STAND. COM. REP. NO. 1018

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 170
                                     H.D. 2




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

Sir:

     Your Committee on Finance, to which was referred H.B. No.
170, H.D. 1, entitled: 

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

begs leave to report as follows:

     The purpose of this bill is to encourage individuals to
better prepare for their long-term health needs by offsetting the
financial burden of having to purchase long-term care insurance.

     Specifically, this bill conforms Hawaii's tax laws to
federal tax laws, which permit taxpayers to deduct amounts paid
on expenses and premiums for certain tax qualified long-term care
insurance as medical expenses.  Currently, Hawaii taxpayers
cannot claim a similar deduction under state law.

     The Department of Commerce and Consumer Affairs, the
Executive Office on Aging, the Hawaii Medical Service
Association, the American Council of Life Insurance, the Hawaii
State Association of Life Underwriters, State Farm Insurance
Companies, the Policy Advisory Board for Elder Affairs, the
American Association of Retired Persons State Legislative
Committee, the Hawaii Long Term Care Association, the National
Association of Retired Federal Employees in Hawaii, and
Healthcare Association of Hawaii testified in support of this
measure.  The Department of Taxation supported the intent of this
measure.  The Tax Foundation of Hawaii commented on this bill.


 
 
 
                                 STAND. COM. REP. NO. 1018
                                 Page 2

 
     Your Committee has made a technical, nonsubstantive
amendment to the bill to correct a drafting error.

     As affirmed by the record of votes of the members of your
Committee on Finance that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
170, H.D. 1, as amended herein, and recommends that it pass Third
Reading in the form attached hereto as H.B. No. 170, H.D. 2.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Finance,



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair