STAND. COM. REP. NO.  1279

Honolulu, Hawaii

                , 2009

RE:   S.B. No. 427

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

Sir:

     Your Committee on Economic Revitalization, Business, & Military Affairs, to which was referred S.B. No. 427 entitled:

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

begs leave to report as follows:

     The purpose of this bill is to ensure that recipients of managed health care under the TRICARE Program (Program) are not subject to increased costs by excluding from the general excise tax, amounts received by a Program managed care support contractor under a contract with the United States, for the actual cost of, or advancement to third party health care providers for the cost of, health care services provided under the Program.

     The Chamber of Commerce of Hawaii, TriWest Healthcare Alliance Inc., and Hawaii Medical Service Association supported this bill.  The Department of Taxation and Tax Foundation of Hawaii commented on this bill.

     Your Committee understands that this bill is necessary to dispel any uncertainty that may exist as to whether the amounts specified under this bill are subject to the state general excise tax. 

     As affirmed by the record of votes of the members of your Committee on Economic Revitalization, Business, & Military Affairs that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 427 and recommends that it be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Economic Revitalization, Business, & Military Affairs,

____________________________

ANGUS L.K. MCKELVEY, Chair