Honolulu, Hawaii
                                                   , 1999

                                 RE: S.B. No. 1034
                                     S.D. 1
                                     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 S.B. No.
1034, S.D. 1, entitled: 


begs leave to report as follows:

     The purpose of this bill is to:

     (1)  Establish a Hawaii Tobacco Settlement Special Fund with
          moneys derived from settlements of the class action
          lawsuit against tobacco companies that will serve as a
          mechanism to maximize financial resources for:

          (a)  Tobacco prevention and control;

          (b)  Health promotion and disease prevention programs;

          (c)  Children's health programs; and

          (d)  Long-term, prevention-oriented public health


     (2)  Establish a Hawaii Tobacco Prevention and Control
          Endowment Fund for public-private partnerships for
          tobacco prevention and control;

                                 STAND. COM. REP. NO. 1258
                                 Page 2

     (3)  Establish a rainy day fund, moneys of which may be
          expended by the Governor at the Governor's discretion
          should it become necessary to make up for decreased
          State revenues; and

     (4)  Establish an advisory board which will develop a
          strategic plan and make recommendations to assist the
          Department of Health and the Hawaii Community
          Foundation to expend tobacco settlement moneys.

     Testimony in support of the bill was received from the
Hawaii Medical Association, Hawaii Health Systems Corporation,
West-Hawaii Tobacco-Free Coalition, the Hawaii Family Support
Center, the American Academy of Pediatrics, the Hawaii Coalition
for Affordable Long Term Care, the Kauai Tobacco-Free Community
Coalition, Good Beginnings Alliance, the American Cancer Society,
the Policy Advisory Board for Elder Affairs, and several
concerned individuals.  

     The American Lung Association, the American Heart
Association, Kaiser Permanente, the Policy Advisory Board for
Elder Affairs, and the Coalition for a Tobacco Free Hawaii
testified in support of the intent of the bill.  The Healthcare
Association of Hawaii and the Hawaii American Association of
Retired Persons, and an individual commented on the bill.

     The Department of Health supported the intent of the bill,
but testified that the language contained in the administration's
proposal was preferable.  The Department of Budget and Finance
also testified in support of restoring the original provisions of
the bill, as proposed by the administration, and further
testified that it could not support the bill in its current form.

     Your Committee finds that a Master Settlement Agreement was
entered into between the State of Hawaii and participating
tobacco manufacturers to settle 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 years.

     Your Committee also finds that because the Master Settlement
Agreement was reached based on the medical care costs for
tobacco-related illnesses, a major share of the settlement should
be designated for prevention and early intervention programs to
offset future health care costs.

     Your Committee has amended this bill by deleting its
substance and replacing it with the contents of H.B. No. 175,
H.D. 1, which was heard and passed by your Committee earlier.

                                 STAND. COM. REP. NO. 1258
                                 Page 3

     As amended, this bill establishes the Hawaii Tobacco
Settlement Special Fund to serve as a medium to:

     (1)  Promote children's health;

     (2)  Reduce tobacco consumption in Hawaii;

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

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

     (5)  Assess the effectiveness of health promotion and
          disease prevention.

This bill also establishes in the Department of Health an
advisory board to develop a strategic plan that shall:

     (1)  Assess the current status and effectiveness of programs
          engaged in health promotion, disease prevention, and
          tobacco prevention and control;

     (2)  Recommend the implementation of specific programs; and

     (3)  Contain sufficient standards and benchmarks by which
          measure of program success may be appropriately

     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 S.B. No.
1034, S.D. 1, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as S.B. No. 1034, S.D.
1, 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