STAND. COM. REP. NO. 2224

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 2938
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B.
No. 2938 entitled: 

     "A BILL FOR AN ACT RELATING TO CONFORMITY OF THE HAWAII
     INCOME TAX LAW TO THE INTERNAL REVENUE CODE,"

begs leave to report as follows:

     The purpose of this measure is to conform Hawaii's income
tax law with the changes to the Internal Revenue Code (IRC).

     Testimony in favor of this measure was submitted by the
Department of Taxation.  The Tax Foundation submitted comments.

     Your Committee finds that adoption of the amendments to the
IRC sections for State income tax purposes assures continued
State conformity with federal income tax law and minimizes
taxpayers' burdens in complying with Hawaii's income tax law.

     Your Committee has amended this measure to make technical
changes to reflect current statutory language and preferred
drafting style.  Your Committee notes that one of the technical
changes is to split section 235-2.4, Hawaii Revised Statutes
(HRS), into two sections, 235-2.4 and 235-2.45.  Section 235-2.4,
HRS, is often amended, has become unwieldy, and the preferred
drafting style requires that the entire section be set out for
any amendment.  As a precedent, Act 19, Session Laws of Hawaii
1985, performed a similar split.


 
a                                                     SB2938 SD1
 
                                   STAND. COM. REP. NO. 2224
                                   Page 2


     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of S.B.
No. 2938, as amended herein, and recommends that it pass Second
Reading in the form attached hereto as S.B. No. 2938, S.D. 1, and
be placed on the calendar for Third Reading.

                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
a                                                     SB2938 SD1