STAND. COM. REP. NO.1394
Honolulu, Hawaii
, 2001
RE: S.B. No. 992
S.D. 2
H.D. 2
Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twenty-First State Legislature
Regular Session of 2001
State of Hawaii
Sir:
Your Committee on Finance, to which was referred S.B. No. 992, S.D. 2, H.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO TOBACCO,"
begs leave to report as follows:
The purpose of this bill is to improve the administration and enforcement of the cigarette tax stamp law by:
(1) Prohibiting the resale of tax-exempt cigarettes from Armed Services sales outlets;
(2) Establishing the Cigarette Tax Stamp Enforcement Special Fund (Enforcement Fund);
(3) Establishing the Cigarette Tax Stamp Administrative Special Fund (Administrative Fund);
(4) Exempting the Enforcement and Administrative Funds from central service and departmental administrative expenses transfers;
(5) Specifying the portions of the tax stamp values that shall be deposited into the Enforcement and Administrative Funds; and
(6) Appropriating funds;
(7) Allowing cigarette distribution businesses to recover costs incurred in affixing stamps to cigarette packages;
(8) Authorizing the cost of stamps to be reduced by an unspecified percentage of the denominated value of each stamp purchased, to allow cigarette distributor cost recovery; and
(9) Providing that the percent reduction for cost recovery is not available to a cigarette distributor that is not in compliance with state law.
The Department of Taxation testified in support of this measure. The Department of the Attorney General (AG) supported the intent of this measure with proposed amendments. The Tax Foundation of Hawaii commented on this measure.
Your Committee has amended this bill by:
(1) Removing the reference to exceeding the general fund appropriation ceiling;
(2) Providing that the cigarette stamp tax is not required to be paid upon cigarettes sold for personal use at sales outlets operated by the armed services, but making it illegal to purchase such cigarettes for resale;
(3) Creating the Tobacco Enforcement Special Fund (Tobacco Fund) to be administered by the AG;
(4) Providing that all unencumbered and unexpended moneys in excess of $350,000 remaining on balance in the Tobacco Fund at the close of the fiscal year to be credited to the Hawaii Tobacco Settlement Special Fund;
(5) Requiring the AG to submit a report to the Legislature no later than twenty days prior to the convening of each regular session, providing an accounting of the receipts and expenditures of the Tobacco Fund;
(6) Exempting the Tobacco Fund from central service and departmental administrative expenses transfers; and
(7) Making technical, nonsubstantive amendments for purposes of clarity and style.
As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 992, S.D. 2, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 992, S.D. 2, H.D. 2.
Respectfully submitted on behalf of the members of the Committee on Finance,
____________________________ DWIGHT Y. TAKAMINE, Chair |