REPORT TITLE:
TOBACCO SETTLEMENT FUND
REALLOCATION


DESCRIPTION:
This bill seeks to amend the tobacco settlement fund to
reallocate the settlement moneys into programs focusing on
prevention.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2347
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO THE TOBACCO SETTLEMENT FUND. 


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

 1      SECTION 1.  "An ounce of prevention is worth a pound of
 
 2 cure" is an old axiom that holds true in the new millennium.
 
 3 Many studies confirm the fact that money spent on prevention
 
 4 programs reduce future health care costs to government.  It is an
 
 5 investment that makes good economic and social sense.
 
 6      The legislature finds that we have the opportunity and
 
 7 resources to make bold and necessary strides in the area of
 
 8 preventative health care.  The original spirit behind the tobacco
 
 9 settlement was to enact programs of prevention to improve health
 
10 care.  This bill seeks to capture the spirit of the original
 
11 settlement and use the moneys as they were supposed to be used,
 
12 not as a blank check to fudge budget numbers.
 
13      The purpose of this bill is to amend the tobacco settlement
 
14 fund statutes and reallocate all of the moneys towards new
 
15 preventative programs.  Specifically, these  programs would
 
16 include health, mental health, drug and alcohol abuse programs
 
17 and child abuse prevention programs.  The rainy day fund will be
 
18 sunseted.  There will also be a prohibition on the funding of
 
19 existing programs.
 

 
Page 2                                                     2347
                                     H.B. NO.           
                                                        
                                                        
 1      SECTION 2.  Chapter 328L, Hawaii Revised Statutes is amended
 
 2 to read as follows:
 
 3                           "CHAPTER 328L
 
 4                 HAWAII TOBACCO SETTLEMENT MONEYS
 
 5      §328L-1 Definitions.  Whenever used in this chapter, unless
 
 6 the context otherwise requires:
 
 7      "Children's health program" means health care for needy
 
 8 children.
 
 9      "Department" means the department of health.
 
10      "Director" means the director of health.
 
11      "Health promotion and disease prevention programs" means
 
12 those public health programs that attempt to reduce resources
 
13 spent on treating preventable illness and functional impairment,
 
14 enhance the quality of life, and reduce disparities in the health
 
15 status of populations.
 
16      "Tobacco prevention and control" means activities or
 
17 programs that attempt to reduce tobacco consumption.
 
18      "Tobacco settlement moneys" refers to moneys received by the
 
19 State pursuant to the tobacco master settlement agreement.
 
20      §328L-2  Hawaii tobacco settlement special fund.(a)  There
 
21 is established in the state treasury the Hawaii tobacco
 
22 settlement special fund into which shall be deposited:
 
23           (1)  All tobacco settlement moneys; and
 
24           (2)  All interest and earnings accruing from the
 
25                investment of moneys in the fund.
 

 
Page 3                                                     2347
                                     H.B. NO.           
                                                        
                                                        
 1 The Hawaii tobacco settlement special fund shall be administered
 
 2 by the department.
 
 3      (b)  The fund shall be used for the purpose of receiving and
 
 4 appropriating the tobacco settlement moneys [as follows:
 
 5           [(1) Forty per cent shall be appropriated into the
 
 6                emergency and budget reserve fund under section
 
 7                328L-3;]
 
 8      [(2)](1)  [Thirty-five]Seventy-five per cent shall be
 
 9                appropriated] to the department for purpose of
 
10                section [328L-4]328L-3. and
 
11      [(3)](2)  Twenty-five per cent shall be appropriated into
 
12                the Hawaii tobacco prevention and control trust
 
13                fund under section [328L-5]328L-4.
 
14      [§328L-3  Emergency and budget reserve fund.(a)  There is
 
15 established in the state treasury the emergency budget and
 
16 reserve fund which shall be a special fund administered by the
 
17 director of finance, into which shall be deposited:
 
18           (1)  Forty per cent of the moneys received from the
 
19                tobacco settlement moneys under section 328L-
 
20                2(b)(1);
 
21           (2)  Appropriations made by the legislature to the
 
22                fund.
 
23      (b)  All interest earned from moneys in the emergency and
 
24 budget reserve fund shall be credited to the general fund.
 
25      (c)  Expenditures from the emergency and budget reserve fund
 
26 shall be a temporary supplemental source of funding for the State
 

 
Page 4                                                     2347
                                     H.B. NO.           
                                                        
                                                        
 1 during times of emergency, economic downturn, or unforeseen
 
 2 reduction in revenues.  No expenditures shall be made from the
 
 3 emergency and budget reserve fund except pursuant to
 
 4 appropriations.  The general appropriations bill or the
 
 5 supplemental appropriations bill, as defined in section 9 of
 
 6 article VII of the Constitution of the State of Hawaii, shall not
 
 7 be used to appropriate moneys from the emergency and budget
 
 8 reserve fund.  The governor, through an appropriations bill, may
 
 9 recommend expenditures from the emergency and budget reserve fund
 
10 by setting forth the purposes of the expenditures consistent with
 
11 subsection (d), the amounts, and the reasons justifying the
 
12 necessity for the appropriations.
 
