SB971 SD2.DOC

SECTION 1. The legislature finds that anti-tobacco campaigns have played a major role in the overall decline of cigarette smoking. A key tool of tobacco control has been taxation, which has been shown to be particularly effective for youths who are generally more price-sensitive and thus less likely to start or maintain cigarette smoking.

The health effects of smoking are well established and include increased risk of heart attack, stroke, and other medical events to which Hawaii′s emergency medical services system routinely responds. A clear nexus can thus be established between cigarette smoking and utilization of the health care system. However, due to declining rates of smoking, the long-term sustainability of the cigarette tax as a revenue source for the emergency medical system special fund is in jeopardy.

The purpose of this Act is to:

(1) Repeal the emergency medical services special fund;

(2) Redirect the fund's revenue sources, which include the cigarette tax, motor vehicle registration fee, and investment pool returns, to the general fund; and

(3) Appropriate an equivalent dollar-for-dollar amount to the department of health for purposes of overseeing the statewide comprehensive emergency medical system.

In fiscal year 2015-2016, revenue collected from the $5 per vehicle registration fee was deposited into the special fund. The emergency medical services special fund revenues from vehicle registration fees in fiscal year 2015-2016 were $6,538,865.

In fiscal year 2015-2016, revenue collected from the 1.25 cents per cigarette sold was deposited into the emergency medical system special fund. The emergency medical system special fund revenues from cigarette sales in fiscal year 2015-2016 were $8,800,000.

The emergency medical system special fund revenues from the investment pool account in fiscal year 2015-2016 were $151,502.46.

The emergency medical system special fund total revenues in fiscal year 2015-2016 were $15,490,367.46.

SECTION 2. Section 36-27, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Except as provided in this section, and notwithstanding any other law to the contrary, from time to time, the director of finance, for the purpose of defraying the prorated estimate of central service expenses of government in relation to all special funds, except the:

(1) Special out-of-school time instructional program fund under section 302A-1310;

(2) School cafeteria special funds of the department of education;

(3) Special funds of the University of Hawaii;

(4) State educational facilities improvement special fund;

(5) Convention center enterprise special fund under section 201B-8;

(6) Special funds established by section 206E-6;

(7) Aloha Tower fund created by section 206J-17;

(8) Funds of the employees' retirement system created by section 88-109;

(9) Hawaii hurricane relief fund established under chapter 431P;

(10) Hawaii health systems corporation special funds and the subaccounts of its regional system boards;

(11) Tourism special fund established under section 201B-11;

(12) Universal service fund established under section 269-42;

(13) Emergency and budget reserve fund under section 328L-3;

(14) Public schools special fees and charges fund under section 302A-1130;

(15) Sport fish special fund under section 187A-9.5;

[[](16)[]] Neurotrauma special fund under section 321H-4;

[[](17)[]] Glass advance disposal fee established by section 342G-82;

[[](18)[]] Center for nursing special fund under section 304A-2163;

[[](19)[]] Passenger facility charge special fund established by section 261-5.5;

[[](20)[]] Solicitation of funds for charitable purposes special fund established by section 467B-15;

[[](21)[]] Land conservation fund established by section 173A-5;

[[](22)[]] Court interpreting services revolving fund under section 607-1.5;

[[](23)[]] Trauma system special fund under section 321-22.5;

[[](24)[]] Hawaii cancer research special fund;

[[](25)[]] Community health centers special fund;

[~~[(26)]~~ ~~Emergency medical services special fund;~~

~~[(27)]~~] (26) Rental motor vehicle customer facility charge special fund established under section 261-5.6;

[~~[(28)]~~] (27) Shared services technology special fund under section 27-43;

[~~[(29)]~~] (28) Automated victim information and notification system special fund established under section 353-136;

[~~[(30)]~~] (29) Deposit beverage container deposit special fund under section 342G-104;

[~~[(31)]~~] (30) Hospital sustainability program special fund under [[]section 346G-4[]];

[~~[(32)]~~] (31) Nursing facility sustainability program special fund under [[]section 346F-4[]];

[~~[(33)]~~] (32) Hawaii 3R's school improvement fund under section 302A-1502.4;

[~~[(34)]~~] (33) After-school plus program revolving fund under section 302A-1149.5; and

[~~[(35)]~~] (34) Civil monetary penalty special fund under section 321-30.2,

shall deduct five per cent of all receipts of all other special funds, which deduction shall be transferred to the general fund of the State and become general realizations of the State. All officers of the State and other persons having power to allocate or disburse any special funds shall cooperate with the director in effecting these transfers. To determine the proper revenue base upon which the central service assessment is to be calculated, the director shall adopt rules pursuant to chapter 91 for the purpose of suspending or limiting the application of the central service assessment of any fund. No later than twenty days prior to the convening of each regular session of the legislature, the director shall report all central service assessments made during the preceding fiscal year."

