STAND. COM. REP. NO. 2459

Honolulu, Hawaii

RE:    S.B. No. 2153

       S.D. 1

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 S.B. No. 2153 entitled:

"A BILL FOR AN ACT RELATING TO GOVERNMENT ACCOUNTABILITY,"

begs leave to report as follows:

     The purpose and intent of this measure is to require an evaluation of all state tax expenditures.

     More specifically, this measure:

     (1)  Requires the Department of Taxation to provide an annual report on tax expenditures to the Legislature on or before September 15th of each odd-numbered year; and

     (2)  Requires legislation establishing new tax expenditures to include certain specified provisions.

     The Department of Taxation and the Tax Foundation of Hawaii provided comments on the measure.

     Your Committee finds that an evaluation of all state tax expenditures would better enable the Legislature to make fiscally-sound and effective spending decisions.  Your Committee also finds that the Department of Taxation currently administers fourteen types of taxes and that a significant amount of time and resources will be required by the Department to implement the necessary changes to the current tax forms and the Department's computer system to capture, analyze, and produce the data required by this measure.

     Your Committee has amended this measure by:

     (1)  Changing the effective date from July 1, 2014, to July 1, 2017, to allow the Department of Taxation sufficient time to begin capturing and analyzing data for the purposes of this measure; and

     (2)  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 S.B. No. 2153, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2153, S.D. 1, and be placed on the calendar for Third Reading.

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

____________________________

DAVID Y. IGE, Chair