REPORT TITLE: 
Cigarette Stamp Tax


DESCRIPTION:
Provides that the excise tax on cigarettes shall be imposed and
collected through the use of stamps purchased by licensees, and
affixed to cigarette packages.  Includes provisions for civil
and criminal penalties, and for forfeitures of cigarettes, to be
enforced by the police departments, liquor commissions, the
attorney general, and prosecuting attorneys.  Requires the
Director of Taxation to submit findings and recommendations to
the legislature for the 2006 Session on effectiveness of Act.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2034 
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                     A BILL FOR AN ACT

RELATING TO TAXATION.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Chapter 245, Hawaii Revised Statutes, is amended
 
 2 by adding a new part to be appropriately designated and to read
 
 3 as follows:
 
 4                 "PART   .  STAMPING OF CIGARETTES
 
 5      245-A  Payment of tax through use of stamps.(a)  The tax
 
 6 imposed under section 245-3 upon the sale or use of cigarettes
 
 7 shall be paid by licensees through the use of stamps.
 
 8      (b)  The department shall furnish stamps for sale.
 
 9      245-B  Sales through financial institutions; rules.  The
 
10 department may enter into agreements to permit the sale of stamps
 
11 by designated financial institutions located within the State.  A
 
12 list of financial institutions designated to sell stamps shall be
 
13 made available at the department.  The department may adopt rules
 
14 as necessary for this purpose pursuant to chapter 91.
 
15      245-C  Designs, specifications, and denominations of
 
16 stamps; affixation; cancellation.  Stamps shall be of such
 
17 designs, specifications, and denominations as may be prescribed
 
18 by the department; provided that these agreements shall be exempt
 
19 from the requirements of chapter 103D.  The department shall
 

 
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 1 adopt rules pursuant to chapter 91, on the method and manner in
 
 2 which stamps are to be affixed to packages of cigarettes, and may
 
 3 provide for the cancellation of stamps.
 
 4      245-D  Affixation prior to distribution.(a)  Beginning
 
 5 December 15, 2000, a licensee, or designee of a licensee, may
 
 6 apply to the department for stamps as provided in this section.
 
 7      (b)  Beginning January 1, 2001, a licensee or the authorized
 
 8 agent or designee of a licensee, shall affix a stamp to the
 
 9 bottom of each individual package of cigarettes, prior to
 
10 distribution.
 
11      (c)  Beginning April 1, 2001, no individual package of
 
12 cigarettes may be sold or offered for sale to the general public,
 
13 unless affixed with the stamp required under this section.
 
14      (d)  Beginning April 1, 2001, no cigarette package may be
 
15 placed or stored in a vending machine, unless affixed with the
 
16 stamp required under this section.
 
17      245-E  Approval of department required for transfer of
 
18 stamps.  Unaffixed stamps shall not be sold, exchanged, or in any
 
19 manner transferred by a licensee to another person without prior
 
20 written approval of the department.  Any person who violates this
 
21 section shall be fined not less than $500 and not more than
 
22 $1,000 for each violation.
 
23      245-F  Authority to order purchases for wholesaler or
 

 


 

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 1 dealer; duration; revocation.  A licensee, in writing, shall
 
 2 authorize those persons who may order purchases of stamps for the
 
 3 licensee at a location where stamps are sold.  The authorization
 
 4 shall continue in effect until written notice of revocation of
 
 5 the authority is delivered at the sales location in the manner
 
 6 prescribed by rules adopted by the department pursuant to chapter
 
 7 91.
 
 8      245-G  Payment of tax without use of stamps in certain
 
 9 transactions; rules.  The department may provide by rule pursuant
 
10 to chapter 91 that the tax imposed by this chapter with respect
 
11 to cigarettes may be paid without the use of stamps in connection
 
12 with a particular type of transaction.
 
13      245-H  Price; payment; deferred payment purchases.(a)
 
14 Stamps shall be sold to licensees at their denominated values,
 
15 plus a state stamp fee of .2 per cent of the denominated value of
 
16 the stamp to pay for the cost to the State of providing the
 
17 stamps; provided that the department may adopt rules, pursuant to
 
18 chapter 91, to modify the state stamp fee to reflect the actual
 
19 costs incurred by the State in providing the stamps.
 
