STAND. COM. REP. 1135

Honolulu, Hawaii

, 2003

RE: S.B. No. 1399

S.D. 2

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committees on Human Services and Housing and Health, to which was referred S.B. No. 1399, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO A LONG-TERM CARE TAX CREDIT,"

beg leave to report as follows:

The purpose of this bill is to encourage individuals to purchase long-term care insurance by providing a phased-in refundable income tax credit beginning at 10 percent of the long-term care insurance premiums in 2004, up to 30 percent in 2006 and thereafter.

The Governor, Department of Taxation, Hawaii State Commission on the Status of Women, Chamber of Commerce of Hawaii, American Council of Life Insurers, Healthcare Association of Hawaii, Health Insurance Association of America, Hawaii Association of Health Underwriters, Hawaii Medical Association, and NAIFA Hawaii testified in support of this measure. The Coalition for Affordable Long Term Care opposed this measure. The Tax Foundation of Hawaii submitted comments.

Your Committees recognize that Hawaii is facing a long-term care crisis and that only about six percent of the population is covered by long-term care insurance. All mechanisms to promote the purchase of long-term care insurance must be considered, including a long-term care premium income tax credit.

Your Committees have amended this bill by replacing its contents with that of H.B. 90, H.D. 1, which:

(1) Allows a taxpayer to claim a refundable tax credit of the lesser of $2,500 or 50 percent of the cost of long-term care insurance premium payments;

(2) Requires a declaration by the Governor to claim the tax credit, provided that general fund tax collections at the close of two successive fiscal years exceed 7.5 percent of the general fund tax collections for each of the two prior fiscal years; and

(3) Applies the tax credit to taxable years beginning after December 31, 2002, and repeals the law on January 1, 2007.

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. 1399, S.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1399, S.D. 2, H.D. 1, and be referred to the Committee on Finance.

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

 

____________________________

DENNIS A. ARAKAKI, Chair

____________________________

MICHAEL PUAMAMO KAHIKINA, Chair