tax Foundation submitted comments on the measure.

Your Committee finds that the measure raises the standard deduction to approximately half of the 1999 federal standard deduction over a three-year period. When fully implemented (taxable year 2003), approximately 17,000 fewer returns will need to be filed and approximately 37,000 more returns will be filed without itemized deductions.

Your Committee has amended the measure by deleting the amounts proposed as the new standard deductions in each category and by making technical, nonsubstantive amendments for the purposes of style and to conform the measure to recommended drafting procedures.

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. 1191, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1191, S.D. 1, and be placed on the calendar for Third Reading.