Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Judiciary, to which was referred H.B. No. 518, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to prohibit the importation into the State of cigarettes bearing the United States trademark of a signatory to the Master Settlement Agreement by persons other than that signatory. This measure also makes it a class B felony for affixing cigarette stamps to packages of cigarettes that are illegal or altered.

Your Committee received written testimony in support of this measure from the Attorney General.

This measure addresses the situation where cigarette manufacturers produce cigarettes outside of the United States that are not intended for sale within the United States. However, unscrupulous vendors attempt to sell these "gray market" cigarettes within the United States. This measure assures compliance with and enforcement of the prohibition of "gray market" cigarettes. In addition, this measure provides meaningful penalties for affixing cigarette tax stamps on "gray market" cigarettes and illegally altered cigarette packages.

As affirmed by the record of votes of the members of your Committee on Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 518, H.D. 1, and recommends that it pass Third Reading.