THE SENATE	S.B. NO.	2179
TWENTY-SIXTH LEGISLATURE, 2012
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO THE FEDERAL EARNED INCOME TAX CREDIT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that the federal earned income tax credit is a mechanism by which families in certain earned income tax categories can reduce the federal tax on their income and even, in some cases, reduce the tax to below zero, resulting in the taxpayer receiving a cash "refund".  Nationally, the credit has been widely heralded for its success in supporting work, raising income, and reducing poverty.

     About 105,000 low-income families in Hawaii claim the credit.  An estimated 19,000 additional families could claim the credit if properly informed, thereby improving their financial situation.  Moreover, since low-income families tend to spend their earned income tax credit on necessities such as rent, food, utilities, and household goods, more widespread use of the credit could help the local economy.

     A collaborative of nonprofit agencies in conjunction with the United States Internal Revenue Service has begun a volunteer tax assistance program in Hawaii to help low-income families claim the federal earned income tax credit.  However, the State's partnership in and coordination of an outreach program for the credit could be critical to its success.

     The purpose of this Act is to require the department of taxation to coordinate an outreach initiative to increase awareness and use of the federal earned income tax credit.

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

     "§235-    Outreach for earned income tax credit. The department shall coordinate an outreach initiative designed to ensure that the maximum number of eligible families apply for and receive the federal earned income tax credit.  The department may contract with a nonprofit agency to coordinate the outreach initiative on behalf of the department."

     SECTION 3.  There is appropriated out of the general revenues of the State of Hawaii the sum of $          or so much thereof as may be necessary for fiscal year 2012-2013 for the coordination of the outreach for earned income tax credit initiative.

     The sum appropriated shall be expended by the department of taxation for the purposes of this Act.

     SECTION 4.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 2012.

INTRODUCED BY:	_____________________________
	BY REQUEST

Report Title:

Office of Hawaiian Affairs Package; Earned Income Tax Credit Outreach Program; Appropriation

Description:

Requires the department of taxation to coordinate an outreach initiative to increase awareness and use of the federal earned income tax credit.  Makes an appropriation.

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