STAND. COM. REP. NO. 1596

Honolulu, Hawaii

RE: H.B. No. 40

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 40 entitled:

"A BILL FOR AN ACT RELATING TO THE GENERAL FUND,"

begs leave to report as follows:

The purpose and intent of this measure is to dispose of excess general fund revenues, as required by article VII, section 6, of the Hawaii State Constitution.

Specifically, this measure:

(1) Provides for an income tax credit to every resident individual taxpayer of the State;

(2) Deposits an unspecified sum into the emergency and budget reserve fund; and

(3) Deposits an unspecified sum into the other post-employment benefits trust fund.

Your Committee received written comments in support of this measure from the Department of Budget and Finance.

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

Your Committee finds that when the balance of the State's general fund at the close of each of two successive fiscal years has exceeded five percent of the general fund revenues for both fiscal years, article VII, section 6, of the Hawaii State Constitution requires the Legislature to:

(1) Provide for a tax refund or tax credit to the taxpayers of the State;

(2) Make a deposit into one or more funds, which shall serve as temporary supplemental sources of funding for the State in times of an emergency, economic downturn, or unforeseen reduction in revenue; or

(3) Appropriate general funds for the pre-payment of:

(A) Debt service of general obligation bonds issued by the State; or

(B) Pension or other post-employment benefit liabilities accrued for state employees.

Your Committee further finds that the required conditions have been met, and that this measure provides a vehicle for the Legislature to implement one or more of the constitutionally mandated options.

Your Committee has amended this measure by:

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

(2) 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 H.B. No. 40, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 40, S.D. 1.

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

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DONOVAN M. DELA CRUZ, Chair