Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Housing, to which was referred S.B. No. 2109 entitled:

begs leave to report as follows:

The purpose of this measure is to permit the direct shipment of wine into the State by persons with a Hawaii class 1 license or another state's license to manufacture wine, upon obtaining a wine direct shipper permit.

Testimony in support of this measure was submitted by the Department of the Attorney General and the Wine Institute. Testimony in opposition to this measure was submitted by Hawaii Liquor Wholesalers Association, Hawaii Food Industry Association, and Legislative Information Services of Hawaii.

According to the Attorney General, this measure addresses the recent United States Supreme Court decision in Granholm v. Heald, 125 S. Ct. 1885 (2005), which held that laws allowing in-state wineries, but not out-of-state wineries, to ship wine directly to consumers violate the Commerce Clause of the United States Constitution.

Your Committee finds that there is dispute among the affected parties as to whether this measure is a proper response to the United States Supreme Court's holding in Granholm.

Upon further consideration, your Committee has amended this measure by:

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2109, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2109, S.D. 1, and be placed on the calendar for Third Reading.