SB2860

SECTION 1. The legislature finds that the emergency medical services special fund is a critical mechanism for supporting the delivery of timely, high-quality emergency medical services across the State. These services are essential to the health and safety of Hawaii's residents and visitors, particularly given the State's geographic isolation, rural communities, and reliance on coordinated emergency response systems of care.

The legislature further finds that the current statutory framework governing revenues deposited into the emergency medical services special fund does not adequately reflect modern emergency medical services operations, financing structures, or reimbursement models. Emergency medical services agencies today increasingly rely on billable revenue generated from the provision of medically necessary emergency care to sustain staffing, equipment, training, data systems, and system readiness.

The legislature recognizes that the emergency medical services system generates an annual cash deposit of approximately $30,000,000 from health insurance reimbursement into the state general fund for services provided in the counties of Hawaii, Kauai, and Maui. Aligning the emergency medical services special fund with contemporary, billable revenue-based funding mechanisms will promote fiscal sustainability, transparency, and accountability, while ensuring that funds generated through emergency medical services activities are reinvested directly into the emergency medical systems of care. Updating the revenue structure will strengthen the State's ability to maintain consistent service levels, address workforce challenges, and support continuous system improvements.

Accordingly, the purpose of this Act is to modernize the emergency medical services special fund by:

(1) Authorizing revenues derived from billable emergency medical services to be deposited into the special fund;

(2) Amending the composition and allowable uses of the special fund; and

(3) Establishing an annual cap on the special fund.

SECTION 2. Section 321-232, Hawaii Revised Statutes, is amended by amending subsection (a) and (b) to read as follows:

"(a) The department shall establish reasonable fees for services rendered to the public within the service area by the department, any county within the service area, or private agency under this part; provided that all revenues collected by the department and the respective counties pursuant to this section shall be deposited into the state general fund[,] and the emergency medical services special fund, except amounts necessary to provide for collection services for bad debt accounts. Fees required to be set by this section shall be established in accordance with chapter 91.

(b) No ambulance, community paramedicine, enhanced and expanded emergency medical services, or any other emergency medical services available from or under the authority of this chapter shall be denied to any person on the basis of the ability of the person to pay therefor or because of the lack of prepaid health care coverage or proof of such ability or coverage."

SECTION 3. Section 321-234, Hawaii Revised Statutes, is amended to read as follows:

"§321-234 Emergency medical services special fund. (a) There is established within the state treasury a special fund to be known as the emergency medical services special fund to be administered and expended by the department.

(b) The moneys in the special fund shall be distributed as follows:

(1) Beginning with fiscal year 2021-2022, $3,500,000 shall be distributed each fiscal year to a county operating a county emergency medical services system pursuant to part XI of chapter 46 for the operation of that system; and

(2) The remainder shall be distributed to the department for operating the system established pursuant to this chapter, including enhanced and expanded services, and shall not be used to supplant funding for emergency medical services authorized prior to July 1, 2004.

(1) No less than fifty per cent of the emergency medical services revenue collected for services provided pursuant to section 321-232;

(2) Fees remitted pursuant to section 249-31[~~, cigarette~~];

(3) Cigarette tax revenues designated under section 245-15[~~, interest~~];

(4) Interest and investment earnings attributable to the moneys in the special fund[~~, legislative~~];

(5) Legislative appropriations, [~~and grants,~~] including grants-in-aid; and

(6) Grants, donations, and contributions from private or public sources for the purposes of the fund, shall be deposited into the special fund.

(d) All unencumbered and unexpended moneys in excess of $45,000,000 remaining on balance in the special fund at the close of June 30 of each year shall lapse to the credit of the general fund.

(e) The emergency medical services special fund shall be used:

(1) By the department to support the continuing development and operation of a comprehensive state emergency medical system of care;

(2) To subsidize the documented costs for the comprehensive emergency medical services, including emergency ambulance, emergency air medical transport services, equipment, supplies, training, education, dispatch, communications and data systems, and public education of 911 emergency medical services; and

(3) Necessary administrative expenses, not to exceed five per cent of the total amount collected in the special fund any given year.

(f) Expenditures from the emergency medical services special fund shall be exempt from chapters 103D and 103F.

[~~(d)~~] (g) The department shall submit an annual report to the legislature no later than twenty days prior to the convening of each regular session that outlines the receipts of, and expenditures from, the special fund.

(h) The department shall adopt rules pursuant to chapter 91 to effectuate the purposes of this section."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2026.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2860
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII