Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1203
                                     H.D. 1

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


     Your Committee on Consumer Protection and Commerce, to which
was referred H.B. No. 1203 entitled: 


begs leave to report as follows:

     The purpose of this bill is to allow collection agencies to
recover their collection fees directly from delinquent taxpayers
when under contract with the Department of Taxation (Department)
for the collection of delinquent taxes.

     The Department testified in support of this bill.  Comments
expressing concerns about the proposed bill were received from
the Tax Foundation of Hawaii.

     Your Committee finds that under current law, collection
agencies are prohibited from collecting any collection fee,
attorney's fee, or commission from any debtor.  Thus, a
collection agency cannot collect its fee from the delinquent
taxpayer at the same time it collects delinquent taxes,
penalties, and interest on behalf of the Department.  As a
result, the Department must make further efforts to collect the
collection agency's fee from the taxpayer.  These efforts not
only aggravate and confuse taxpayers who believe they have fully
paid their delinquent taxes, but are also an inefficient use of
Department resources.

     Your Committee has amended this bill by making technical,
nonsubstantive amendments for purposes of style and clarity.

                                 STAND. COM. REP. NO. 445
                                 Page 2


     As affirmed by the record of votes of the members of your
Committee on Consumer Protection and Commerce that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 1203, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B. No.
1203, H.D. 1, and be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Consumer
                                   Protection and Commerce,

                                   RON MENOR, Chair