HB916 HD1

PART I

SECTION 1. The legislature finds that Hawaii's economy depends on a highly skilled workforce to stay competitive and that new means have to be explored and applied to ensure meeting the constantly increasing demands on the workforce.

The legislature believes that in support of a national effort to foster workforce development and to deal with the lack of skilled workers, lifelong learning accounts can be the means to develop the workforce properly, and at the same time to fulfill an employer's needs and to accomplish an individual's career goals. Lifelong learning accounts are employer-matched, portable, individual savings accounts used to finance education and training--similar to an employer-sponsored retirement plan or 401(k) plan, but used for skill building and career advancement. Lifelong learning accounts provide tax incentives for both the employer and the employee. The purpose of this part is to establish a lifelong learning accounts program in Hawaii, to encourage employer and employee investment in upgrading the skills of the incumbent workforce.

SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

"§235- Lifelong learning account tax credit. (a) Each individual taxpayer, who files an individual income tax return for a taxable year and who is not claimed or is not otherwise eligible to be claimed as a dependent by another taxpayer for Hawaii state individual income tax purposes, may claim a lifelong learning account tax credit equal to payments made by the taxpayer into a lifelong learning account during the taxable year against the taxpayer's net individual income tax liability for the taxable year for which the individual's income tax return is being filed. An individual who has no income taxable under this chapter, and who is not claimed or is not otherwise eligible to be claimed as a dependent by a taxpayer for Hawaii state individual income tax purposes, may also claim this credit. The tax credit shall be as follows:

(1) The tax credit shall not exceed $1,000 in aggregate for a husband and wife filing a joint return; provided that a husband and wife filing separate tax returns for a taxable year, for which a joint return could have been filed by them, shall claim only the tax credit to which they would have been entitled under this section had a joint return been filed; and

(2) The tax credit shall not exceed $500 in the aggregate for all other taxpayers filing a return.

(b) The tax credit applies to payments made by the taxpayer during the taxable year into a qualified lifelong learning account for the benefit of the taxpayer.

"Lifelong learning account" means an individual asset account held by a trustee, custodian, or fiduciary approved by the department of labor and industrial relations on behalf of the employee in the state.

(d) For the purpose of this credit, the "net income tax liability" means income tax liability reduced by all other credits allowed under this chapter. If the tax credits claimed by a taxpayer exceed the amount of income tax payment due from the taxpayer, the excess of credits over payments due shall be refunded to the taxpayer; provided that tax credits properly claimed by an individual who has no income tax liability shall be paid to the resident individual; and provided further that no refunds or payment on account of the tax credit allowed by this section shall be made for amounts less than $1.

(e) All claims, including any amended claims, for tax credits under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

(f) If a taxpayer claims any other tax credit or deduction under title 14, including a deduction under Section 162 or 213 of the Internal Revenue Code, to which state law conforms, for premiums paid on a long-term care insurance policy, no credit shall be claimed under this section for the same premium payments.

(g) The director of taxation shall prepare forms that may be necessary to claim a tax credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of the claims for a tax credit made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91.

§235- Employer's tax credit for lifelong learning account matching funds paid for employees. (a) Subject to the limitations of this section, an employer subject to taxation under this chapter may claim a non-refundable tax credit equal to the amount of payments made by the employer during the taxable year as matching payments to lifelong learning accounts for its employees. The maximum tax credit shall not exceed $500 during the taxable year for each employee on whose behalf qualified lifelong learning account matching payments are made.

(b) The credit allowed under this section shall be claimed against the employer's net income tax liability for the taxable year. If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of the credit may be carried forward until exhausted.

(c) All claims, including any amended claims, for tax credits under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with this provision shall constitute a waiver of the right to claim the credit.

(d) The director of taxation shall prepare forms that may be necessary to claim a credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of the claims for deductions made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91.

(e) As used in this section:

SECTION 3. Chapter 394, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§394- Lifelong learning accounts program. (a) There is established within the department of labor and industrial relations the lifelong learning accounts program.

(b) For the purposes of this section, “lifelong learning account” means an individual asset account held by a trustee, custodian, or fiduciary approved by the department of labor and industrial relations on behalf of an employee in the state. The moneys in the individual asset account shall be used only to pay education expenses incurred by or on behalf of the account owner.

