STAND. COM. REP. NO. 96-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. NO. 2961
                                     H.D. 1




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

Sir:

     Your Committee on Health, to which was referred H.B. No.
2961 entitled: 

     "A BILL FOR AN ACT RELATING TO TOBACCO,"

begs leave to report as follows:

     The purpose of this bill is to regulate the sale of tobacco
by requiring cigarette or tobacco licensees to affix a stamp
certifying payment of applicable excise taxes on packages of
cigarettes before the packages are sold to the general public. 

     The idea of tax stamping for cigarettes was first introduced
by the Representative for the 31st House District several years
ago.  Your Committee finds that this measure will:

     (1)  Ensure that cigarette taxes are paid, keeping the price
          of the product at market levels;
     
     (2)  Assure that untaxed cigarettes, which are less
          expensive, will not find their way into the hands of
          minors; and 

     (3)  Provide for the registration of all retail tobacco
          sellers and the suspension or revocation of that
          license in the case of repeat offenders.

     Testimony in support of this measure was submitted by the
Department of Taxation, Hawaii Food Industry Association, and

 
 
 
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                                 Page 2

 
Hawaii Nurses' Association.  Comments were submitted by the
Office of Information Practices and the Tax Foundation of Hawaii.      
The Department of Health and the Coalition For A Tobacco Free
Hawaii supported the intent of this bill.

     Your Committee has amended this measure by:

     (1)  Clarifying that the Hawaii stamp be affixed to only
          those cigarettes that the State approves for sale; and 

     (2)  Making technical, nonsubstantive amendments for
          consistency and clarity.

     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.
2961, as amended herein, and recommends that it pass Second
Reading in the form attached hereto as H.B. No. 2961, H.D. 1, and
be referred to the Committees on Consumer Protection and Commerce
and Judiciary and Hawaiian Affairs.

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



                                   ______________________________
                                   ALEXANDER C. SANTIAGO, Chair