Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 817
                                        S.D. 1

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


     Your Committees on Health and Human Services and Commerce
and Consumer Protection, to which was referred S.B. No. 817


beg leave to report as follows:

     The purpose of this measure is to establish individual
development accounts (IDAs).

     Your Committees received testimony in support of this
measure from the Department of Community Services of the City and
County of Honolulu, Hawaii State Commission on the Status of
Women, Parents and Children Together, Legal Aid Society of
Hawaii, Maui Economic Opportunity, Bank of Hawaii, Consuelo Zobel
Alger Foundation, American Friends Service Committee, Waimanalo
Community Development Corporation, Work Hawaii, three private
citizens, and numerous persons who signed petitions and
testimonials.  The Department of Human Services (DHS) stated it
was not able to support the bill because the Department lacks the
staff resources to administer the program.

     This measure is intended to promote savings, investment, and
accumulation of assets for welfare recipients and other low
income persons not on public assistance.  Funds may be used by an
account holder for post-secondary education and training,
purchase of a first home, or business capitalization expense.

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                                   STAND. COM. REP. NO. 496
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Your Committees find that this measure has tremendous potential
to lift welfare recipients and others out of poverty and to place
them into the mainstream of society.

     According to the Bank of Hawaii, this measure is an
outgrowth of the federal Assets for Independence Act, recently
signed into law by President Clinton.  The Act establishes a
five-year demonstration program to help low-income individuals
and families save part of their income for future use toward
specified activities.  To date, IDAs have been primarily utilized
by local government.

     According to the DHS, it has the authority to establish IDAs
as part of the Temporary Assistance to Needy Families Program.
However, it has not done so because the administrative costs
would be excessive.

     Your Committees have amended this measure on the
recommendation of the Hawaii Independent Development Account
Collaborative by:

     (1)  Adding language to the purpose section to explain IDAs;

     (2)  Providing that IDAs be administered by fiduciary
          organizations which would bid for a contract with DHS;

     (3)  Providing income tax credits for contributing matching
          funds to IDAs.

     Your Committees also have made technical, nonsubstantive
amendments for purposes of clarity and style.

     As affirmed by the records of votes of the members of your
Committees on Health and Human Services and Commerce and Consumer
Protection that are attached to this report, your Committees are
in accord with the intent and purpose of S.B. No. 817, as amended
herein, and recommend that it pass Second Reading in the form
attached hereto as S.B. No. 817, S.D. 1, and be referred to the
Committee on Ways and Means.

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                                   STAND. COM. REP. NO. 496
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                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Health and Human
                                   Services and Commerce and
                                   Consumer Protection,

_____________________________      ______________________________
BRIAN KANNO, Co-Chair              SUZANNE CHUN OAKLAND, Chair


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