Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Higher Education, to which was referred H.B. No. 2798 entitled:

begs leave to report as follows:

The purpose of this bill is to appropriate funds for scholarships for students at the University of Hawaii (UH) who qualify for tuition waivers to enable them to take advantage of the federal HOPE Scholarship tax credit.

UH submitted testimony in support of this bill.

Your Committee finds that the HOPE Scholarship tax credit provides needed economic relief to college students throughout the country. To take advantage of this opportunity, a student must have qualified educational expenses upon which to claim the tax credit, and tuition paid through scholarships is one type of qualified expense. Because UH grants tuition waivers rather than scholarships, students who receive these tuition waivers do not have any educational expenses to claim, and cannot take advantage of the tax credit.

Your Committee further finds that appropriating funds to UH for scholarships that can be granted in lieu of tuition waivers would allow these students to take advantage of the HOPE Scholarship tax credit, while keeping these funds within the State, as they would be returned to UH in the form of tuition payments.

Upon further consideration, your Committee has amended this bill by deleting the appropriation amount and replacing it with an unspecified amount to facilitate further discussion.

As affirmed by the record of votes of the members of your Committee on Higher Education that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2798, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2798, H.D. 1, and be referred to the Committee on Finance.