Honolulu, Hawaii



RE:    H.B. No. 1849

       H.D. 1

       S.D. 1




Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii




     Your Committee on Health, to which was referred H.B. No. 1849, H.D. 1, entitled:




begs leave to report as follows:


     The purpose and intent of this measure is to reduce the excise tax rate on large cigars from fifty percent of the wholesale price to the lesser of:


     (1)  50 cents for each large cigar; or


     (2)  Fifty percent of the wholesale price of each large cigar.


     Your Committee received testimony in support of this measure from the Hawaii Cigar Association; Cigar Association of America, Inc.; Hawaii Food Industry Association; and several individuals.  Your Committee received testimony in opposition to this measure from the American Cancer Society Cancer Action Network; American Lung Association; Hawaii COPD Coalition; American Heart Association; Coalition for a Tobacco-Free Hawaii; and several individuals.  Your Committee received comments on this measure from the Department of Taxation, Tax Foundation of Hawaii, and several individuals.


     Your Committee finds that it is important to create fair tax revenue standards for Hawaii's businesses, which include cigar wholesalers and dealers.


     Your Committee has amended this measure by:


     (1)  Inserting blank amounts for the excise tax on large cigars;


     (2)  Inserting a definition of "premium cigar" into section 328J-1, Hawaii Revised Statutes;


     (3)  Exempting the sale of premium cigars from the direct, face-to-face restriction in section 328J-18, Hawaii Revised Statutes; and


     (4)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.


     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. 1849, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1849, H.D. 1, 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,