STAND. COM. REP. NO. 794

Honolulu, Hawaii

RE:    S.B. No. 1839

       S.D. 2

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 1839, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAX SYSTEMS,"

begs leave to report as follows:

     The purpose of this measure is to authorize the Department of Taxation to execute and provide a funding mechanism to pay for benefits-funded revenue generating initiatives provided by automated or enhanced tax system vendors when measurable increases in revenues resulting from the initiatives are collected by the State. 

     The income, general excise, and use tax revenues generated from these initiatives would be deposited in an Integrated Tax Services and Management Special Fund (Special Fund) established under this measure and used by the Department of Taxation to enhance its computer system and to streamline related operational procedures.  The measure also establishes an unspecified expenditure ceiling for the Special Fund and lapses any revenues contained in the Special Fund that are in excess of an unspecified amount to the credit of the general fund.

     The Department of Taxation submitted written comments supporting the intent of this measure.  The Tax Foundation of Hawaii submitted written comments.

     Your Committee amended this measure to protect the amendments to Section 237-31, Hawaii Revised Statutes, made in this measure from the sunset date established in Act 304, Session Laws of Hawaii 2006.  Technical, nonsubstantive changes were also made for the purposes of clarity and consistency.

     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 S.B. No. 1839, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1839, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

ROSALYN H. BAKER, Chair