Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Health, to which was referred S.B. No. 466 entitled:

begs leave to report as follows:

The purpose of this measure is to create an income tax credit for physicians and dentists who practice in medically or dentally underserved areas of the State.

Healthcare Association of Hawaii, the American College of Obstetricians and Gynecologists, and Consumer Lawyers of Hawaii submitted testimony in support of this measure. The Department of Taxation submitted testimony in opposition. The Legislative Tax Bill Service submitted comments.

Your Committee finds that there is a serious crisis in the provision of medical and dental services to the poor and uninsured in medically underserved areas of the State, particularly in the rural areas. Financial incentives extended to physicians and dentists will provide an impetus to treat the poor and medically underserved in those areas. Proponents noted that medical malpractice insurance premiums are reaching levels that discourage the practice of medicine, and that an ideal incentive for physicians to treat the poor and uninsured is to provide them with an income tax credit for a portion of the amounts paid for medical malpractice insurance premiums. Certain specialties, especially orthopedics and obstetrics-gynecology and others in short supply are especially scarce in underserved areas.

Upon further consideration, your Committee has amended this measure by limiting eligibility to specific physicians who practice neurosurgery, orthopedics, obstetrics-gynecology, or emergency room medicine.

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. 466, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 466, S.D. 1, and be referred to the Committee on Ways and Means.