Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Labor, to which was referred S.B. No. 1190 entitled:

begs leave to report as follows:

The purpose of this measure is to provide members of collective bargaining unit (12), police officers, with a state income tax exemption for salaries and wages as set forth in the collective bargaining agreement for unit (12).

Testimony in support of this measure was submitted by the State of Hawaii Organization of Police Officers. Testimony in opposition to this measure was submitted by Department of Taxation.

Your Committee finds that a shortage of police officers and viable candidates for becoming police officers exists within the State, and that efforts must be made to equitably compensate, retain, and recruit qualified individuals to fill these positions. During these difficult financial times, innovative methods for attracting and retaining qualified candidates must be explored. Therefore, your Committee determines that exempting the wages and salary of police officers from the state income tax provides an attractive benefit and incentive for our existing dedicated police officers and new recruits.

As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1190 and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.