STAND. COM. REP. NO. 512

Honolulu, Hawaii

RE: S.B. No. 641

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 641 entitled:

"A BILL FOR AN ACT RELATING TO ALCOHOL,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Define "low alcohol by volume spirits beverage"; and

(2) Establish a tax on low alcohol by volume spirits at a rate of $0.85 per wine gallon.

Your Committee received testimony in support of this measure from Maui Wine, Napali Brewing Company, and one individual.

Your Committee received testimony in opposition to this measure from the Beer Institute and Wine Institute.

Your Committee received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

Your Committee finds that it is necessary to define the concept of a "low alcohol by volume spirits beverage" in the Hawaii Revised Statutes governing Liquor Tax Law and to apply an appropriate tax on this new category of product when it is sold in the State. This definition is needed to fill gaps in existing law and address the popular, growing industry of craft beverages, which comprises drinks such as canned alcoholic cocktails and alcoholic seltzers.

Your Committee has amended this measure by inserting an effective date of July 1, 2050, to encourage further discussion.

As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 641, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 641, S.D. 1, and be referred to your Committee on Ways and Means.

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

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JARRETT KEOHOKALOLE, Chair