HOUSE OF REPRESENTATIVES	H.B. NO.	1297
THIRTY-FIRST LEGISLATURE, 2021		H.D. 2
STATE OF HAWAII		S.D. 1

A BILL FOR AN ACT

RELATING TO STATE FINANCES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

PART I

SECTION 1. Chapter 37, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

"§37-   Special fund program measures reports. No later than October 1 annually, each department shall submit to the legislature a report for each non-general fund account that shall include but not be limited to the following:

(1) A statement of its objectives;

(2) Measures quantifying the target population to be served for each of the ensuing six fiscal years;

(3) Measures by which the effectiveness in attaining the objectives is to be assessed;

(4) The level of effectiveness planned for each of the ensuing six fiscal years;

(5) A brief description of the activities encompassed;

(6) The program size indicators; and

(7) The program size planned for each of the next six fiscal years.

§37-   Special fund cost element reports. No later than October 1 annually, each department shall submit to the legislature a report for each non-general fund that shall include but not be limited to the following:

(1) Budget details by cost element; and

(2) Non-general fund names and account codes for each item or object code."

SECTION 2. Section 37-47, Hawaii Revised Statutes, is amended to read as follows:

"[[]§37-47[]] Reporting of non-general fund information. No later than [twenty days prior to the convening of each regular session,] October 1 annually, each department shall submit to the legislature a report for each non-general fund account [which] that shall include but not be limited to[,] the following:

(1) The name of the fund and a cite to the law authorizing the fund;

(2) The intended purpose of the fund;

(3) The current program activities which the fund supports;

(4) The balance of the fund at the beginning of the current fiscal year;

(5) The total amount of expenditures and other outlays from the fund account for the previous fiscal year;

(6) The total amount of revenue deposited to the account for the previous fiscal year;

(7) A detailed listing of all transfers from the fund;

(8) The amount of moneys encumbered in the account as of the beginning of the fiscal year;

(9) The amount of funds in the account which are required for the purposes of bond conveyance or other related bond obligations;

(10) The amount of moneys in the account derived from bond proceeds; and

(11) The amount of moneys of the fund held in certificates of deposit, escrow accounts or other investments."

PART II

SECTION 3. 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] 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)] (4) Special funds established by section 206E-6;

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

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

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

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

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

(12)] (9) Universal service fund established under section 269‑42;

[(13)] (10) Emergency and budget reserve fund under section 328L‑3;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[[(35)]] (30) 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 4. 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)] (4) Special funds established by section 206E-6;

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

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

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

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

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

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

(12)] (9) Universal service fund established under section 269‑42;

[(13)] (10) Emergency and budget reserve fund under section 328L‑3;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[[(29)]] (24) 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 5. Section 245-15, Hawaii Revised Statutes, is amended to read as follows:

"§245-15 Disposition of revenues. (a) 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:

(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) 0.75 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:

(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) 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]:

(A) Before July 1, 2041 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) 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) Before July 1, 2021, 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.

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

PART III

SECTION 6. The University of Hawaii cancer center (UH cancer center) reduces the burden of cancer through research, education, patient care, and community outreach. The UH cancer center is the only National Cancer Institute (NCI)-designated cancer center in Hawaii and the Pacific region. The UH cancer center is a member of the Hawaii Cancer Consortium along with five hospital groups and the University of Hawaii John A. Burns school of medicine (JABSOM).

JABSOM educates and trains health care professionals, including physicians, biomedical scientists, and allied health workers. JABSOM also conducts fundamental medical research and translates discoveries into delivery practices. Because JABSOM is a community-based medical school without its own university hospital, it partners with private hospitals in the community to achieve its educational mission.

The public funds and other resources the State has made available to JABSOM and the UH cancer center have been substantial. The magnitude of state funds and other resources provided to the University of Hawaii, the distinction of the university being the sole public institution of higher education in the State, and the UH cancer center being the only NCI-designated cancer center in Hawaii underscore the importance of establishing complementary strategic priorities and coordinating the management and deployment of state resources appropriated to JABSOM and UH cancer center.

It is in the public's interest that State resources be efficiently and effectively managed to optimize the public benefits. Just as co-locating the physical facilities for JABSOM and UH cancer center on adjoining sites in Kakaako promotes synergistic efforts, the legislature determines that it is a statewide concern to ensure that the management of public resources provided to JABSOM and UH cancer center be integrated, coordinated, and focused on common priorities to avoid unnecessary duplication of administrative expenses or conflicting priorities.

Placing resources devoted to training and educating physicians and conducting cancer research in an integrated university organizational structure as opposed to stand-alone and duplicative organizations will foster a uniform strategic vision. Unified leadership will also allow better coordination with the University of Hawaii's private partners in the hospital community and with other state agencies.

The legislature finds that as a matter of statewide concern, the UH cancer center should be more closely affiliated with JABSOM and be administered as an organized research unit of JABSOM. Merging JABSOM and the UH cancer center's administrative services and infrastructure teams will offer efficiency by eliminating redundancy and sharing administrative expertise and experience to reduce processing delays.

