STAND. COM. REP. NO. 426

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 47
                                        




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Health and Human Services, to which was
referred S.B. No. 47 entitled: 

     "A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

     The purpose of this measure is to eliminate, reduce, or
alleviate the general excise tax on certain health care services.

     Your Committee received testimony in support of this measure
from the Healthcare Association of Hawaii, Central Oahu Physician
Hospital Organization, and Wahiawa Hospital Association which
presented a petition with numerous signatures.  Informational
testimony was presented by the Tax Foundation of Hawaii.  The
Department of Taxation submitted testimony that commented on the
measure.

     Your Committee finds that this measure is intended to
alleviate the imposition of the general excise tax on health care
services in recognition of the reshaping of the health care
delivery system through a system of managed care and medical
consultation through telecommunications.  By reducing or
eliminating the general excise tax when the services are sold to
a foreign patient or provided in a site out of the State, this
measure enables Hawaii to become a center for health care in the
Pacific Rim.  It also clarifies the taxation of the various
formations and relationships in the health field.

     As affirmed by the record of votes of the members of your

 
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                                   STAND. COM. REP. NO. 426
                                   Page 2


Committee on Health and Human Services that is attached to this
report, your Committee is in accord with the intent and purpose
of S.B. No. 47 and recommends that it pass Second Reading and be
referred to the Committee on Ways and Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Health and Human
                                   Services,



                                   ______________________________
                                   SUZANNE CHUN OAKLAND, Chair

 
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