STAND. COM. REP. NO.1259

Honolulu, Hawaii

, 2001

RE: H.B. No. 516

H.D. 1

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committees on Health and Human Services and Judiciary, to which was referred H.B. No. 516, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TOBACCO,"

beg leave to report as follows:

The purpose of this measure is to create the cigarette stamp enforcement special fund and the cigarette tax stamp administrative special fund.

Your Committees received testimony in support of this measure from the Department of Taxation, Attorney General, Hawaiian Isle Enterprises, Inc., and Costco Wholesale. The Tax Foundation of Hawaii submitted comments.

This measure also:

(1) Exempts from the cigarette tax stamp cigarettes sold for personal use at sales outlets operated by the U.S. armed forces;

(2) Makes appropriations for deposit into the cigarette tax stamp enforcement special fund and cigarette tax stamp administrative special fund; and

(3) Appropriates money out of the cigarette tax stamp enforcement special fund for the attorney general for enforcement, and out of the cigarette tax stamp administrative special fund for the department of taxation for administration.

This measure is intended to improve the enforcement and administration of the cigarette tax, tobacco tax, and cigarette stamp tax system.

Your Committees have amended this measure by:

(1) Creating the tobacco enforcement special fund;

(2) Requiring that the sum representing the difference between the first $350,000 of tobacco settlement moneys received by the State each fiscal year and the unexpended and unencumbered balance of the tobacco enforcement special fund be deposited to the credit of the tobacco settlement special fund;

(3) Requiring tobacco product manufacturers to file reports with the Attorney General of shipments of cigarettes into the State;

(4) Requiring the Department of Taxation to provide the Attorney General with certain necessary information for administration and enforcement purposes;

(5) Allowing the Attorney General to bring a civil action against any entity failing to provide information deemed necessary by the Attorney General;

(6) Making an appropriation out of the tobacco enforcement special fund;

(7) Allowing licensees a discount from the denominated value of stamps to cover the costs of affixation;

(8) Deleting the first section regarding the spending ceiling as not relevant to the legislative branch; and

(9) Inserting an effective date of January 1, 2050.

As affirmed by the records of votes of the members of your Committees on Health and Human Services and Judiciary that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 516, H.D. 1, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 516, H.D. 1, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Health and Human Services and Judiciary,

____________________________

BRIAN KANNO, Chair

____________________________

DAVID MATSUURA, Chair