STAND. COM. REP. NO. 102

Honolulu, Hawaii

, 2005

RE: S.B. No. 469

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Health, to which was referred S.B. No. 469 entitled:

"A BILL FOR AN ACT RELATING TO TAX CREDITS FOR MEDICAL STUDENT LOANS,"

begs leave to report as follows:

The purpose of this measure is to establish an income tax credit to be applied to the repayment of loans to attend medical school granted to a physician who practices after training in medically underserved areas of the State.

The University of Hawai'i System, Hawaii Medical Association, Healthcare Association of Hawaii, American College of Obstetricians and Gynecologists, and Hawai'i Psychological Association submitted testimony in support of this measure. The Department of Taxation and the Tax Foundation of Hawaii submitted comments.

Your Committee finds that there is a serious crisis in the provision of medical services in the medically underserved areas of the State, particularly in the rural areas. Incentives need to be extended to medical students to practice after graduation in those areas. Some medical students finance their education with substantial student loans, often amounting to $90,000. An ideal incentive for these students to practice in the medically underserved areas is for student loans to be repaid from income tax credits allowed to the loan recipient, on the condition that the doctor practices in those areas and serve patients that are Medicaid, QUEST, or SCHIP recipients.

Upon further consideration, your Committee has amended this measure by adding an income tax credit to the repayment of loans to attend dental school granted to a dentist who practices after training in dentally underserved areas of the State, and by increasing the percentage of total income the taxpayer must derive from Medicaid, QUEST, or SCHIP reimbursement.

As affirmed by the record of votes of the members of your Committee on Health that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 469, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 469, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Health,

____________________________

ROSALYN H. BAKER, Chair