Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 1008
                                        S.D. 1

Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Judiciary, to which was referred H.B. No.
1008 entitled: 


begs leave to report as follows:

     The purpose of this bill is to neutralize any advantage that
non-settling tobacco manufacturers may gain by requiring non-
settling manufacturers to establish a reserve fund to pay
judgments or settlements on future claims brought against them.

     Your Committee finds that cigarette smoking presents serious
financial burdens to the State, which may have an obligation to
provide medical assistance to citizens with smoking-related
diseases.  Your Committee further finds that such burdens should
be borne by the tobacco product manufacturers rather than by the
State.  Requiring tobacco product manufacturers to either
participate in the settlement with the State or ensure that they
have sufficient funds available to pay future claims by Hawaii
smokers will help to place the financial burden of cigarette
smoking on tobacco product manufacturers instead of the State.

     Testimony in support of this measure was submitted by the
Attorney General, who informed your Committee that this measure
is based upon model legislation agreed to by the Attorney General
as part of a master settlement agreement between tobacco
manufacturers and a group of states including Hawaii.  Your
Committee was also informed by the Attorney General that the
tobacco manufacturers may seek to avoid making payments to any

                                   STAND. COM. REP. NO. 1044
                                   Page 2

state that has not passed the precise form of this measure as
agreed upon in the master settlement agreement.

     Thus, the Attorney General is requesting amendments to this
measure that are inconsistent with the statutory conventions and
style of the Hawaii Revised Statutes, in order to conform it to
the exact form agreed upon in the master settlement agreement.
While your Committee will agree to these amendments, rather than
risk losing any part of the settlement proceeds, your Committee
also agrees that the passage of this measure should not be
construed nor interpreted as an abdication of legislative
authority to develop and dictate policy, both as to substance and
to form.  Your Committee further believes that preempting,
through a settlement agreement, the authority of the Legislature
should not be recommended nor agreed to in the future.

     As affirmed by the record of votes of the members of your
Committee on Judiciary that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
1008, as amended herein, and recommends that it pass Second
Reading in the form attached hereto as H.B. No. 1008, S.D. 1, and
be referred to the Committee on Ways and Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Judiciary,

                                   AVERY B. CHUMBLEY, Co-Chair

                                   MATTHEW M. MATSUNAGA, Co-Chair