STAND. COM. REP. NO. 3351

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2277
                                        H.D. 1
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.B.
No. 2277, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO THE HAWAII TOBACCO SETTLEMENT
     SPECIAL FUND,"

begs leave to report as follows:

     The purpose of this measure is to clarify that any
expenditure of moneys by the Department of Health (DOH) of
tobacco settlement moneys for health promotion and disease
prevention programs shall not supplant or diminish the funding of
programs by the State's general fund.

     This measure clarifies your Committee's original intent in
enacting chapter 328L, Hawaii Revised Statutes, providing for the
disposition of the Hawaii tobacco settlement moneys, that the
tobacco settlement moneys would be in addition to budgeted moneys
so that there would be more funding for health programs.  Your
Committee believes that it would be anomalous for the State to
receive a windfall of moneys intended for health programs if new
and expanded health programs do not benefit from the tobacco
settlement moneys. 

     Your Committee has amended this measure by:

     (1)  Clarifying that tobacco settlement moneys shall be
          transferred rather than appropriated from the Hawaii
          tobacco settlement special fund to the three funds

 
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          receiving tobacco settlement moneys, and allowing the
          transfers to be made without an appropriation act or
          budget proviso, in order to alleviate the necessity of
          annual legislative appropriation measures which was not
          the intent of the Act 304, Session Laws of Hawaii 1999,
          that created the various funds;

     (2)  Creating the Department of Health tobacco special fund
          for tobacco settlement moneys received by the DOH, in
          order to provide consistency and convenience;

     (3)  Adding specified programs to the health promotion and
          disease prevention programs;

     (4)  Requiring the DOH to expend available moneys for each
          program in a proportionate amount, if tobacco
          settlement moneys are less than anticipated, because of
          the difficulty of accurately predicting the precise
          amounts of moneys that will be received in any upcoming
          fiscal year;

     (5)  Allowing the selected nonprofit entity to expend moneys
          from the Hawaii tobacco prevention and control trust
          fund to implement the tobacco prevention and control
          strategic plan;

     (6)  Revising the appropriated amounts contained in Act 304,
          Session Laws of Hawaii 1999, to reflect new anticipated
          amounts of tobacco settlement moneys for the coming
          fiscal year; and

     (7)  Making various appropriations from the funds receiving
          tobacco settlement moneys.

     Your Committee notes that the amounts appropriated into the
three special funds are high projections, consisting of actual
amounts received to date and estimates of future receipts of
tobacco settlement moneys.  Your Committee also notes that the
various appropriations for programs are conservative amounts,
based on low estimates of anticipated receipts.

     Your Committee is aware that the "transfer" of moneys as
provided in the amended measure could be construed as a violation
of Article VII, section 5, of the State Constitution, which
provides that no public money shall be expended except pursuant
to appropriations made by law.  However, your Committee notes
that there is adequate precedent for the permissibility of these
transfers, such as in sections 36-27, 36-28, 36-28.5, 36-29,
36-30, and 36-31, Hawaii Revised Statutes, relating to transfers

 
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from special funds for central service expenses and departmental
administrative expenses.  Your Committee finds that the transfers
from one fund to another do not constitute an expenditure of
public money as contemplated by the State Constitution.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of H.B.
No. 2277, H.D. 1, as amended herein, and recommends that it pass
Third Reading in the form attached hereto as H.B. No. 2277,
H.D. 1, S.D. 1.

                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
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