STAND. COM. REP. NO. 745

Honolulu, Hawaii

RE: S.B. No. 885

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. 885 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 increase the income ceiling to qualify for the low-income household renters income tax credit and increase the amount of the tax credit per qualified exemption.

Your Committee received testimony in support of this measure from the Oahu County Committee on Legislative Priorities of the Democratic Party of Hawaii, League of Women Voters of Hawaii, Catholic Charities Hawaii, Americans for Democratic Action Hawaii, Hawaii Appleseed Center for Law and Economic Justice, Hawaii Alliance for Progressive Action, IMUAlliance, Chamber of Commerce Hawaii, and five individuals.

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

Your Committee finds that the low-income household renters tax credit amount has not been changed since 1981, and the adjusted gross income ceiling has not been adjusted since 1989.

Your Committee further finds that basing the income threshold for the income tax credit for low-income renters on the taxpayer's filing status will ensure efficient and fair administration of the tax credit.

Your Committee has amended this measure by:

(1) Changing the income threshold amount from $60,000 for all taxpayers to $30,000 for single filers or married filers filing separately, $45,000 for head of household filers, and $75,000 for joint filers;

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

(3) Making this measure applicable to taxable years beginning after December 31, 2019.

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. 885, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 885, 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