Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Education, to which was referred S.B. No. 1211 entitled:

begs leave to report as follows:

The purpose of this measure is to create a Hawaii school repair and maintenance revolving fund and allow taxpayers to donate $2 from their tax liability to the fund.

Your Committee heard testimony in support of the measure from the Lieutenant Governor, the Department of Education, the Department of Accounting and General Services, the Hawaii State Teachers Association, the Hawaii Government Employees Association, the Hawaii Congress of Parents, Teachers and Students, the Hawaii State Student Council, and a private individual. Testimony in opposition was received from the Department of Budget and Finance and the Department of Taxation. Technical comments on the measure were provided by the Tax Foundation of Hawaii.

Your Committee finds that creating a new fund is unnecessary, as the existing school-level minor repairs and maintenance accounts could fulfill the same objectives. Furthermore, enabling taxpayers to donate $2 from their tax liability would adversely impact the general revenues of the State, in spite of the great worthiness of the issue being addressed. In addition, directing a taxpayer's donation towards a specific school would cause significant administrative difficulties in tracking the donations, and could possibly cause resources to bypass schools with the greatest need for repairs. Finally, your Committee also finds that school-level minor repairs and maintenance accounts serve such a pressing need that these funds should not lapse into the general fund at the close of the fiscal year.

Your Committee amended the measure to permit donations from a taxpayer's tax refund to the existing school-level minor repairs and maintenance accounts established under section 302A-1504, Hawaii Revised Statutes. Section 302A-1504 was also amended so that such funds would not lapse into the general fund at the close of the fiscal year. Technical, nonsubstantive changes were also made for the purpose of clarity.

As affirmed by the record of votes of the members of your Committee on Education that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1211, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1211, S.D. 1, and be referred to the Committee on Ways and Means.