Honolulu, Hawaii
                                                   , 1999

                                 RE: H.B. No. 175
                                     H.D. 1

Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Health, to which was referred H.B. No. 175


begs leave to report as follows:

     The purpose of this bill is to provide statewide tobacco
prevention services and other health-related initiatives by
establishing the Tobacco Agreement Special Fund (Special Fund),
to be funded by half of the amount paid to the State by the
tobacco Master Settlement Agreement.

     The Hawaii Medical Association submitted testimony in
support of this measure.  The Departments of Health, Human
Services, and Budget and Finance, the Hawaii Nurses' Association,
the American Lung Association, and the American Cancer Society
submitted testimony in support of the intent of this measure.
The Healthcare Association of Hawaii and the Coalition for a
Tobacco-Free Hawaii submitted comments.

     Your Committee finds that late last year, the Governor and
the Attorney General accepted a Master Settlement Agreement with
participating tobacco manufacturers to settle and resolve with
finality all related claims against participating manufacturers.
Under the Master Settlement Agreement, the State will receive
approximately $1.1 billion dollars over the next twenty-five

                                 STAND. COM. REP. NO. 14
                                 Page 2

     Your Committee believes that the moneys deposited into the
Special Fund should be used almost exclusively to fund:

     (1)  Programs and services for tobacco control and
          prevention; and

     (2)  Other healthcare prevention and early intervention
          services and programs.

     Your Committee believes that the Master Settlement Agreement
was reached based on the cost to the health care system for
tobacco-related illnesses.  Thus, your Committee believes in
designating a major share of the settlement for prevention and
early intervention programs to offset future health care costs.

     Your Committee finds that designating only fifty percent of
the Master Settlement Agreement for tobacco prevention and other
health-related initiatives is too limiting, and believes that the
Special Fund should receive the entire amount for at least the
first year.  Therefore, your Committee has amended this measure

     (1)  Establishing a new chapter in the Hawaii Revised
          Statutes establishing the Hawaii Tobacco Settlement
          Special Fund;

     (2)  Authorizing the State to deposit the total amount
          received from the Master Settlement Agreement into the
          Hawaii Tobacco Settlement Special Fund;

     (3)  Transferring up to fifty percent of the allocation to
          the Department of Human Services for healthcare for
          needy children;

     (4)  Specifying that the remaining funds shall be used to:

          (A)  Reduce cigarette smoking and tobacco use among
               youth and adults through education and enforcement

          (B)  Control and prevent chronic diseases where tobacco
               use is a risk factor;

          (C)  Promote healthy lifestyles through better
               nutrition and improved physical activity; and

          (D)  Assess the effectiveness of "health promotion and
               disease prevention" and "tobacco prevention and
               control" programs;

                                 STAND. COM. REP. NO. 14
                                 Page 3


     (5)  Establishing an advisory board to develop a strategic
          plan to effectuate the Hawaii Tobacco Special Fund; and

     (6)  Making technical, nonsubstantive amendments for
          purposes of clarity and style.

     As affirmed by the record of votes of the members of your
Committee on Health that is attached to this report, your
Committee is in accord with the intent and purpose of H.B. No.
175, as amended herein, and recommends that it pass Second
Reading in the form attached hereto as H.B. No. 175, H.D. 1, and
be referred to the Committee on Finance.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Health,

                                   ALEXANDER C. SANTIAGO, Chair