STAND. COM. REP. NO. 414-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2961
                                     H.D. 2




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.
2961, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO TOBACCO,"

beg leave to report as follows:

     The purpose of this measure is to prohibit the sale of
"export" cigarettes and the altering of these cigarette packages.
This measure requires documentation of foreign cigarettes by a
licensed wholesaler or dealer.  Criminal and civil penalty
provisions for violation by a licensee has been included in the
bill. 

     Your Committees are concerned about the significant problem
of cigarette sales to minors and the sale and trafficking of
illegal cigarettes.  Your Committees find that this measure would
help to reduce sales of untaxed cigarettes, help stem black
market activity, and protect the health of Hawaii's children.

     Testimony was received in support of this measure from the
State Department of Taxation, the Hawaii Nurses' Association, and
a volunteer consumer advocate.  The Department of Health(DOH),
the Coalition for a Tobacco Free Hawaii, and the Hawaii Food
Industry Association supported the intent of this measure.  

     The Department of Liquor Control, County of Hawaii, with
concurrence from the County of Maui and County of Kauai Liquor
Departments, and the City and County of Honolulu Liquor

 
 
                                 STAND. COM. REP. NO. 414-00
                                 Page 2

 
Commission opposed portions of this measure which seek to mandate
and task them with the enforcement of this measure.  

     The Office of Information Practices (OIP) takes no position
on the substance of this bill.  The Tax Foundation of Hawaii and
OIP offered comments.

     Your Committees, upon further consideration, have
streamlined this measure to meet the concerns of those who
testified.  Following further discussion with the DOH and the
Department of the Attorney General, this measure has been amended
by:

     (1)  deleting all references to licensing;

     (2)  deleting all references to the cigarette stamp tax; and

     (3)  leaving the effective date blank to ensure further
          discussion.  

     Your Committees are also requesting the Finance Committee to
determine whether the criminal penalties that are included in
this measure are too severe.

     Technical, nonsubstantive amendments have also 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.
2961, H.D. 1, as amended herein, and recommends that it be
referred to the Committee on Finance, in the form attached hereto
as H.B. No. 2961, H.D. 2.

                                   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