Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Third Special Session of 2001

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 13 entitled:

begs leave to report as follows:

The purpose of this measure is to authorize the University of Hawaii Board of Regents to issue $150,000,000 in revenue bonds, and to appropriate $150,000,000 in private donations and other university moneys, for the construction of a health and wellness center, including a new medical school facility.

In addition, this measure allows a portion of the moneys in the Hawaii tobacco settlement special fund to be used to pay the principal of and interest on, and to generate required coverage, if any, for, the revenue bonds issued by the University of Hawaii Board of Regents. Specifically, this measure reduces from forty per cent to twenty-four and one-half per cent the amount of tobacco settlement moneys appropriated into the emergency and budget reserve fund. This measure also reduces from twenty-five per cent to twelve and one-half per cent the amount of moneys appropriated into the Hawaii tobacco prevention and control trust fund. The resultant twenty-eight per cent is appropriated into the university revenue-undertakings fund, to be applied solely to the payment of the principal of and interest on, and to generate required coverage, if any, for, the revenue bonds issued by the University of Hawaii Board of Regents.

Furthermore, this measure allows up to fifty per cent of the total market value of the Hawaii tobacco prevention and control trust fund to be expended annually for tobacco prevention and control.

Your Committee finds that this measure will enable the State to infuse needed money into Hawaii's ailing business sector while taking advantage of low interest rates in the current municipal bond market. In addition, this measure will not increase the State's debt load since revenue bonds issued by the University of Hawaii Board of Regents are not considered general obligations of the State.

Your Committee received testimony in support of this measure from the Department of Budget and Finance, Hawaii Community Development Authority, University of Hawaii, John Burns School of Medicine, Cancer Research Center of Hawaii, Kakaako Improvement Association, Hawaii Biotechnology Group, Healthcare Association of Hawaii, The Chamber of Commerce of Hawaii, General Contractors Association, and Victoria Ward Limited. The American Heart Association of Hawaii, American Lung Association of Hawaii, American Cancer Society Hawaii Pacific, Hawaii Nurses' Association, Coalition for a Tobacco Free Hawaii, Hui Olelo Hawaii (a laryngectomee support group), and a retired physician opposed the use of Hawaii tobacco prevention and control trust fund moneys to pay for the new medical school.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee concurs with the intent and purpose of S.B. No. 13 and recommends that it pass Second Reading and be placed on the calendar for Third Reading.