STAND. COM. REP. NO. 1600

Honolulu, Hawaii

, 2019

RE: S.B. No. 1405

S.D. 2

H.D. 1

Honorable Scott K. Saiki

Speaker, House of Representatives

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committees on Consumer Protection & Commerce and Judiciary, to which was referred S.B. No. 1405, S.D. 2, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO ELECTRONIC SMOKING PRODUCTS,"

beg leave to report as follows:

The purpose of this measure is to deter the use of electronic smoking devices and treat electronic smoking devices and e-liquid products similarly to tobacco products by:

(1) Prohibiting the shipment of e-liquid products with limited exceptions; and

(2) Including e-liquid and electronic smoking devices containing e-liquid within the definition of "tobacco product" for the purposes of the Cigarette Tax and Tobacco Tax Law, thereby:

(A) Subjecting e-liquid and electronic smoking devices containing e-liquid to the excise tax on tobacco products;

(B) Requiring retailers of e-liquid to obtain a retail tobacco permit to sell, possess, keep, acquire, distribute, or transport e-liquid;

(C) Prohibiting persons from engaging in the business of a wholesaler or dealer of e-liquid without first obtaining a license from the Department of Taxation; and

(D) Applying other requirements of chapter 245, Hawaii Revised Statutes.

This measure also:

(1) Increases the license fee for persons engaged as a wholesaler or dealer of cigarettes and tobacco products;

(2) Increases the retail tobacco permit fee for retailers engaged in the retail sale of cigarettes and tobacco products;

(3) Allocates portions of the tobacco tax revenues to the Tobacco Prevention and Control Trust Fund and to the University of Hawaii Cancer Center to support tobacco and cancer prevention research; and

(4) Repeals various obsolete statutory provisions relating to electronic smoking devices.

The Department of Health, Department of Taxation, a Councilmember of the Maui County Council, Hawaii Primary Care Association, Hawaii State Teachers Association, American Heart Association, We Are One, Inc., Blue Zones Project-Hawaii, Lanai Community Health Center, Coalition for a Tobacco-Free Hawai‘i, American Cancer Society Cancer Action Network, Hawai‘i Pacific Health, Adventist Health Castle, Breathe Aloha Club at UH Manoa, and numerous individuals testified in support of this measure. Irie Hawaii Stores, Hawaii Smokers Alliance, Retail Merchants of Hawaii, VOLCANO Fine Electronic Cigarettes, and numerous individuals opposed this measure. The Department of the Attorney General provided comments on this measure.

As affirmed by the records of votes of the members of your Committees on Consumer Protection & Commerce and Judiciary that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1405, S.D. 2, H.D. 1, and recommend that it be referred to your Committee on Finance.

Respectfully submitted on behalf of the members of the Committees on Consumer Protection & Commerce and Judiciary,

____________________________ CHRIS LEE, Chair

____________________________ ROY M. TAKUMI, Chair