STAND. COM. REP. NO.  355-16


Honolulu, Hawaii

                , 2016


RE:   H.B. No. 1870

      H.D. 1




Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii




     Your Committee on Labor & Public Employment, to which was referred H.B. No. 1870 entitled:




begs leave to report as follows:


     The purpose of this measure is to create an income tax credit for businesses that hire individuals with a disability.


     The State Council on Developmental Disabilities; Hawaii Restaurant Association; Easter Seals Hawaii; Hale Oluea Clubhouse; Lanakila Pacific; and numerous concerned individuals supported this measure.  The Department of Taxation; Tax Foundation of Hawaii; Hawaii Disability Rights Center; and a concerned individual provided comments.


     Your Committee has amended this measure by:


     (1)  Providing that the wages allowed as the base of the tax credit are not also allowed as a deduction to the employer;


     (2)  Clarifying that the Department of Taxation may disqualify wages that were paid to a non-qualified employee without the employer receiving notice that the employee's certification as a person totally disabled was false;


     (3)  Clarifying that in the case of a successor employer, only the current employer may claim the credit and that the credit shall not be claimed multiple times for the same employee;


     (4)  Removing the definition of "individual with a disability" and replacing all references with "person totally disabled" as it is defined under section 235-1, Hawaii Revised Statutes;


     (5)  Making the tax credit apply to taxable years beginning after December 31, 2017; and


     (6)  Making technical, nonsubstantive amendments for purposes of clarity and consistency.


     As affirmed by the record of votes of the members of your Committee on Labor & Public Employment that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1870, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1870, H.D. 1, and be referred to your Committee on Finance.



Respectfully submitted on behalf of the members of the Committee on Labor & Public Employment,