STAND. COM. REP. NO.  49

Honolulu, Hawaii

                , 2009

RE:   H.B. No. 702

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

Sir:

     Your Committee on Health, to which was referred H.B. No. 702 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 a managed care support contractor for actual costs or advances to third party health care providers made pursuant to a contract for the administration of the federal TRICARE program are exempt from general excise tax.

     The West Healthcare Alliance, Inc., and the Hawaii Medical Service Association supported this bill.  The Department of Taxation and Tax Foundation of Hawaii submitted comments.

     As affirmed by the record of votes of the members of your Committee on Health that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 702 and recommends that it pass Second Reading and be referred to the Committee on Economic Revitalization, Business, & Military Affairs.

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

____________________________

RYAN I. YAMANE, Chair