STAND. COM. REP. NO. 1202

 

Honolulu, Hawaii

                  

 

RE:    H.B. No. 382

       H.D. 2

       S.D. 2

 

 

 

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

 

Sir:

 

     Your Committee on Ways and Means, to which was referred H.B. No. 382, H.D. 2, S.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO THE AUDITOR,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to facilitate the Auditor's execution of statutory and constitutional duties with regard to audits of the Department of Taxation.

 

     Specifically, this measure:

 

     (1)  Expressly authorizes the Auditor to inspect all accounts, books, records, files, papers, and documents and all financial affairs of the Department of Taxation;

 

     (2)  Requires the Auditor to implement internal policies to protect the confidentiality of private personal information contained in tax returns; and

 

     (3)  Expands the application of existing penalties for unauthorized disclosures of tax information by a state officer or employee to expressly include the Auditor and the Auditor's agent.

 

     Your Committee received comments in support of this measure from Marion M. Higa, State Auditor, Office of the Auditor, State of Hawaii; and Frederick D. Pablo, Director, Department of Taxation.

 

     Your Committee received comments on this measure from Tax Foundation of Hawaii.

 

     Your Committee finds that while this measure grants express authority to the Auditor to effectively evaluate the activities and performance of the Department of Taxation, careful consideration should be given to the confidentiality of private taxpayer information that may be subject to these examinations.

 

     Accordingly, your Committee has amended this measure by:

 

     (1)  Clarifying that the Auditor shall have access to tax returns and the accounts, books, records, files, papers, documents, and financial affairs of the Department of Taxation only to the extent necessary in the administration of the Auditor's duties and within the scope of an audit;

 

     (2)  Making the measure effective upon its approval; and

 

     (3)  Making a technical, nonsubstantive amendment to reflect existing statutory language.

 

     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 H.B. No. 382, H.D. 2, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 382, H.D. 2, S.D. 2.

 

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

 

 

 

____________________________

DAVID Y. IGE, Chair