STAND. COM. REP. NO. 3026

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2961
                                        H.D. 3
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committees on Commerce and Consumer Protection and
Judiciary, to which was referred H.B. No. 2961, H.D. 3, entitled: 

     "A BILL FOR AN ACT RELATING TO TOBACCO,"

beg leave to report as follows:

     The purpose of this measure is to prohibit the importation,
distribution, and sale of cigarettes intended for export or use
outside the United States. 

     The Department of Health submitted testimony on the measure. 

     Your Committees find that cigarettes intended for foreign
export or sale are being imported and sold in the State at below
the cost of cigarettes legally in the market, and that cigarette
and tobacco taxes are not being paid on these transactions.  This
measure would help to stem the loss of tobacco tax revenues to
the State by prohibiting the sale of export cigarettes,
authorizing the forfeiture of illegally sold cigarettes, and
establishing civil and criminal penalties and a private right of
action for violations of the prohibition.  

     Your Committees further find that this measure will aid in
smoking prevention efforts by making the less expensive, untaxed
cigarettes less available to minors. 

     Upon careful consideration, your Committees have amended
this measure by replacing its contents with the language of S.B.

 
a                                                     HB2961 SD1
                                   STAND. COM. REP. NO. 3026
                                   Page 2


No. 3179, a substantially similar measure passed out earlier by
your Committees.  As amended, this measure:

     (1)  Contains additional provisions relating to cigarette
          tax stamps, documentation of foreign cigarettes,
          suspension of a tax license, additional civil
          penalties, definition of "importer" and "package", and
          the redesignation of sections in chapter 245, Hawaii
          Revised Statutes; and

     (2)  Takes effect upon its approval.

     Additionally, your Committees have made technical,
nonsubstantive amendments to the measure for purposes of clarity,
consistency, and style. 

     As affirmed by the records of votes of the members of your
Committees on Commerce and Consumer Protection and Judiciary that
are attached to this report, your Committees are in accord with
the intent and purpose of H.B. No. 2961, H.D. 3, as amended
herein, and recommend that it pass Second Reading in the form
attached hereto as H.B. No. 2961, H.D. 3, S.D. 1, and be referred
to the Committee on Ways and Means.


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


____________________________       ______________________________
AVERY B. CHUMBLEY, Co-Chair        BRIAN KANNO, Co-Chair



____________________________       ______________________________
MATTHEW M. MATSUNAGA, Co-Chair     BRIAN T. TANIGUCHI, Co-Chair

 
a                                                     HB2961 SD1