STAND. COM. REP. NO. 3271

Honolulu, Hawaii

RE:    H.B. No. 2576

       H.D. 1

       S.D. 2

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred H.B. No. 2576, H.D. 1, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO EDUCATION,"

begs leave to report as follows:

     The purpose and intent of this measure is to support charter schools in the State.

     More specifically, this measure:

     (1)  Establishes an income tax credit for contributions of money or in-kinds goods and services for the development of charter school facilities;

     (2)  Establishes the Hawaii charter school facility development special fund; and

     (3)  Appropriates funds to support the development of charter school facilities

     Your Committee received written comments in support of this measure from the State Public Charter School Commission, Hawaii Public Charter Schools Network, Kamehameha Schools, Na Wai Ola Public Charter School Governing Board, and seven individuals.  The Department of Budget and Finance, Department of Taxation, and Tax Foundation of Hawaii submitted written comments on the measure.

     Your Committee finds that a scarcity of funding for the development and maintenance of facilities is a serious issue facing Hawaii charter schools.  Your Committee also finds that start-up charter schools must pay for the cost of their facilities with already limited operational funds.  Your Committee believes that this measure will provide a mechanism to fund the development of charter school facilities.

     Your Committee has amended this measure by:

     (1)  Clarifying that the cap amount applies to the amount of tax credits that may be claimed, rather than the value of contributions that may be claimed;

     (2)  Clarifying that a taxpayer may not use the same contribution to claim both a charitable deduction and a tax credit under the measure; and

     (3)  Making technical nonsubstantive amendments for the purposes of consistency, clarity, and style.

     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 H.B. No. 2576, H.D. 1, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 2576, H.D. 1, S.D. 2.

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

____________________________

DAVID Y. IGE, Chair