Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 1547
                                        S.D. 1

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


     Your Committee on Health and Human Services, to which was
referred S.B. No. 1547 entitled: 


begs leave to report as follows:

     The purpose of this measure is to increase the taxes on
liquor and tobacco, and to require the amount of increases to be
apportioned between the Hawaii Health Systems Corporation (HHSC)
and early childhood development programs.

     Your Committee received testimony in support of this measure
from the HHSC.  Testimony in opposition was received from the
Brown & Williamson Tobacco Corporation, Lorillard Tobacco
Company, Legislative Center (representing Anheuser Busch
Companies), Legislative Information Services of Hawaii
(representing Hawaii Food Industry Association, Retail Liquor
Dealers Association, and Retail Gasoline Dealers Association),
and two private citizens.  Informational testimony was submitted
by the Tax Foundation of Hawaii.

     The intent of this measure is to generate more revenues for
the State to assist the HHSC in financing the purchase of medical
equipment for its health care facilities and to help fund early
childhood education and care programs.  Your Committee believes
that the use of funds for those purposes are necessary and
laudable, without reducing budget allocations.  In essence, this
measure creates a dedicated source of funding for programs that
would otherwise be wholly funded from general funds.             

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                                   STAND. COM. REP. NO. 457
                                   Page 2

     Your Committee has amended this measure to correct a
Ramseyer error.

     As affirmed by the record of votes of the members of your
Committee on Health and Human Services that is attached to this
report, your Committee is in accord with the intent and purpose
of S.B. No. 1547, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as S.B. No. 1547,
S.D. 1, and be referred to the Committee on Ways and Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Health and Human

                                   SUZANNE CHUN OAKLAND, Chair

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