STAND. COM. REP. NO.  513

Honolulu, Hawaii

                , 2017

RE:   H.B. No. 1495

      H.D. 1

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sir:

     Your Committee on Health, to which was referred H.B. No. 1495 entitled:

"A BILL FOR AN ACT RELATING TO REMOTE SALES OF CIGARETTES AND TOBACCO PRODUCTS,"

begs leave to report as follows:

The purpose of this measure is to prohibit mail order and internet-based cigarette and tobacco product sales that circumvent the State's regulatory and tax requirements by prohibiting the shipment of tobacco products including electronic cigarettes to any person in the State other than a licensed wholesaler, dealer, or retailer with a valid tobacco sales permit.

Your Committee received testimony in support of this measure from the Department of Health, American Heart Association, American Cancer Society Cancer Action Network, Hawaii Public Health Institute, and numerous individuals.  Your Committee received testimony in opposition to this measure from VOLCANO Fine Electronic Cigarettes, Retail Merchants of Hawaii, Hawaii Cigar Association, Smokeless Hawaii, Hawaii Smokers Alliance, PC Gamerz Hawaii, and several individuals.  The Department of Taxation, Department of the Attorney General, and an individual submitted comments.  

     Your Committee has amended this measure by:

     (1)  Specifying that the prohibition on shipping to an unlicensed and non-permitted person in the State applies to shipment of cigarettes or tobacco products including electronic smoking devices;

     (2)  Clarifying that authorization for shipments to retailers applies specifically to tobacco retailers;

     (3)  Clarifying penalties by specifying that each shipment shall be a separate violation and deleting the $5,000 limit on criminal fines;

     (4)  Clarifying the definition of electronic smoking devices that are subject to the prohibition;

     (5)  Changing its date to July 1, 2090, to encourage further discussion; and

     (6)  Making technical, nonsubstantive changes for the purpose of clarity and consistency.

     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 H.B. No. 1495, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1495, 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