Report Title:

HOPE Scholarships

Description:

Appropriates funds for scholarships to allow UH students who receive tuition waivers to claim the HOPE scholarship tax credit. (SD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

2798

TWENTY-FIRST LEGISLATURE, 2002

H.D. 1

STATE OF HAWAII

S.D. 1


 

A BILL FOR AN ACT

 

Relating to scholarships.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. When Congress passed the Taxpayer Relief Act of 1997, included in this legislation were provisions to help students and their families afford college. One of these programs was the HOPE scholarship tax credit, which allows students an income tax credit of up to $1,500 for qualified out-of-pocket expenses in each of their first two years of college. These federal tax credits can provide significant economic relief for students during their early years of postsecondary education. Unfortunately, there are many students in the University of Hawaii (UH) system who cannot take advantage of these benefits.

Tuition can qualify as out-of-pocket expenses under the HOPE scholarship program. Because UH provides tuition waivers rather than actual scholarships to students, many of these academically distinguished students do not have qualified out-of-pocket expenses upon which to claim the HOPE credit.

The State would be wasting a great opportunity to help UH students take advantage of this valuable federal program by continuing to provide only tuition waivers. By providing scholarships to students who qualify for tuition waivers, these students would enjoy the benefits of the income tax credit, while the funds appropriated for the scholarships would stay within the State by being paid over to UH.

Accordingly, the purpose of this Act is to appropriate funds to UH for scholarships for students who qualify for tuition waivers.

SECTION 2. There is appropriated out of the general revenues of the State of Hawaii the sum of $1, or so much thereof as may be necessary for fiscal year 2002-2003 for scholarships for students in the University of Hawaii system; provided that:

(1) Scholarships shall only be provided to students who qualify for tuition waivers at the University of Hawaii; and

(2) Each scholarship shall be for a maximum of $2,000 per student.

The sum appropriated shall be expended by the University of Hawaii for the purposes of this Act.

SECTION 3. This Act shall take effect on July 1, 2002.