STAND. COM. REP. NO. 2086

Honolulu, Hawaii

RE:    S.B. No. 2922

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B. No. 2922 entitled:

"A BILL FOR AN ACT RELATING TO THE TAX REVIEW COMMISSION,"

begs leave to report as follows:

     The purpose and intent of this measure is to enable the Tax Review Commission to carry out its mandate of evaluating the State's tax structure and recommending revenue and tax policy.

Specifically, this measure:

     (1)  Extends the reporting date of the 2015-2017 Tax Review Commission to thirty days prior to the convening of the regular legislative session of 2018; and

     (2)  Appropriates $250,000 for the Tax Review Commission for fiscal year 2016-2017.

     Your Committee received written testimony in support of this measure from the Department of Taxation.  The Tax Foundation of Hawaii submitted written comments on this measure.

     Your Committee finds that a Tax Review Commission is appointed every five years to review the State's tax structure and make related recommendations to the Legislature thirty days prior to the second regular legislative session following the appointment of the Commission.  The most recent Tax Review Commission was required to have been appointed by July 1, 2015, and to submit its report to the Legislature in December 2016, pursuant to section 232E-3, Hawaii Revised Statutes.  However, as of December 31, 2015, none of the Tax Review Commission members had been appointed.

     Your Committee finds that this bill effectively permits the appointment of a Tax Review Commission in 2016 instead of 2015.  Your Committee further finds that the date by which the Tax Review Commission shall submit its report to the Legislature should be extended to thirty days prior to the convening of the Regular Session of 2018.  Your Committee further finds that an appropriation of $250,000 should be made for the Tax Review Commission to carry out its mandate of evaluating the State's tax structure and recommending revenue and tax policy.

     Your Committee intends that this bill be passed by the Legislature and enacted into law as soon as possible.  Concurrent with the movement of this bill through the legislative process during the 2016 Regular Session, your Committee urges the Governor to submit nominees to the Senate in anticipation of enactment of this bill.  Your Committee intends that the Senate consider the nominees for advice and consent while this bill moves through the legislative process.  This concurrent process, your Committee hopes, will result in the appointment of commission members before the adjournment sine die of the 2016 Regular Session.

     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. 2922 and recommends that it pass Second Reading and be placed on the calendar for Third Reading.

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

________________________________

JILL N. TOKUDA, Chair