STAND. COM. REP. NO. 354

Honolulu, Hawaii

RE: S.B. No. 161

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committee on Human Services, to which was referred S.B. No. 161 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose and intent of this measure is to provide to a taxpayer who hires an individual with a disability a nonrefundable tax credit for the six-month period after the individual is initially hired by the taxpayer.

Your Committee received testimony in support of this measure from a member of the Kaua‘i County Council, a member of the Maui County Council, Hawai‘i State Association of Counties, Hawaii Disability Rights Center, and O‘ahu County Committee on Legislative Priorities of the Democratic Party of Hawai‘i. Your Committee received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

Your Committee finds that providing an incentive to hire individuals with disabilities encourages employers to hire those individuals. Your Committee further finds that hiring individuals with disabilities facilitates the economic self-sufficiency of those individuals, creates awareness and opportunities surrounding workplace accessibility and productivity of workers with disabilities, and adds motivated people to the work force. This measure provides a tax credit to employers who hire individuals with disabilities, which allows employers to capitalize on the value and talent that individuals with disabilities offer in the workplace, while receiving an added benefit of a tax credit.

Your Committee has amended this measure by:

(1) Adopting language suggested by the Department of Taxation that:

(A) Changes the tax credit from fifty percent of the qualified wages for the first six months after the individual with a disability is initially hired to twenty-five percent of the qualified wages for the first twelve months after the individual with a disability is initially hired;

(B) Clarifies the definition of "individual with a disability"; and

(C) Clarifies that the definition of "wages" is based solely on cash wages; and

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

As affirmed by the record of votes of the members of your Committee on Human Services that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 161, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 161, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Human Services,

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RUSSELL E. RUDERMAN, Chair