20      (b)  Payment for stamps shall be made at the time of
 
21 purchase; provided that the department may adopt rules pursuant
 
22 to chapter 91 to permit a licensee to defer payments therefor as
 
23 provided for in section 245-I.
 

 
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 1      245-I  Application to fix maximum amount and time of
 
 2 deferred-payment purchases; bonding; designation of sales
 
 3 locations.(a)  A licensee may apply to the department to set
 
 4 the maximum amount of deferred-payment purchases of stamps that
 
 5 may remain unpaid by the licensee during the time specified under
 
 6 section 245-J.  Upon receipt of the application and any bond
 
 7 required pursuant to subsection (b), the department shall set the
 
 8 amount for deferred-payment purchases.
 
 9      (b)  The department may require that a licensee who submits
 
10 an application for deferred-payment purchases of stamps post a
 
11 bond in an amount of up to one hundred per cent of the maximum
 
12 amount of allowed deferred-payment purchases as a condition of
 
13 approval of the application by the department.
 
14      245-J  Time for payment of deferred-payment purchases;
 
15 manner of payment.  Amounts owing for stamps purchased on the
 
16 deferred-payment basis in any calendar month shall be due and
 
17 payable on or before the last day of the following calendar
 
18 month.  Payment shall be made by a remittance payable to the
 
19 department.
 
20      245-K  Suspension of privilege to purchase on deferred-
 
21 payment basis or reduction of amount of permissible purchases.
 
22 The department may suspend, without prior notice, a licensee's
 
23 privilege to purchase stamps on the deferred-payment basis, or
 

 
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 1 may reduce the amount of deferred-payment purchases allowed the
 
 2 licensee, if:
 
 3      (1)  The licensee fails to promptly pay for stamps when
 
 4           payment is due;
 
 5      (2)  The bond or bonds required of the licensee are
 
 6           canceled, become void, impaired, or unenforceable for
 
 7           any reason; or
 
 8      (3)  In the opinion of the department, collection of any
 
 9           amounts unpaid or due from the licensee under this
 
10           chapter is jeopardized.
 
11      245-L  Penalty for failure to make timely payment.  A
 
12 licensee who fails to pay any amount owing for the purchase of
 
13 stamps within the time required shall pay a penalty of ten per
 
14 cent of the amount due in addition to the amount due plus
 
15 interest at the rate specified in section 231-39, from the date
 
16 on which the amount became due and payable until the date of
 
17 payment.
 
18      245-M  Unused stamps.  The department shall adopt rules
 
19 pursuant to chapter 91 for a refund or credit to a licensee in
 
20 the amount of the denominated values of any unused stamps.
 
21      245-N  Cigarettes and tobacco products shipped outside the
 
22 State for sale or use outside the State; refund or credit of
 
23 taxes.(a)  The department shall adopt rules pursuant to chapter
 

 
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 1 91 to provide a tobacco tax refund or credit to a licensee who
 
 2 has paid a tobacco tax on the distribution of cigarettes or
 
 3 tobacco products that are shipped to a point outside the State
 
 4 for subsequent sale or use outside the State.
 
 5      (b)  This part shall not apply to cigarettes or tobacco
 
 6 products that are distributed in this State to consumers and that
 
 7 are subsequently taken outside the State.
 
 8      245-O  Monthly report on distributions of cigarettes and
 
 9 tobacco products, and purchases of stamps.(a)  On or before the
 
10 last day of each month, every licensee shall file, on forms
 
11 prescribed by the department, a report of the licensee's
 
12 distributions of cigarettes and purchases of stamps during the
 
13 preceding month, and any other information that the department
 
14 may require to carry out this section.
 
15      (b)  On or before the last day of each month, every licensee
 
16 shall file, on forms prescribed by the department, a report of
 
17 the licensee's distributions of tobacco products and the
 
18 wholesale costs of tobacco products during the preceding month,
 
19 and any other information that the department may require to
 
20 carry out this part.
 
21      245-P  Counterfeiting stamps.  Any person who:
 
22      (1)  Falsely or fraudulently makes, forges, alters, reuses,
 
23           or counterfeits any stamp provided for or authorized
 

 
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 1           under this part;
 
 2      (2)  Causes any stamp to be falsely or fraudulently made,
 
 3           forged, altered, reused, or counterfeited; or
 
 4      (3)  Knowingly and willfully utters, publishes, passes, or
 
 5           tenders as genuine, any false, forged, altered, reused,
 
 6           or counterfeited stamp,
 
 7 is guilty of a class B felony; provided the person shall be
 
 8 subject to:  imprisonment for not less than one year and not more
 
 9 than ten years; a maximum fine of $50,000; or both.
 
