STAND. COM. REP. NO. 1774

                                 Honolulu, Hawaii
                                                   , 1999

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

     "A BILL FOR AN ACT RELATING TO INCOME TAXATION,"

begs leave to report as follows:

     The purpose of this bill is to encourage the purchase of
long-term care (LTC) insurance by:

     (1)  Providing a state income tax credit of up to fifty
          percent of the premium costs of a qualified LTC policy,
          up to a maximum of $1,000 per year; and

     (2)  Conforming Hawaii income tax law to the federal income
          tax law to allow taxpayers to deduct as medical
          expenses amounts paid for expenses and premiums for
          certain tax qualified long-term care insurance.

     The Department of Commerce and Consumer Affairs, the Hawaii
State Commission on the Status of Women, the Hawaii State
Association of Life Underwriters, AARP, the Hawaii Coalition for
Affordable Long Term Care, the American Council of Life
Insurance, Benefit Services of Hawaii, and the Policy Advisory
Board for Elder Affairs testified in support of this measure.
The Department of Taxation, the Executive Office on Aging, and
the Tax Foundation of Hawaii commented on this measure.

     Your Committee has amended this bill by:

 
 
                                 STAND. COM. REP. NO. 1774
                                 Page 2

 
     (1)  Deleting the state income tax credit provisions for
          qualified LTC policies; and

     (2)  Making technical, nonsubstantive amendments for clarity
          and style.

     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 S.B. No.
194, S.D. 2, H.D. 1, as amended herein, and recommends that it
pass Third Reading in the form attached hereto as S.B. No. 194,
S.D. 2, H.D. 2.

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



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair