STAND. COM. REP. NO. 2210

Honolulu, Hawaii

RE:    S.B. No. 2807

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2010

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 2807 entitled:

"A BILL FOR AN ACT PROPOSING AN AMENDMENT TO ARTICLE VII, SECTION 6, OF THE HAWAII CONSTITUTION, RELATING TO THE TAX REBATE REQUIREMENT,"

begs leave to report as follows:

     The purpose of this measure is to propose a constitutional amendment to article VII, section 6, of the Hawaii constitution to authorize the Legislature to determine whether excess funds should be used as tax refunds or tax credits to taxpayers or be diverted to the State's emergency and budget reserve fund.

     Your Committee received testimony in opposition to this measure from the Governor and one state agency.  One organization offered comments.

     Written testimony presented to the Committee may be reviewed on the Legislature's website.

     Your Committee finds that the requirement that the Legislature dispose of excess revenues is established in article VII, section 6, of the Hawaii Constitution.  On the other hand, the emergency and budget reserve fund is established in section 328L‑3, Hawaii Revised Statutes, as a temporary supplemental source of funding for the State during times of emergency, economic downturn, or unforeseen reduction in revenues.

Your Committee finds that making a specific reference in the Hawaii constitution to a section of the Hawaii Revised Statutes might restrict the Legislature's ability to someday amend or reorganize that portion of the statutes unless and until the Hawaii constitution is amended.

Upon further consideration, your Committee has amended this measure by:

(1)  Restoring the mandate upon the Legislature to dispose of the excess revenues; and

(2)  Removing the specific reference to section 328L‑3, Hawaii Revised Statutes, and replacing it with more general language referring to the "emergency and budget reserve fund established by law".

     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. 2807, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2807, S.D. 1, and be referred to the Committee on Judiciary and Government Operations.

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

____________________________

DONNA MERCADO KIM, Chair