SECTION 3. Section 36-30, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Each special fund, except the:

(1) Special out-of-school time instructional program fund under section 302A-1310;

(2) School cafeteria special funds of the department of education;

(3) Special funds of the University of Hawaii;

(4) State educational facilities improvement special fund;

(5) Special funds established by section 206E-6;

(6) Aloha Tower fund created by section 206J-17;

(7) Funds of the employees' retirement system created by section 88-109;

(8) Hawaii hurricane relief fund established under chapter 431P;

(9) Convention center enterprise special fund established under section 201B-8;

(10) Hawaii health systems corporation special funds and the subaccounts of its regional system boards;

(11) Tourism special fund established under section 201B-11;

(12) Universal service fund established under section 269-42;

(13) Emergency and budget reserve fund under section 328L-3;

(14) Public schools special fees and charges fund under section 302A-1130;

(15) Sport fish special fund under section 187A-9.5;

[[](16)[]] Neurotrauma special fund under section 321H-4;

[[](17)[]] Center for nursing special fund under section 304A-2163;

[[](18)[]] Passenger facility charge special fund established by section 261-5.5;

[[](19)[]] Court interpreting services revolving fund under section 607-1.5;

[[](20)[]] Trauma system special fund under section 321-22.5;

[[](21)[]] Hawaii cancer research special fund;

[[](22)[]] Community health centers special fund;

[[~~(23)]~~ ~~Emergency medical services special fund;~~

[~~(24)]~~] (23) Rental motor vehicle customer facility charge special fund established under section 261-5.6;

[[~~(25)]~~] (24) Shared services technology special fund under section 27-43;

[[~~(26)]~~] (25) Nursing facility sustainability program special fund established pursuant to [[]section 346F-4[]];

[[~~(27)]~~] (26) Automated victim information and notification system special fund established under section 353-136;

[[~~(28)]~~] (27) Hospital sustainability program special fund under [[]section 346G-4[]]; and

[~~[(29)]~~] (28) Civil monetary penalty special fund under section 321-30.2,

shall be responsible for its pro rata share of the administrative expenses incurred by the department responsible for the operations supported by the special fund concerned."

SECTION 4. 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), after September 30, 2008, and prior to July 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;

(C) 0.25 cents per cigarette shall be deposited to the credit of the community health centers special fund established pursuant to section 321-1.65; and

(D) 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 June 30, 2009, and prior to July 1, 2013:

(B) 0.75 cents per cigarette shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5;

(C) 0.75 cents per cigarette shall be deposited to the credit of the community health centers special fund established pursuant to section 321-1.65; 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)(11), after June 30, 2013, and prior to July 1, 2015:

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

(C) 1.25 cents per cigarette shall be deposited to the credit of the community health centers special fund established pursuant to section 321-1.65; 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; [~~and~~]

(6) Section 245-3(a)(11), after June 30, 2015, and [~~thereafter:~~] prior to July 1, 2017:

(B) 1.125 cents per cigarette, but not more than $7,400,000 in a fiscal year, shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5;

(C) 1.25 cents per cigarette, but not more than $8,800,000 in a fiscal year, shall be deposited to the credit of the community health centers special fund established pursuant to section 321-1.65; and

(D) 1.25 cents per cigarette, but not more than $8,800,000 in a fiscal year, shall be deposited to the credit of the emergency medical services special fund established pursuant to section 321-234[.]; and

(7) Section 245-3(a)(11), after June 30, 2017, and thereafter:

(B) 1.125 cents per cigarette, but not more than $7,400,000 in a fiscal year, shall be deposited to the credit of the trauma system special fund established pursuant to section 321-22.5; and

(C) 1.25 cents per cigarette, but not more than $8,800,000 in a fiscal year, shall be deposited to the credit of the community health centers special fund established pursuant to section 321-1.65.

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

SECTION 5. Section 249-31, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) From each annual motor vehicle registration fee, the director shall deposit $40 into the state highway fund and $5 into the [~~emergency medical services special fund.~~] general fund."

SECTION 6. Section 321-234, Hawaii Revised Statutes, is repealed.

["~~§321-234 Emergency medical services special fund.~~ ~~(a) There is established within the state treasury a special fund to be known as the emergency medical services special fund to be administered and expended by the department.~~

(b) The moneys in the special fund shall be used by the department for operating a state comprehensive emergency medical services system including enhanced and expanded services, and shall not be used to supplant funding for emergency medical services authorized prior to [July 1, 2004].

(c) Fees remitted pursuant to section 249-31, cigarette tax revenues designated under section 245-15, interest and investment earnings attributable to the moneys in the special fund, legislative appropriations, and grants, donations, and contributions from private or public sources for the purposes of the fund, shall be deposited into the special fund.

(d) The department shall submit an annual report to the legislature no later than twenty days prior to the convening of each regular session that outlines the receipts of, and expenditures from, the special fund."]

SECTION 7. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2017-2018 and the same sum or so much thereof as may be necessary for fiscal year 2018-2019 for the statewide comprehensive emergency medical services system.

The sums appropriated shall be expended by the department of health for the purposes of this Act.

SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 9. This Act shall take effect on July 1, 2050.

THE SENATE	S.B. NO.	971
TWENTY-NINTH LEGISLATURE, 2017		S.D. 2
STATE OF HAWAII