STAND. COM. REP. NO.  529-10

Honolulu, Hawaii

                , 2010

RE:   H.B. No. 2852

      H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fifth State Legislature

Regular Session of 2010

State of Hawaii

Sir:

     Your Committee on Finance, to which was referred H.B. No. 2852 entitled:

"A BILL FOR AN ACT RELATING TO THE INSURANCE PREMIUM TAX,"

begs leave to report as follows:

     The purpose of this bill is to raise additional revenue by temporarily imposing, from July 1, 2010, to June 30, 2015, the insurance premium tax on mutual benefit societies and health maintenance organizations.  This bill also establishes a credit against the insurance premium tax that a health insurer offering health insurance plans may claim for expenditures on medical workforce promotion, health workforce education, or indigent health care programs.

     The Department of Commerce and Consumer Affairs, National Fraternal Congress of America, and Kaiser Permanente Hawaii testified in opposition to this bill.  The Tax Foundation of Hawaii and Hawaii Medical Service Association offered comments.

     Your Committee has amended this bill by:

     (1)  Excluding fraternal benefit societies that offer benefit      contracts from the insurance premium tax; and

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

     As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2852, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2852, H.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Finance,

____________________________

MARCUS R. OSHIRO, Chair