10      245-Q  Sale or purchase of packages of cigarettes without
 
11 stamps; fines and penalties.(a)  Beginning April 1, 2001, a
 
12 person who knowingly possesses, keeps, stores, acquires,
 
13 transports, or retains for the purpose of sale, or sells or
 
14 offers to sell, three thousand or more cigarettes with an
 
15 aggregate wholesale price of $250 or more, to which there are not
 
16 affixed the stamps required under this part, regardless of the
 
17 source of, or method of obtaining the cigarettes, is guilty of a
 
18 class C felony; provided that:
 
19      (1)  The person shall be subject to:
 
20           (A)  Imprisonment for not less than one year and not
 
21                more than five years;
 
22           (B)  A maximum fine of not more than $10,000; or
 
23           (C)  Both; and
 

 
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 1      (2)  A corporation shall be fined not more than $50,000.
 
 2      (b)  Beginning April 1, 2001, a person who knowingly
 
 3 possesses, keeps, stores, acquires, transports, or retains for
 
 4 the purpose of sale, or sells or offers to sell, one thousand two
 
 5 hundred or more, but not more than two thousand nine hundred
 
 6 ninety-nine, cigarettes with an aggregate wholesale value of $100
 
 7 or more, but less than $250, to which there are not affixed the
 
 8 stamps required under this part, regardless of the source of, or
 
 9 method of obtaining the cigarettes, is guilty of a misdemeanor;
 
10 provided that:
 
11      (1)  The person shall be subject to:
 
12           (A)  Imprisonment for not more than one year;
 
13           (B)  A maximum fine of not more than $5,000; or
 
14           (C)  Both; and
 
15      (2)  A corporation shall be fined not more than $25,000.
 
16      (c)  Beginning April 1, 2001, a person who knowingly
 
17 violates a provision of this part for which a criminal punishment
 
18 is not otherwise provided is guilty of a misdemeanor.
 
19      245-R  Vending unstamped cigarettes; offense; punishment.
 
20 Beginning April 1, 2001, a person in possession or control of, or
 
21 having access to, a cigarette vending machine, who knowingly or
 
22 wilfully places for sale in the vending machine any cigarettes
 
23 not contained in packages to which are affixed Hawaii tax stamps,
 

 
Page 9                                                     2034 
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 1 shall be guilty of a class C felony; provided that:
 
 2      (1)  The person shall be subject to:
 
 3           (A)  Imprisonment of not less than one year and not
 
 4                more than ten years;
 
 5           (B)  A maximum fine of not more than $10,000; or
 
 6           (C)  Both; and
 
 7      (2)  A corporation shall be fined not more than $50,000.
 
 8      245-S  Treatment of unstamped cigarettes.  Beginning
 
 9 April 1, 2001, all persons in possession or control of unstamped
 
10 cigarettes shall destroy the unstamped cigarettes or return the
 
11 unstamped cigarettes to the manufacturers.  Failure to comply may
 
12 subject persons in possession or control of unstamped cigarettes
 
13 to the criminal penalties and administrative fines provided for
 
14 in sections 245-Q, 245-R, 245-U, 245-V, and 245-W.
 
15      245-T  Enforcement; injunction; disposition of fines.(a)
 
16 Enforcement of this part shall be under the jurisdiction of the
 
17 attorney general.
 
18      (b)  Notwithstanding the existence of other remedies at law,
 
19 the attorney general may apply for, and the court may grant, a
 
20 temporary or permanent injunction restraining any person from
 
21 violating or continuing to violate this part.  The injunction
 
22 shall be issued without bond.
 
23      (c)  Where the attorney general initiates and conducts an
 

 
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 1 investigation resulting in the imposition and collection of a
 
 2 criminal fine pursuant to this part, one hundred per cent of the
 
 3 fine shall be distributed to the attorney general.
 
 4      245-U Seizure and confiscation of unstamped cigarettes.
 
