STAND. COM. REP. NO.  346-08

Honolulu, Hawaii

                , 2008

RE:   H.B. No. 2306

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Sir:

     Your Committee on Public Safety & Military Affairs, to which was referred H.B. No. 2306 entitled:

"A BILL FOR AN ACT RELATING TO GENERAL EXCISE TAXATION,"

begs leave to report as follows:

     The purpose of this bill is to clarify that amounts received by TriWest as reimbursements of costs or advances made pursuant to a contract for the administration of the federal TRICARE program are exempt from general excise tax (GET).

     TriWest and Hawaii Medical Service Association supported this bill.  The Department of Taxation and Tax Foundation of Hawaii submitted comments.

     Your Committee has amended this bill by:

(1)  Clarifying that the GET exemption will be for amounts for reimbursement of costs or advances made to health care providers; and

(2)  Making technical, nonsubstantive changes for clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Public Safety & Military Affairs that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2306, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2306, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Public Safety & Military Affairs,

____________________________

CINDY EVANS, Chair