STAND. COM. REP. NO. 2623

Honolulu, Hawaii

RE: S.B. No. 2109

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2024

State of Hawaii

Sir:

Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 2109 entitled:

"A BILL FOR AN ACT RELATING TO UNLAWFUL SHIPMENT OF TOBACCO PRODUCTS,"

begs leave to report as follows:

The purpose and intent of this measure is to exempt from the offense of unlawful shipment of tobacco products the shipments of large cigars and pipe tobacco sold to a consumer in the State through the Internet under certain circumstances.

Your Committee received testimony in support of this measure from the Cigar Association of America, Inc.; Retail Merchants of Hawaii; and thirteen individuals.

Your Committee received testimony in opposition to this measure from the Department of Health, one member of the Hawaiʻi County Council, American Cancer Society Cancer Action Network, Hawaiʻi Public Health Institute, The Friends of Kamalani and Lydgate Park, and three individuals.

Your Committee finds that for many adults that enjoy consuming large cigars and pipe tobacco, the inability to order these products directly from online sellers is an inconvenience and costly constraint, due to the stark difference between online and retail sales prices. Your Committee further finds that the lack of an exemption for large cigars, which includes high-quality, hand-rolled premium cigars, has also led many consumers to purchase these products illegally, resulting in the establishment of a black market and a reduction in taxes collected by the State. This measure will provide a much-needed exemption from the offense of unlawful shipment of tobacco products for certain large cigars and pipe tobacco products sold through the Internet for the benefit of consumers across the State.

Your Committee has amended this measure by:

(1) Inserting a definition for the term "pipe tobacco";

(2) Limiting the exemption from the offense of unlawful shipment of tobacco products for large cigars and pipe tobacco to sales that occur on or before June 30, 2025;

(3) Inserting an effective date of July 1, 2040, to encourage further discussion; 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 Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2109, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2109, S.D. 1, and be referred to your Committees on Judiciary and Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,

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JARRETT KEOHOKALOLE, Chair