STAND. COM. REP. NO. 2177

Honolulu, Hawaii

RE: S.B. No. 2379

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2022

State of Hawaii

Sir:

Your Committee on Government Operations, to which was referred S.B. No. 2379 entitled:

"A BILL FOR AN ACT RELATING TO THE SPECIAL ENFORCEMENT SECTION,"

begs leave to report as follows:

The purpose and intent of this measure is to allow the Department of Taxation's Special Enforcement Section to examine any sector of Hawaii's economy, initiate civil investigations, and refer and recommend cases or examinations of segments of the economy to the Office Audit and Field Audit branches of the Department of Taxation for auditing.

Your Committee received testimony in support of this measure from the Department of Taxation.

Your Committee finds that this measure clarifies and expands the investigation and enforcement powers of the Department of Taxation's Special Enforcement Section. Accordingly, your Committee finds that this measure will help ensure that all taxpayers in the State pay their fair and lawful share of taxes and help prevent tax noncompliance through education, enforcement, and deterrence.

Your Committee has amended this measure by removing the prioritization of cash-based business investigations to clarify that the Special Enforcement Section has the authority to investigate all matters pertaining to state tax law.

As affirmed by the record of votes of the members of your Committee on Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2379, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2379, S.D. 1, and be referred to your Committees on Ways and Means and Judiciary.

Respectfully submitted on behalf of the members of the Committee on Government Operations,

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SHARON MORIWAKI, Chair