Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 957, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to provide Hawaii residents an earned income tax credit equal to twenty per cent of the earned income tax credit provided under the Internal Revenue Code.

Your Committee finds that the earned income tax credit is an effective method of increasing the resources of low-income taxpayers and countering the regressive nature of other taxes.

Your Committee has amended this measure by substituting the contents of S.B. No. 1410, S.D. 1, which was passed earlier by your Committee, which provides for an earned income tax credit at an unspecified percentage of the federal earned income credit.

As your Committee stated earlier with regard to S.B. No. 1410, S.D. 1, your Committee is in agreement with the intent of this measure as well but has left the amount of the tax credit unspecified to facilitate 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 H.B. No. 957, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 957, H.D. 1, S.D. 1, and be placed on the calendar for Third Reading.