STAND. COM. REP. NO. 1476

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 176
                                        H.D. 2
                                        S.D. 2




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.B.
No. 176, H.D. 2, S.D. 1, entitled: 

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

begs leave to report as follows:

     The purpose of this measure is to require cigarette or
tobacco licensees to affix a stamp certifying payment of
applicable excise taxes on packages of cigarettes prior to being
sold to the general public.

     Your Committee finds that this measure will provide greater
assurance that state cigarette taxes are paid thereby reducing
the sales of untaxed cigarettes and keeping the price of the
product at market levels, and that untaxed cigarettes, which are
less expensive, will not find their way into the hands of minors.
As a result, minors will be discouraged from experimenting with
cigarettes and the likelihood of them becoming adult smokers will
be reduced.

     Your Committee has amended this measure by:

     (1)  Specifying that the state stamp fee of $1 is on each
          package of twenty cigarettes;

     (2)  Deleting the new section requiring that every licensee
          report monthly on its distributions of cigarettes and

 
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                                   STAND. COM. REP. NO. 1476
                                   Page 2


          purchases of stamps during the preceding month as
          redundant to section 245-5, Hawaii Revised Statutes;

     (3)  Clarifying that the appeals process under 245-10,
          Hawaii Revised Statutes, does not apply to appeals on
          the forfeiture of a cigarette, package of cigarettes,
          or carton of cigarettes;

     (4)  Clarifying the ability of the liquor commission to
          inspect and examine the records of a licensee relating
          to the sale or use of cigarettes or tobacco products;
          and

     (5)  Making technical, nonsubstantive amendments for
          purposes of clarity and consistency, and to reflect
          preferred drafting style.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of H.B.
No. 176, H.D. 2, S.D. 1, as amended herein, and recommends that
it pass Third Reading in the form attached hereto as H.B.
No. 176, H.D. 2, S.D. 2.

                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
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