HB1732.DOC

SECTION 1. The legislature finds that the State is undergoing a significant and possibly protracted economic downturn in tandem with the national and global economic and financial crises. Numerous jobs have been lost, a number of large and small companies have declared bankruptcy or left the State, and many families have suffered foreclosure on their over-mortgaged houses. In the past year, the council on revenues has consistently reduced its forecasts of Hawaii's tax revenues. Across-the-board spending restrictions have already been put in place in state government and a general hiring freeze has already been implemented except in areas that impact public health and safety.

In the face of these extraordinary conditions, the State cannot proceed with business as usual. All resources must be examined to address critical statewide health, safety, and educational needs.

Accordingly, the purpose of this Act is to generate additional general funds to ensure the delivery of critical services statewide by retaining in the state general fund portions of the tobacco tax revenues collected under chapter 245, Hawaii Revised Statutes, by permanently:

(1) Repealing the distribution of a portion of the tobacco tax revenues into the emergency medical services special fund established pursuant to section 321-234, Hawaii Revised Statutes, beginning on July 1, 2009; and

(2) Reducing the distribution of portions of the tobacco tax revenues into the Hawaii cancer research special fund established pursuant to section 304A-2168, Hawaii Revised Statutes, and into the trauma system special fund established pursuant to section 321-22.5, Hawaii Revised Statutes.

SECTION 2. Section 245-15, Hawaii Revised Statutes, is amended to read as follows:

"§245-15 Disposition of revenues. All moneys collected pursuant to this chapter shall be paid into the state treasury as state realizations to be kept and accounted for as provided by law; provided that, of the moneys collected under the tax imposed pursuant to:

(1) Section 245-3(a)(5), after September 30, 2006, and prior to October 1, 2007, 1.0 cent per cigarette shall be deposited to the credit of the Hawaii cancer research special fund, established pursuant to section 304A-2168, for research and operating expenses and for capital expenditures;

(2) Section 245-3(a)(6), after September 30, 2007, and prior to October 1, 2008:

(A) 1.5 cents per cigarette shall be deposited to the credit of the Hawaii cancer research special fund, established pursuant to section 304A-2168, for research and operating expenses and for capital expenditures;

(B) 0.25 cents per cigarette shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5; and

(C) 0.25 cents per cigarette shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321‑234;

(3) Section 245-3(a)(7), except for subparagraph (D), after September 30, 2008, and prior to October 1, 2009:

(A) 2.0 cents per cigarette shall be deposited to the credit of the Hawaii cancer research special fund, established pursuant to section 304A-2168, for research and operating expenses and for capital expenditures;

(B) 0.5 cents per cigarette shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5;

(D) And only until June 30, 2009, 0.25 cents per cigarette shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321-234;

(4) Section 245-3(a)(8), after September 30, 2009, and prior to October 1, 2010:

(A) [~~2.0~~] 1.5 cents per cigarette shall be deposited to the credit of the Hawaii cancer research special fund, established pursuant to section 304A-2168, for research and operating expenses and for capital expenditures;

(B) [~~0.75~~] 0.25 cents per cigarette shall be deposited to the credit of the trauma system special fund established pursuant to section 321‑22.5; and

~~(D)~~ ~~0.5 cents per cigarette shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321-234;~~]

(5) Section 245-3(a)(9), after September 30, 2010, and prior to October 1, 2011:

(B) [~~1.0 cent~~] 0.5 cents per cigarette shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5; and

~~(D)~~ ~~1.0 cent per cigarette shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321-234;~~] and

(6) Section 245-3(a)(10), after September 30, 2011, and thereafter:

(B) [~~1.5 cents~~] 1.0 cent per cigarette shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5; and

~~(D)~~ ~~1.25 cents per cigarette shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321-234~~].

The department shall provide an annual accounting of these dispositions to the legislature."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval and be repealed on June 30, 2015.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1732
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII