HAWAII
REPORT TITLE:
Tobacco Settlement
DESCRIPTION:
Creates the Hawaii tobacco settlement trust fund, rainy day fund, and Hawaii tobacco
prevention and control trust fund; specifies how tobacco settlement moneys are to be
transferred and used.
(CD1)
THE SENATE
S.B.
NO. S.D. 1
TWENTIETH LEGISLATURE,
1999
H.D.
2
STATE OF HAWAII
C.D.
1
A BILL FOR AN ACT RELATING TO THE HAWAII TOBACCO SETTLEMENT
SPECIAL FUND.
E IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
1 SECTION 1. Research has shown that cigarette smoking
and
2 tobacco use are the leading causes of preventable morbidity and
3 mortality in Hawaii and the nation. In Hawaii, more than 1,300
4 residents die annually as a result of tobacco-related illness
5 which is sixteen per cent of all resident deaths. Tobacco-
6 related illnesses also account for more than $320,000,000 in
7 health care costs and expenditures of about $40,000,000 in
8 Medicaid payments. The economic impact is substantial.
9 Smoking by women during pregnancy is likewise correlated
10 with miscarriages, premature births, hospitalized child abuse
11 cases, learning disabilities, and behavioral problems, and
12 represents a major cause of illness and death among infants and
13 children. Federal and state health objectives for the years 2000
14 and 2010, which offer a vision for the new century, call for
15 improvements in health status. These improvements can be
16 achieved through prevention, intervention, reductions in
17 preventable death and disability, enhanced quality of life, and
18 reduced disparities in the health of populations within Hawaii,
19 the Pacific, and the nation.
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1 The purpose of this Act is to establish the Hawaii tobacco
2 settlement special fund with moneys received from the settlement
3 from a class action lawsuit against the tobacco companies. The
4 fund will serve as a medium for a public-private partnership to:
5 (1) Reduce tobacco consumption in Hawaii;
6 (2) Control and prevent chronic diseases where
tobacco is a
7 risk factor;
8 (3) Promote healthy lifestyles through better
nutrition and
9 improved physical activity;
and
10 (4) Promote children's health.
11 The fund shall serve as a mechanism to maximize financial
12 resources for tobacco prevention and control, health promotion
13 and disease prevention programs, children's health programs, and
14 to serve as a long-term source of stable funding for
15 prevention-oriented public health efforts.
16 An emergency and budget reserve account is also
established
17 to provide the State with a financial reserve to be used when
18 there is an emergency or economic downturn.
19 SECTION 2. The Hawaii Revised Statutes is amended
by adding
20 a new chapter to be appropriately designated and to read as
21 follows:
22
"CHAPTER
23
HAWAII
TOBACCO SETTLEMENT MONEYS
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1 § -1 Definitions. Whenever used
in this chapter, unless
2 the context otherwise requires:
3 "Children's health program" means health care
for needy
4 children.
5 "Department" means the department of health.
6 "Director" means the director of health.
7 "Health promotion and disease prevention
programs" means
8 those public health programs that attempt to reduce resources
9 spent on treating preventable illness and functional impairment,
10 enhance the quality of life, and reduce disparities in the health
11 status of populations.
12 "Tobacco prevention and control" means
activities or
13 programs that attempt to reduce tobacco consumption.
14 "Tobacco settlement moneys" refers to moneys
received by the
15 State pursuant to the tobacco master settlement agreement.
16 § -2 Hawaii tobacco settlement special
fund.(a) There
17 is established in the state treasury the Hawaii tobacco
18 settlement special fund into which shall be deposited:
19 (1) All tobacco settlement moneys; and
20 (2) All interest and earnings accruing from the
investment
21 of moneys in the fund.
22 The Hawaii tobacco settlement special fund shall be administered
23 by the department.
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1 (b) The fund shall be used for the purpose of
receiving and
2 appropriating the tobacco settlement moneys as follows:
3 (1) Forty per cent shall be appropriated into the
emergency
4 and budget reserve fund
under section -3;
5 (2) Thirty-five per cent shall be appropriated to
the
6 department for purpose of
section -4; and
7 (3) Twenty-five per cent shall be appropriated into
the
8 Hawaii tobacco prevention
and control trust fund under
9 section
-5.
10 § -3 Emergency and budget reserve fund.(a)
There is
11 established in the state treasury the emergency budget and
12 reserve fund which shall be a special fund administered by the
13 director of finance, into which shall be deposited:
14 (1) Forty per cent of the moneys received from the
tobacco
15 settlement moneys under
section -2(b)(1);
16 (2) Appropriations made by the legislature to the
fund.
17 (b) All interest earned from moneys in the
emergency and
18 budget reserve fund shall be credited to the general fund.
