Honolulu, Hawaii



RE:    S.B. No. 2202

       S.D. 1




Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii




     Your Committee on Ways and Means, to which was referred S.B. No. 2202 entitled:




begs leave to report as follows:


     The purpose and intent of this measure is to amend the refundable food/excise tax credit by updating its adjusted gross income threshold and tax credit amounts and tying future tax credit amounts to the Consumer Price Index.


     Your Committee received testimony in support of this measure from Hawaii Appleseed Center for Law and Economic Justice, Hawaii Alliance for Community-Based Development, Goodwill Industries of Hawaii, Aloha United Way, Catholic Charities Hawaii, Partners in Care, ILWU Local 142, and six individuals.  Your Committee received comments on this measure from the Department of the Attorney General, Department of Taxation, Tax Foundation of Hawaii, and one individual.


     Your Committee finds that for low-income people, the general excise tax imposes the greatest tax burden.  The refundable food/excise tax credit provides a key means to promote financial stability, as well as a more equitable tax system.  Your Committee notes, however, that the amount of the tax credit has not been adjusted for inflation since 2007.


     Your Committee has amended this measure by:


(1)  Removing provisions that tie the tax credit amounts to the Consumer Price Index;


(2)  Changing the adjusted gross income threshold and tax credit amounts to unspecified figures;


(3)  Deleting the requirement that a person claiming the qualified exemption shall have physically resided in the State for more than nine months during the taxable year; and


(4)  Changing the effective date to July 1, 2050, to facilitate further discussion on the measure.


     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2202, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2202, S.D. 1, and be placed on the calendar for Third Reading.


Respectfully submitted on behalf of the members of the Committee on Ways and Means,