STAND. COM. REP. NO. 1659

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.C.R. No. 53
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Transportation and Intergovernmental
Affairs, to which was referred S.C.R. No. 53 entitled:

     "SENATE CONCURRENT RESOLUTION REQUESTING THE UNITED STATES
     ARMY TO PREPARE AN ENVIRONMENTAL IMPACT STATEMENT FOR
     MILITARY TRAINING AND RELATED ACTIVITIES AT THE MAKUA
     MILITARY RESERVATION ON OAHU,"

begs leave to report as follows:

     The purpose of this measure is to request the United States
Army to prepare an environmental impact statement for military
training and related activities at the Makua military reservation
on Oahu.

     Your Committee distributed and conducted a hearing on a
proposed Senate Draft of this measure that requests the
Department of Taxation to repeal the exemption from withholding
taxes for nonresident employees and require all employees' wages
to be subject to withholding regardless of residency.

     Testimony commenting on the proposed Senate Draft of this
measure was received from the Department of Taxation.

     Your Committee finds that this measure will close the
loophole being exploited by unscrupulous members of the
construction industry to avoid the withholding tax requirements.
Your Committee has amended this measure by narrowing its scope by
requiring all wages of the employees of contractors in the

 
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                                   STAND. COM. REP. NO. 1659
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construction industry be subject to withholding taxes regardless
of residency.

     As affirmed by the record of votes of the members of your
Committee on Transportation and Intergovernmental Affairs that is
attached to this report, your Committee concurs with the intent
and purpose of S.C.R. No. 53, as amended herein, and recommends
its adoption in the form attached hereto as S.C.R. No. 53,
S.D. 1.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Transportation
                                   and Intergovernmental Affairs,



                                   ______________________________
                                   CAL KAWAMOTO, Chair

 
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