STAND. COM. REP. NO. 2313

Honolulu, Hawaii

RE:    S.B. No. 2179

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2012

State of Hawaii

Sir:

     Your Committee on Human Services, to which was referred S.B. No. 2179 entitled:

"A BILL FOR AN ACT RELATING TO THE FEDERAL EARNED INCOME TAX CREDIT,"

begs leave to report as follows:

     The purpose and intent of this measure is to require and appropriate funds to the Department of Taxation to coordinate an outreach initiative to increase awareness and use of the federal earned income tax credit.

     Your Committee received testimony in support of this measure from the Department of Human Services; the Hawaii State Commission on the Status of Women; the Association of Hawaiian Civic Clubs; the Hawai‘i Alliance for Community-Based Economic Development; the Office of Hawaiian Affairs; the Women's Caucus, Democratic Party of Hawai‘i; and one individual.  Your Committee received comments on this measure from the Department of Taxation and the Tax Foundation of Hawaii.

     Your Committee finds that the federal earned income tax credit is considered one of the nation's largest and most successful anti-poverty and work incentive programs.  Your Committee also finds that although the federal earned income tax credit is widely known to reduce poverty with 104,000 families taking advantage of the federal earned income tax credit, another 19,000 families could claim the credit if they were aware of the program and their eligibility.  It is estimated that Hawaii workers fail to claim between $31,299,580 and $41,732,301 in federal earned income tax credit benefits annually.  This measure will require the Department of Taxation to conduct an outreach initiative to educate families on the federal earned income tax credit and to appropriate funds to the Department to carry out the initiative.

     Your Committee further finds that the Volunteer Income Tax Assistance Program offers free tax help to persons earning $50,000 or less, who need assistance preparing their taxes and provides free basic income tax return preparation to qualified individuals in local communities.  Therefore, your Committee requests the Department of Taxation to partner with the Volunteer Income Tax Assistance Program to carry out the outreach initiative.

     As affirmed by the record of votes of the members of your Committee on Human Services that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2179 and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Human Services,

____________________________

SUZANNE CHUN OAKLAND, Chair