19 (c) Expenditures from the emergency and budget
reserve fund
20 shall be a temporary supplemental source of funding for the State
21 during times of emergency, economic downturn, or unforeseen
22 reduction in revenues. No expenditures shall be made from the
23 emergency and budget reserve fund except pursuant to
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1 appropriations. The general appropriations bill or the
2 supplemental appropriations bill, as defined in section 9 of
3 article VII of the Constitution of the State of Hawaii, shall not
4 be used to appropriate moneys from the emergency and budget
5 reserve fund. The governor, through an appropriations bill, may
6 recommend expenditures from the emergency and budget reserve fund
7 by setting forth the purposes of the expenditures consistent with
8 subsection (d), the amounts, and the reasons justifying the
9 necessity for the appropriations.
10 (d) The legislature may make appropriations from
the fund
11 for the following purposes:
12 (1) To maintain levels of programs determined to be
13 essential to the public
health, safety, and welfare;
14 (2) To provide for counter cyclical economic and
employment
15 programs in periods of
economic downturn;
16 (3) To restore facilities destroyed or damaged or
services
17 disrupted by disaster in
any county; and
18 (4) To meet other emergencies when declared by the
governor
19 or determined to be urgent
by the legislature.
20 Any act making appropriations from the emergency and
budget
21 reserve fund shall include a declaration of findings and purposes
22 setting forth the purposes, the amounts, and the reasons why the
23 appropriations are necessary and shall require a two-thirds
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1 majority vote of each house of the legislature.
2 (e) Appropriations for the following purposes from
the
3 emergency and budget reserve fund are specifically prohibited:
4 (1) To meet expenses of the legislature;
5 (2) To provide for salary adjustments for officials
6 appointed pursuant to
article V, section 6 or article
7 VI, section 3 of the
Constitution of the State of
8 Hawaii and for others whose
salaries are directly
9 related to salaries of these
officials; and
10 (3) To fund cost items in any collective bargaining
11 contract.
12 § -4 Use of funds appropriated to the
department. The
13 department, immediately upon receipt of the thirty-five per cent
14 of moneys appropriated pursuant to section -2(b)(2) shall:
15 (1) Transfer up to ten per cent of the total moneys
16 received by the State from
tobacco settlement moneys to
17 the department of human
services for the children's
18 health insurance program;
and
19 (2) Expend the remainder of the moneys received by
the
20 department for health
promotion and disease prevention
21 programs, including but not
limited to, maternal child
22 health and child
development programs, promotion of
23 healthy lifestyles
(including fitness, nutrition, and
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1 tobacco control), and
prevention oriented public health
2 programs.
3 For purposes of paragraph (2), the director shall convene
an
4 advisory group that shall be separate from the tobacco prevention
5 and control advisory board, to strategically plan the development
6 and implementation of preventive systems to achieve measurable
7 outcomes and to make recommendations for the expenditure of these
8 moneys. The advisory group shall be composed of nine members
9 with expertise in the programs under paragraph (2), and shall be
10 selected at the discretion of the director.
11 § -5 Hawaii tobacco prevention and
control trust fund.
12 (a) There is established the Hawaii tobacco prevention and
13 control trust fund as a separate fund of a nonprofit entity
14 having a board of directors and qualifying under section
15 501(c)(3) of the Internal Revenue Code of 1986, as amended, into
16 which shall be deposited twenty-five per cent of moneys received
17 as provided under section -2(b)(3). The director of health with
18 the concurrence of the governor, shall select, in accordance with
19 law, the entity based upon the proven record of accomplishment of
20 the entity in administering a similar trust fund.
21 (b) Notwithstanding that the Hawaii tobacco and
prevention
22 and control trust fund is established within a private entity,
23 the department of budget and finance shall have oversight
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1 authority over the fund and may make periodic financial audits of
2 the fund; provided that the director of finance may contract with
3 a certified public accountancy firm for this purpose. The
4 director of health with the concurrence of the governor in their
5 sole discretion may rescind the selection of the entity. If the
6 selection of the entity in rescinded, moneys in the trust fund
7 shall revert back to the State and shall be deemed to be trust
8 moneys.
9 (c) The entity selected under subsection (a) shall
expend
10 moneys from the Hawaii tobacco prevention and control trust fund
11 for tobacco prevention and control, including but not limited to,
12 reducing cigarette smoking and tobacco use among youth and adults
13 through education and enforcement activities, and controlling and
14 preventing chronic diseases where tobacco use is a risk factor.
15 (d) The Hawaii tobacco prevention and control trust
fund
16 may receive appropriations, contributions, grants, endowments, or
17 gifts in cash or otherwise from any source, including the State,
18 corporations or other businesses, foundations, government,
19 individuals, and other interested parties; provided that any
20 appropriations made by the State shall not supplant or diminish
21 the funding of existing tobacco prevention and control programs
22 or any health related programs funded in whole or in part by the
23 State.
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1 (e) The assets of the Hawaii tobacco prevention and
control
2 trust fund shall consist of:
3 (1) Moneys appropriated under section
-2(b)(3);
4 (2) Moneys appropriated to the Hawaii tobacco
prevention
5 and control trust fund by
the state, county, or federal
6 government;
7 (3) Private contributions of cash or property; and
8 (4) Income and capital gains earned by the trust
fund.
