STAND. COM. REP. NO. 328

Honolulu, Hawaii

RE:    S.B. No. 38

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

Madam:

     Your Committee on Health, to which was referred S.B. No. 38 entitled:

"A BILL FOR AN ACT RELATING TO TAX ON TOBACCO PRODUCTS OTHER THAN CIGARETTES,"

begs leave to report as follows:

     The purpose of this measure is to protect public health by reducing youth consumption of tobacco products other than cigarettes, such as smokeless tobacco, snuff, and pipe tobacco.

     Specifically, this measure includes smokeless tobacco and pipe tobacco to the definition of "tobacco products" and increases the excise tax on the wholesale price of tobacco products from forty per cent to sixty per cent.  The measure further allows for the taxes collected from tobacco products other than cigarettes to be deposited into the community health centers special fund.

     Your Committee received testimony in support of this measure from the American Heart Association, American Cancer Society, American Lung Association, Coalition for Tobacco-Free Hawaii, Hawaii Primary Care Association, Tobacco-Free Big Island, Healthy Mothers Healthy Babies, and the Boys and Girls Club of the Big Island.  Comments on this measure were submitted by the Department of Taxation and the Tax Foundation of Hawaii.  Written testimony presented to your Committee may be reviewed on the Legislature's website.

     Your Committee finds that this measure will protect public health by deterring youth consumption of tobacco products by increasing the tax on tobacco products, including smokeless tobacco and pipe tobacco, by twenty per cent.

     Your Committee has amended this measure by making technical, nonsubstantive amendments for the purposes of clarity and style.

     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. 38, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 38, S.D. 1, and be referred to the Committee on Ways and Means.

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

____________________________

DAVID Y. IGE, Chair