Income Tax Credit

Establishes an income tax credit for volunteers who participate
in community-based private-public volunteer projects that improve

THE SENATE                              S.B. NO.           1576
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  Economic trends that have taken place during the
 2 last decade have forced the State of Hawaii and the counties to
 3 readdress the method in which government services are provided.
 4 State and county governments have been downsized while the demand
 5 for service has increased.  The need for public-private
 6 partnerships has never been more evident.  The legislature finds
 7 that having the state and county governments create community-
 8 based public-private volunteer projects is an effective way to
 9 handle these issues.
10      Building these public-private partnerships through
11 community-based volunteer projects will be possible once
12 incentives are in place.  The legislature finds that a tax credit
13 incentive is needed to attract private partners.
14      The purpose of this Act is to establish a credit from income
15 tax liability for taxpayers who participate in community-based
16 private-public volunteer projects.
17      SECTION 2.  Chapter 235, Hawaii Revised Statutes, is amended
18 by adding a new section to be appropriately designated and to
19 read as follows:

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                                     S.B. NO.           1576

 1      "235-    Community partnership credit.  (a)  Each resident
 2 individual or corporate taxpayer, who files an individual or
 3 corporate income tax return for a taxable year, and who is not
 4 claimed or is not otherwise eligible to be claimed as a dependent
 5 by another taxpayer for Hawaii state individual income tax
 6 purposes, may claim a community partnership credit against the
 7 resident taxpayer's income tax liability for the taxable year for
 8 which the income tax return is being filed; provided that the
 9 taxpayer participates in a community-based public-private
10 partnership volunteer project.
11      (b)  The amount of the credit shall be equal to $50 per
12 resident taxpayer in any one taxable year; provided that a
13 taxpayer filing a joint return may claim $100 when each
14 individual filing the joint return participates in a community-
15 based pubic-private partnership volunteer project and is eligible
16 for the credit under this section.
17      (c)  The tax credit claimed by a resident taxpayer pursuant
18 to this section shall be deductible from the resident taxpayer's
19 income tax liability, if any, for the tax year in which the
20 credit is properly claimed.  If the tax credit claimed by a
21 resident taxpayer exceeds the amount of income tax payment due
22 from the resident taxpayer, the excess of credit over payment due
23 shall be refunded to the resident taxpayer; provided that the tax

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                                     S.B. NO.           1576

 1 credit properly claimed by a resident individual who has no
 2 income tax liability shall be paid to the resident individual;
 3 and provided further that no refunds or payment on account of the
 4 tax credit allowed by this section shall be made for amounts less
 5 than $1.
 6      (d)  For the purposes of this section:
 7      "Community-based public-private partnership volunteer
 8 project" means a project certified by a state or county
 9 department or agency that uses volunteer labor and expertise from
10 the community.
11      "Participates" means the taxpayer voluntarily provides at
12 least      hours of services or        dollars of goods to a
13 certified community-based public-private volunteer project for no
14 compensation.
15      (e)  The director of taxation shall prepare forms as may be
16 necessary to claim a credit under this section.  The director may
17 also require the taxpayer to furnish reasonable information in
18 order that the director may ascertain the validity of the claim
19 for credit made under this section.  The director may adopt rules
20 necessary to effectuate the purposes of this section pursuant to
21 chapter 91.
22      (f)  All claims for tax credits under this section,
23 including any amended claims, shall be filed on or before the end

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                                     S.B. NO.           1576

 1 of the twelfth month following the close of the taxable year for
 2 which the credits may be claimed.  Failure to comply with the
 3 foregoing provision shall constitute a waiver of the right to
 4 claim the credit."
 5      SECTION 3.  New statutory material is underscored.
 6      SECTION 4.  This Act, upon its approval, shall apply to
 7 taxable years beginning after December 31, 1998.
 9                           INTRODUCED BY:  _______________________