STAND. COM. REP. NO. 743

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 233

       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 S.B. No. 233, S.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO TOBACCO PRODUCTS,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to deter smoking by imposing flat $3.20 excise tax on tobacco products other than cigarettes, little cigars, or large cigars that is equivalent to the excise tax on packs of twenty cigarettes or little cigars.  The measure also directs a portion of the excise tax collected to be expended by the Department of Health on tobacco prevention programs and services.

 

     Comments in support of this measure were submitted by Donald Weisman, Hawaii Advocacy Director, American Heart/Stroke Association; George S. Massengale, JD, Director of Government Relations, American Cancer Society; Valerie Chang, Executive Director, Hawaii COPD Coalition; Trisha Nakamura, Esq., Policy and Advocacy Director, Coalition for a Tobacco Free Hawaii; Jackie Berry, Executive Director, Healthy Mothers Healthy Babies Coalition of Hawaii; Cara Sadira, CEO & Board Chair, Rising Up; Ron Fleck, M.S. CRC Vocational Consultant; Renee Schuetter, The Path Clinic; and five concerned individuals

 

     Comments on this measure were submitted by the Tax Foundation of Hawaii.

 

     Your Committee finds that this measure will, in effect, create a flat tax on tobacco products other than cigarettes and little cigars, which are already taxed.  Your Committee further finds that taxing tobacco products will discourage smoking and, in turn, reduce smoking-related health conditions in Hawaii.

 

Your Committee further notes the concern of the Coalition for a Tobacco-Free Hawaii that the current tobacco tax structure should take into account variable quantities of cigars and tobacco products sold and tax those sales in proportion to the corresponding tax on cigarettes.

 

     Accordingly, your Committee has amended this measure by:

 

(1)  Changing the amount of the excise tax on tobacco products other than large cigars to an unspecified amount;

 

(2)  Adding a new paragraph to section 245-3(a), Hawaii Revised Statutes, that establishes unspecified excise tax amounts on bulk purchases of tobacco products and small quantity purchases of these items that are in proportion to the corresponding tax on cigarettes;

 

(3)  Changing the amount of the excise tax collected to be used for tobacco prevention programs to an unspecified amount;

 

(4)  Expanding the scope of programs and services for which the Department of Health may expend the funds collected to include the tobacco dependence treatment services;

 

(5)  Changing the effective date to July 1, 2050, to facilitate further discussion on the measure; and

 

(6)  Making technical nonsubstantive amendments for the purposes of clarity, consistency, and style.

 

     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 S.B. No. 233, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 233, S.D. 2.

 

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

 

 

 

____________________________

DAVID Y. IGE, Chair