Honolulu, Hawaii
                                                     , 1999

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

Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committees on Health and Human Services and Ways and
Means, to which was referred S.B. No. 1034 entitled: 


beg leave to report as follows:

     The purpose of this administration measure is to create a
Hawaii tobacco settlement special fund.

     Your Committees received testimony in support of this
measure from the Department of Health (DOH), Department of Human
Services, American Lung Association, American Academy of
Pediatrics, Coalition for a Tobacco Free Hawaii, American Cancer
Society, Good Beginnings Alliance, Hawaii State Primary Care
Association, Childcare Business Coalition, Healthy Start, Hawaii
Early Intervention Coordinating Council, Hawaii Association for
the Education of Young Children, and one private citizen.

     The State of Hawaii is in the process of receiving an
estimated $1.13 billion from a class action lawsuit against
several giant tobacco companies.  This measure provides for the
allocation and use of those moneys upon receipt.  Your Committees
believe that it is prudent to plan ahead for the use of those

     The Legislature has been beset with many requests from
public and private agencies to receive a portion of the tobacco
settlement moneys.  Your Committees wish they could satisfy all

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of those requests, but find that the most critical areas that
need funding are in areas of health, childhood education,
nutrition, early intervention, and tobacco prevention.

     Your Committees have amended this measure by:

     (1)  Adding language in section 1 about the importance of
          early childhood education programs and early childhood
          intervention services, and about the dangers of
          maternal smoking;

     (2)  Changing the title of the new chapter from "Hawaii
          Tobacco Settlement Special Fund" to "Hawaii Tobacco
          Settlement Moneys" to accommodate the broadened scope
          of the amendments;

     (3)  Deleting the definition of "children's health program"
          as being unnecessary;

     (4)  Inserting a new definition for "tobacco settlement";

     (5)  Creating a Hawaii tobacco prevention and control
          endowment fund, a board of trustees for the endowment
          fund, and a rainy day fund;

     (6)  Requiring that the endowment fund be under the Hawaii
          Community Foundation;

     (7)  Clarifying that all tobacco settlement moneys are to be
          initially deposited into the Hawaii tobacco settlement
          special fund before transferring moneys to other
          specified funds and purposes for fiscal years 1999-2000
          and 2000-2001;

     (8)  Changing the administrative responsibilities for the
          Hawaii tobacco settlement fund from the Department of
          Budget and Finance to the DOH;

     (9)  Providing for the appointment of members of the
          advisory board by the Director of Health, to include
          specified persons and other representatives of
          particular groups;

     (10) Clarifying that the advisory board shall exist for so
          long as tobacco settlement moneys are received by the

    (11)  Requiring the Auditor to report to the Legislature and
          the governor on a financial audit before the 2002

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          regular session and an evaluation audit before the 2004
          regular session, of the Hawaii tobacco prevention and
          control endowment fund; and

    (12)  Deleting the appropriation section.

     Your Committees desire that the Legislature evaluate this
measure, perhaps prior to the 2001 or 2002 regular session, to
determine the appropriate statutory amendments for the allocation
of tobacco settlement moneys after July 1, 2001.  Under this
measure, as amended, the special fund will hold and distribute
all moneys until July 1, 2001, or until the Legislature
determines further statutory allocations.  Your Committees
believe that this flexibility is important for now in light of
changing circumstances and needs in the future.

     Your Committees have also renumbered sections and
reformatted the measure to reflect preferred drafting style, and
made technical, nonsubstantive amendments for purposes of clarity
and style.

     As affirmed by the records of votes of the members of your
Committees on Health and Human Services and Ways and Means that
are attached to this report, your Committees are in accord with
the intent and purpose of S.B. No. 1034, as amended herein, and
recommend that it pass Second Reading in the form attached hereto
as S.B. No. 1034, S.D. 1, and be placed on the calendar for Third

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Health and Human
                                   Services and Ways and Means,

____________________________       ______________________________


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