13      (d)  The legislature may make appropriations from the fund
 
14 for the following purposes:
 
15           (1)  To maintain levels of programs determined to be
 
16                essential to the public health, safety, and
 
17                welfare;
 
18           (2)  To provide for counter cyclical economic and
 
19                employment programs in periods of economic
 
20                downturn;
 
21           (3)  To restore facilities destroyed or damaged or
 
22                services disrupted by disaster in any county; and
 
23           (4)  To meet other emergencies when declared by the
 
24                governor or determined to be urgent by the
 
25                legislature.
 

 
Page 5                                                     2347
                                     H.B. NO.           
                                                        
                                                        
 1      Any act making appropriations from the emergency and budget
 
 2 reserve fund shall include a declaration of findings and purposes
 
 3 setting forth the purposes, the amounts, and the reasons why the
 
 4 appropriations are necessary and shall require a two-thirds
 
 5 majority vote of each house of the legislature.
 
 6      (e)  Appropriations for the following purposes from the
 
 7 emergency and budget reserve fund are specifically prohibited:
 
 8           (1)  To meet expenses of the legislature; 
 
 9           (2)  To provide for salary adjustments for officials
 
10                appointed pursuant to article V, section 6 or
 
11                article VI, section 3 of the Constitution of the
 
12                State of Hawaii and for others whose salaries are
 
13                directly related to salaries of these officials;
 
14                and
 
15           (3)  To fund cost items in any collective bargaining
 
16                contract.]
 
17      §[328L-4]328L-3  Use of funds appropriated to the
 
18 department.  The department, immediately upon receipt of the
 
19 [thirty-five per cent of]seventy-five per cent of the moneys
 
20 appropriated pursuant to section 328L-2(b)[(2)](1) shall:
 
21      (1)  Transfer up to ten per cent of the total moneys
 
22           received by the State from tobacco settlement moneys to
 
23           the department of human services for the children's
 
24           health insurance program; and
 
25      (2)  Expend the remainder of the moneys received by the
 
26           department for health promotion and disease prevention
 

 
Page 6                                                     2347
                                     H.B. NO.           
                                                        
                                                        
 1           programs, including but not limited to, maternal child
 
 2           health and child development programs, promotion of
 
 3           healthy lifestyles (including fitness, nutrition, and
 
 4           tobacco control), mental health programs, drug and
 
 5           alcohol abuse treatment programs and prevention
 
 6           oriented public health programs, including but not
 
 7           limited to, child abuse prevention programs, and drug
 
 8           and alcohol prevention programs.
 
 9      For purposes of paragraph (2), the director shall convene an
 
10 advisory group that shall be separate from the tobacco prevention
 
11 and control advisory board, to strategically plan the development
 
12 and implementation of preventive systems to achieve measurable
 
13 outcomes and to make recommendations for the expenditure of these
 
14 moneys.  The advisory group shall be composed of nine members
 
15 with expertise in the programs under paragraph (2), and shall be
 
16 selected at the discretion of the director.
 
17      (3)  The moneys appropriated pursuant to §328L-2(b)(1) shall
 
18           only be used to fund programs that meet the criteria in
 
19           paragraph (2).
 
20      §[328L-5]328L-4  Hawaii tobacco prevention and control trust
 
21 fund.  (a)  There is established the Hawaii tobacco prevention
 
22 and control trust fund as a separate fund of a nonprofit entity
 
23 having a board of directors and qualifying under section
 
24 501(c)(3) of the Internal Revenue Code of 1986, as amended, into
 
25 which shall be deposited twenty-five per cent of moneys received
 
26 as provided under section 328L-2(b)[(3)](2).  The director of
 

 
Page 7                                                     2347
                                     H.B. NO.           
                                                        
                                                        
 1 health with the concurrence of the governor, shall select, in
 
 2 accordance with law, the entity based upon the proven record of
 
 3 accomplishment of the entity in administering a similar trust
 
 4 fund. 
 
 5      (b)  Notwithstanding that the Hawaii tobacco and prevention
 
 6 and control trust fund is established within a private entity,
 
 7 the department of budget and finance shall have oversight
 
 8 authority over the fund and may make periodic financial audits of
 
 9 the fund; provided that the director of finance may contract with
 
10 a certified public accountancy firm for this purpose.  The
 
11 director of health with the concurrence of the governor in their
 
12 sole discretion may rescind the selection of the entity.  If the
 
13 selection of the entity in rescinded, moneys in the trust fund
 
14 shall revert back to the State and shall be deemed to be trust
 
15 moneys.
 
