RELATING TO THE EMERGENCY MEDICAL SERVICES SPECIAL FUND.
HB1966 modernizes Hawaii’s Emergency Medical Services Special Fund. The bill would allow revenues from billable emergency medical services to be deposited into the fund, rather than relying on the current cigarette-tax-based allocation structure. It also updates the fund’s composition and permitted uses so the money can support the statewide EMS system, including ambulance and air medical services, equipment, supplies, training, education, dispatch, communications, data systems, and public education related to 911 EMS.
The bill preserves the existing requirement that EMS services not be denied based on a person’s ability to pay or lack of health coverage. It also keeps the annual county distribution of $3.5 million and directs the remaining funds to the Department of Health for system operations and related purposes. In addition, it sets a cap on the fund balance, limits administrative expenses to 5 percent, requires annual reporting to the Legislature, and exempts expenditures from state procurement and purchasing rules in chapters 103D and 103F, HRS.
A major fiscal change in the bill is the discontinuation of cigarette tax revenues to the EMS special fund beginning January 1, 2027. The bill amends the cigarette tax disposition statute to remove the EMS fund from future cigarette-tax allocations after that date, while preserving other health-related allocations such as cancer research, trauma, and community health centers. The measure also reflects the Legislature’s finding that EMS agencies increasingly depend on billable revenue and that the current framework no longer matches modern EMS financing.
The overall sentiment appears supportive and practical, with the bill advancing through committee with amendments and no recorded opposition in the available vote history. The discussion embedded in the bill text emphasizes fiscal sustainability, transparency, accountability, and reinvestment of EMS-generated revenue back into EMS operations. The tone suggests broad agreement that the funding structure should be updated to better match current service delivery and reimbursement realities.
The main point of contention is likely the funding shift itself: replacing a dedicated cigarette-tax stream with billable EMS revenue and changing how the special fund is financed and spent. That change could raise questions about revenue stability, the effect on the state general fund, and whether counties and the Department of Health will have sufficient and predictable resources. Another possible issue is the cap on fund balances and the exemption from procurement rules, which may draw scrutiny over oversight and spending flexibility.
The bill amends sections 321-232, 321-234, and 245-15 of the Hawaii Revised Statutes. It changes the EMS funding structure by authorizing billable EMS revenues to be deposited into the Emergency Medical Services Special Fund, revising the fund’s allowable uses, and ending cigarette-tax deposits to the fund after December 31, 2026. It also adds a cap on unencumbered fund balances above $45 million, limits administrative spending, and requires annual reporting and rulemaking by the Department of Health. These changes affect the Department of Health, county EMS systems, EMS providers, and the state’s cigarette-tax allocation scheme.
The available record suggests generally favorable sentiment. The Senate Health and Human Services Committee passed the bill with amendments, and the measure advanced to Ways and Means after a report was adopted and second reading was completed. The bill’s findings frame the proposal as a modernization effort to improve EMS financing, sustainability, and accountability, indicating support for updating the funding model rather than maintaining the existing cigarette-tax-based approach.
The likely areas of contention are fiscal and administrative. Shifting the EMS special fund away from cigarette-tax revenues could prompt concerns about whether billable EMS receipts will reliably replace the lost funding and how the change affects the state’s broader revenue picture. The bill’s cap on fund balances, the 5 percent administrative limit, and the exemption from chapters 103D and 103F may also be debated as issues of oversight, spending flexibility, and procurement accountability. No direct opposition is shown in the available vote history, but these are the most plausible pressure points.