STAND. COM. REP. NO. 3003

Honolulu, Hawaii

RE: S.B. No. 2261

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2020

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 2261, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose and intent of this measure is to address the shortage of teachers in the State.

Specifically, this measure:

(1) Provides an income tax exclusion for certain public school teachers who earn $60,000 or less per year; and

(2) Defines eligible teachers as school teachers, special education teachers, school librarians, and school counselors employed by the Department of Education or a charter school.

Your Committee received written comments in support of this measure from the Early Learning Board, Hawaii Teacher Standards Board, Democratic Party of Hawaii Education Caucus, Hawaii State Teachers Association, Hui for Excellence in Education, Kamehameha Schools, and one individual.

Your Committee received written comments in opposition to this measure from the Hawaii Government Employees Association.

Your Committee received written comments on this measure from the Department of Taxation, Executive Office on Early Learning, and Tax Foundation of Hawaii.

Your Committee finds that the State is experiencing a chronic shortage of qualified teachers, due in part to the high cost of living in Hawaii. This measure is intended to improve teacher recruitment and retention by reducing the income tax burden on eligible teachers.

Your Committee has amended this measure by:

(1) Establishing the income tax exclusion as part of section 235-7, Hawaii Revised Statutes, rather than as a new statutory section; and

(2) 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. 2261, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2261, S.D. 2.

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

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DONOVAN M. DELA CRUZ, Chair