STAND. COM. REP. NO. 939-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 364
                                     S.D. 2
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Consumer Protection and Commerce, to which
was referred S.B. No. 364, S.D. 2, entitled: 

     "A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

     The purpose of this measure is to include within the general
excise tax exemption for insurance companies' gross proceeds,
proceeds received by corporate attorney-in-fact in connection
with administrative functions performed on behalf of reciprocal
insurers.

     Testimony in support of this measure was submitted by the
Hawaii Captive Insurance Council and the Medical Insurance
Exchange of California.

     Testimony in opposition to this measure was submitted by the
Department of Taxation.

     Testimony commenting on this measure was submitted by the
Insurance Division of the Department of Commerce and Consumer
Affairs. 

     Your Committee finds that this measure simply recognizes
what is recognized in the Insurance Code and does not propose to
treat reciprocal insurers any differently than other forms of
insurers.  Accordingly, this measure clarifies that this

 
 
 
                                 STAND. COM. REP. NO. 939-00
                                 Page 2

 
Legislature intends no disparity in treatment between stock,
mutual, and reciprocal insurance companies.

     Your Committee has made technical, nonsubstantive amendments
for purposes of consistency and style.

     As affirmed by the record of votes of the members of your
Committee on Consumer Protection and Commerce that is attached to
this report, your Committee is in accord with the intent and
purpose of S.B. No. 364, S.D. 2, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as S.B. No. 364, S.D. 2, H.D. 1, and be referred to the
Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Consumer
                                   Protection and Commerce,



                                   ______________________________
                                   RON MENOR, Chair