STAND. COM. REP. NO. 3203

Honolulu, Hawaii

RE: S.B. No. 2627

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. 2627, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAX CREDITS,"

begs leave to report as follows:

The purpose and intent of this measure is to adjust the eligibility requirements for the income tax credit for low-income household renters.

Specifically, this measure:

(1) Sets the tax credit amount based on adjusted gross income and filing status, phasing out the credit as the taxpayer's income rises;

(2) Establishes a maximum tax credit of $200 per exemption; and

(3) Automatically adjusts the tax credit in future years according to increases in the United States Department of Labor consumer price index.

Your Committee received written comments in support of this measure from the League of Women Voters Hawaii, Americans for Democratic Action Hawaii, LGBT Caucus of the Democratic Party of Hawaii, Hawaii Alliance for Community-Based Economic Development, Hawaii Children's Action Network Speaks!, Our Revolution Hawaii, Hawaii Appleseed Center for Law and Economic Justice, IMUA Alliance, Hawaii Government Employees Association, and three individuals.

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

Your Committee finds that this measure provides a needed adjustment to the eligibility requirements for the income tax credit for low-income household renters, as the cost of housing in the State has increased by three hundred ninety per cent since the income eligibility threshold for this credit was last adjusted in 1989.

Your Committee has amended this measure by:

(1) Changing the annual adjustment to the income tax credit to be based on consumer price index data from the month of June;

(2) Changing the effective date to July 1, 2050, to facilitate further discussion on the measure; and

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

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. 2627, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2627, 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