Report Title:

Hawaii Tobacco Settlement Special Fund

Description:

Requires the University of Hawaii to repay the tobacco settlement funds it received over time. (SD1)

THE SENATE

S.B. NO.

2153

TWENTY-SECOND LEGISLATURE, 2004

S.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO HEALTH.

 

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

SECTION 1. When Hawaii entered into the multi-state lawsuit against the tobacco industry, the purpose of the legal action was to recoup billions of taxpayer dollars that had been spent on treating illnesses caused by the tobacco industry's deadly products. Upon agreeing to settle its lawsuit with the industry, Hawaii made a commitment to direct substantial portions of the funds to tobacco prevention and cessation. Legislators also took on the responsibility to manage those public funds.

During the 2003 special session of the legislature, it was argued that spending money on construction on a new medical school is an appropriate use for tobacco settlement funds. Medical school researchers would use the new facilities to seek new treatments, and possibly a cure, for cancer. But statistics show that smoking is the number one preventable cause of death, and this legislature finds that the tobacco settlement funds moneys should be used to reduce, and ultimately eliminate, tobacco use through public education, maintaining the original intent of the special fund. Prevention education programs are also the most cost-effective and proven way to win the battle against smoking.

When Hawaii's tobacco settlement special fund was established, its funding levels were based on minimum standards recommended by the Centers for Disease Control. The original allocation of twenty-five per cent was cut in half to its current level of 12.5 per cent. At this level, approximately $3,000,000 to $4,000,000 a year goes into the special fund. The Centers for Disease Control best practices guidelines recommend that to be effective, Hawaii should spend between $10,400,000 and $23,400,000 per year on comprehensive tobacco control. After funds were diverted to help build the new medical school, smoking prevention and cessation programs have suffered, operating on well below the recommended CDC funding levels of sufficient funding for a program that will show strong, long-term results.

This legislature wholly recognizes the significant value the medical school has for the people and future of Hawaii. But after the medical school becomes fully operative, and new faculty is recruited, millions of dollars in revenue will be generated every year through grants and contracts. During the first nine months of the 2002-2003 academic year, medical school faculty brought in $41,000,000 in grants and contracts. This will enable the University of Hawaii to reimburse the tobacco settlement special funds it received to construct the new medical school. Since the medical school will open its doors at the new Kakaako site beginning in the fall of 2005, this legislature finds it reasonable for the University of Hawaii to begin repayment in 2010.

The purpose of this Act is to require the University of Hawaii to repay $           in funds it received from the tobacco settlement special fund.

SECTION 2. Beginning with fiscal year 2010-2011, the University of Hawaii shall repay moneys received from the Hawaii tobacco settlement special fund, pursuant to section 328L-2, at a rate of $           per year.

SECTION 3. This Act shall take effect upon approval.