Honolulu, Hawaii

                , 2011


RE:   H.B. No. 306

      H.D. 1





Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii




     Your Committee on Finance, to which was referred H.B. No. 306 entitled:




begs leave to report as follows:


     The purpose of this bill as received by your Committee is to require the Department of Taxation (DOTAX) to provide the Legislature with an annual report on individual income patterns in the State; a biennial report on the income patterns of corporations, proprietorships, and partnerships in the State; and an annual report on tax credits.


     For the purposes of a public hearing, your Committee circulated a proposed H.D. 1 that deletes the bill's contents and:


     (1)  Amends the method of computing the estate and transfer tax;


     (2)  Repeals the income tax credit for resident taxpayers for income taxes paid to other jurisdictions; and


     (3)  Imposes an excise tax on direct broadcast satellite service providers.


     A concerned individual opposed this bill.  DOTAX, the Tax Foundation of Hawaii, Hawaii Association of REALTORS, Oceanic Time Warner Cable, and several concerned individuals provided comments.


     Your Committee has amended this bill by adopting the proposed H.D. 1.


     Your Committee has further amended this bill by:


     (1)  Making the changes made to the computing method of the estate and transfer tax apply retroactively to the estates of decedents who died after April 30, 2010;


     (2)  Changing its effective date to July 1, 2030, to encourage further discussion; and


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


     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. 306, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 306, H.D. 1, and be placed on the calendar for Third Reading.


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