STAND. COM. REP. NO. 1613
Honolulu, Hawaii
, 2005
RE: H.B. No. 97
H.D. 2
S.D. 2
Honorable Robert Bunda
President of the Senate
Twenty-Third State Legislature
Regular Session of 2005
State of Hawaii
Sir:
Your Committee on Ways and Means, to which was referred H.B. No. 97, H.D. 2, S.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO LONG-TERM CARE,"
begs leave to report as follows:
The purpose of this measure is to provide individual and employer long-term care tax credits for payment of long-term care insurance premium costs.
Specifically, this bill creates a long-term care tax credit for long-term care insurance premium payments made to purchase a qualified long-term care insurance contract that may be claimed against an individual taxpayer's income tax liability for the year in which the individual's income tax return is filed. For tax year 2006, the credit is the lesser of $500 in the aggregate for a husband and wife filling jointly, or a range of percentages of the total cost of premium payments made, based on the husband's and wife's adjusted gross income. The credit for all other individual taxpayers is the lesser of $250 in the aggregate or a similar range of percentages of total cost of premium payments made. For tax years 2007 and beyond, the credit rises to the lesser of $1,000 in the aggregate for joint filers (or a range) and the lesser of $500 in the aggregate for all other individual filers (or a range).
The qualified long-term care insurance contract may cover the taxpayer, the taxpayer's dependent, spouse, son, daughter, stepson, stepdaughter, father, mother, stepfather, or stepmother. The bill also defines "activity of daily living", "chronically ill individual", "licensed health care practitioner", "maintenance or personal care services", "qualified long-term care insurance contract", and "qualified long-term care services".
This bill further creates a non-refundable employer long-term care insurance premium tax credit. The amount of the credit is $25 or fifty per cent of the premiums paid for tax year 2006 and $50 or fifty per cent of the premiums paid for tax year 2007 and beyond. The bill takes effect on July 1, 2010, and applies to taxable years beginning after December 31, 2005.
Your Committee has made amendments recommended by the Department of Taxation to:
(1) Clarify that the employer tax credit is not the greater of, but the lesser of, $25 or fifty per cent of the premiums paid in taxable year 2006, and the lesser of $50 or fifty per cent in taxable year 2007 and beyond; and
(2) Amend the definition of "chronically ill individual" to conform to the definition contained in section 7702B(c)(2) of the Internal Revenue Code by inserting "within the preceding twelve-month period" immediately after "individual who has been certified by a licensed health care practitioner" on page 10, line 9, and page 15, line 4, and by deleting the words "for the preceding twelve-month period" at the end of the definition on page 10, lines 19-20, and page 15, lines 14-15.
Your Committee also made the following technical amendments to:
(1) Change "and" to "or" on page 8, line 19 to clarify that not all of the individuals listed need to be covered by long-term insurance for a tax credit to be claimed;
(2) Amend the definition of "activity of daily living" on page 10, line 6, and page 15, line 1, to "activities" of daily living to conform to the same definition in section 431:10H-201, Hawaii Revised Statutes;
(3) Delete the word "professional" from the phrase "registered professional nurse" on page 10, line 22, and page 15, line 20; and
(4) Make technical, nonsubstantive amendments for the purposes of clarity, style, and consistency.
As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 97, H.D. 2, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 97, H.D. 2, S.D. 2.
Respectfully submitted on behalf of the members of the Committee on Ways and Means,
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____________________________ BRIAN T. TANIGUCHI, Chair |
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