STAND. COM. REP. NO. 3015

Honolulu, Hawaii

RE: S.B. No. 3124

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. 3124 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose and intent of this measure is to change the income tax rates for taxable years beginning after December 31, 2020.

Your Committee received testimony in support of this measure from Hawaii Appleseed Center for Law and Economic Justice, Hawaiian Community Assets and Hawaii Community Lending, Hawaii Health and Harm Reduction Center, League of Women Voters of Hawaii, Patients Without Time, and five individuals.

Your Committee received comments on this measure from the Department of Taxation, Americans for Democratic Action, and Tax Foundation of Hawaii.

Your Committee finds that Hawaii's high cost of living is an economic burden on working families. Your Committee also finds that this burden is a contributing factor in the net migration of persons who move away from the State to find better economic opportunities. Accordingly, your Committee believes that it is appropriate to relieve some of the economic burden on lower-income individuals by adjusting the income tax rates.

Your Committee has amended this measure by:

(1) Adjusting some of the new income tax rates to correct for rounding errors;

(2) Correcting language in the effective date clause regarding the taxable years to which the new income tax rates shall apply;

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

(4) Making technical nonsubstantive changes 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. 3124, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 3124, 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