STAND. COM. REP. NO. 1056

Honolulu, Hawaii

RE:    H.B. No. 547

       H.D. 2

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sir:

     Your Committees on Education and International Affairs and the Arts, to which was referred H.B. No. 547, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

beg leave to report as follows:

     The purpose and intent of this measure is to establish an income tax credit for host families of foreign exchange students, fellows, and interns.

     Your Committees received testimony in support of this measure from the International Hospitality Center and fifteen individuals.  Your Committees received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

     Your Committees find that foreign exchange study programs in Hawaii provide significant benefits to program participants and to the State as a whole.  Your Committees further find that, although volunteer host families incur significant expenses while hosting an exchange student, fellow, or intern, they receive no compensation.  The tax credit established by this measure will alleviate some of the financial burden experienced by host families and make participation in foreign exchange programs as a host economically feasible for more families in Hawaii.

     Your Committees have amended this measure by:

     (1)  Removing language specifying how the tax credit may be claimed by partnerships and other entities;

     (2)  Changing the minimum requirement that a taxpayer act as a host to a foreign individual from thirty days to one month;

     (3)  Changing the earliest taxable year to which the tax credit may be applied from taxable years beginning after December 31, 2016, to taxable years beginning after December 31, 2017; and

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

     As affirmed by the records of votes of the members of your Committees on Education and International Affairs and the Arts that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 547, H.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 547, H.D. 2, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Education and International Affairs and the Arts,

________________________________ BRIAN T. TANIGUCHI, Chair

________________________________ MICHELLE N. KIDANI, Chair