Report Title:

Hawaii Tobacco Settlement Special Fund; Reallocation; General Fund



Reallocates for 6 years from 07/01/09 to 06/30/2015, distribution of moneys in the Hawaii tobacco settlement special fund, including depositing 14% into the state general fund.



H.B. NO.














relating to the hawaii tobacco settlement special fund.





SECTION 1. The legislature finds that the State is undergoing a significant and possibly protracted economic downturn in tandem with the national and global economic and financial crises. Numerous jobs have been lost, a number of large and small companies have declared bankruptcy or left the State, and many families have suffered foreclosure on their over-mortgaged houses. In the past year, the council on revenues has consistently reduced its forecasts of Hawaii's tax revenues. Across-the-board spending restrictions have already been put in place in state government and a general hiring freeze has already been implemented except in areas that impact public health and safety.

In the face of these extraordinary conditions, the State cannot proceed with business as usual. All resources must be examined to address critical statewide health, safety, and educational needs.

Accordingly, the purpose of this Act is to generate additional general funds to ensure the delivery of critical services statewide by reallocating the distribution of moneys in the Hawaii tobacco settlement special fund under section 328L‑2, Hawaii Revised Statutes, including depositing a certain percentage into the state general fund.

SECTION 2. Section 328L-2, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The fund shall be used for the purpose of receiving, allocating, and appropriating the tobacco settlement moneys as follows:

(1) [Twenty-four and one-half] Thirty per cent shall be appropriated into the emergency and budget reserve fund under section 328L-3;

(2) [Thirty-five] Twenty-eight per cent shall be appropriated to the department for purposes of section 328L-4;

(3) [Twelve and one-half] Six per cent shall be appropriated into the Hawaii tobacco prevention and control trust fund under section 328L-5; [and]

(4) [Twenty-eight] Twenty-two per cent shall be appropriated into the university revenue-undertakings fund created in section [304A-2167,] 304A-2167.5 to be applied to the payment of the principal of and interest on, and to generate required coverage, if any, for, revenue bonds issued by the board of regents of the University of Hawaii to finance the cost of construction of a university health and wellness center, including a new medical school facility, to be situated on the island of Oahu, for the succeeding fiscal year; and the payment of annual operating expenses incurred by the new medical school facility; provided that any moneys in excess of the amounts required under this paragraph shall be transferred in the succeeding fiscal year [in the following amounts:

(A) To] to the emergency and budget reserve fund under section 328L-3[--eighty per cent of the excess; and

(B) To the Hawaii tobacco prevention and control trust fund under section 328L-5--twenty per cent of the excess.]; and

(5) Fourteen per cent shall be deposited to the credit of the state general fund."

SECTION 3. Section 328L-3, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) There is established in the state treasury the emergency and budget reserve fund which shall be a special fund administered by the director of finance, into which shall be deposited:

(1) [Twenty-four and one-half per cent of the moneys] Moneys received from the tobacco settlement moneys under section [328L-2(b)(1);] 328L-2; and

(2) Appropriations made by the legislature to the fund."

SECTION 4. Section 328L-4, Hawaii Revised Statutes, is amended to read as follows:

"[[]328L-4[]] Use of funds appropriated to the department. The department, immediately upon receipt of the [thirty-five] twenty-eight per cent of moneys appropriated pursuant to section 328L-2(b)(2) shall:

(1) Transfer up to ten per cent of the total moneys received by the State from tobacco settlement moneys to the department of human services for the children's health insurance program; and

(2) Expend the remainder of the moneys received by the department for health promotion and disease prevention programs, including but not limited to, maternal child health and child development programs, promotion of healthy lifestyles (including fitness, nutrition, and tobacco control), and prevention oriented public health programs.

For purposes of paragraph (2), the director shall convene an advisory group that shall be separate from the tobacco prevention and control advisory board, to strategically plan the development and implementation of preventive systems to achieve measurable outcomes and to make recommendations for the expenditure of these moneys. The advisory group shall be composed of nine members with expertise in the programs under paragraph (2), and shall be selected at the discretion of the director."

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval and be repealed on June 30, 2015; provided that the amendments made to section 328L‑2(b), Hawaii Revised Statutes, by section 2 of this Act, shall not be repealed when that section is repealed and reenacted on June 30, 2011, pursuant to Act 16, Session Laws of Hawaii 2008.