REPORT TITLE:
Tax Credit


DESCRIPTION:
Authorizes an income tax credit of $     .

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           1007
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO THE INCOME TAX CREDIT.



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

 1      SECTION 1.  The legislature finds that article VII, section
 
 2 6, of the Constitution of the State of Hawaii requires the
 
 3 legislature to provide a tax refund or tax credit when certain
 
 4 factors are met.  The legislature finds that these factors have
 
 5 been met and that the legislature is constitutionally required to
 
 6 provide a tax credit or tax refund.
 
 7      The purpose of this Act is to provide for an income tax
 
 8 credit of $      to the taxpayers of the State to satisfy
 
 9 constitutionally mandated requirements.
 
10      SECTION 2.  (a)  There shall be allowed each resident
 
11 individual taxpayer who files an individual income tax return for
 
12 a taxable year, and who is not claimed or is not otherwise
 
13 eligible to be claimed as a dependent by another taxpayer for
 
14 federal or Hawaii state income tax purposes; provided that a
 
15 resident individual who has no income or no taxable income under
 
16 chapter 235 and who is not claimed or otherwise eligible to be
 
17 claimed as a dependent by a taxpayer may claim a general income
 
18 tax credit of $      that shall be deducted from income tax
 
19 liability computed under chapter 235, Hawaii Revised Statutes.
 

 
Page 2                                                     
                                     S.B. NO.           1007
                                                        
                                                        

 
 1      (b)  The general income tax credit of $      shall be
 
 2 multiplied by the number of qualified exemptions to which the
 
 3 taxpayer is entitled under chapter 235, Hawaii Revised Statutes.
 
 4 Each person for whom the qualified exemption is claimed shall
 
 5 have been a resident of the State, as defined in section 235-1,
 
 6 Hawaii Revised Statutes, for at least nine months regardless of
 
 7 whether the qualified resident was physically in the State for
 
 8 nine months.  For the purposes of this section, multiple
 
 9 exemptions shall not be granted for this tax credit because of
 
10 age or deficiencies in vision, hearing, or other disability.  The
 
11 tax credit under this section shall not be available to:
 
12      (1)  Any person who has been convicted of a felony and who
 
13           has been committed to prison and has been physically
 
14           confined for the full taxable year;
 
15      (2)  Any person who would otherwise be eligible to be
 
16           claimed as a dependent but who has been committed to a
 
17           youth correctional facility and has resided at the
 
18           facility for the full taxable year; or
 
19      (3)  Any misdemeanant who has been committed to jail and has
 
20           been physically confined for the full taxable year.
 
21      (c)  The general income tax credit allowed under this
 
22 section shall be deducted from income tax liability, if any, for
 

 
 
 
Page 3                                                     
                                     S.B. NO.           1007
                                                        
                                                        

 
 1 the taxable year 1998.  If the tax credits claimed by a resident
 
 2 taxpayer exceed the amount of income tax payment due from the
 
 3 resident taxpayer, the excess of credits over payments due shall
 
 4 be refunded to the resident taxpayer; provided that tax credits
 
 5 properly claimed by a resident individual who has no income tax
 
 6 liability shall be paid to the resident individual; and provided
 
 7 further that no refunds or payment on account of the tax credits
 
 8 allowed by this section shall be made for amounts less than
 
 9 $     .
 
10      (d)  This section implements the provisions of article VII,
 
11 section 6, of the Constitution of the State of Hawaii, enacted by
 
12 the 1978 Constitutional Convention, which reads as follows:
 
13                  "DISPOSITION OF EXCESS REVENUES
 
14      Section 6.  Whenever the state general fund balance at the
 
15 close of each of two successive fiscal years exceeds five percent
 
16 of general fund revenues for each of the two fiscal years, the
 
17 legislature in the next regular session shall provide for a tax
 
18 refund or tax credit to the taxpayers of the State, as provided
 
19 by law."
 
20      SECTION 3.  This Act shall take effect upon its approval.
 
21 
 
22                           INTRODUCED BY:  _______________________