Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Human Services, to which was referred H.B. No. 146, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to exempt from the general excise tax operators of a licensed adult residential care home, licensed group child care home, and group child care center on income received from the State for services provided.

Your Committee received testimony in support of this measure from the Baris Care Home and Alliance of Residential Care Administrators. Your Committee received testimony in opposition to this measure from the Department of Taxation. Comments were received from the Tax Foundation of Hawaii.

Your Committee finds that this measure provides a much needed incentive to increase the number of adult residential care home operators and licensed group child care home and group child care center operators. Furthermore, because these operators are assisting the State in performing necessary services for the State, it is appropriate that the operators be exempt from the excise tax.

As affirmed by the record of votes of the members of your Committee on Human Services that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 146, H.D. 1, and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.