Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Health and Human Services, to which was referred S.B. No. 994 entitled:

begs leave to report as follows:

The purpose of this measure is to designate as illegal any package of cigarettes that bears a brand name that is a registered trademark of a participating manufacturer if the package was imported by anyone other than the participating manufacturer.

In addition, the measure establishes a class C felony for any person who knowingly affixes any cigarette stamp to the package of any illegal or altered cigarettes.

Your Committee received testimony in favor of this measure from the State Attorney General.

Your Committee finds that cigarettes that are manufactured outside of the United States that bear the registered United States trademark of a participating manufacturer and are not intended for sale within the United States are gray market cigarettes, and therefore illegal in the State. Enforcement of the prohibition against "gray market" cigarettes requires appropriate criminal sanctions such as those proposed by this measure.

Your Committee has amended this measure by making technical, nonsubstantive amendments.

As affirmed by the record of votes of the members of your Committee on Health and Human Services that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 994, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 994, S.D. 1, and be referred to the Committee on Judiciary.