STAND. COM. REP. NO. 750

Honolulu, Hawaii

RE: S.B. No. 579

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 Ways and Means, to which was referred S.B. No. 579 entitled:

"A BILL FOR AN ACT RELATING TO TAX CREDITS,"

begs leave to report as follows:

The purpose and intent of this measure is to provide tax relief to low-income households.

Specifically, this measure:

(1) Amends the allowable income tax credit for low-income household renters to an unspecified amount;

(2) Makes the earned income tax credit refundable for ten taxable years after December 31, 2019; and

(3) Amends the allowable amount of the refundable food/excise tax credit to an unspecified amount.

Your Committee received testimony in support of this measure from the Oahu County Committee on Legislative Priorities of the Democratic Party of Hawaii, Americans for Democratic Action Hawaii, HACBED, League of Women Voters, IMUAlliance, Hawaii Appleseed Center for Law and Economic Justice, and two individuals.

Your Committee received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

Your Committee finds that this measure would provide financial relief to the thirty-five thousand families in the State that a recent report found were "food insecure," meaning they have had trouble obtaining adequate food and, in some cases, have gone hungry.

Your Committee has amended this measure by:

(1) Removing provisions that make the earned income tax credit refundable;

(2) Extending the sunset date of the earned income tax credit to December 31, 2029;

(3) Providing that the changes to the tax credits in the measure shall apply to taxable years beginning after December 31, 2019;

(4) Changing the effective date to July 1, 2050, to facilitate further discussion on the measure; and

(5) Making technical nonsubstantive amendments for the purpose of style.

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. 579, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 579, S.D. 1, and be placed on the calendar for Third Reading.

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

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DONOVAN M. DELA CRUZ, Chair