SENATE HEALTH COMMITTEE

STATEMENT TO

SENATE, No. 44

with committee amendments

STATE OF NEW JERSEY

DATED: FEBRUARY 22, 1996

      The Senate Health Committee reports favorably Senate Bill No. 44 with committee amendments.

      As amended by committee, this bill provides a 10% tax credit against the New Jersey Corporation Business Tax imposed pursuant to P.L.1945, c.162 (C.54:10A-1 et seq.), and the tax imposed on insurance companies generally pursuant to P.L.1945, c.132 (C.54:18A-1 et seq.), as appropriate, beginning on or after July 1, 1997 but before July 1, 1999, for the purchase, lease or rental of electronic data interchange technology to store, retrieve and transmit health care information.

      These tax credits are intended to provide a financial incentive for health care facilities and providers, third party payers and employers to purchase, lease or rent computer equipment and software that will permit electronic claims processing and other electronic data exchanges, which have the potential to significantly reduce health care administrative costs in this State, according to the Healthcare Information Networks and Technologies (HINT) report to the Legislature under the joint auspices of Thomas Edison State College and the New Jersey Institute of Technology. This bill is part of a legislative package designed to effectuate the recommendations included in the HINT report.

      The committee amended the bill to provide that in order to qualify for a corporation tax credit, in addition to meeting other requirements, a taxpayer must be an entity which processes claims for health care benefits, rather than a self-insured entity or an employer who provides a health benefits plan for his employees, as the bill originally provided. This amendment will allow additional entities involved in the processing of claims to qualify for the tax credit under this bill.