Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 170
                                     H.D. 1

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Consumer Protection and Commerce, to which
was referred H.B. No. 170 entitled: 


begs leave to report as follows:

     The purpose of this bill is to adopt the federal income tax
deduction for long-term health care insurance premiums.

     This bill conforms the state income tax law with the
Internal Revenue Code regarding the treatment of long-term health
care insurance premiums.  The federal tax law has allowed a
medical expense deduction from taxable income for long-term
health care insurance premiums since 1997.  Current state income
tax law does not allow the deduction.

     Your Committee received testimony in support of this measure
from the Department of Commerce and Consumer Affairs, the
Executive Office on Aging, the Department of Taxation, Hawaii
Medical Service Association, State Farm Insurance Companies, the
American Council of Life Insurance, Hawaii State Association of
Life Underwriters, American Association of Retired Persons,
Hawaii Long Term Care Association, Healthcare Association of
Hawaii, the Hawaii Coalition for Affordable Long Term Care,
Policy Advisory Board for Elder Affairs, and a concerned citizen.
No testimony in opposition to this measure was received.

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                                 STAND. COM. REP. NO.457
                                 Page 2

     Your Committee finds that this measure will be an incentive
for people to plan ahead by taking out long-term health care
insurance.  The more people that purchase long-term health care
insurance policies, the lighter the State's financial burden will
be, especially as the bulk of the population moves into their
advanced years.

     Your Committee has made technical, nonsubstantive amendments
to this bill.

     As affirmed by the record of votes of the members of your
Committee on Consumer Protection and Commerce that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 170, as amended herein, and recommends that
it be referred to the Committee on Finance, in the form attached
hereto as H.B. No. 170, H.D. 1.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Consumer
                                   Protection and Commerce,

                                   RON MENOR, Chair

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