STAND. COM. REP. NO. 2203

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 2334
                                        




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Education and Technology, to which was
referred S.B. No. 2334 entitled: 

     "A BILL FOR AN ACT RELATING TO GENERAL EXCISE TAX,"

begs leave to report as follows:

     The purpose of this bill is to exempt from the general
excise tax fundraising amounts raised by certain nonprofit groups
and purchases made by such groups for public schools.

     Testimony in favor of the measure was received from the
Department of Education; Parent Teacher Associations for Kapolei
Elementary School, Mauka Lani Elementary School, Ewa Elementary
School, and Aikahi Elementary School; Hawaii Association of
Realtors; Parent Teacher Student Association of James Campbell
High School; and Kapolei Elementary School.  Testimony in
opposition to the measure was received from the Department of
Taxation and one individual.  Comments on the measure were
offered by the Tax Foundation of Hawaii.

     Currently, although profits from school-related nonprofit
groups that conduct fundraising events are deposited directly to
a public school, those profits are subject to the general excise
tax of four per cent.  Given the cyclical nature of Hawaii's
economy and the budget constraints for public schools, profits
from these nonprofit groups provide support for extra programs
that otherwise would not exist.  This measure will provide relief
for those nonprofits by exempting their fundraising amounts from

 
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                                   STAND. COM. REP. NO. 2203
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the general excise tax, thereby increasing the moneys available
to the public schools.

     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 S.B. No. 2334 and recommends that it pass Second Reading 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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