The state Senate today rejected a bill that would have diverted $150 million from a Honolulu transit tax to help close the state's budget deficit.

The bill would have given the city the option to extend the tax surcharge for two years — to 2024 — and would have repaid the city with $250 million in bonds.

State Sen. Donna Mercado Kim, chairwoman of the Senate Ways and Means Committee, recommended that the bill be sent back to committee.

Kim told her colleagues that she did not want to do anything to jeopardize the city's rail project. She cited a letter of concern about the bill from U.S. Sen. Daniel K. Inouye, D-Hawaii.

The state House and Senate were moving out dozens of bills today in advance of the deadline on Thursday for bills to cross between chambers.

The House turned back a bill that would have extended the deadline for an environmental impact statement for Hawaii Superferry.

The law that allows Superferry to operate while the environmental review is being completed expires this summer.

The state Department of Transportation has said the review should be completed before the deadline, but there is some concern that environmentalists could sue to stop the project if the review is not finished by the cutoff.

The House, meanwhile, passed a bill that could lead to further caps on noneconomic damages in medical malpractice lawsuits against doctors in five specialties. A task force would recommend the caps.

The Senate moved out a bill that would restructure the state's ailing public hospital system. The bill would allow hospitals within the system to convert to nonprofit or private companies to become more financially competitive.