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. 699 entitled:

begs leave to report as follows:

The purpose of this measure is to provide an income tax credit in addition to any other credit allowed under chapter 235, Hawaii Revised Statutes, pursuant to article VII, section 6, of the Constitution of the State of Hawaii.

Your Committee received testimony commenting on this measure from the Department of Taxation and the Tax Foundation of Hawaii.

Your Committee finds that Article VII, Section 6, of the Constitution of the State of Hawaii, requires the legislature to enact a tax credit or refund if the general fund balance exceeds general fund revenues by 5 per cent two years in a row. In concurrence with the Department of Taxation, your Committee finds that this requirement has been met and the tax credit provided by this measure is in accordance with the Constitution of the State of Hawaii. In addition, your Committee acknowledges that for every $1 tax credit provided to a taxpayer pursuant to this measure, $1,000,000 is the aggregate amount of the tax credit provided to all taxpayers. Your Committee is approving this bill with an unspecified amount for the tax credit to further discussion on this matter.

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. 699 and recommends that it pass Second Reading and be placed on the calendar for Third Reading.