STAND. COM. REP. NO. 1212_______

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: S.B. No. 194
                                     S.D. 2
                                     H.D. 1

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


     Your Committees on Human Services and Housing and Health, to
which was referred S.B. No. 194, S.D. 2, entitled: 


beg leave to report as follows:

     The purpose of this bill is to encourage the purchase of
long-term care (LTC) insurance by providing a State income tax
credit of up to 50 percent of the premium cost of a qualified LTC
policy, to a maximum of $1,000 per year.

     State Farm Insurance Companies, the Department of Commerce
and Consumer Affairs, the Hawaii State Commission on the Status
of Women, the American Association of Retired Persons, the Hawaii
Coalition for Affordable Long Term Care, and the Hawaii Long Term
Care Association testified in support of this measure.  The
Department of Taxation testified in support of the intent of this
measure.  The Tax Foundation of Hawaii submitted comments.

     Your Committees believe that providing taxpayers with a
State income tax credit for LTC insurance costs creates an
incentive for individuals to purchase LTC insurance during their
younger years when premiums are more affordable.

     To further assist persons needing LTC, your Committees have
amended this measure by inserting additional language reflected
in H.B. No. 170, H.D. 3.  As amended, this measure also conforms
Hawaii's tax laws to federal tax laws, which permit taxpayers to

                                 STAND. COM. REP. NO. 1212_______
                                 Page 2

deduct amounts paid on expenses and premiums for certain tax
qualified LTC insurance as medical expenses.  Currently, Hawaii
taxpayers cannot claim a similar deduction under state law.

     Technical, nonsubstantive amendments have also been made for
clarity and style.

     As affirmed by the records of votes of the members of your
Committees on Human Services and Housing and Health that are
attached to this report, your Committees are in accord with the
intent and purpose of S.B. No. 194, S.D. 2, as amended herein,
and recommend that it pass Second Reading in the form attached
hereto as S.B. No. 194, S.D. 2, H.D. 1, and be referred to the
Committee on Consumer Protection and Commerce.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Human Services
                                   and Housing and Health,

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