STAND

STAND. COM. REP. NO. 213-04

Honolulu, Hawaii

, 2004

RE: H.B. No. 1867

H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Health, to which was referred H.B. No. 1867 entitled:

"A BILL FOR AN ACT RELATING TO HEALTH,"

begs leave to report as follows:

The purpose of this bill is to reallocate the Tobacco Settlement moneys by:

(1) Increasing the portion appropriated to the Hawaii Tobacco Prevention and Control Trust Fund (Tobacco Fund) from 12½ percent to 25 percent; and

(2) Decreasing the portion appropriated to the University Revenue-undertakings Fund (UH Fund) from 28 percent to 15½ percent.

The American Heart Association of Hawaii and Coalition for a Tobacco Free Hawaii testified in support of this measure. The Department of Budget and Finance and the University of Hawaii (UH) School of Medicine opposed this measure. The Department of Health and UH provided comments.

Your Committee finds that the original allocation to the Tobacco Fund was 25 percent of the Tobacco Settlement moneys. Your Committee believes it is crucial that funding be reinstated to prevent smoking, particularly among youth. Your Committee received testimony stating that 24.5 percent of public high school students and 12.9 percent of public middle school students in Hawaii reported being smokers.

Your Committee also received testimony expressing concern about the reduction in funding for the UH Fund because the UH relies on the allocation to cover debt service costs related to the revenue bonds issued to finance the construction of the medical school facilities in Kakaako.

Accordingly, your Committee has amended this bill by:

(1) Gradually adjusting the appropriated Tobacco Settlement moneys as follows:

(a) Beginning July 1, 2004, reducing the amount appropriated to the Emergency and Budget Reserve Fund (Rainy Day Fund) from 24½ percent to 12 percent, and increasing the amount appropriated to the Tobacco Fund from 12½ percent to 25 percent;

(b) Beginning July 1, 2006, increasing the amount appropriated to the Rainy Day Fund to 20 percent, and reducing the amount appropriated to the UH Fund to 20 percent;

(c) Beginning July 1, 2008, increasing the amount appropriated to the Rainy Day Fund to 25 percent, and reducing the amount appropriated to the UH Fund to 15 percent; and

(d) Beginning July 1, 2010, increasing the amount appropriated to the Rainy Day Fund to 30 percent, and reducing the amount appropriated to the UH Fund to 10 percent;

and

(2) Making technical, nonsubstantive amendments for purposes of clarity and style.

As affirmed by the record of votes of the members of your Committee on Health that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1867, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1867, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Health,

		____________________________ DENNIS A. ARAKAKI, Chair