STAND. COM. REP. NO. 2774

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 2434
                                        S.D. 2




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

Sir:

     Your Committee on Ways and Means, to which was referred S.B.
No. 2434, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO SUBSTANCE ABUSE,"

begs leave to report as follows:

     The purpose of this bill is to create a substance abuse
multi-agency coordinating council to be administratively attached
to the Department of Health to develop a statewide integrated
policy to set the general direction for substance abuse
prevention and treatment programs.

     The bill also creates a substance abuse programs revolving
fund in the Department of Health to be used solely to support the
operations of the substance abuse multi-agency coordinating
council and any substance abuse programs and services designated
by legislative appropriations.  The revolving fund is to receive
moneys collected by the Department of Taxation pursuant to the
Liquor Tax Law (chapter 244D, Hawaii Revised Statutes) and the
Cigarette and Tobacco Tax Law (chapter 245, Hawaii Revised
Statutes).

     The bill further increases:

     (1)  The liquor permit application and renewal fee from
          $2.50 to $500;


 
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     (2)  The duplicate liquor permit fee from 50 cents to $50;

     (3)  The gallonage tax on six categories of liquor to
          unspecified amounts;

     (4)  The wholesaler or dealer cigarette and tobacco license
          fee from $2.50 to $250; and

     (5)  The excise tax on cigarettes from five cents to an
          unspecified amount for each cigarette.

     All moneys collected from the permit and license fees
(paragraphs (1) and (4) above) are to be deposited into the
substance abuse programs revolving fund.  The bill also requires
ten per cent of all moneys collected under "section 244D-17" and
"section 245-15" relating to the Liquor Tax Law and the Cigarette
and Tobacco Tax Law, respectively, are to be deposited into the
substance abuse programs revolving fund.

     This bill further requires that moneys collected pursuant to
violations of certain drug laws are to be deposited into the
substance abuse programs revolving fund instead of the drug
demand reduction assessments special fund.  The bill additionally
requires twenty-five per cent of the moneys to be appropriated
into the emergency and budget reserve fund from the tobacco
settlement moneys (forty per cent) to be deposited into the
substance abuse programs revolving fund and appropriates a blank
amount to be deposited into the substance abuse programs
revolving fund.

     The bill also repeals the state advisory commission on drug
abuse and controlled substances and related sections in the
Hawaii Revised Statutes while revamping the Department of
Health's duties and responsibilities with regard to substance
abuse.  The bill finally appropriates a blank amount for fiscal
year 2000-2001 to implement integrated case management for
substance-abusing criminal offenders and appropriates a blank
amount of the substance abuse programs "special" fund for
substance abuse treatment services for criminal offenders.  The
bill takes effect upon approval except that parts III, IV, and
VI, relating to the revolving fund and the appropriations are to
take effect on July 1, 2000.

     Upon further consideration, your Committee has amended this
bill by:


 
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     (1)  Deleting sections 3 and 4 of the bill relating to
          increases in liquor fees and the gallonage tax;

     (2)  Deleting sections 6 and 7 of the bill relating to
          increases in cigarette and tobacco license fees and the
          cigarette excise tax;

     (3)  Amending section 321-    in section 2 to change the
          substance abuse programs revolving fund to the
          substance abuse programs special fund;

     (4)  Amending sections 5 and 8 of the bill to reflect that
          moneys collected under section 244D-17, and 245-15,
          Hawaii Revised Statutes, are to be deposited into the
          special fund.

     Your Committee is aware and agrees that substance abuse is
Hawaii's most pressing public health problem.  Your Committee
agrees that this bill, as amended, will contribute to an
effective statewide drug control policy, stimulate and encourage
interagency collaboration, and directly address the issue of
developing and implementing an integrated substance abuse
treatment policy and program for criminal offenders.

     Your Committee has amended this bill by making technical,
nonsubstantive amendments for purposes of clarity and style.

     Your Committee believes that the amendments made to this
bill reflect a shift to a more effective strategy to address
substance abuse and that this measure provides a superior vehicle
for improving efforts to achieve an integrated, statewide
approach to the problem of substance abuse.

     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.
2434, S.D. 1, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as S.B. No. 2434,
S.D. 2.


 
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                                 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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