STAND. COM. REP. NO. 2974

 

Honolulu, Hawaii

                  

 

RE:    H.B. No. 2478

       H.D. 1

       S.D. 1

 

 

 

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

 

Madam:

 

     Your Committee on Human Services, to which was referred H.B. No. 2478, H.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO TAXATION,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to encourage employers to hire individuals with disabilities by providing taxpayers who hire an individual with a disability a nonrefundable tax credit for the six-month period after the individual is initially hired.

 

     Your Committee received testimony in support of this measure from the State Council on Developmental Disabilities, Hawaii Disability Rights Center, The Arc in Hawaii, and one individual.  Your Committee received testimony in opposition to this measure from one individual.  Your Committee received comments on this measure from the Department of Taxation, Department of Human Services, and Tax Foundation of Hawaii.

 

     Your Committee finds that employing individuals with intellectual and developmental disabilities serves to improve the individuals' economic self-sufficiency, allow them to contribute to the community as tax-paying citizens, and provide them with the opportunity to establish relationships and social networks.  Your Committee believes it is important to encourage employment of individuals with disabilities because their unemployment rate far surpasses the overall unemployment rate nationwide.  Your Committee received testimony on this measure expressing concern that the tax credit is somewhat duplicative of existing statute that creates a tax credit for hiring vocational rehabilitation referrals.  Concern was also raised that this measure allows an employer to claim both a deduction and a tax credit for the same amount of wages expended.

 

     Accordingly, your Committee has amended this measure by:

 

     (1)  Inserting language that prohibits a taxpayer from using the same wages paid to an individual with a disability for both a deduction and a tax credit;

 

     (2)  Repealing section 235-55.91, Hawaii Revised Statutes, which provides a tax credit for taxpayers who hire vocational rehabilitation referrals; and

 

     (3)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

 

     As affirmed by the record of votes of the members of your Committee on Human Services that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2478, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2478, H.D. 1, S.D. 1, and be referred to the Committee on Ways and Means.

 

Respectfully submitted on behalf of the members of the Committee on Human Services,

 

 

 

____________________________

SUZANNE CHUN OAKLAND, Chair