CONFERENCE COMMITTEE REP. NO. 121

Honolulu, Hawaii

                 , 2017

RE:    H.B. No. 209

       H.D. 1

       S.D. 1

       C.D. 1

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sirs:

     Your Committee on Conference on the disagreeing vote of the House of Representatives to the amendments proposed by the Senate in H.B. No. 209, H.D. 1, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.

     The purpose of this measure is to amend the State's income tax law by:

     (1)  Establishing a state earned income tax credit based on a percentage of the federal earned income tax credit;

     (2)  Changing income tax rates for taxable years after December 31, 2016;

     (3)  Repealing the sunset date for amendments made to the refundable food/excise tax credit by Act 223, Session Laws of Hawaii 2015; and

     (4)  Appropriating funds to the Department of Taxation for certain tax preparation assistance outreach programs.

     Your Committee on Conference has amended this measure by:

     (1)  Specifying that the state earned income tax credit shall:

          (A)  Be 20 percent of the federal earned income tax credit;

          (B)  Be nonrefundable; and

          (C)  Not apply to taxable years beginning after December 31, 2022;

     (2)  Defining "qualifying individual taxpayer;"

     (3)  Clarifying the disallowance period for the state earned income tax credit;

     (4)  Changing the income tax rates for taxable years beginning after December 31, 2017;

     (5)  Removing the appropriation to the Department of Taxation;

     (6)  Changing the effective date to upon its approval; and

     (7)  Making technical, nonsubstantive amendments for clarity, consistency, and style.

     As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of H.B. No. 209, H.D. 1, S.D. 1, as amended herein, and recommends that it pass Final Reading in the form attached hereto as H.B. No. 209, H.D. 1, S.D. 1, C.D. 1.

Respectfully submitted on behalf of the managers:

ON THE PART OF THE SENATE

ON THE PART OF THE HOUSE

____________________________ JILL N. TOKUDA Chair

____________________________ SYLVIA LUKE Chair