STAND. COM. REP. NO. 31-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 1691
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Finance, to which was referred H.B. No.
1691 entitled: 

     "A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:                                 

     The purpose of this bill is to fulfill United States treaty
obligations by recognizing a general excise and transient
accommodations tax exemption for eligible foreign diplomats and
consular officials in the State. 

     Testimony in support of this measure was submitted by the
United States Department of State and the Consulate-General of
Japan.  Comments were received from the Department of Taxation
and the Tax Foundation of Hawaii.

     Your Committee has amended this measure by:

     (1)  Amending the definition of "use" under the Use Tax Law
          to include the use of property, services, or
          contracting imported by foreign diplomats and consular
          officials who are holding cards issued or authorized by
          the United States Department of State granting them an
          exemption from state taxes;                            

     (2)  Changing the effective date of the bill to July 1,
          2000; and


 
 
 
                                 STAND. COM. REP. NO. 31-00
                                 Page 2

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

     As affirmed by the record of votes of the members of your
Committee on Finance that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
1691, as amended herein, and recommends that it pass Second
Reading in the form attached hereto as H.B. No. 1691, H.D. 1, and
be placed on the calendar for Third Reading.

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



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair