Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Health, to which was referred S.B. No. 682, S.D. 2, entitled:

begs leave to report as follows:

The purpose of this bill is to require all vendors of cigarettes to acquire a permit from the Department of Taxation (DOTAX) to enable the State to keep track of who is selling tobacco product vendors, and enhance enforcement of tobacco regulation laws.

DOTAX, the Department of the Attorney General (AG), Department of Health, American Heart Association, American Lung Association, and Coalition for a Tobacco Free Hawaii supported this bill. Legislative Information Services of Hawaii opposed this bill. The Tax Foundation of Hawaii provided comments.

DOTAX reported that the $39 fee required to obtain a permit will generate approximately $85,732 for the general fund that will be used to administer this new program. The AG reported that this program will be a large step in enforcing the laws regulating the sale of tobacco products because the department will know who is actually selling cigarettes.

Your Committee voices its concern in the area of penalties and notes that there is no language currently in this measure that could allow for corrective action without causing extreme harm to a person and their livelihood. A person new to the retail business or a "Mom-and-Pop" store that may not have an up-to-date permit or was unaware of this law, could potentially be sent to prison for up to five years for a mistake rather than an intentional abuse of the law. Therefore, your Committee encourages further study of and discussion on this bill to ensure enforcement that would incorporate corrective action befitting the degree of the offense.

Your Committee has amended this bill by changing the effective date to July 1, 2020, to encourage further discussion.

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. 682, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 682, S.D. 2, H.D. 1, and be referred to the Committee on Judiciary.