16      (c)  The entity selected under subsection (a) shall expend
 
17 moneys from the Hawaii tobacco prevention and control trust fund
 
18 for tobacco prevention and control, including but not limited to,
 
19 reducing cigarette smoking and tobacco use among youth and adults
 
20 through education and enforcement activities, and controlling and
 
21 preventing chronic diseases where tobacco use is a risk factor.
 
22      (d)  The Hawaii tobacco prevention and control trust fund
 
23 may receive appropriations, contributions, grants, endowments, or
 
24 gifts in cash or otherwise from any source, including the State,
 
25 corporations or other businesses, foundations, government,
 
26 individuals, and other interested parties; provided that any
 

 
Page 8                                                     2347
                                     H.B. NO.           
                                                        
                                                        
 1 appropriations made by the State shall not supplant or diminish
 
 2 the funding of existing tobacco prevention and control programs
 
 3 or any health related programs funded in whole or in part by the
 
 4 State.
 
 5      (e)  The assets of the Hawaii tobacco prevention and control
 
 6 trust fund shall consist of:
 
 7           (1)  Moneys appropriated under section 328L-
 
 8                2(b)[(3)](2);
 
 9           (2)  Moneys appropriated to the Hawaii tobacco
 
10                prevention and control trust fund by the state,
 
11                county, or federal government;
 
12           (3)  Private contributions of cash or property; and
 
13           (4)  Income and capital gains earned by the trust fund.
 
14      (f)  The aggregate principal sum deposited in the Hawaii
 
15 tobacco prevention and control trust fund shall be invested by
 
16 the entity selected under subsection (a) in a manner intended to
 
17 maximize the rate of return on investment of the trust fund
 
18 consistent with the objective of preserving the trust fund's
 
19 principal.
 
20      (g)  If the entity selected under subsection (a) is
 
21 dissolved, the director of health, with the concurrence of the
 
22 governor, shall select a successor entity.  If the Hawaii tobacco
 
23 prevention and control trust fund is terminated, the moneys
 
24 remaining in the trust fund shall revert back to the State and
 
25 shall be deemed to be trust moneys.
 

 
Page 9                                                     2347
                                     H.B. NO.           
                                                        
                                                        
 1      (h)  The administration of the Hawaii tobacco prevention and
 
 2 control trust fund shall be advised by the tobacco prevention and
 
 3 control advisory board created under section 328L-6.
 
 4      §328L-6  Tobacco prevention and control advisory board.(a)
 
 5 There is established a tobacco prevention and control advisory
 
 6 board under the department for administrative purposes.
 
 7      (b)  The tobacco prevention and control advisory board shall
 
 8 consist of members who are involved in tobacco prevention and
 
 9 control.  Membership of the board shall be as follows:
 
10           (1)  One member of the governor's staff, appointed by
 
11                the governor;
 
12           (2)  One member to be appointed by the governor from a
 
13                list of two names submitted by the president of
 
14                the senate;
 
15           (3)  One member to be appointed by the governor from a
 
16                list of two names submitted by the speaker of the
 
17                house of representatives;
 
18           (4)  The director or the director's designee;
 
19           (5)  The superintendent of education or the
 
20                superintendent's designee;
 
21           (6)  Three members having demonstrated interest in and
 
22                having backgrounds beneficial to controlling and
 
23                preventing the use of tobacco, appointed by the
 
24                director of health; and
 
25           (7)  Three members representing populations at risk for
 
26                tobacco use, appointed by the governor.
 

 
Page 10                                                    2347
                                     H.B. NO.           
                                                        
                                                        
 1      (c)  Members shall:
 
 2           (1)  Be appointed or designated, as applicable, without
 
 3                regard to section 26-34;
 
 4           (2)  Serve without compensation; and
 
 5           (3)  Serve for a term of three years. 
 
 6      (d)  The tobacco prevention and control advisory board, in
 
 7 collaboration with the department, shall develop a strategic plan
 
 8 for tobacco prevention and control, including:
 
 9           (1)  Developing and implementing effective and cost
 
10                efficient programs, including health promotion and
 
11                disease prevention;
 
12           (2)  Developing adequate standards and benchmarks by
 
13                which measures of program success under paragraph
 
14                (1) of this subsection may be appropriately
 
15                evaluated; and
 
16           (3)  Assessing the effectiveness of programs engaged in
 
17                health promotion and disease prevention.
 
18      The strategic plan shall be in writing and shall be a public
 
19 document.
 
20      (e)  The tobacco prevention and control advisory board shall
 
21 advise the on the administration of the Hawaii tobacco prevention
 
22 and control trust fund."
 
23      SECTION 3.  Statutory material to be repealed is bracketed.
 
24 New statutory material is underscored.
 

 
Page 11                                                    2347
                                     H.B. NO.           
                                                        
                                                        
 1      SECTION 4.  This Act shall take effect upon its approval.
 
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 3                       INTRODUCED BY:  ___________________________
 
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