STAND. COM. REP. NO.  1118-16

Honolulu, Hawaii

                , 2016

RE:   S.B. No. 2691

      S.D. 2

      H.D. 1

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii

Sir:

     Your Committee on Health, to which was referred S.B. No. 2691, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO CHAPTER 245, HAWAII REVISED STATUTES,"

begs leave to report as follows:

The purpose of this measure is to regulate electronic smoking devices and e-liquid, in addition to cigarettes and tobacco products, under chapter 245, Hawaii Revised Statutes, by:

(1)  Imposing an excise tax on disposable electronic smoking devices and e-liquid sold by a wholesaler or dealer, whether or not sold at wholesale, or if not sold then at the same rate upon use by the wholesaler or dealer; and

(2)  Requiring every retailer engaged in the retail sale of cigarettes, tobacco products, electronic smoking devices, or e-liquid to obtain a retail tobacco permit to sell, possess, keep, acquire, distribute, or transport cigarettes, tobacco products, electronic smoking devices, or e-liquid for retail sale.

The Department of Health, University of Hawai‘i Cancer Center, Blue Zone Project, American Lung Association in Hawaii, Coalition for a Tobacco-Free Hawaii, and numerous individuals testified in support of this measure.  PC Gamerz, Hawaii Vapers United Association, VOLCANO Fine Electronic Cigarettes, and numerous individuals testified in opposition to this measure.  The Department of Taxation, American Heart Association, and Tax Foundation of Hawaii commented on this measure.

     Your Committee has amended this measure by:

(1)  Increasing the license fee for persons engaged as a wholesaler or dealer of cigarettes, tobacco products, electronic smoking devices, and e-liquid;

(2)  Increasing the retail tobacco permit fee for retailers engaged in the retail sale of cigarettes, tobacco products, electronic smoking devices, and e-liquid;

(3)  Changing its effective date to July 1, 2112, to facilitate 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. 2691, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2691, S.D. 2, H.D. 1, and be referred to your Committee on Consumer Protection & Commerce.

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

____________________________

DELLA AU BELATTI, Chair