STAND. COM. REP. 845

Honolulu, Hawaii

, 2003

RE: H.B. No. 291

H.D. 2

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Finance, to which was referred H.B. No. 291, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE JOB CREATION INCOME TAX CREDIT,"

begs leave to report as follows:

The purpose of this bill is to support Hawaii's workforce by:

(1) Establishing a temporary, nonrefundable Job Creation Income Tax Credit (Tax Credit) equal to $5,000 per qualified employee, provided that an amount equal to two-thirds of the Tax Credit is used for workforce training;

(2) Providing incentives for more stable, higher-paying jobs by allowing the Tax Credit to be applied only for full-time employees who earn $25,000 or more in wages and remain employed by the taxpayer for at least two years; and

(3) Requiring the Department of Taxation (DOTAX) to submit a yearly study to the legislature outlining the use and effect of the Tax Credit.

The Chamber of Commerce of Hawaii supported the intent of this bill. DOTAX and Tax Foundation of Hawaii offered comments.

Your Committee notes that two-thirds of the credit to be provided must be used by the employer for workforce training. While your Committee wishes to do all it can to help the employment situation during these dire economic times, your Committee is also concerned about accountability for this requirement.

Your Committee has amended this measure by:

(1) Allowing the Tax Credit to be claimed only upon declaration by the Governor;

(2) Requiring the Governor to issue a declaration allowing taxpayers to claim the Tax Credit when the general fund revenue collections at the close of each of two successive fiscal years exceed 7.5 percent of the general fund revenues for each of the two fiscal years; and

(3) Making technical, nonsubstantive amendments for purposes of style and clarity.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 291, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 291, H.D. 2.

Respectfully submitted on behalf of the members of the Committee on Finance,

 

____________________________

DWIGHT Y. TAKAMINE, Chair