Honolulu, Hawaii



RE:    H.B. No. 547

       H.D. 2

       S.D. 2




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. 547, H.D. 2, S.D. 1, entitled:




begs leave to report as follows:


     The purpose and intent of this measure is to authorize a tax credit of up to $400 per month for qualified expenses incurred by a taxpayer for hosting a foreign exchange individual.


     Your Committee received written comments in support of this measure from International Hospitality Center and fourteen individuals.


     Your Committee received written comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.


     Your Committee finds that foreign exchange study programs benefit not only program participants, but also the State.  However, volunteer host families may incur significant expenses for participating in the programs, yet receive no financial compensation.  Your Committee believes that the tax credit established by this measure may reduce the financial burden for host families, and make participation in foreign exchange programs economically feasible for more Hawaii families.


     Your Committee notes that the Department of Taxation estimates that if this measure were to take effect on July 1, 2017, the tax credit in the measure would lead to tax revenue losses, as follows:


              Fiscal Year        Tax Revenue Loss

                 2019               $2,450,000

                 2020               $2,570,000

                 2021               $2,700,000

                 2022               $2,830,000

                 2023               $2,970,000


     Your Committee has amended this measure by:


     (1)  Changing the maximum monthly amount of the tax credit to an unspecified sum;


     (2)  Conforming a reference to the Internal Revenue Code of 1986, as amended, to recommended drafting convention; and


     (3)  Making the measure applicable to taxable years beginning after December 31, 2051, 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 H.B. No. 547, H.D. 2, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 547, H.D. 2, S.D. 2.


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