Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Business and Economic Development, to which was referred S.B. No. 1009 entitled:

begs leave to report as follows:

The purpose of this measure is to implement an individual development account contribution tax credit, to permit a fiduciary organization to expend private moneys for program administration, to extend the deadline for adoption of rules, and to increase the contribution ceiling.

Testimony in support of this measure was submitted by Aloha United Way, Legal Aid Society of Hawaii, the Hawaii Alliance for Community-Based Economic Development, and two individuals. Your Committee also received comments from the Department of Taxation and the Tax Foundation of Hawaii.

Your Committee finds that individual development accounts promote financial self-sufficiency by encouraging low-income residents to save for home purchases, post-secondary education, or to open a small business. Hawaii's individual development account programs provide financial literacy training to low-income individuals on the importance of saving for a goal. This measure supports those efforts by creating an incentive for private contributions to individual development account programs.

Your Committee has amended this measure by making technical, non-substantive amendments for the purposes of style and clarity.

As affirmed by the record of votes of the members of your Committee on Business and Economic Development that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1009, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1009, S.D. 1, and be referred to the Committee on Ways and Means.