 5 The attorney general may seize and confiscate any cigarette,
 
 6 package of cigarettes, or carton of cigarettes that is possessed,
 
 7 kept, stored, acquired, transported, or retained for the purpose
 
 8 of sale, or sold or offered for sale in violation of this part,
 
 9 subject to the requirements of chapter 281.
 
10      245-V  Arrest; abetters.  The owner, keeper, and any person
 
11 having custody of any cigarette, package of cigarettes, or carton
 
12 of cigarettes seized as provided in section 245-U, may be
 
13 arrested without necessity of warrant and brought before the
 
14 district court of the circuit in which the seizure occurred.  If
 
15 the owner or keeper of the cigarette, package of cigarettes, or
 
16 carton of cigarettes seized is unknown to the police officer
 
17 making the seizure, or if no person is found in apparent
 
18 possession or custody of them, the police officer may arrest and
 
19 bring before the court the owner or occupant of the building,
 
20 place, or premises, or the driver, operator, owner, or other
 
21 person in charge of the conveyance in which the cigarette,
 
22 package of cigarettes, or carton of cigarettes is found, if the
 
23 person is known or can be ascertained.  Any person who has
 

 
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 1 knowingly engaged in, aided, assisted, or abetted the obtaining,
 
 2 keeping, or sale of any cigarette, package of cigarettes, or
 
 3 carton of cigarettes seized as provided in section 245-U, or has
 
 4 been privy thereto, or has knowingly permitted the use of any
 
 5 place, building, premises, or conveyance for that unlawful
 
 6 purpose, shall be guilty of a misdemeanor.
 
 7      245-W  Forfeitures; disposition.(a)  Any cigarette,
 
 8 package of cigarettes, or carton of cigarettes unlawfully
 
 9 possessed, kept, stored, acquired, transported, or retained for
 
10 the purpose of sale, or sold or offered for sale, in violation of
 
11 this part, may be ordered forfeited pursuant to chapter 281 by an
 
12 appropriate administrative or judicial proceeding. 
 
13      (b)  Any cigarette, package of cigarettes, or carton of
 
14 cigarettes forfeited pursuant to this section shall be sold to a
 
15 licensed wholesaler or dealer.
 
16      (c)  All proceeds from the sale of any cigarette, package of
 
17 cigarettes, or carton of cigarettes forfeited as provided in this
 
18 section, after payment of expenses of administration and sale,
 
19 shall be distributed to the attorney general.
 
20      (d)  Money distributed to the attorney general shall be used
 
21 for law enforcement purposes, and shall complement but not
 
22 supplant the funds regularly appropriated for those purposes.
 
23      245-X  Appeals.  A claimant of a cigarette, package of
 
24 cigarettes, or carton of cigarettes forfeited pursuant to section
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 245-W, may appeal the forfeiture in the same manner as appeals
 
 2 are allowed in other cases governed by chapter 281.  If the
 
 3 claimant fails to appear, or to diligently prosecute the appeal,
 
 4 or fails to secure a reversal of the judgment in the appellate
 
 5 court, the judgment appealed from shall be carried out.
 
 6      245-Y  Claims.  If the owner or possessor of any cigarette,
 
 7 package of cigarettes, or carton of cigarettes seized under this
 
 8 part appears and makes claim to the item, the owner or possessor
 
 9 shall file with the court before whom the proceedings are
 
10 pending, a claim in writing, setting forth the claimant's
 
11 interest therein, and the reason why the items claimed should not
 
12 be forfeited.  The claimant shall also give bond in favor of the
 
13 State, sufficient in amount and sureties, as required by the
 
14 court, and conditioned so that if the claim is diligently
 
15 prosecuted and decided against the claimant, the claimant shall
 
16 pay the costs of the proceedings conducted to resolve the claim.
 
17 If the judgment is against the claimant, the cigarette, package
 
18 of cigarettes, carton of cigarettes, and all containers thereof
 
19 shall be forfeited and shall be disposed of as provided in
 
20 section 245-V.
 
21      245-Z  Prosecutions not to exclude other remedies affecting
 
22 goods.  The criminal penalties and administrative fines
 
23 authorized under this part shall be in addition to any
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 forfeitures imposed pursuant to section 245-W."
 
