STAND. COM. REP. NO. 2950

Honolulu, Hawaii

RE:    H.B. No. 584

       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. 584, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

     The purpose of this measure is to establish a long-term care tax credit to be applied to premium payments for long-term care insurance paid by individual taxpayers.

     Testimony in support of this measure was submitted by the Department of Taxation, the American Council of Life Insurers, and the National Association of Insurance and Financial Advisors Hawaii.  Comments on the measure were submitted by the University of Hawaii Public Policy Center and the Tax Foundation of Hawaii.

     Your Committee finds that meeting the growing financial burden for long-term care is an urgent and complex issue facing federal and state governments, and that one potential way to reduce future costs borne by the State is to encourage individuals to purchase long-term care insurance policies.  Your Committee further finds that such a strategy would unfetter funds from the government-funded Medicaid "safety-net" to serve those truly in need.

     Your Committee has amended this measure by:

     (1)  Changing the effective date to July 1, 2008, and the measure's applicability to taxable years beginning after December 31, 2008; and

     (2)  Making technical, nonsubstantive amendments for the purposes of clarity and style.

     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. 584, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 584, 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