9 (f) The aggregate principal sum deposited in the
Hawaii
10 tobacco prevention and control trust fund shall be invested by
11 the entity selected under subsection (a) in a manner intended to
12 maximize the rate of return on investment of the trust fund
13 consistent with the objective of preserving the trust fund's
14 principal.
15 (g) If the entity selected under subsection (a) is
16 dissolved, the director of health, with the concurrence of the
17 governor, shall select a successor entity. If the Hawaii tobacco
18 prevention and control trust fund is terminated, the moneys
19 remaining in the trust fund shall revert back to the State and
20 shall be deemed to be trust moneys.
21 (h) The administration of the Hawaii tobacco
prevention and
22 control trust fund shall be advised by the tobacco prevention and
23 control advisory board created under section -6.
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1 § -6 Tobacco prevention and control advisory
board.(a)
2 There is established a tobacco prevention and control advisory
3 board under the department for administrative purposes.
4 (b) The tobacco prevention and control advisory
board shall
5 consist of members who are involved in tobacco prevention and
6 control. Membership of the board shall be as follows:
7 (1) One member of the governor's staff, appointed by
the
8 governor;
9 (2) One member to be appointed by the governor from
a list
10 of two names submitted by
the president of the senate;
11 (3) One member to be appointed by the governor from
a list
12 of two names submitted by
the speaker of the house of
13 representatives;
14 (4) The director or the director's designee;
15 (5) The superintendent of education or the
superintendent's
16 designee;
17 (6) Three members having demonstrated interest in
and
18 having backgrounds
beneficial to controlling and
19 preventing the use of
tobacco, appointed by the
20 director of health; and
21 (7) Three members representing populations at risk
for
22 tobacco use, appointed by
the governor.
23 (c) Members shall:
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1 (1) Be appointed or designated, as applicable,
without
2 regard to section 26-34;
3 (2) Serve without compensation; and
4 (3) Serve for a term of three years.
5 (d) The tobacco prevention and control advisory
board, in
6 collaboration with the department, shall develop a strategic plan
7 for tobacco prevention and control, including:
8 (1) Developing and implementing effective and cost
9 efficient programs,
including health promotion and
10 disease prevention;
11 (2) Developing adequate standards and benchmarks by
which
12 measures of program success
under paragraph (1) of this
13 subsection may be
appropriately evaluated; and
14 (3) Assessing the effectiveness of programs engaged
in
15 health promotion and
disease prevention.
16 The strategic plan shall be in writing and shall be a
public
17 document.
18 (e) The tobacco prevention and control advisory
board shall
19 advise the on the administration of the Hawaii tobacco prevention
20 and control trust fund."
21 SECTION 3. Section 36-27, Hawaii Revised Statutes,
is
22 amended to read as follows:
23 "§36-27 Transfers from special funds for
central service
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1 expenses. Except as provided in this section, and
2 notwithstanding any other law to the contrary, from time to time
3 the director of finance, for the purpose of defraying the
4 prorated estimate of central service expenses of government in
5 relation to all special funds, except the:
6 (1) Special summer school and intersession fund
under
7 section 302A-1310;
8 (2) School cafeteria special funds of the department
of
9 education;
10 (3) Special funds of the University of Hawaii;
11 (4) State educational facilities improvement
special fund;
12 (5) Convention center capital special fund under
section
13 206X-10.5 and the
convention center operations special
14 fund under section
206X-10.6;
15 (6) Special funds established by section 206E-6;
16 (7) Housing loan program revenue bond special fund;
17 (8) Housing project bond special fund;
18 (9) Aloha Tower fund created by section 206J-17;
19 (10) Domestic violence prevention special fund under
section
20 321-1.3;
21 (11) Spouse and child abuse special account under section
22 346-7.5;
23 (12) Spouse and child abuse special account under section
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1 601-3.6;
2 (13) Funds of the employees' retirement system created by
3 section 88-109;
4 (14) Unemployment compensation fund established under
5 section 383-121;
6 (15) Hawaii hurricane relief fund established under
chapter
7 431P;
8 (16) Hawaii health systems corporation special funds;
9 (17) Boiler and elevator safety revolving fund established
10 under section 397-5.5;
11 (18) Tourism special fund established under section
12 [[]201B-11[]]; [and]
13 (19) Department of commerce and consumer affairs' special
14 funds;
15 (20) Hawaii tobacco settlement special fund
under section
16 -2;
and
17 (21) Emergency budget and reserve fund under
section -3;
18 shall deduct five per cent of all receipts of all other special
19 funds, which deduction shall be transferred to the general fund
20 of the State and become general realizations of the State. All
21 officers of the State and other persons having power to allocate
22 or disburse any special funds shall cooperate with the director
23 in effecting these transfers. To determine the proper revenue
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1 base upon which the central service assessment is to be
2 calculated, the director shall adopt rules pursuant to chapter 91
3 for the purpose of suspending or limiting the application of the
4 central service assessment of any fund. No later than twenty
5 days prior to the convening of each regular session of the
6 legislature, the director shall report all central service
7 assessments made during the preceding fiscal year."
