Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Health, to which was referred S.B. No. 607 entitled:

begs leave to report as follows:

The purpose of this measure is to provide a tax credit for improvements made to federally qualified health centers.

Testimony supporting this measure was received from the Waianae Coast Comprehensive Health Center and Hana Community Health Center. The Department of Taxation took no position on this measure pending further review and offered comments. Comments on this measure were received from the Tax Foundation of Hawaii.

Your Committee finds that health centers in Hawaii that provide services to the underserved experience severe financial problems during an economic slowdown. This results in fewer and compromised medical services to those who desperately need basic care. This measure provides an incentive for investment in federally qualified health centers which generally serve low-income communities that have a high incidence of medical problems and few alternative sources of care. Your Committee believes that this measure will spur the development of capital improvement projects that will provide needed medical facilities and services.

In addition, your Committee finds that this tax credit will be a catalyst for other investment and reinvestment in the regions served by the federally qualified health centers, providing a positive economic benefit as well.

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

As affirmed by the record of votes of the members of your Committee on Health that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 607, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 607, S.D. 1, and be referred to the Committee on Ways and Means.