Tax Credits

Establishes Individual Development Account Contribution tax
credit equal to fifty per cent of the contribution.

HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  Chapter 235, Hawaii Revised Statutes, is amended
 2 by adding a new section to be appropriately designated and to
 3 read as follows:
 4      "235-     Individual development account contribution tax
 5 credit.  (a)  There shall be allowed to each taxpayer subject to
 6 the tax imposed under this chapter, an individual development
 7 account contribution tax credit certified under chapter 257 which
 8 shall be applied against the taxpayer's net income tax liability,
 9 if any, imposed by this chapter for the taxable year in which the
10 credit is properly claimed.
11      (b)  The individual development account contribution tax
12 credit shall be equal to fifty per cent of the amount contributed
13 by individuals, organizations, and businesses to a fiduciary
14 organization as defined by and in the manner prescribed in
15 chapter 257.
16      (c)  If the tax credit under this section exceeds the
17 taxpayer's income tax liability, the excess of the tax credit
18 over liability may be used as a credit against the taxpayer's
19 income tax liability in subsequent years until exhausted.  All

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 1 claims, including any amended claims, for tax credits under this
 2 section shall be filed on or before the end of the twelfth month
 3 following the close of the taxable year for which the credit may
 4 be claimed.  Failure to comply with the foregoing provision shall
 5 constitute a waiver of the right to claim the credit.
 6      (d)  Application for the credit under this section shall be
 7 upon forms provided by the department.
 8      (e)  The credit under this section shall be available for
 9 taxable years beginning after December 31, 1999, but shall not be
10 available for taxable years beginning after December 31, 2004."
11      SECTION 2.  Section 257-10, Hawaii Revised Statutes, is
12 amended as follows:
13      1.  By amending subsection (a) to read:
14      "(a)  [Individuals, organizations, or businesses
15 contributing matching funds for individual development accounts
16 shall receive a tax credit equal to fifty per cent of the amount
17 contributed.] Taxpayers subject to the tax imposed under
18 chapter 235 who contribute matching funds for individual
19 development accounts may be eligible for the tax credit provided
20 under section 235-   ."
21      2.  By amending subsection (c) to read:
22      "(c)  The administrator of the fiduciary organization, with
23 the cooperation of the participating organizations, shall

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 1 maintain records of the names of contributors and the total
 2 amount each contributor contributes to an individual development
 3 account match fund for the [calendar] taxable year.  All
 4 contributions shall be verified by the department of human
 5 services.  The department of human services shall certify that
 6 the total amount of all contribution tax credits do not exceed
 7 $1,000,000 in the aggregate.  Upon each determination, the
 8 department of human services shall issue a certificate to the
 9 taxpayer.  The taxpayer shall file the certificate with the
10 taxpayer's tax return with the department of taxation."
11      SECTION 3.  Act 160, Session Laws of Hawaii 1999, is amended
12 by amending section 33 to read as follows:
13      "SECTION 33.  This Act shall take effect upon its approval;
14 provided that:
15      (1)  Part I, Part III, and Part V, and sections 29 and 30 of
16           this Act shall take effect on July 1, 1999; [and]
17      (2)  Section 25 shall take effect for taxable years
18           beginning after December 31, 1999; and
19     [(2)] (3)  Section 28 shall take effect on June 29, 1999."
20      SECTION 4.  Statutory material to be repealed is bracketed.
21 New statutory material is underscored.

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 1      SECTION 5.  This Act shall take effect upon its approval and
 2 shall apply to taxable years beginning after December 31, 1999,
 3 and before January 1, 2005.
 5                           INTRODUCED BY:  _______________________