8 SECTION 4. Section 36-30, Hawaii Revised Statutes,
is
9 amended by amending subsection (a) to read as follows:
10 "(a) Each special fund, except the:
11 (1) Transportation use special fund established by
section
12 261D-1;
13 (2) Special summer school and intersession fund
under
14 section 302A-1310;
15 (3) School cafeteria special funds of the
department of
16 education;
17 (4) Special funds of the University of Hawaii;
18 (5) State educational facilities improvement
special fund;
19 (6) Special funds established by section 206E-6;
20 (7) Aloha Tower fund created by section 206J-17;
21 (8) Domestic violence prevention special fund under
section
22 321-1.3;
23 (9) Spouse and child abuse special account under
section
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1 346-7.5;
2 (10) Spouse and child abuse special account under section
3 601-3.6;
4 (11) Funds of the employees' retirement system created by
5 section 88-109;
6 (12) Unemployment compensation fund established under
7 section 383-121;
8 (13) Hawaii hurricane relief fund established under
chapter
9 431P;
10 (14) Convention center capital special fund established
11 under section 206X-10.5 and
the convention center
12 operations special fund
established under section
13 206X-10.6;
14 (15) Hawaii health systems corporation special funds;
[and]
15 (16) Tourism special fund established under section
16 [[]201B-11[]];
17 (17) Hawaii tobacco settlement special fund
under section
18 -2;
and
19 (18) Emergency and budget reserve fund under
section -3;
20 shall be responsible for its pro rata share of the administrative
21 expenses incurred by the department responsible for the
22 operations supported by the special fund concerned."
23 SECTION 5. There is appropriated out of the Hawaii
tobacco
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1 settlement special fund the sum of $5,777,903, or so much thereof
2 as may be necessary, for fiscal year 1999-2000, and the sum of
3 $15,436,031, or so much thereof as may be necessary, for fiscal
4 year 2000-2001, to be deposited into the the emergency and budget
5 reserve fund.
6 SECTION 6. There is appropriated out of the Hawaii
tobacco
7 settlement special fund the sum of $5,055,665, or so much thereof
8 as may be necessary, for fiscal year 1999-2001, and the sum of
9 $13,506,527, or so much thereof as may be necessary, for fiscal
10 year 2000-2001, to the department of health to be expended for
11 the purposes specified in section -4, Hawaii Revised Statutes.
12 The sums appropriated shall be expended by the department of
13 health.
14 Of the appropriation for fiscal years 1999-2000, up to
the
15 sum of $1,400,000, and for fiscal year 2000-2001, up to the sum
16 of $3,859,000, shall be transferred to the department of human
17 services to be expended for the children's health insurance
18 program; provided that the amount of moneys to be transferred
19 shall not exceed the amount of moneys needed by the childrens
20 health insurance program.
21 SECTION 7. There is appropriated out of the Hawaii
tobacco
22 settlement special fund the sum of $3,611,189, or so much thereof
23 as may be necessary, for fiscal year 1999-2000, and the sum of
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1 $9,647,519, or so much thereof as may be necessary, for fiscal
2 year 2000-2001, to be deposited into the Hawaii tobacco
3 prevention and control trust fund.
4 SECTION 8. If any provision of this Act, or its
application
5 to any person or circumstance is held invalid, the invalidity
6 shall not affect other provisions or applications of the Act
7 which may be given effect without the invalid provision or
8 application, and to this end the provisions of this Act are
9 severable.
10 SECTION 9. Statutory material to be repealed is
bracketed.
11 New statutory material is underscored.
12 SECTION 10. This Act shall take effect on July 1,
1999;
13 provided that:
14 (1) The amendments made to sections 36-27 and
36-30, Hawaii
15 Revised Statutes, by this
Act shall not be repealed
16 when those sections are
reenacted on July 1, 2000,
17 pursuant to section 13 of
Act 216, Session Laws of
18 Hawaii 1997; and
19 (2) The amendments made to section 36-27, Hawaii
Revised
20 Statutes, by this Act shall
not be repealed when that
21 section is reenacted on
July 31, 2003, pursuant to
22 section 9 of Act 142,
Session Laws of Hawaii 1998.