STAND. COM. REP. NO. 2502

Honolulu, Hawaii

RE: S.B. No. 2905

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

Sir:

Your Committees on Education, Labor, and Human Services, to which was referred S.B. No. 2905 entitled:

"A BILL FOR AN ACT RELATING TO ON-SITE EARLY CHILDHOOD FACILITIES,"

beg leave to report as follows:

The purpose and intent of this measure is to:

(1) Establish an income tax credit for employers who create on-site early childhood facilities; and

(2) Establish and appropriate funds for one on-site early childhood facility coordinator position.

Your Committees received testimony in support of this measure from the Executive Office on Early Learning; Ho‘omana Pono, LLC; Oahu County Committee on Legislative Priorities of the Democratic Party of Hawai‘i; and three individuals. Your Committees received testimony in opposition to this measure from one individual. Your Committees received comments on this measure from the Department of Human Services, Department of Taxation, and Tax Foundation of Hawaii.

Your Committees find that Hawaii has one of the highest costs for child care in the nation. In many cases, the costs for child care for two children are as much as one full-time working parent would make in a year after taxes, leading to one parent leaving the workforce to care for children on a full-time basis in many families. Kindergarten teachers within the Department of Education have indicated that children who do not attend pre-kindergarten programs can be eighteen to twenty-four months developmentally behind their peers who do attend preschool. The creation of on-site early childhood facilities by employers can increase employee retention while providing affordable access to early childhood learning programs.

Your Committees have amended this measure by:

(1) Clarifying the use of the term "qualified costs" throughout the measure;

(2) Exempting employers who close an early childhood facility before the minimum of ten years from credit recapture if the Department of Human Services certifies that the employer closed the facility for reasonable cause;

(3) Inserting a blank annual aggregate cap for the on-site early childhood facility tax credit;

(4) Inserting an effective date of July 1, 2019; and

(5) 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, Labor, and Human Services that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2905, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2905, 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, Labor, and Human Services,

________________________________ JILL N. TOKUDA, Chair	________________________________ MICHELLE N. KIDANI, Chair
	________________________________ JOSH GREEN, Chair