STAND. COM. REP. NO. 1072

Honolulu, Hawaii

, 2005

RE: S.B. No. 1236

S.D. 2

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Health, to which was referred S.B. No. 1236, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO CIGARETTE TAX,"

begs leave to report as follows:

The purpose of this bill is to discourage smoking by:

(1) Incrementally increasing over three years, the 7 cents tax on every cigarette sold, starting July 1, 2006, from 9 cents, to 11 cents, and then to 13 cents; and

(2) Allocating the revenues derived from the increase, 25 percent to the state general fund, 25 percent to Department of Health, health promotion and disease prevention programs, and 50 percent to the Hawaii Tobacco Prevention and Control Trust Fund (Trust Fund).

The American Cancer Society, American Lung Association, American Heart Association, and Coalition for a Tobacco Free Hawaii testified in support of this measure. The Department of Taxation opposed this bill. The Tax Foundation of Hawaii provided comments.

Your Committee finds that increasing the cost of cigarettes is the most effective deterrent to smoking, and believes that raising the price of cigarettes will decrease the number of teens and adolescents who start smoking and provide adult smokers with a greater incentive to quit.

Your Committee has amended this measure so that all amounts realized as a result of the increase would be paid to the Trust Fund, with the exception that of the initial tax revenues there would be a one-time allotment of:

(1) $6,500,000 to the John A. Burns School of Medicine, for research on disease prevention; and

(2) $2,000,000 to the Department of Human Services for health insurance coverage for uninsured children through the Children's Health Insurance Program.

As affirmed by the record of votes of the members of your Committee on Health that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1236, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1236, S.D. 2, H.D. 1, and be referred to the Committee on Economic Development & Business Concerns.

Respectfully submitted on behalf of the members of the Committee on Health,

 

____________________________

DENNIS A. ARAKAKI, Chair