STAND. COM. REP. NO. 512________

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 727
                                     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 Judiciary and Hawaiian Affairs, to which
was referred H.B. No. 727 entitled: 


begs leave to report as follows:

     The purpose of this bill is to allow the courts to grant
probation in tax evasion cases.

     Testimony in support of the measure was received from the
Department of Taxation, the Hawaii State Bar Association, Tax
Division, the Hawaii Society of Certified Public Accountants, and
members of the public. Additional testimony was received from the
Tax Foundation of Hawaii.

     Your Committee finds that current laws do not give courts
the option to place taxpayers on probation.  Your Committee
believes that this option will allow the courts to maintain
jurisdiction over taxpayers to ensure that payments of back taxes
due are remitted to the State.

     Your Committee has amended this bill by:

     (1)  Clarifying that the court may assess a fine,
          imprisonment, probation or any combination thereof; and

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

                                 STAND. COM. REP. NO. 512________
                                 Page 2

     As affirmed by the record of votes of the members of your
Committee on Judiciary and Hawaiian Affairs that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 727, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B. No.
727, H.D. 1, and be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Judiciary &
                                   Hawaiian Affairs,

                                   PAUL T. OSHIRO, Chair