Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Health and Human Services, to which was referred S.B. No. 2829 entitled:

begs leave to report as follows:

The purpose of this measure is to provide the same general excise tax benefits to persons with impaired sight, hearing, or who are totally disabled regardless of the entity in which they choose to do business.

Your Committee received testimony in support of the measure from the Department of Taxation and a private individual. Your Committee received comments from the Tax Foundation of Hawaii.

Your Committee finds that certain general excise tax benefits are available to deaf, blind, and totally disabled persons. These provisions, however, may not be available depending on the entity in which impaired persons choose to do business. Currently, section 237-17, Hawaii Revised Statutes, provides a one-half per cent general excise tax rate for individuals who are blind, deaf, or totally disabled, or corporations all of whose outstanding shares are owned by individuals who are blind, deaf, or totally disabled. Similarly, section 237-24(13), Hawaii Revised Statutes, exempts from the general excise tax $2,000 a year of gross income received by any blind, deaf, or totally disabled person engaging in business. This bill recognizes the various other entities that may be formed to do business, such as partnerships of all types and limited liability companies.

Your Committee has amended the measure by making technical, nonsubstantive changes to reflect preferred drafting style.

As affirmed by the record of votes of the members of your Committee on Health and Human Services that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2829, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2829, S.D. 1, and be referred to the Committee on Ways and Means.