The legislature notes that several outstanding medical schools at other universities integrate their cancer research programs closely with their medical schools. For example, the Washington University School of Medicine in St. Louis is the parent institution to the Siteman Cancer Center. The Siteman Cancer Center is designated as a comprehensive cancer center and holds an "exceptional" rating from the NCI. The MD Anderson Cancer Center in Houston, Texas is a comprehensive cancer center and operates in close affiliation with the McGovern Medical School as part of the University of Texas Health Science Center at Houston.

The legislature also notes that from 2014 to 2016, the University of Hawaii developed business plans, hired consultants, and made presentations to its board of regents on the university's plans to integrate the University of Hawaii Kakaako health science campus and eliminate operational redundancies between JABSOM and the UH cancer center. Further, the University of Hawaii frequently groups different organized research units within a larger administrative structure. For example, the school of ocean and earth science and technology encompasses several outstanding research units, including the center for microbial oceanography: research and education and Hawaii institute of marine biology.

To maintain the NCI designation as a cancer center consistent with NCI guidelines, the director of the UH cancer center shall continue to have a direct line of reporting and accountability to the provost of the University of Hawaii at Manoa.

Accordingly, the purpose of this part is to require:

(1) The director of UH cancer center to be appointed by the University of Hawaii's board of regents upon recommendation from the provost of the University of Hawaii at Manoa instead of the dean of JABSOM;

(2) The UH cancer center to be administratively affiliated with JABSOM;

(3) The director of the UH cancer center to report to the provost of the University of Hawaii at Manoa and coordinate with the president of the university;

(4) Funds expended from or originating from the University of Hawaii tuition and fees special fund established by section 304A-2153, Hawaii Revised Statutes, for JABSOM or the UH cancer center to be used for educational purposes only; and

(5) Funds expended from or originating from the research and training revolving fund established by section 304A-2253, Hawaii Revised Statues, for JABSOM or the UH cancer center to be used for research and research-related purposes only.

SECTION 7. Chapter 304A, part IV, Hawaii Revised Statutes, is amended by adding a new subpart to be appropriately designated and to read as follows:

"     . Cancer Research Center of Hawaii

§304A-   Cancer research center of Hawaii. (a) There is established an organized research unit, hereinafter known as the "cancer research center of Hawaii", to conduct cancer research. The cancer research center of Hawaii shall be administered by a director to be appointed by the board of regents upon recommendation by the provost of the University of Hawaii at Manoa with the concurrence of the president of the university. The cancer research center of Hawaii shall be affiliated with the John A. Burns school of medicine; provided that the director of the cancer research center of Hawaii shall report to the provost of the University of Hawaii at Manoa and coordinate with the president of the university.

(b) Notwithstanding any other law to the contrary, funds expended from or originating from the University of Hawaii tuition and fees special fund, established under section 304A‑2153, for the school of medicine or the cancer research center of Hawaii shall be used by the school of medicine or the cancer research center of Hawaii for educational purposes only.

(c) Notwithstanding any other law to the contrary, funds expended from or originating from the research and training revolving fund, established under section 304A-2253, for the school of medicine or the cancer research center of Hawaii shall be used by the school of medicine or the cancer research center of Hawaii for research and research-related purposes only.

(d) The cancer research center of Hawaii's research agenda shall focus on research, education, patient care, and community outreach and should reflect an understanding of the ethnic, cultural, and environmental characteristics of the State and the Pacific region. The cancer research center of Hawaii may:

(1) Engage in international research collaborations;

(2) Undertake research studies and clinical trials; and

(3) Participate in projects and programs of the National Cancer Institute."

SECTION 8. Section 304A-2153, Hawaii Revised Statutes, is amended to read as follows:

"§304A-2153 University of Hawaii tuition and fees special fund. (a) There is established the University of Hawaii tuition and fees special fund into which shall be deposited all revenue collected by the university for regular, summer, and continuing education credit tuition, tuition-related course and fee charges, and any other charges to students, except as provided by law. Moneys deposited into the fund shall be expended to maintain or improve the university's programs and operations and shall not be:

(1) Used as a justification for reducing any budget request or allotment to the university unless the university requests such a reduction;

(2) Transferred unless otherwise authorized by the legislature; and

(3) Restricted by the governor or the director of finance without the prior approval of the legislature.

Any rule, policy, or action of any agency or individual in contravention of this subsection shall be void as against public policy.

(b) Any law to the contrary notwithstanding, the board of regents may authorize expenditures of up to $3,000,000 annually, excluding in-kind services, from this fund for the purposes of promoting alumni relations and generating private donations for deposit into the University of Hawaii Foundation for the purposes of the university. Any expenditure authorized pursuant to this subsection shall be for a public purpose and shall not be subject to chapters 42F, 103, 103D, and 103F. The university shall submit a comprehensive report to the legislature detailing the use of any funds authorized by the board under this subsection no later than twenty days prior to the convening of each regular session.

