STAND. COM. REP. NO.  535

Honolulu, Hawaii

                , 2007

RE:   H.B. No. 1409

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Sir:

     Your Committee on Human Services & Housing, to which was referred H.B. No. 1409 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

     The purpose of this bill is to provide tax relief for households with dependents by:

     (1)  Providing an additional personal exemption for dependents age 18 or younger of families with a federal adjusted gross income of $200,000 or less; and

     (2)  Increasing the dependent care employment-related expense credit expenditure ceiling to $5,000 per dependent.

This bill also makes housekeeping amendments to conform to the Internal Revenue Code.

     The State Administration and the Department of Taxation testified in support of this bill.

     Under this bill, households would receive a $1,000 exemption for each dependent 18 or younger when the adjusted gross income is $100,000 or less.  For households with adjusted gross incomes of between $100,001 to $200,000, the exemption per dependent is $500.

     Your Committee has amended this bill by:

     (1)  Lowering the adjusted gross income limit from $200,000 to $150,000 for households to qualify for the exemption; and

     (2)  Making technical, nonsubstantive amendments for clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Human Services & Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1409, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1409, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Human Services & Housing,

____________________________

MAILE SHIMABUKURO, Chair