STAND. COM. REP. NO. 3013

Honolulu, Hawaii

RE: S.B. No. 2624

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2020

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 2624 entitled:

"A BILL FOR AN ACT RELATING TO THE LOW-INCOME HOUSEHOLD RENTERS CREDIT,"

begs leave to report as follows:

The purpose and intent of this measure is to amend the low-income tax credit for low-income household renters.

Specifically, this measure:

(1) Sets the tax credit amount based on adjusted gross income and filing status, phasing out the credit as the taxpayer's income rises;

(2) Establishes a maximum tax credit of $150 per exemption; and

(3) Automatically adjusts the tax credit in future years according to increases in the United States Department of Labor consumer price index for urban Hawaii.

Your Committee received written comments in support of this measure from the IMUAlliance, Hawaii Appleseed Center for Law & Economic Justice, and Americans for Democratic Action Hawaii.

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

Your Committee finds that this measure provides a needed adjustment to the eligibility requirements for renters under the income tax credit for low-income household renters, as the cost of housing in the State has increased by three hundred ninety per cent since the income eligibility threshold for this credit was last adjusted in 1989. Your Committee further finds that this adjustment to the tax credit will benefit qualified low-income renters in the State.

Your Committee has amended this measure by:

(1) Amending the provision for automatic adjustment of the tax credit in future years to be calculated using the percentage, if any, by which the consumer price index for June of the preceding calendar year exceeds the consumer price index for June 2020; and

(2) Making technical nonsubstantive amendments for purposes of clarity, consistency, and 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. 2624, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2624, 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,

________________________________

DONOVAN M. DELA CRUZ, Chair