Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committees on Human Services and Health and Education, to which was referred S.R. No. 36 entitled:

beg leave to report as follows:

The purpose of this measure is to request adequate federal financial impact assistance for services provided to citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau, with which the United States has formed an agreement through the Compact of Free Association.

Testimony in support of this measure was submitted by the University of Hawaii and the Healthcare Association of Hawaii. The Department of Human Services and the Hawaii Government Employees Association submitted testimony supporting the intent of this measure.

Your Committees find that many citizens of the Freely Associated States, drawn by the promise of better medical care, education, and Hawaii's similar climate, culture, and lifestyle, have migrated and continue to migrate to Hawaii. Currently, over six thousand Freely Associated States citizens are residing in Hawaii. Because they are not eligible under federal law for federal medical and financial assistance programs, the State of Hawaii must bear the full cost of providing such assistance to Freely Associated States citizens residing within the State. Between 1998 and 2002, medical and financial assistance costs for Freely Associated States citizens totaled $28,340,119. Moreover, Hawaii's current healthcare crisis is exacerbated by operating losses directly attributable to the provision of healthcare for Freely Associated States citizens residing in Hawaii. Between 1998 and 2001, operating losses totaling $10.1 million were reported by three (of Hawaii's twenty-three) hospitals; all Hawaii hospitals experienced similar losses. In addition, since 1988, the State has spent more than $78 million to educate students from the Freely Associated States residing in Hawaii, with over $13 million spent in school year 2001-2002 alone.

Your Committees find that it is imperative that Hawaii be granted immediate and substantial assistance to mitigate the significant impacts resulting from Freely Associated States citizens residing in Hawaii. Hawaii's geographic proximity and similar climate, Pacific Island culture, and lifestyle are attractive to many Freely Associated States citizens. As a result, your Committees believe, Hawaii, perhaps more than any other state in the union, is disproportionately impacted by the sheer volume of Freely Associated States citizens who migrate to Hawaii with the intent to reside permanently.

Your Committees have amended this measure by:

As affirmed by the records of votes of the members of your Committees on Human Services and Health and Education that are attached to this report, your Committees concur with the intent and purpose of S.R. No. 36, as amended herein, recommend that it be referred to the Committee on Transportation, Military Affairs, and Government Operations, in the form attached hereto as S.R. No. 36, S.D. 1.