STAND. COM. REP. NO. 2952

Honolulu, Hawaii

RE:    H.B. No. 3008

       H.D. 2

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Madam:

     Your Committee on Human Services and Public Housing, to which was referred H.B. No. 3008, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO QUALIFIED IMPROVEMENT TAX CREDIT,"

begs leave to report as follows:

     The purpose of this measure is to provide a tax credit for qualified capital improvements made to federally qualified health centers.

     Testimony in support of this measure was submitted by Hawai‘i Primary Care Association, Kokua Kalihi Valley, the Waianae Coast Comprehensive Health Center, and the Waikiki Health Center.  Comments on the measure were submitted by the Hawaii Tax Foundation.  Comments on the measure were submitted by the Department of Taxation.

     Your Committee finds that community health centers in Hawaii are critical safety net providers that face an increasingly high demand for free and discounted medical, dental, behavioral health, pharmaceutical and other services for low-income and underserved groups.  In their attempts to meet greater community need, community health centers face the challenging prospects of expanding facilities, obtaining equipment, and upgrading technology systems.  Your Committee further finds that community health centers are major economic engines in their respective communities, generating millions of dollars in economic activity, employing a substantial number of people, and providing training, career ladders, and civic leadership opportunities.  In addition, your Committee wishes to note that this measure would stimulate nearly $130,000,000 in capital improvements and expansion and would allow community health centers to increase their capacity by almost sixty per cent.

     Your Committee has amended this measure by:

     (1)  Changing the effective date to upon its approval, and its applicability to taxable years beginning after December 31, 2008; and

     (2)  Incorporating the comments made by the Waianae Coast Comprehensive Health Center to allow the tax credit described in the measure to be claimed by tax-exempt organizations.

     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 H.B. No. 3008, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 3008, H.D. 2, 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