The report shall:

(1) Identify each department of the University of Hawaii Foundation supported by moneys from the fund;

(2) Describe the purposes and activities of each department identified in paragraph (1) and how it participates in fundraising activities and benefits the university;

(3) Provide the total expenditures of each department identified in paragraph (1) by primary expense categories;

(4) Identify all moneys from the fund transferred to any fund of the university and provide a justification of how these moneys are used to benefit the university;

(5) Provide a financial summary of the operating activities of the University of Hawaii Foundation, including revenues and expenditures by major reporting categories; and

(6) Identify amounts and purposes of all expenditures from the University of Hawaii support fund.

(c) Any law to the contrary notwithstanding, the university may transfer funds from the University of Hawaii tuition and fees special fund into the scholarship and assistance special fund established pursuant to section 304A‑2159.

(d) In estimating its quarterly budget requirements, each campus of the University of Hawaii shall prepare a plan for the fiscal year for the operation of each of the programs that it is responsible for administering. The operations plan shall be:

(1) In such form and content as the vice president for budget and finance and chief financial officer of the University of Hawaii may prescribe; and

(2) Submitted, together with the estimated quarterly budget requirements, to the vice president for budget and finance and chief financial officer on [such] a date [as] that the vice president for budget and finance and chief financial officer may prescribe.

(e) The president and vice president for budget and finance and chief financial officer of the University of Hawaii:

(1) Shall review the operations plan for each campus to determine if:

(A) It is consistent with the policy decisions of the board of regents and appropriations by the legislature;

(B) It reflects proper planning and efficient management methods; and

(C) Appropriations have been made for the planned purpose and will not be exhausted before the end of the fiscal year;

(2) Shall approve the operations plan for each campus if they determine that the operations plan meets the requirements of paragraph (1); and

(3) May modify or withhold the planned expenditures of any campus at any time during the appropriations period.

(f) At the end of each fiscal year, the moneys in the University of Hawaii tuition and fees special fund for each campus shall lapse to the credit of program identification number UOH900 (University of Hawaii, system wide support).

(g) Notwithstanding any other law to the contrary, funds expended from or originating from this fund for the University of Hawaii school of medicine or the cancer research center of Hawaii shall be used by the school of medicine or the cancer research center of Hawaii for educational purposes only."

SECTION 9. Section 304A-2253, Hawaii Revised Statutes, is amended to read as follows:

"§304A-2253 Research and training revolving fund. (a) There is established a University of Hawaii research and training revolving fund into which shall be deposited one hundred per cent of the total amount of indirect overhead revenues generated by the university from research and training programs. The board of regents is authorized to expend one hundred per cent of the revenues deposited in the fund for:

(1) Research and training purposes that may result in additional research and training grants and contracts;

(2) Facilitating research and training at the university; and

(3) Further deposit into the discoveries and inventions special fund.

(b) The annual report required to be made for this revolving fund shall include but not be limited to a breakdown of travel expenses.

(c) Notwithstanding section 304A-107 to the contrary, the board of regents, or its designee, may establish a separate account within the research and training revolving fund for the purpose of providing advance funding to meet reimbursable costs incurred in connection with federally financed research and training projects. Any reimbursement received as a result of providing advance funding shall be deposited into the research and training revolving fund to be used for the purpose of meeting reimbursable costs incurred in connection with federally financed projects.

(d) Revenues deposited into the fund shall not be used as a basis for reducing any current or future budget request or allotment to the university unless the university requests such a reduction.

(e) Notwithstanding any other law to the contrary, funds expended from or originating from this fund for the University of Hawaii school of medicine or the cancer research center of Hawaii shall be used by the school of medicine or the cancer research center of Hawaii for research and research-related purposes only."

PART IV

SECTION 10. Section 304A-2168, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) Beginning on January 1, 2010, the University of Hawaii shall report [semi-annually] to the legislature, no later than twenty days prior to the convening of each regular session, on the moneys in the Hawaii cancer research special fund, including deposits, expenditures, and other transactions. The [reports] report shall explain in detail all expenditures from the special fund[.] for the last fiscal year."

PART V

SECTION 11. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 12. This Act shall take effect on July 1, 2050.

Report Title:

State Finances; Special Funds; General Fund; Central Services Expenses; Reporting

Description:

Part I - By October 1 of each year, requires each department to submit program measures, costs elements, and accounting reports for all non-general funds to the Legislature. Specifies that the cigarette tax revenues deposited to the credit of the cancer research special fund shall only be used for capital expenditures and only until 7/1/2041. Part II - Makes certain special funds subject to deductions for central service expenses into the general fund. Beginning 7/1/2021 transfers to the credit of the general fund surcharges and cigarette tax revenue allocated to the trauma systems special fund. Part III - Requires the cancer research center of Hawaii to be affiliated with the John A. Burns school of medicine with direct lines of reporting to the provost of University of Hawaii at Manoa and coordinate with the president of the university. Requires funds expended from the tuition and fees special fund for the John A. Burns school of medicine or cancer research center of Hawaii to be used for educational purposes only. Requires funds expended from the research and training revolving fund for the John A. Burns school of medicine and cancer research center of Hawaii to be used for research and research-related purposes only. Amends the reporting requirement on the Hawaii cancer research special fund from semi-annually to annually. Effective 7/1/2050. (SD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.