Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 176
                                     H.D. 1

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Health, to which was referred H.B. No. 176


begs leave to report as follows:

     The purpose of this bill is to ensure the proper payment of
tobacco taxes by wholesalers and dealers by using stamps as a
means of proving that the tobacco tax has been paid on

     The Legislative Information Services of Hawaii and the
American Lung Association submitted testimony in support of this
measure.  The Departments of Health and Taxation submitted
testimony in support of the intent of this measure.  The Tax
Foundation of Hawaii and the Department of the Prosecuting
Attorney of the City and County of Honolulu submitted comments.

     Your Committee believes that a cigarette stamping program
would stem the tide of cigarette tax evasion and consequently
decrease the consumption of cigarettes.

     Your Committee finds, however, that reference to the
forfeiture and disposition of untaxed cigarettes pursuant to
Chapters 712A and 281, Hawaii Revised Statutes (HRS), creates
possible conflicts with the requirements of Chapter 712A, HRS,
and as a result, causes confusion.  Thus, your Committee has
amended this measure by deleting all references to Chapter 712A,

                                 STAND. COM. REP. NO. 15
                                 Page 2

HRS.  This measure has also been amended by making technical,
nonsubstantive amendments for purposes of clarity and style.

     As affirmed by the record of votes of the members of your
Committee on Health that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
176, as amended herein, and recommends that it pass Second
Reading in the form attached hereto as H.B. No. 176, H.D. 1, and
be referred to the Committee on Finance.

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

                                   ALEXANDER C. SANTIAGO, Chair