STAND. COM. REP. NO. 1151

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 307
                                        H.D. 2
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Education and Technology, to which was
referred H.B. No. 307, H.D. 2, entitled: 

     "A BILL FOR AN ACT RELATING TO HIGHER EDUCATION,"

begs leave to report as follows:

     The purpose of this measure is to encourage savings for
higher education expenses by establishing a college savings
program.  This will enable families to save for college tuition
and other expenses through college accounts.

     Testimony in support of this measure was submitted by the
University of Hawaii, the Department of Education, the Department
of Budget and Finance, the Department of Accounting and General
Services, the Hawaii State Teachers Association, TIAA-CREFF, and
two concerned individuals.  The Department of Taxation submitted
testimony in support of the intent of this measure.  Information
was submitted by the Tax Foundation of Hawaii.

     Your Committee finds that this measure would provide federal
and state income tax benefits for those saving for college
attendance at public and private colleges.  Because education is
such a high priority in this State, your Committee endorses this
mechanism to help Hawaii families provide for the cost of their
children's education.  

     Your Committee has amended this measure pursuant to the
requests of the Department of Taxation, the Department of Budget

 
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                                   STAND. COM. REP. NO. 1151
                                   Page 2


and Finance, and the Department of Accounting and General
Services.  Specifically, your Committee has amended this measure
to:

     (1)  Conform to the qualification requirements of the
          federal tax laws and section 529 of the Internal
          Revenue Code of 1986;

     (2)  Delete the provision that the designated beneficiary
          may be the account holder; and

     (3)  Replace the Comptroller with the Director of Finance as
          the administrator of the program.  Both Departments of
          Accounting and General Services and Budget and Finance
          agree that this will minimize administrative costs
          accrued by the State.

     Technical, nonsubstantive changes also were made for
purposes of clarity and style.

     As affirmed by the record of votes of the members of your
Committee on Education and Technology that is attached to this
report, your Committee is in accord with the intent and purpose
of H.B. No. 307, H.D. 2, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B.
No. 307, H.D. 2, S.D. 1, and be referred to the Committee on Ways
and Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Education and
                                   Technology,



                                   ______________________________
                                   DAVID Y. IGE, Chair

 
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