STAND. COM. REP. NO. 962-04

Honolulu, Hawaii

, 2004

RE: S.B. No. 3019

S.D. 1

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Labor and Public Employment, to which was referred S.B. No. 3019, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO HEALTH BENEFITS,"

begs leave to report as follows:

The purpose of this bill is to establish a refundable tax credit of $960 per year for single health coverage and $2,400 per month for family health coverage for members of collective bargaining unit 12 (police officers).

The State of Hawaii Organization of Police Officers (SHOPO) and Honolulu Police Department (HPD) testified in support of this bill. The Department of Taxation (DOTAX) and Hawaii Government Employees Association testified in opposition to this measure. The Tax Foundation of Hawaii offered comments.

Your Committee finds that despite approval of a new contract with the City and County of Honolulu which included a salary increase, HPD officers experienced a net financial loss due to increases in member health insurance premiums. This situation compounds the exceedingly difficult task of recruiting and retaining police officers that is experienced by all of the counties throughout the State.

As such, this bill would serve as another tool to assist the counties with the recruitment and retention of qualified police officers throughout the State.

Although valid concerns were raised by DOTAX regarding the fiscal implications of this bill, your Committee has received assurances from SHOPO that the City and County of Honolulu has expressed interest in accepting the financial responsibility for the estimated revenue loss that would be realized by the State.

Accordingly, your Committee has amended this bill by deleting its contents and replacing it with language that:

(1) Establishes a health care tax credit (Tax Credit) for members of collective bargaining unit 12 who are not claimed or not otherwise eligible to be claimed as a dependent by another taxpayer for Hawaii state income tax purposes;

(2) Requires the Director of Taxation to adopt rules, prepare necessary forms, and require proof of the claim for claiming this Tax Credit;

(3) Requires all claims for the Tax Credit to be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed;

(4) Requires the Director of Taxation to report the total cost of the Tax Credit experienced by a particular county to that county's Director of Finance; and

(5) Requires the counties to reimburse the State for the loss in revenue experienced from the implementation of the tax credit no later than six months after the end of the fiscal year.

As affirmed by the record of votes of the members of your Committee on Labor and Public Employment that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3019, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 3019, S.D. 1, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Labor and Public Employment,

 

____________________________

MARCUS R. OSHIRO, Chair