STAND.
COM. REP. NO. 1255-22
Honolulu, Hawaii
, 2022
RE: S.B. No. 3044
S.D. 1
H.D. 1
Honorable Scott K. Saiki
Speaker, House of Representatives
Thirty-First State Legislature
Regular Session of 2022
State of Hawaii
Sir:
Your Committee on Judiciary & Hawaiian Affairs, to which was referred S.B. No. 3044, S.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO TOBACCO MANUFACTURER QUALIFIED ESCROW FUNDS,"
begs leave to report as follows:
The purpose of this measure is to provide a mechanism for:
(1) Tobacco product manufacturers that are not signatories to the Master Settlement Agreement to assign their interest in any qualified escrow fund balances to the State; and
(2) Financial institutions acting as the escrow agent of the qualified escrow fund to petition the courts to authorize transfer of funds to the State when the qualified escrow fund is abandoned.
Your Committee finds that the Tobacco Liability Act requires certain tobacco product manufacturers that are not signatories to the Master Settlement Agreement (nonparticipating tobacco manufacturers) to make certain payments into a qualified escrow fund based on their cigarette sales in the State. Under the Tobacco Liability Act, these nonparticipating tobacco manufacturers are required to open and manage their own escrow fund, with rights to the escrow funds belonging only to the manufacturers and the State.
However, your Committee finds that existing law is silent as to how a nonparticipating tobacco manufacturer should close an escrow account or what financial institutions may do when an escrow account is abandoned. In 2018, one nonparticipating tobacco manufacturer indicated a willingness to assign its interest in its qualified escrow fund to the State. This step was part of its efforts to close the escrow fund since the manufacturer no longer sold tobacco products in the United States. This measure would authorize such assignments.
Your Committee has amended this measure by making a technical, nonsubstantive amendment for the purposes of clarity, consistency, and style.
As affirmed by the record of votes of the members of your Committee on Judiciary & Hawaiian Affairs that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3044, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 3044, S.D. 1, H.D. 1, and be referred to your Committee on Finance.
Respectfully submitted on behalf of the members of the Committee on Judiciary & Hawaiian Affairs,
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____________________________ MARK M. NAKASHIMA, Chair |
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