STAND. COM. REP. NO. ___________

                                 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 Finance, 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 bill is restore the tax exemption for
sales of cigarettes and tobacco products to the United States,
including any agency or instrumentality that is wholly owned or
otherwise constituted to be immune from the cigarette and tobacco
tax levy.

     The Department of Taxation, Fleming Companies, Inc., the
Hawaii Food Industry Association, and S&K Sales Co. testified in
support of this measure.

     As affirmed by the record of votes of the members of your
Committee on Finance 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 Third Reading.

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



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair