STAND. COM. REP. NO. 2335

Honolulu, Hawaii

RE:    S.B. No. 2350

       S.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Madam:

     Your Committees on Public Safety, Intergovernmental and Military Affairs and Health, to which was referred S.B. No. 2350 entitled:

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

beg leave to report as follows:

     The purpose and intent of this measure is to clarify that the amounts received by a contractor of the patient-centered community care program for the costs or advancement to third party health care providers, pursuant to a contract with the United States Department of Veterans Affairs for the administration of the patient-centered community care program, are excluded from the state general excise tax.

     Your Committees received testimony in support of this measure from the Department of Taxation and TriWest Healthcare Alliance Inc.  Your Committees received comments on this measure from the Tax Foundation of Hawaii.

     Your Committees find that there is a need to support health care administrators and to avoid increasing the costs of health care services delivered through the patient-centered community care program.  It is necessary to clarify that the amounts received by a contractor of the patient-centered community care program are not subject to the state general excise tax.

     Your Committees have amended this measure by making a technical, nonsubstantive amendment for the purposes of clarity and consistency.

     As affirmed by the records of votes of the members of your Committees on Public Safety, Intergovernmental and Military Affairs and Health that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2350, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2350, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Public Safety, Intergovernmental and Military Affairs and Health,

____________________________ JOSH GREEN, Chair

____________________________ WILL ESPERO, Chair