STAND. COM. REP. NO. 1435

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 1026
                                        H.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.B.
No. 1026, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO INSURANCE PREMIUM TAXES,"

begs leave to report as follows:

     The purpose of this bill is to extend the low-income housing
income tax credit to the premium tax liability of insurance
companies.

     The Hawaii state income tax law allows a credit against
income tax liability for participation in low-income housing to
the extent section 235-110.8 and corresponding Internal Revenue
Code sections provide.  Current law does not allow insurance
companies the tax advantage of participation in low-income
housing because they are taxed on their premiums earned under the
insurance code, specifically under section 431:7-202.  This
measure extends the same low-income housing credit under the
income tax law to apply to the premium tax liability of insurance
companies.

     Your Committee finds that allowing insurance companies to
participate in the tax advantages of providing low-income housing
may be an incentive to develop more affordable housing that is so
dramatically needed in the State.


 
a                                                      HB1026 HD1
 
 
 
                                   STAND. COM. REP. NO. 1435
                                   Page 2


     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
1026, H.D. 1, and recommends that it pass Third Reading.

                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
a                                                      HB1026 HD1