STAND. COM. REP. NO. 244

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1222
                                     H.D. 1




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

Sir:

     Your Committee on Public Safety and Military Affairs, to
which was referred H.B. No. 1222 entitled: 

     "A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

     The purpose of this bill is to provide tax incentives for
the hiring of recently released felons.

     The Hawaii Paroling Authority, the Department of Public
Safety, the Community Alliance on Prisons, T.J. Mahoney and
Associates, the Hawaii Parole Board, and members of the public
testified in support of the measure.  The Department of Taxation
opposed the measure.  The Tax Foundation of Hawaii, the Iron
Workers Stabilization Fund, and individual members of the public
commented on the bill.

     Your Committee finds that paroled felons face great hurdles
when attempting to find employment after release from
incarceration.  Many who cannot find gainful employment often
return to crime as a last resort.

     Your Committee believes that a tax incentive, as proposed in
this measure, will increase the likelihood that released felons
will find gainful employment and become useful, productive
members of our society.


 
 
 
 
                                 STAND. COM. REP. NO. 244
                                 Page 2

 
     Your Committee has amended this bill by:

     (1)  Adding language to clarify the purpose of this measure;

     (2)  Adding language to provide tax incentives for the
          hiring of work release inmates as well as parolees;

     (3)  Replacing the term "qualified parolee" with the term
          "qualified offender" to clarify that work release
          program inmates are also included in the tax relief
          measure;

     (4)  Providing that the tax credit is graduated over two
          years; and

     (5)  Making technical, nonsubstantive amendments for
          purposes of style and clarity.

     As affirmed by the record of votes of the members of your
Committee on Public Safety and Military Affairs that is attached
to this report, your Committee is in accord with the intent and
purpose of H.B. No. 1222, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B. No.
1222, H.D. 1, and be referred to the Committee on Economic
Development and Business Concerns.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Public Safety and
                                   Military Affairs,



                                   ______________________________
                                   NESTOR R. GARCIA, Chair