(c) The department of labor and industrial relations shall use moneys appropriated for the lifelong learning accounts program to:

(1) Encourage both lower-income and lower-skilled healthcare, hospitality, and technology industry workers to participate in a lifelong learning account;

(2) Encourage the establishment of lifelong learning accounts in diverse geographic and economic areas and among differing sizes of firms, including healthcare, hospitality, and technology industry workers in urban, suburban, and rural areas of the state;

(3) Make technical assistance available to companies, and make educational and career advising available to individual participants;

(4) Document the process and outcomes in the establishment of lifelong learning accounts and prepare a report thereon; and

(5) Partially offset the contribution of low-income employees.

(d) In conformity with and subject to chapter 91, the director of labor and industrial relations shall make rules, not inconsistent with this chapter, which the director deems necessary for or conducive to its proper application and enforcement of this chapter.

(e) The department may enter into contracts with other government agencies, non-profit organizations, or for-profit firms in addressing the purpose and required activities of the lifelong learning accounts program.”

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $1,000,000 or so much thereof as may be necessary for fiscal year 2007-2008 and the sum of $1,000,000 or so much thereof as may be necessary for fiscal year 2008-2009 to carry out the purposes of the lifelong learning accounts program.

The sums appropriated shall be expended by the department of labor and industrial relations for the purposes of this part.

PART II

SECTION 5. This part establishes a statewide kama`aina come home program, that will assist the efforts of county, private sector, and state organizations to attract out-of-state, former Hawaii residents (kama`aina) back into Hawaii's economy.

Pioneering efforts to attract kama`aina back home have been developed by county economic development boards and the department of business, economic development, and tourism. The Hawaii county economic development board, which originated the "Kama`aina come home" brand, pioneered the concept in the 1990s and ever since, the counties and the State have run occasional events on the mainland to attract kama`aina.

SECTION 6. Chapter 201, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§201- Establishment of kama`aina come home program. (a) There is established within the department of business, economic development, and tourism, the kama`aina come home program. The purpose of the program is to initiate new efforts, and support existing efforts by the county economic development boards and other agencies, organizations, and businesses, to attract former Hawaii residents with high-demand work skills back into jobs in Hawaii's economy.

(b) The program shall pursue but not be limited to the following activities to achieve the purpose of the program:

(1) Development of a joint effort between the department, the county economic development boards, and major employers a series of periodic events in selected mainland U.S. cities to inform and recruit back to the state, skilled kama`aina based on actual employment opportunities;

(2) Development of or support of the development of a voluntary, ongoing data base of high school seniors in Hawaii, and establishment of methods to continuously track the residency of these graduates for the purpose of informing them about career opportunities in Hawaii; and

(3) Cooperation with the department to enhance the department's HIRENET job search web site to include specific information on Hawaii job opportunities and related information for out-of-state kama`aina.

(c) The department may enter into contracts with other government agencies, the county economic development boards, other non-profit organizations, or for-profit firms in addressing the purpose and required activities of the program.

(d) The program shall establish measures of effectiveness regarding the effectiveness of the high school senior and out-of-state databases developed, the success of the out-of-state events at filling jobs in Hawaii, and the effectiveness of the HIRENET component to match out-of-state kama`aina with jobs under the program. "

SECTION 7. There is appropriated out of the general revenues of the State of Hawaii the sum of $225,000 or so much thereof as may be necessary for fiscal year 2007-2008 and the sum of $260,000 or so much thereof as may be necessary for fiscal year 2008-2009 to carry out the purposes of the kama`aina come home program.

Of the sums appropriated, $190,000 for fiscal year 2007-2008 and $250,000 for fiscal year 2008-2009 shall be expended by the department of business, economic development, and tourism for the purposes of this part. Of the sums appropriated, $35,000 for fiscal year 2007-2008 and $10,000 for fiscal year 2008-2009 shall be expended by the department of labor and industrial relations for the purposes of this part.

SECTION 8. New statutory material is underscored.

SECTION 9. This Act shall take effect on July 1, 2007.

HOUSE OF REPRESENTATIVES	H.B. NO.	916
TWENTY-FOURTH LEGISLATURE, 2007		H.D. 1
STATE OF HAWAII