STAND. COM. REP. NO. 660

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 1207
                                     




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Health, to which was referred H.B. No.
1207 entitled: 

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

begs leave to report as follows:

     The purpose of this measure is to cure a technical defect in
the cigarette and tobacco tax law to restore the tax exemption
for sales of cigarettes and tobacco products to the United States
of any instrumentality thereof.  

     The Department of Taxation, the Hawaii Food Industry
Association, and S&K Sales Company testified in support of this
measure.  The Tax Foundation of Hawaii also submitted testimony.

     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 H.B. No.
1207 and recommends that it pass Second Reading and be referred
to the Committee on Finance.

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



                                   ______________________________
                                   ALEXANDER C. SANTIAGO, Chair