STAND. COM. REP. NO. 126

Honolulu, Hawaii

RE:    S.B. No. 258

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

Madam:

     Your Committee on Human Services and Public Housing, to which was referred S.B. No. 258 entitled:

"A BILL FOR AN ACT RELATING TO LONG-TERM CARE,"

begs leave to report as follows:

     The purpose of this measure is to establish a long-term care income tax to pay for long-term care benefits and a long-term care income tax credit for long-term care insurance premiums.

     The Policy Advisory Board for Elder Affairs, Kokua Council, and International Longshore and Warehouse Union Local 142 submitted testimony in favor of this measure.  The Department of Taxation and the Association of Insurance and Financial Advisors submitted testimony in opposition.  The Tax Foundation of Hawaii submitted comments.

     Your Committee finds that this measure proposes a gradually increasing flat tax to be paid by all taxpayers that will provide a gradually increasing benefit for caregivers.  The benefit will provide caregivers with a modest income to enable them to care for a qualifying individual in the home.  The measure also provides a tax credit to encourage individuals to purchase a supplemental private long-term care insurance plan.

     It is the Committee's intent to support caregivers and encourage the provision of long-term care coverage for Hawaii residents.

     Your Committee has amended this measure by making technical, nonsubstantive changes for the purposes of clarity, consistency, and style.

     Your Committee notes the Department of Taxation's fiscal impact for the tax credit for the purchase of long-term care insurance is $1.9 million to $5.5 million for tax years 2010 to 2017.  No methodology for determining the revenue loss was furnished.

     As affirmed by the record of votes of the members of your Committee on Human Services and Public Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 258, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 258, S.D. 1, and be referred to the Committee on Economic Development and Taxation.

Respectfully submitted on behalf of the members of the Committee on Human Services and Public Housing,

____________________________

SUZANNE CHUN OAKLAND, Chair