REPORT TITLE:
HHSC; Tobacco Funds Endowment


DESCRIPTION:
Appropriates $2,000,000 in FY 1999-2000 and for each year
thereafter for the duration of the 25-year period of the national
tobacco settlement to the Hawaii health systems corporation as an
endowment to allow the HHSC to become self-sufficient.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
HOUSE OF REPRESENTATIVES                H.B. NO.1592       
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

MAKING AN APPROPRIATION FOR THE GENERAL ENDOWMENT OF THE HAWAII
   HEALTH SYSTEMS CORPORATION.



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

 1      SECTION 1.  The legislature finds that the Hawaii health
 
 2 systems corporation was created to administer the State's
 
 3 community hospitals and to maintain and enhance the health care
 
 4 services provided to the people of Hawaii throughout the State.
 
 5 The Hawaii health systems corporation was designed to be a public
 
 6 benefit corporation to operate autonomously and free the
 
 7 facilities from unwarranted bureaucratic oversight.  Although
 
 8 many advances have been made to make the corporation as self-
 
 9 sufficient as possible, it must still operate within the
 
10 structure of the State with regard to collective bargaining,
 
11 capital improvement funding, the issuing of revenue bonds, annual
 
12 legislative review, oversight, and support of the direct patient
 
13 care services provided by the corporation's facilities.
 
14      The legislature also finds that the pending national tobacco
 
15 settlement has provided the State with a unique opportunity to
 
16 expand the funding of important public health needs in our State.
 
17 These moneys also provide an opportunity to build assets to
 
18 supplement state revenues by actively managing a portion of the
 
19 settlement principal to derive benefits from the interest and
 

 
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                                     H.B. NO.1592       
                                                        
                                                        

 
 1 investment dividends earned.  By earmarking a certain portion of
 
 2 the tobacco settlement funds as an endowment to the Hawaii health
 
 3 systems corporation, the corporation will, over time, be able to
 
 4 reduce or eliminate the need for annual state funding support for
 
 5 its operations, provide a foundation for the corporation to avoid
 
 6 the need to issue revenue bonds for capital needs, and in the
 
 7 long-run, to be truly self-sufficient, thus fulfilling the
 
 8 original intent of the legislature in creating the corporation.
 
 9 This will also enable the corporation to further enhance and
 
10 maintain the important health care services that it provides
 
11 through its community-based hospital facilities.
 
12      The purpose of this Act is to create a mechanism to obligate
 
13 a portion of Hawaii's share of the national tobacco settlement
 
14 moneys not being used to support public health needs to the
 
15 Hawaii health systems corporation as a general endowment to
 
16 enable the corporation to become more self-sufficient and to
 
17 allow the corporation to provide better health care for all the
 
18 people of the State, especially the underinsured and those served
 
19 by small rural facilities.
 
20      SECTION 2.  There is appropriated out of the general
 
21 revenues of the State of Hawaii, from a portion of the moneys due
 
22 to the State from the Attorneys General Master Tobacco Settlement
 
23 Agreement not being used to support public health services or
 

 
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                                     H.B. NO.1592       
                                                        
                                                        

 
 1 needs, the sum of $2,000,000, for fiscal year 1999-2000, and for
 
 2 each fiscal year thereafter for the entire twenty-five-year
 
 3 period of payments, to provide a general endowment for the Hawaii
 
 4 health systems corporation.  The appropriation made for the
 
 5 general endowment authorized under this Act for each fiscal year
 
 6 shall not lapse at the end of the fiscal year for which the
 
 7 appropriation is made.
 
 8      SECTION 3.  The sums appropriated shall be expended by the
 
 9 Hawaii health systems corporation for the purposes of this Act.
 
10      SECTION 4.  This Act shall take effect on July 1, 1999.
 
11 
 
12                              INTRODUCED BY:______________________