STAND. COM. REP. NO.  1137-14

Honolulu, Hawaii

                , 2014

RE:   S.B. No. 2496

      S.D. 2

      H.D. 1

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Sir:

     Your Committee on Health, to which was referred S.B. No. 2496, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO TOBACCO PRODUCTS,"

begs leave to report as follows:

The purpose of this measure is to:

     (1)  Impose an excise tax of an unspecified amount on tobacco products other than large cigars, but including loose and roll-your-own tobacco products, effective January 1, 2015;

     (2)  Automatically and proportionally increase the tax on tobacco products upon any increase of the excise tax on cigarettes and little cigars; and

     (3)  Deposit collected amounts to the credit of the Hawaii cancer research special fund.

The University of Hawaii Cancer Center, Coalition for a Tobacco-Free Hawaii, American Cancer Society Cancer Action Network, and numerous individuals testified in support of this measure.  A councilmember of the Kauai County Council; Hawaii Smokers Alliance; Cigar Association of America, Inc.; Hawaii Food Industry Association; and many individuals testified in opposition of this measure.  The Department of Taxation, Department of Budget and Finance, Tax Foundation of Hawaii, and an individual provided comments.

     Your Committee has amended this measure by:

     (1)  Removing the automatic and proportional excise tax increase on tobacco products upon any future increase to the excise tax on cigarettes or little cigars;

     (2)  Depositing collected amounts to the credit of the Hawaii cancer research special fund and the Hawaii tobacco prevention and control trust fund in unspecified proportions;

     (3)  Changing its effective date to July 1, 2150, to encourage further discussion; and

     (4)  Making technical, nonsubstantive amendments for clarity, consistency, 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. 2496, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2496, S.D. 2, H.D. 1, and be referred to the Committee on Finance.

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

____________________________

DELLA AU BELATTI, Chair