STAND. COM. REP. NO. 336-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2034
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committees on Consumer Protection and Commerce and
Judiciary and Hawaiian Affairs, to which was referred H.B. No.
2034 entitled: 

     "A BILL FOR AN ACT RELATING TO TAXATION,"

beg leave to report as follows:

     The purpose of this bill is to create a cigarette stamp tax
requirement to insure that state cigarette excise taxes are paid.
This measure includes provisions for civil and criminal penalties
and enforcement.

     Your Committees find that a cigarette stamp tax would
provide a greater assurance that state cigarette taxes are paid
and curtail youth access to illegal cigarettes.

     Testimony was received in support of this measure from the
Department of Health, Tax Foundation of Hawaii, Hawaii Food
Industry Association, and Hawaii Nurses' Association.  The
Coalition for a Tobacco Free Hawaii and the American Cancer
Society support the intent of the bill.  The City and County of
Honolulu Liquor Commission opposed the portion of the bill which
seeks to mandate and task them with the enforcement of the
cigarette tax stamp. 

     Your Committees, following further discussions with the
Department of Health and the Department of the Attorney
General(AG), have amended this measure by:


 
 
                                 STAND. COM. REP. NO. 336-00
                                 Page 2

 
     (1)  placing the enforcement responsibility for the
          cigarette tax stamp on the AG;  

     (2)  deleting all references to enforcement by the county
          liquor boards;

     (3)  changing the appropriation amount in section 10 from
          $405,500 to $404,500 to accurately reflect the
          appropriated amount;

     (4)  deleting the appropriation for FY 2002-2003 to reflect
          the general practice of the legislature which does not
          appropriate funds in fiscal years following the current
          fiscal biennium; and

     (5)  deleting the effective date to ensure continued
          discussion on this measure.

     Furthermore, your Committees recommend that when the Finance
Committee reviews this bill, it should consider the feasibility
of utilizing Tobacco Settlement Fund monies to implement
enforcement of the provisions of this measure.

     Technical non-substantive amendments have been made for the
purposes of clarity, consistency, and style.

     As affirmed by the records of votes of the members of your
Committees on Consumer Protection and Commerce and Judiciary and
Hawaiian Affairs that are attached to this report, your
Committees are in accord with the intent and purpose of H.B. No.
2034, as amended herein, and recommend that it pass Second
Reading in the form attached hereto as H.B. No. 2034, H.D. 1, and
be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Consumer
                                   Protection and Commerce and
                                   Judiciary and Hawaiian
                                   Affairs,

                                   
                                   
                                   
                                   
______________________________     ______________________________
ERIC G. HAMAKAWA, Chair            RON MENOR, Chair