Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Finance, to which was referred H.B. No. 172, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this bill is to establish an Employment of National Guard Members Income Tax Credit (Tax Credit) for taxpayers that pay or incur salary or wage costs for qualified employees who are active members of the Hawaii National Guard. Specifically, this bill establishes the Tax Credit at five percent of the qualified employee's salary or wage costs and limits the Tax Credit to $1,000 per qualified employee per taxable year.

The Department of Defense, The Chamber of Commerce of Hawaii, Hawaii National Guard Enlisted Association, and a concerned citizen supported this bill. The Department of Taxation and Tax Foundation of Hawaii offered comments.

Your Committee notes that while its members appreciate the valiant efforts and sacrifices made by all of Hawaii's military, this legislation is intended, especially, to help those enlisted members, non-commissioned officers, and junior officers who can most benefit from the Tax Credit contained within.

Your Committee has amended this bill by:

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 172, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 172, H.D. 2.