Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Health, to which was referred S.B. No. 181, S.D. 3, entitled:

begs leave to report as follows:

The purpose of this bill is to establish a statewide tobacco licensing program within the Department of Health to regulate the retail and wholesale sale of tobacco.

The Coalition for a Tobacco Free Hawaii, American Cancer Society, Honolulu Police Department, and the Department of the Attorney General submitted testimony in support of the measure.

The Department of Health supported the intent of the measure but had reservations regarding the implementation of a licensing program as drafted in the bill. The Department felt that more time was needed to develop a workable draft that was conducive to this state's characteristics. They also felt that since most of the viable programs regarding tobacco sales are administered under statewide alcoholic beverage commissions, the Department would be unable to efficiently handle issuing tobacco licenses and coordinating activities outside of the Department, such as investigations of violations and enforcement of this statute.

The Hawaii Food Industry Association also supported the intent of this bill but had concerns with licensing fees based upon the costs and expenses of the Department of Health in its control of the program.

The Hawaii Restaurant Association opposed the measure because they felt it would cede far too much rulemaking authority to the Department of Health.

Your Committee realizes that smoking among our youth in Hawaii is increasing and that more youth start smoking at a younger age, despite a current statute which prohibits, and provides financial penalty for, the retail sale of tobacco to minors. Owners or management of retail businesses rarely suffer consequences and penalties often falls upon the clerk who sells the tobacco product to the minor.

It was further noted that substantial economic incentives exist for businesses who circumvent conventional tax and trade requirements which allow these businesses to sell tobacco products at prices far below retail levels. This "gray market" tobacco product is inexpensive, particularly attractive to youth, and increases the temptation for tobacco utilization.

Your Committee feels that this measure is a step in the right direction to preventing a serious health hazard to the public, especially our youth.

However, your Committee also understands the concerns of the Department of Health and has amended the measure accordingly by:

(3) Changing the effective date to July 1, 2003; and

As affirmed by the record of votes of the members of your Committee on Health that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 181, S.D. 3, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 181, S.D. 3, H.D. 1, and be referred to the Committee on Judiciary and Hawaiian Affairs.