Bill Text: HI HB1915 | 2010 | Regular Session | Amended

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Bill Title: Asset Building; Omnibus

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2010-02-05 - (H) Passed Second Reading as amended in HD 1 and referred to the committee(s) on FIN with none voting no (0) and M. Lee, McKelvey excused (2). [HB1915 Detail]

Download: Hawaii-2010-HB1915-Amended.html

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STAND. COM. REP. NO.  157-10

 

Honolulu, Hawaii

                , 2010

 

RE:   H.B. No. 1915

      H.D. 1

 

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fifth State Legislature

Regular Session of 2010

State of Hawaii

 

Sir:

 

     Your Committee on Human Services, to which was referred H.B. No. 1915 entitled:

 

"A BILL FOR AN ACT RELATING TO ASSET BUILDING,"

 

begs leave to report as follows:

 

     The purpose of this bill is to move families and individuals out of poverty by:

 

     (1)  Establishing a State Earned Income Tax Credit;

 

(2)  Requiring and appropriating funds for the Department of Human Services (DHS) to offer financial education to applicants for and recipients of Temporary Assistance to Needy Families;

 

(3)  Amending the Individual Development Account (IDA) law to, among other things, require DHS to:

 

(A)  Assist entities to become fiduciary organizations under the IDA law; and

 

(B)  Increase to 25 percent, the amount of state funds that may be used by fiduciary organizations to cover operating costs; and

 

(4)  Appropriating funds to allow fiduciary organizations to conduct IDA programs.

 

     Goodwill Industries of Hawaii, Inc.; Hawai'i Alliance for Community Based Economic Development; and Aloha United Way testified in support of this measure.  The Tax Foundation of Hawaii commented.

 

     Your Committee notes that the Tax Foundation of Hawaii had numerous concerns about establishing a state earned income tax credit (EITC).  Among those concerns were that:

 

     (1)  Basing Hawaii's credit on the federal EITC would import problems with the federal EITC.  Administrators and practitioners agree that it is one of the most difficult and complicated federal credits to implement, and the Internal Revenue Service reports an error rate of greater than 25 percent;

 

     (2)  By taking a percentage of the federal EITC, Hawaii's lawmakers are surrendering their oversight over this tax policy to the federal government, because it bears no relationship to state tax burdens or whether it will assist recipients to leave welfare, and will change when the federal government changes its EITC policy; and

 

     (3)  It will result in an estimated $23,200,000 decline in tax revenues, based on 2003 tax returns, funds that may be unavailable during this downturn, and if available, may be better spent on state programs that assist persons in gaining skills needed to move out of poverty.

 

     To encourage further discussion of this measure your Committee has changed its effective date to January 1, 2050.  Technical, nonsubstantive amendments were also made for clarity and consistency.

 

     As affirmed by the record of votes of the members of your Committee on Human Services that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1915, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1915, H.D. 1, and be referred to the Committee on Finance.

 

Respectfully submitted on behalf of the members of the Committee on Human Services,

 

 

		____________________________ JOHN M. MIZUNO, Chair