This Act seeks to exclude proceeds from the manufacture, packaging, and sale of food from general excise tax liability for a period of 13 weeks. Gives the Governor the authority to extend moratorium for another 13 weeks.

A BILL FOR AN ACT

SECTION 1. The tragic and vicious events of September 11, 2001, suddenly thrust the United States and Hawaii in an economic whirlpool. Fear of terrorism on airplanes since that day contributed to a sharp decrease in visitor arrivals to our state, forcing many tourist oriented businesses to lay off or furlough hundreds of workers. Without a steady income other than unemployment benefits, these workers face a continuing struggle to make ends meet until such time as the tourist industry can recover and businesses can re-hire these workers. The purpose of this Act is to assist these workers and every citizen of Hawaii in coping with the economic downturn by reducing the cost of food.

SECTION 2. Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§237- (a) Exemption for food. There shall be exempted from, and excluded from the measure of, the taxes imposed by this chapter all of the gross proceeds or income arising from the manufacture, production, packaging, and sale of food items within the State.

(b) As used in this section, "food items" means (1) any food or food product for home consumption except alcoholic beverages, tobacco, and hot foods or hot food products ready for immediate consumption other than those authorized pursuant to clauses (3), (4), (5), (6), (7) and (8) of this subsection, (2) seeds and plants for use in gardens to produce food for the personal consumption of the eligible household, (3) in the case of those persons who are sixty years of age or over or who receive supplemental security income benefits or disability or blindness payment under title I, II, X, XIV, or XVI of the Social Security Act (42 U.S.C.A. §§ 301 et seq., 401 et seq., 1201 et seq., 1351 et seq., or 1381 et seq.), and their spouses, meals prepared by and served in senior citizens' centers, apartment buildings occupied primarily by such persons, public or private nonprofit establishments that contract with the appropriate agency of the State to offer meals for such persons at concessional prices, and meals prepared for and served to residents of federally subsidized housing for the elderly, (4) in the case of persons sixty years of age or over and persons who are physically or mentally handicapped or otherwise so disabled that they are unable adequately to prepare all of their meals, meals prepared for and delivered to them (and their spouses) at their home by a public or private establishment that contracts with the appropriate State agency to perform such services at concessional prices, (5) in the case of narcotics addicts or alcoholics, and their children, served by drug addiction or alcoholic treatment and rehabilitation programs, meals prepared and served under such programs, (6) in the case of disabled or blind recipients of benefits under Title I, II, X, XIV, or XVI of the Social Security Act (42 U.S.C. §§301 et seq., 401 et seq., 1201 et seq., or 1381 et seq.), or individuals described in 7 U.S.C. 2012(r)(2) through (7) who are residents in a public or private nonprofit group living arrangement that serves no more than sixteen residents and is certified by the appropriate State agency or agencies under regulations issued under section 1616(e) of the Social Security Act (42 U.S.C. §1382(e)(1))or under standards determined by the Secretary to be comparable to standards implemented by appropriate State agencies under such section, meals prepared and served under such arrangement, (7) in the case of women and children temporarily residing in public or private nonprofit shelters for battered women and children, meals prepared and served by such shelters, and (8) in the case of households that do not reside in permanent dwellings and households that have no fixed mailing addresses, meals prepared for and served by a public or private nonprofit establishment (approved by an appropriate State or local agency) that feeds such individuals and by private establishments that contract with the appropriate agency of the State to offer meals for such individuals at concessional prices.

The phrase "food items" may be further defined by the department of taxation through the enumeration of items in rules or informational releases, provided that the department shall consult with the federal Food and Nutrition Service of the United States Department of Agriculture in further defining the phrase "food items" for food stamp purposes.

SECTION 3. New statutory material is underscored.