STAND. COM. REP. NO. 1391-18

Honolulu, Hawaii

, 2018

RE: S.B. No. 2654

S.D. 2

H.D. 1

Honorable Scott K. Saiki

Speaker, House of Representatives

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

Sir:

Your Committee on Consumer Protection & Commerce, to which was referred S.B. No. 2654, S.D. 2, H.D. 1, 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 protect public health by decreasing the consumption of electronic smoking devices, also known as e-cigarettes, and other tobacco products. Specifically, this measure:

(1) Prohibits the shipment of tobacco products including electronic smoking devices, for sale to anyone other than a licensee;

(2) Prohibits the transport of tobacco products ordered through remote sale to anyone other than a licensee and the purchase, use, or possession of tobacco products for which state taxes have not been paid by any person;

(3) Amends the definition of "tobacco products" as used in the Cigarette Tax and Tobacco Tax Law to include "e-liquid";

(4) Increases the license fees for wholesalers or dealers of cigarettes and tobacco products;

(5) Increases the fees for retail tobacco permits; and

(6) Increases, by an unspecified amount, the excise tax on:

(A) Each cigarette or little cigar sold, used, or possessed by a wholesaler or dealer; and

(B) The wholesale price of each article or item of tobacco products, other than large cigars, sold by a wholesaler or dealer.

The Department of Health, American Heart Association, Kapiolani Medical Center for Women and Children, Hawai‘i Public Health Association, Pioneering Healthier Communities of Honolulu, Hawaii Public Health Institute, Coalition for a Tobacco Free Hawai‘i, Planned Parenthood Votes Northwest and Hawaii, Blue Zones Project, Keiki Injury Prevention Coalition, and numerous concerned individuals testified in support of this measure. The Retail Merchants of Hawaii, Eciggity, Irie Hawaii, Hawaii Smokers Alliance, Hawaii Cigar Association, Kauai Cigar Company, Volcano cCigs, PCG Enterprises LLC, and numerous concerned individuals testified in opposition to this measure. The Department of Taxation and Tax Foundation of Hawaii provided comments.

As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2654, S.D. 2, H.D. 1, and recommends that it be referred to your Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,

____________________________

ROY M. TAKUMI, Chair