STAND. COM. REP. NO. 727

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 612
                                        




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 S.B.
No. 612 entitled: 

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

begs leave to report as follows:

     The purpose of this bill is to require tobacco manufacturers
that do not participate in the tobacco litigation master
settlement agreement with the State to deposit funds into an
escrow fund to pay judgments or settlements on claims brought
against the manufacturer.

     Your Committee finds that many serious diseases such as lung
cancer, emphysema, and heart disease, result from smoking.
Medical costs to treat these illnesses are often borne by the
State under medical assistance programs. This is a huge financial
burden that can extend well into the next century because of the
delayed effects of tobacco related illnesses.  In November 1998,
when several tobacco product manufacturers entered into a master
settlement agreement with the State, some manufacturers did not
enter into that settlement.  This bill is designed to require
those non-settling manufacturers to establish a reserve fund to
guarantee a source of compensation and to prevent those
manufacturers from deriving short-term profits and becoming
judgment proof.  Your Committee finds that this is the

 
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                                   STAND. COM. REP. NO. 727
                                   Page 2


responsible thing for the State to do to protect the finances of
the State and the taxpaying public.

     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 S.B. No.
612 and recommends that it pass Third Reading.

                                 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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