STAND. COM. REP. NO. 869

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1421
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Judiciary, to which was referred S.B. No.
1421 entitled: 

     "A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

     The purpose of this bill is to allow probation as a
sentencing option for income tax offenses.

     Your Committee finds that the Hawaii Supreme Court recently
determined that under current law, the state statutes relating to
penalties for tax offenses provide for mandatory sentencing
options of a fine, imprisonment, or both, but do not allow
probation.  Your Committee further finds that including probation
as a sentencing option will give courts more flexibility in
sentencing, and will enable the Department of Taxation to collect
taxes from convicted offenders that might have been uncollectible
had such offenders been imprisoned.

     Testimony in support of this measure was submitted by the
Department of Taxation, the Tax Foundation of Hawaii, the Hawaii
Society of Certified Public Accountants, the Tax Section of the
Hawaii State Bar Association, and a former District Court Judge.

     Upon further consideration, your Committee has amended this
measure by making it clear that a court has the option to impose
a sentence that combines one or more of the listed penalties.


 
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                                   STAND. COM. REP. NO. 869
                                   Page 2


     As affirmed by the record of votes of the members of your
Committee on Judiciary that is attached to this report, your
Committee is in accord with the intent and purpose of S.B. No.
1421, as amended herein, and recommends that it pass Second
Reading in the form attached hereto as S.B. No. 1421, S.D. 1, and
be placed on the calendar for Third Reading.

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



                                   ______________________________
                                   AVERY B. CHUMBLEY, Co-Chair



                                   ______________________________
                                   MATTHEW M. MATSUNAGA, Co-Chair

 
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