Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committees on Health and Human Services and Judiciary, to which was referred S.B. No. 992 entitled:

beg leave to report as follows:

The purpose of this measure is to create the cigarette tax stamp enforcement special fund (special fund) and the cigarette tax stamp administrative special fund (administrative fund).

Your Committees received testimony in support of this measure from the Attorney General (AG) and Department of Taxation (DOTAX). The Tax Foundation of Hawaii submitted comments.

The special fund would hold moneys from an allocated portion of the stamp fee designated to pay for the cost of enforcing the cigarette tax stamp and fines. The fund would be administered by the AG for use in administering, operating, monitoring, and ensuring compliance and enforcement of the cigarette stamp tax and tobacco taxes.

The administrative fund would hold moneys from an allocated portion of the stamp fee designated to pay for the cost to the State of providing the stamps. The fund would be administered by the DOTAX for use in providing the stamps and administering the cigarette tax stamp system.

This measure also clarifies the tobacco tax exemption on cigarettes sold for personal use at sales outlets operated by the armed services of the United States, and makes appropriations to DOTAX to continue to administer the cigarette tax stamp program.

Your Committees have amended this measure to make technical, nonsubstantive amendments for proper drafting style.

As affirmed by the records of votes of the members of your Committees on Health and Human Services and Judiciary that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 992, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 992, S.D. 1, and be referred to the Committee on Ways and Means.