STAND. COM. REP. NO. 1261_______

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: S.B. No. 47
                                     S.D. 1
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committees on Economic Development and Business
Concerns and Health, to which was referred S.B. No. 47, S.D. 1,
entitled: 

     "A BILL FOR AN ACT RELATING TO TAXATION,"

beg leave to report as follows:

     The purpose of this bill is to address certain aspects of
Hawaii's tax structure by clarifying the general excise taxation
of joint ventures in the health care field.  In addition, this
measure eliminates the taxation of the sale of prescription drugs
and prosthetic devices to health care facilities.

     Testimony in support of this measure was submitted by the
Department of Taxation and the Healthcare Association of Hawaii.
The Tax Foundation of Hawaii provided comments.

     Your Committee has amended section 7 of this bill by
eliminating the phrase "amounts paid or incurred after June 30,
1999" and substituting language specifying that tangible personal
property acquired by an importer or purchaser becomes taxable by
the State after June 30, 1999.

     As affirmed by the records of votes of the members of your
Committees on Economic Development and Business Concerns and
Health that are attached to this report, your Committees are in
accord with the intent and purpose of S.B. No. 47, S.D. 1, as
amended herein, and recommend that it pass Second Reading in the

 
 
                                 STAND. COM. REP. NO. 1261_______
                                 Page 2

 
form attached hereto as S.B. No. 47, S.D. 1, H.D. 1, and be
referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Economic
                                   Development and Business
                                   Concerns and Health,

                                   
                                   
                                   
                                   
______________________________     ______________________________
ALEXANDER C. SANTIAGO, Chair       ROBERT N. HERKES, Chair