 2      SECTION 2.  Section 245-1, Hawaii Revised Statutes, is
 
 3 amended by adding nine new definitions to be appropriately
 
 4 inserted and to read as follows:
 
 5      ""Attorney general" means the attorney general or deputy
 
 6 attorneys general of the State.
 
 7      "Department" means the department of taxation.
 
 8      "License" means any license granted under this chapter.
 
 9      "Licensee" means a holder of a license granted under this
 
10 chapter.
 
11      "Stamp" means a stamp printed, manufactured, or made by
 
12 authority of the department, as provided in this chapter, which
 
13 is issued, sold, or circulated by the department, and by the use
 
14 of which the tax levied under this chapter is paid."
 
15      SECTION 3.  Section 245-3, Hawaii Revised Statutes, is
 
16 amended by amending the title and subsection (a) to read as
 
17 follows:
 
18      "245-3  Taxes[; limitations].(a)  Every licensee
 
19 wholesaler, or dealer, in addition to any other taxes provided by
 
20 law, shall pay for the privilege of conducting business and other
 
21 activities in the State an:
 
22      (1)  Excise tax equal to[:
 
23           (A)  4.00 cents for each cigarette sold, used, or
 

 
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 1                possessed by the wholesaler or dealer, after
 
 2                August 31, 1997; and
 
 3           (B)] 5.00 cents for each cigarette sold, used, or
 
 4                possessed by a licensee, wholesaler, or dealer
 
 5                after June 30, 1998,
 
 6           whether or not sold at wholesale, or if not sold then
 
 7           at the same rate upon the use by the licensee,
 
 8           wholesaler, or dealer; and
 
 9      (2)  Excise tax equal to forty per cent of the wholesale
 
10           price of each article or item of tobacco products sold
 
11           by the licensee, wholesaler, or dealer, whether or not
 
12           sold at wholesale, or if not sold then at the same rate
 
13           upon the use by the licensee, wholesaler, or dealer.
 
14      Where the tax imposed has been paid on cigarettes or tobacco
 
15 products which thereafter become the subject of a casualty loss
 
16 deduction allowable under chapter 235, the tax paid shall be
 
17 refunded or credited to the account of the licensee, wholesaler,
 
18 or dealer.  [In applying the tax, the tax shall be applied
 
19 against the latest of the activities of selling, using, or
 
20 possessing.  The tax shall be imposed at the time of the last of
 
21 the following activities to occur:  the sale; the use; or the
 
22 possession of cigarettes or tobacco products.] The tax shall be
 
23 applied to cigarettes through the use of stamps."
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      SECTION 4.  Section 245-5, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "245-5  Returns.  Every licensee, wholesaler, or dealer, on
 
 4 or before the last day of each month, shall file with the
 
 5 department [of taxation] a return showing the cigarettes and
 
 6 tobacco products sold, possessed, or used by the licensee,
 
 7 wholesaler, or dealer during the preceding calendar month and of
 
 8 the taxes chargeable against the taxpayer in accordance with this
 
 9 chapter.  The form of the return shall be prescribed by the
 
10 department and shall [contain such information including a]
 
11 include:
 
12      (1)  A separate statement of the number and wholesale price
 
13           of cigarettes[,];
 
14      (2)  The amount of stamps purchased and used; [and the]
 
15      (3)  The wholesale price of tobacco products, sold,
 
16           possessed, or used[, as it]; and
 
17      (4)  Any other information that the department may deem
 
18           necessary,
 
19 for the proper administration of this chapter."
 
20      SECTION 5.  Section 245-6, Hawaii Revised Statutes, is
 
21 amended to read as follows:
 
22      "245-6  Payment of taxes; penalties.  At the time of the
 
23 filing of the return required under section 245-5 and within the
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 time prescribed therefor, each licensee, wholesaler, or dealer
 
 2 shall pay to the department [of taxation] the taxes imposed by
 
 3 this chapter, required to be shown by the return[.], including
 
 4 the unpaid amount of taxes imposed by this chapter.
 
 5      Penalties and interest shall be added to and become a part
 
 6 of the taxes, when and as provided by section 231-39."
 
