HB1082.DOC

SECTION 1. Since 2007, the legislature, governor, department of education, university of Hawaii community colleges, department of human services, and department of business, economic development, and tourism have worked collaboratively to create an educational focus on science, technology, engineering, and math programs in public schools. These areas of education will help Hawaii's students develop world-class analytical and problem-solving skills that will make them employable in the future and help the State become globally competitive.

This bill creates a tax credit that can be claimed by individuals and businesses who donate money to directly support a qualifying science, technology, engineering, and mathematics academy at a Hawaii school, as certified by the department of business, economic development, and tourism, in collaboration with the director of academies, Honolulu community college. The creation of this new funding mechanism allows the community to directly support science, technology, engineering, and mathematics education, which contributes to the development of an internationally competitive and thriving labor force within Hawaii.

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

"§235- Science, technology, engineering, and math education tax credit. (a) There shall be allowed to each taxpayer subject to the taxes imposed by this chapter, a science, technology, engineering, and math education tax credit that shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed.

(b) The amount of the tax credit shall be fifty per cent of the amount donated to a qualifying science, technology, engineering, and math academy, subject to the limitations provided in this section.

(1) For individuals other than persons filing a joint return, the amount of the tax credit shall not exceed $ ;

(2) For persons filing a joint return, the amount of the tax credit shall not exceed $ ;

(3) In the case of a corporation, the amount of the tax credit shall not exceed $ ;

(4) In the case of a partnership, S corporation, or estate of trust, the tax credit is allowable for cash donated by the entity and shall not exceed $ per the return of the partnership, S corporation, or estate or trust, filed in any taxable year. Allocations of the tax credit shall be determined under the income tax rules governing allocations of credits; and

(5) An allocation of tax credit under this subsection is subject to the limitations in paragraphs (1), (2), (3), and (4).

(d) The department of business, economic development, and tourism shall maintain records of and certify the total amount of the donations eligible for the credit made during the taxable year, including donations made to a qualifying science, technology, engineering, and math academy at a school. All donations eligible for the credit shall be verified by the department of business, economic development, and tourism, in consultation with the director of academies, Honolulu community college. The department of business, economic development, and tourism shall total and record all of the certified donations. Upon each determination, the department of business, economic development, and tourism shall issue a certificate to the taxpayer certifying the amount of the donations eligible to be claimed as a credit. The taxpayer shall file the certificate from the department of business, economic development, and tourism with the taxpayer's tax return, subject to the limitations in subsection (c), with the department of taxation to claim the credit. The department of business, economic development, and tourism shall certify no more than $1,000,000 in donations in the aggregate for all taxpayers for each taxable year. When the total amount of certified donations reaches $500,000, the department of business, economic development, and tourism shall immediately discontinue certifying donations and notify the department of taxation.

(e) If the tax credit claimed by a taxpayer exceeds the taxpayer's income tax liability, the excess of the tax credit over liability may be used as a credit against the taxpayer's income liability, up to five consecutive taxable years following the year of the donation until exhausted subject to the limitations in subsection (c). If the credit is not exhausted within the five consecutive taxable years following the year of the donation, the credit expires.

(f) If a deduction is taken under section 170 (with respect to charitable contributions and gifts) of the Internal Revenue Code on the taxpayer's federal or state income tax return for the amount donated to a qualifying science, technology, engineering, and math academy at a school, no tax credit shall be allowed for that portion of the donation for which the deduction was taken.

(g) The term "qualifying science, technology, engineering, and math academy" as used in this section means a primary, middle, or high school operated by the department of education that has been approved by the department of business, economic development, and tourism or the director of academies, Honolulu community college to participate in its science, technology, engineering, and math educational programs.

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

(i) All claims for the tax credit under this section, including any amended claims, 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."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2008.

INTRODUCED BY:

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By Request

HOUSE OF REPRESENTATIVES	H.B. NO.	1082
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII