STAND. COM. REP. NO. 1609

Honolulu, Hawaii

, 2005

RE: S.B. No. 682

S.D. 2

H.D. 3

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

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

"A BILL FOR AN ACT RELATING TO TOBACCO,"

begs leave to report as follows:

The purpose of this bill is to improve tobacco regulation by:

(1) Requiring businesses engaged in the retail sale of cigarettes and other tobacco products to obtain a retail tobacco permit from the Department of Taxation (DOTAX);

(2) Requiring payment of a $39 fee for each retail tobacco permit;

(3) Establishing criminal offenses for the retail sale of cigarettes and other tobacco products without a valid retail tobacco permit;

(4) Providing that any cigarette or tobacco product unlawfully sold, possessed, kept, stored, acquired, distributed, or transported may be seized and ordered forfeited; and

(5) Appropriating:

(A) $37,000 out of the Tobacco Enforcement Special Fund to be transferred to DOTAX to establish and administer the licensing and permitting of tobacco and cigarette sales, and for other expenses incurred by DOTAX in carrying out the provisions of this bill; and

(B) $85,732 in general funds for DOTAX to administer the licensing and permitting of tobacco and cigarette sales.

Several concerned individuals supported this bill. Several concerned individuals supported the intent of this measure.

Your Committee distributed a proposed draft of this bill for public consideration. The Attorney General and Department of Health supported the proposed draft. The American Cancer Society, American Heart Association, and Coalition for a Tobacco Free Hawaii supported the intent of the proposed draft. The Department of Budget and Retail Merchants of Hawaii opposed the proposed draft. DOTAX and the Tax Foundation of Hawaii offered comments on the proposed draft. The Hawaii Food Industry supported the bill as referred to your Committee but opposed the proposed draft.

Your Committee recognizes that the provisions of this bill will shift the penalties for illegal sale of tobacco products from retail employees to retail employers.

Your Committee has amended this measure by:

(1) Deleting the appropriations for DOTAX;

(2) Changing the fee for retail tobacco permits to an unspecified amount;

(3) Specifying that of the moneys collected from the issuance of retail tobacco permits that exceed the costs of administering the permit requirements:

(A) Fifty percent shall be appropriated to the John A. Burns School of Medicine; and

(B) Fifty percent shall be appropriated to the Department of Human Services for the Children's Health Insurance Program;

and

(4) Making technical, nonsubstantive amendments for style, clarity, and consistency.

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. 682, S.D. 2, H.D. 2, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 682, S.D. 2, H.D. 3.

Respectfully submitted on behalf of the members of the Committee on Finance,

 

____________________________

DWIGHT TAKAMINE, Chair