 7      SECTION 6.  Section 245-8, Hawaii Revised Statutes, is
 
 8 amended by amending subsection (a) to read as follows:
 
 9      "(a)  Every licensee, wholesaler, and dealer shall keep a
 
10 record of [every]:
 
11      (1)  Every sale or use of cigarettes and tobacco products by
 
12           the licensee, wholesaler, or dealer[, the];
 
13      (2)  The number and wholesale price of cigarettes[, and
 
14           the];
 
15      (3)  The wholesale price of tobacco products, sold,
 
16           possessed, or used[, and of the];
 
17      (4)  The taxes payable [thereon,] on tobacco products sold,
 
18           possessed, or used, if any[,]; and
 
19      (5)  The amounts of stamps purchased and used,
 
20 in such form as the department [of taxation] may prescribe.  The
 
21 records shall be offered for inspection and examination at any
 
22 time upon demand by the department and shall be preserved for a
 
23 period of five years, except that the department, in writing, may
 

 
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                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 consent to their destruction within the five-year period or may
 
 2 require that they be kept longer.  The department, by rule, may
 
 3 require the licensee, wholesaler, or dealer to keep such other
 
 4 records as it may deem necessary for the proper enforcement of
 
 5 this chapter."
 
 6      SECTION 7.  Section 245-15, Hawaii Revised Statutes, is
 
 7 amended to read as follows:
 
 8      "245-15  Disposition of revenues.  All moneys collected
 
 9 pursuant to this chapter shall be paid into the state treasury as
 
10 state realizations to be kept and accounted for as provided by
 
11 law[.], except for the amounts designated by sections 245-T, and
 
12 245-W, for distribution to the attorney general."
 
13      SECTION 8.  Chapter 245, Hawaii Revised Statutes, is amended
 
14 by designating sections 245-1 to 245-15 as part I and inserting a
 
15 title before section 245-1 to read as follows:
 
16                   "PART I.  GENERAL PROVISIONS"
 
17      SECTION 9.  There is appropriated out of the general
 
18 revenues of the State of Hawaii the sum of $35,000, or so much
 
19 thereof as may be necessary, for fiscal year 2000-2001, for
 
20 start-up costs for implementing the cigarette stamp tax system,
 
21 including a one year supply of stamps and stamp cylinders.
 
22      The sum appropriated shall be expended by the department of
 
23 taxation for purposes of this Act.
 

 
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 1      SECTION 10.  There is appropriated out of the general
 
 2 revenues of the State of Hawaii the sum of $404,500, or so much
 
 3 thereof as may be necessary, for fiscal year 2000-2001, to the
 
 4 attorney general.
 
 5      The sums appropriated shall be expended by the attorney
 
 6 general for the purposes of this Act including the hiring of
 
 7 necessary staff.
 
 8      SECTION 11.  The director of taxation shall submit findings
 
 9 and recommendations to the legislature twenty days prior to the
 
10 regular session of 2006 as to the effectiveness of this Act in
 
11 reducing the loss of cigarette tax revenue to the State from
 
12 illegal sales of untaxed cigarettes.  The director of taxation
 
13 may submit an interim report to the legislature on any findings
 
14 relating to the effectiveness of this Act before 2006.
 
15      SECTION 12.  The attorney general shall report to the
 
16 legislature no later than twenty days before the convening of
 
17 each of the regular sessions of 2002 and 2003 on its activities
 
18 relating to this Act, including expenses, fines, and penalties
 
19 collected, and forfeitures.
 
20      SECTION 13.  This Act does not affect the rights and duties
 
21 that matured, penalties that were incurred, and proceedings that
 
22 were begun, before its effective date.
 
23      SECTION 14.  In codifying the new part added to chapter 245,
 

 
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 1 Hawaii Revised Statutes, by section 1 of this Act, the revisor of
 
 2 statutes shall substitute appropriate section numbers for the
 
 3 letters used in designating the new sections in this Act.
 
 4      SECTION 15.  Statutory material to be repealed is bracketed.
 
 5 New statutory material is underscored.
 
 6      SECTION 16.  This Act shall take effect on _____________;
 
 7 provided that:
 
 8      (1)  Sections 10 and 11 shall take effect on July 1, 2000;
 
 9      (2)  On June 30, 2006, this Act shall be repealed and
 
10           sections 245-1, 245-3, 245-5, 245-6, 245-8, 245-15, and
 
11           281-17, Hawaii Revised Statutes, shall be reenacted in
 
12           the form in which they read on the day before the
 
13           approval of this Act.