STAND. COM. REP. NO. 2532

Honolulu, Hawaii

RE:    S.B. No. 3251

       S.D. 2

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Madam:

     Your Committee on Economic Development and Taxation, to which was referred S.B. No. 3251, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO EDUCATION,"

begs leave to report as follows:

     The purpose of this measure is to establish a task force to study the adequacy of funding for education in the State and to develop estimates and methods for meeting funding needs.  This measure also establishes a tax credit for volunteer services performed for the public schools or the University of Hawaii.

     Testimony in support of this measure was submitted by the Hawaii Association of Independent Schools, the Hawai‘i Business Roundtable, the Hawai‘i Alliance for Community-Based Economic Development, the Hawaii State Teachers Association, and Imperium Renewables.  Testimony in opposition of this measure was submitted by the Department of Education and the Department of Taxation.  Comments on the measure were submitted by the Tax Foundation of Hawaii.

     Your Committee finds that permitting some taxpayers to interpret whether their voluntary services are eligible for the tax credit would likely be problematic.  The Department of Taxation raised additional concerns over implementation of the tax credit.

     Accordingly, your Committee does not support providing a tax credit for volunteer services performed by taxpayers for public schools or the University of Hawaii.

     Your Committee has amended this measure by:

     (1)  Deleting the tax credit for volunteer services performed at a public school or the University of Hawaii; and

     (2)  Making technical, nonsubstantive amendments for the purpose of clarity.

     As affirmed by the record of votes of the members of your Committee on Economic Development and Taxation that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3251, S.D. 1, as amended herein, and recommends that it be referred to the Committee on Ways and Means, in the form attached hereto as S.B. No. 3251, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Economic Development and Taxation,

____________________________

CAROL FUKUNAGA, Chair