Honolulu, Hawaii



RE:    H.B. No. 375

       H.D. 1

       S.D. 1




Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii




     Your Committee on Ways and Means, to which was referred H.B. No. 375, H.D. 1, entitled:




begs leave to report as follows:


     The purpose and intent of this measure is to amend state income tax rates to eliminate income tax liability for taxpayers living at or below poverty thresholds.


     Your Committee received testimony in support of this measure from the Office of Hawaiian Affairs and Americans for Democratic Action Hawaii.


     Your Committee received comments on this measure from the Department of Taxation, Hawaii Appleseed Center for Law and Economic Justice, and Tax Foundation of Hawaii.


     Your Committee finds that Act 223, Session Laws of Hawaii 2015, temporarily increased the amount of the refundable food/excise tax credit.  According to the Department of Taxation, making this increase permanent is expected to result in an annual revenue loss of $6,500,000.


     Your Committee has amended this measure by:


     (1)  Deleting its contents and replacing them with provisions to make permanent the amendments to the refundable food/excise tax credit by repealing the sunset date in Act 223, Session Laws of Hawaii 2015; and


     (2)  Changing the effective date to upon approval.


     Your Committee notes that these new provisions also appear in H.B. No. 209, H.D. 1, and S.B. No. 648, both of which were heard by your Committee.  It is your Committee's intent to keep the provisions making permanent the amendments to the refundable food/excise tax credit by Act 223, Session Laws of Hawaii 2015, independent of other measures, in order to increase the provisions' chances of successful passage.


     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 H.B. No. 375, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 375, H.D. 1, 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,