Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committees on Health and Human Services and Commerce, Consumer Protection and Housing, to which was referred S.B. No. 245 entitled:

beg leave to report as follows:

The purpose of this measure is to establish a state income tax credit equal to 50 per cent of premium cost paid for a maximum of $1,000 per taxable year, for a qualified long-term care insurance contract as defined in section 7702B of the Internal Revenue Code.

Testimony in support of this measure was submitted by American Council of Life Insurers, Hawaii Long Term Care Association, Kokua Council, Executive Office of Aging, and Healthcare Association of Hawaii. Testimony in opposition was submitted by the Department of Taxation and Department of Budget and Finance. Comments on this measure were submitted by the Tax Foundation of Hawaii.

Your Committees find that more individuals need to be encouraged to purchase long-term care to secure and provide for their own financial well-being. Your Committees further find that although most current purchasers of long-term care insurance are on pensions and not currently large income taxpayers, this measure may provide some incentive for the purchase of long-term care insurance for parents or grandparents.

Your Committees have amended this measure by making the tax credit nonrefundable.

As affirmed by the records of votes of the members of your Committees on Health and Human Services and Commerce, Consumer Protection and Housing that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 245, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 245, S.D. 1, and be referred to the Committee on Ways and Means.