STAND. COM. REP. NO. 772

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 307
                                     H.D. 2




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Finance, to which was referred H.B. No.
307, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO HIGHER EDUCATION,"

begs leave to report as follows:

     The purpose of this bill is to encourage savings for higher
education expenses by establishing a college savings program.
Contributions and distributions from an account established under
this program would be excluded from gross income, adjusted gross
income, and taxable income for Hawaii income tax purposes.

     The University of Hawaii, the Department of Education, the
Associated Students of the University of Hawaii at Manoa, TIAA-
CREF, a college and career counselor, and nineteen high school
students testified in support of this measure.  The Department of
Accounting and General Services, the Department of Taxation, the
Tax Foundation of Hawaii, and the State Representative from the
24th District (Makiki, Tantalus, Manoa) and 34th District
(Waimalu, Waiau, Royal Summit, Newtown) commented on this bill.

     For the purpose of continued discussion, your Committee has
amended the bill by deleting:

     (1)  The maximum amount that may be contributed to an
          account during a taxable year to qualify for an income
          tax exemption; and


 
 
 
                                 STAND. COM. REP. NO. 772
                                 Page 2

 
     (2)  The percentages and amounts in a college savings
          account that are exempt from application to the
          satisfaction of a money judgment pursuant to chapter
          654, Hawaii Revised Statutes.

     Your Committee has also made technical, nonsubstantive
amendments for the purpose of clarity.

     As affirmed by the record of votes of the members of your
Committee on Finance that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
307, H.D. 1, as amended herein, and recommends that it pass Third
Reading in the form attached hereto as H.B. No. 307, H.D. 2.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Finance,



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair