Report Title:

Drug Abuse

Description:

Creates a substance abuse prevention, education, and treatment special fund.

HOUSE OF REPRESENTATIVES

H.B. NO.

2695

TWENTY-SECOND LEGISLATURE, 2004

H.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO SUBSTANCE ABUSE.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Chapter 321, Hawaii Revised Statutes, is amended by adding a new section to part XVI to be appropriately designated and to read as follows:

"321- Substance abuse prevention, education, and treatment special fund. (a) There is created in the state treasury a special fund to be designated as the substance abuse prevention, education, and treatment special fund. The proceeds in the fund shall be used by the department of health to fund substance abuse prevention, education, and treatment programs and services in the State.

(b) The fund shall be funded through:

(1) The surcharge established in section 244D-4(c);

(2) The surcharge established in section 245-3(c); and

(3) The State's share of any proceeds from federal drug forfeiture laws.

All interest earned or accrued on moneys deposited in the fund shall become a part of the fund. Every July 1, all moneys in the fund shall be released to the department of health for expenditure in that fiscal year for the purposes of drug and alcohol abuse prevention, education, and treatment."

SECTION 2. Section 244D-4, Hawaii Revised Statutes, is amended to read as follows:

"244D-4 Tax; limitations. (a) Every person who sells or uses any liquor in the State not taxable under this chapter, in respect of the transaction by which the person or the person's vendor acquired the liquor, shall pay a gallonage tax which is hereby imposed at the following rates for the various liquor categories defined in section 244D-1:

[For the period July 1, 1997, to June 30, 1998, the tax rate shall be:

(1) $5.92 per wine gallon on distilled spirits;

(2) $2.09 per wine gallon on sparkling wine;

(3) $1.36 per wine gallon on still wine;

(4) $0.84 per wine gallon on cooler beverages;

(5) $0.92 per wine gallon on beer other than draft beer;

(6) $0.53 per wine gallon on draft beer;]

On July 1, 1998, and thereafter, the tax rate shall be:

(1) $5.98 per wine gallon on distilled spirits;

(2) $2.12 per wine gallon on sparkling wine;

(3) $1.38 per wine gallon on still wine;

(4) $0.85 per wine gallon on cooler beverages;

(5) $0.93 per wine gallon on beer other than draft beer;

(6) $0.54 per wine gallon on draft beer;

and at a proportionate rate for any other quantity so sold or used.

(b) The tax levied pursuant to subsection (a) shall be paid only once upon the same liquor; provided further that the tax shall not apply to:

(1) Liquor held for sale by a permittee but not yet sold;

(2) Liquor sold by one permittee to another permittee;

(3) Liquor which under the Constitution and laws of the United States cannot be legally subjected to the tax imposed by this chapter so long as and to the extent to which the State is without power to impose the tax;

(4) Liquor sold for sacramental purposes or the use of liquor for sacramental purposes, or any liquor imported pursuant to section 281-33;

(5) Alcohol sold pursuant to section 281-37 to a person holding a purchase permit or prescription therefor, or any sale or use of alcohol, so purchased, for other than beverage purposes.

(c) In addition to the liquor tax imposed under subsection (a), every person subject to the liquor tax shall pay a surcharge of 25 cents per wine gallon, and at a proportionate rate for any other quantity so sold or used, to the substance abuse prevention, education, and treatment fund established under section 321- .

SECTION 3. Section 245-3, Hawaii Revised Statutes, is amended to read as follows:

"245-3 Taxes. (a) Every wholesaler or dealer, in addition to any other taxes provided by law, shall pay for the privilege of conducting business and other activities in the State:

[(1) An excise tax equal to 5.00 cents for each cigarette sold, used, or, possessed by a wholesaler or dealer after June 30, 1998, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

(2)] (1) An excise tax equal to 6.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer after September 30, 2002, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

[(3)] (2) An excise tax equal to 6.50 cents for each cigarette sold, used, or possessed by a wholesaler or dealer after June 30, 2003, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer;

[(4)] (3) An excise tax equal to 7.00 cents for each cigarette sold, used, or possessed by a wholesaler or dealer after June 30, 2004, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer; and

[(5)] (4) An excise tax equal to forty per cent of the wholesale price of each article or item of tobacco products sold by the wholesaler or dealer, whether or not sold at wholesale, or if not sold then at the same rate upon the use by the wholesaler or dealer.

Where the tax imposed has been paid on cigarettes or tobacco products that thereafter become the subject of a casualty loss deduction allowable under chapter 235, the tax paid shall be refunded or credited to the account of the wholesaler or dealer. The tax shall be applied to cigarettes through the use of stamps.

(b) The taxes, however, are subject to the following limitations:

(1) The measure of the taxes shall not include any cigarettes or tobacco products exempted, and so long as [the same] they are exempted, from the imposition of taxes by the Constitution or laws of the United States;

(2) The measure of taxes shall exempt and exclude all sales of cigarettes and tobacco products to the United States (including any agency or instrumentality thereof that is wholly owned or otherwise so constituted as to be immune from the levy of a tax under this chapter), sold by any person licensed under this chapter; and

(3) The taxes shall be paid only once with respect to the same cigarettes or tobacco product. This limitation shall not prohibit the imposition of the excise tax on receipts from sales of tobacco products under subsection [(a)(5);] (a)(4); provided that the amount subject to the tax on each sale shall not include amounts previously taxed under this chapter.

(c) In addition to the tax imposed under subsection (a), every person subject to the tax shall pay a surcharge of 25 cents per pack of cigarettes sold, used, or possessed by a wholesaler or dealer, and a surcharge set at a proportionate rate for any tobacco product sold by the wholesaler or dealer, after June 30, 2004, to the substance abuse prevention, education, and treatment fund established under section 321-   ."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2004.