STAND. COM. REP. NO. 1706

Honolulu, Hawaii

RE: H.B. No. 441

H.D. 2

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 441, H.D. 2, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO CIGARETTE TAXES,"

begs leave to report as follows:

The purpose and intent of this measure is to amend statutory provisions relating to taxes on tobacco products.

More specifically, this measure:

(1) Increases the tax on each cigarette or little cigar that is sold, used, or possessed by a wholesaler or dealer; and

(2) Allocates the increase in tax revenues for debt reduction for the Cancer Research Center of Hawaii.

Your Committee received written comments in support of this measure from the Department of the Attorney General, Department of Health, State Health Planning and Development Agency, University of Hawaii System, Coalition for a Tobacco-Free Hawaii Youth Council, Hawaii COPD Coalition, Hawaii Medical Association, Hawaii Pacific Health, Hawaii Public Health Institute, Hawaii Substance Abuse Coalition, The Queen's Health Systems, and twelve individuals.

Your Committee received written comments in opposition to this measure from the Cigar Association of America and Retail Merchants of Hawaii.

Your Committee received written comments on this measure from the Department of Taxation and American Cancer Society Cancer Action Network.

Your Committee finds that a portion of the cigarette tax revenues currently allocated to the Hawaii cancer research special fund is specifically pledged towards revenue bonds sold to construct the Cancer Research Center of Hawaii in 2010, conduct cancer research, and fund the Center's operations. Your Committee also finds that plummeting cigarette tax revenues have jeopardized the revenue stream for debt service for the revenue bonds and diminishes the availability of resources for the Cancer Research Center of Hawaii to deliver cutting-edge cancer treatments to the State's cancer patients.

Your Committee has amended this measure by:

(1) Specifying that the increased tax revenues be deposited into the Hawaii cancer research special fund; and

(2) Requiring that, until June 30, 2041, all cigarette tax revenues allocated to the Hawaii cancer research special fund be used exclusively for debt service of capital expenditures and building maintenance.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 441, H.D. 2, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 441, H.D. 2, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

________________________________

DONOVAN M. DELA CRUZ, Chair