STAND. COM. REP. NO.316
Honolulu, Hawaii
, 2001
RE: H.B. No. 516
H.D. 1
Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twenty-First State Legislature
Regular Session of 2001
State of Hawaii
Sir:
Your Committees on Consumer Protection and Commerce and Judiciary and Hawaiian Affairs, to which was referred H.B. No. 516 entitled:
"A BILL FOR AN ACT RELATING TO TOBACCO,
beg leave to report as follows:
The purpose of this bill is to allow the cigarette tax stamp law and related statutes to be better administered and enforced by:
(1) Creating a presumption that all cigarettes are subject to the stamp tax;
(2) Changing the law's exemption of cigarettes from military outlets, that currently applies both at the time of purchase and when resold, by making it illegal to resell cigarettes purchased at military outlets;
(3) Remedying an oversight in the law by establishing and exempting from central service and departmental administrative expenses transfers, two special funds to receive monies currently designated for the law's enforcement and implementation:
(A) The Cigarette Tax Stamp Administrative Special Fund (CTSA Special Fund), to be administered by the Department of Taxation (DOTAX) to provide stamps and administer the law; and
(B) The Cigarette Tax Stamp Enforcement Special Fund, (CTSE Special Fund), to be administered by the Department of the Attorney General (AG) to enforce the law;
and
(4) Seeking appropriations as follows:
(A) From the general fund for fiscal year 2001-2002, start up appropriations of $40,000 for deposit into the CTSA Special Fund, and $100,000 for deposit into the CTSE Special Fund, to allow administration and enforcement of the law from its effective date until revenues are generated by the stamp fee;
(B) From the CTSA Special Fund, $120,000 for fiscal year 2001-2002, and $80,000 for fiscal year 2002-2003 for DOTAX administration of the law; and
(C) From the CTSE Special Fund, $700,000 for fiscal year 2001-2002 and $600,000 for fiscal year 2002-2003 for AG enforcement of the law.
Your Committees received testimony in support of this bill from AG and DOTAX. Tax Foundation of Hawaii commented on the measure.
Your Committees find that the provisions of this bill that apply to military cigarette sales will remove a loophole from the stamp tax law and reduce the amount of untaxed cigarette sales in the State. Your Committees further find that the establishment of the CTSA and CTSE special funds and the requested appropriations will allow successful implementation of the stamp tax law.
Upon further consideration, your Committees have amended this bill by changing the effective date of all provisions other than the bill's appropriation sections, from July 1, 2001, to upon approval, to give the law earlier effect that more closely coincides with the implementation of the stamping program on April 1st of this year. Your Committees have also made technical, nonsubstantive amendments for 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. 516, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 516, 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,
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____________________________ ERIC G. HAMAKAWA, Chair |
____________________________ KENNETH T. HIRAKI, Chair |
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