Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committees on Health and Human Services, to which was referred S.B. No. 682 entitled:

beg leave to report as follows:

The purpose of this measure is to require businesses engaged in the retail sale of cigarettes and other tobacco products to acquire a retail tobacco permit from the Department of Taxation.

The Department of Health, the Department of Taxation, the State Attorney General, a Hawaii County Council member, American Lung Association, American Heart Association, American Cancer Society, Coalition for a Tobacco Free Hawaii, Tobacco Prevention and Control Advisory Board, Hawaii Medical Service Association, and three individuals submitted testimony in support of this measure. The Tax Foundation of Hawaii and Hawaii Food Industry Association submitted comments.

Your Committees find that youth access to tobacco products is a significant factor in determining whether a minor will ever smoke, experiment with tobacco, or become occasional or regular tobacco users. A retail business is the most common way a minor acquires tobacco products.

At present, it is not possible to know who or how many retail vendors are currently selling tobacco products. The retail tobacco permit will facilitate enforcement of the requirements of current law by providing a known and measurable list of entities engaged in the retail sale of cigarettes and other tobacco products. The ability to know with a greater degree of certainty who is licensed to sell tobacco products will greatly enhance and support efforts to reduce youth access to tobacco and keep the rates of illegal sale of tobacco to minors at one of the lowest in the nation. Also, the record-keeping requirement of this measure provides a tool to deal with the issue of counterfeit stamped products and counterfeit cigarettes, and facilitates diligent enforcement of the Master Settlement Agreement and Cigarette Tax Law.

Upon further consideration, your Committees have amended this measure by making technical non-substantive amendments for clarity and style.

As affirmed by the records of votes of the members of your Committees on Health and Human Services that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 682, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 682, S.D. 1, and be referred to the Committee on Ways and Means.