2000 Volume 59
Developed by the
Committee on Suggested State Legislation
The Council of State Governments
The supplement is a compilation of ideas about how states will spend the money that they receive from the tobacco lawsuit. Due to the variety of ideas, the SSL committee chose to present viable and non-viable legislation in this document as well as enacted bills. The status of each item is the latest that SSL committee staff could obtain as of July 21, 1999.
I. Waiting to Exhale
II. Links to state legislation table
III. Abstracts of state legislation
a. Summary of Tobacco Settlement Agreement
b. Model Consent Decree
c. Model Statute
d. Strategic Contribution Awards - total payments to states - ranked by population and per capita
Waiting to Exhale
Weighing proposals to
spend $206 billion in tobacco settlement money.
Chester Hicks, Southern Regional Coordinator for The Council of State Governments
(updated July 1999)
Governors and legislators from
46 states are considering how to spend the $206 billion tobacco settlement pledged over
the next 25 years. Florida, Minnesota, Mississippi and Texas have separate agreements with
tobacco manufacturers to receive a total of $40 billion. As of late April, more than 400
bills had been introduced in states to deal with settlement money.
Two tobacco-growing states this spring agreed how to spend their money. Virginia, the nations fifth largest tobacco producer, became the first state to establish a formula for distributing money from the national settlement. Under the legislative formula, farmers will get half of the states $4 billion share and 10 percent will go to programs to discourage youth smoking. The proposal sailed through the General Assembly without a public hearing, and without a dissenting vote among the 140 lawmakers in the session that ended Feb. 28. The state will determine how to spend the remaining 40 percent next year. Lisa Myers Becker, a lobbyist for the American Heart Association, said, "a lot of my counterparts across the country dont understand why we only went for 10 percent. It was as much as we could have expected in a state like Virginia with our history with tobacco."
In North Carolina, lawmakers approved a bill channeling the states share of the settlement into a foundation and two trust funds. The foundation, set up in compliance with a court consent decree, would use the money to help communities hurt by the decline of tobacco. The foundation would receive half the money, or $2.3 billion, over 25 years. The two trust funds, one for tobacco farmers and quota holders and another for health programs, would each get a quarter of the settlement, or about $1.15 billion. In a news conference, House Speaker Jim Black said tobacco farmers would come to see the benefits of the bill. Money for farmers will be set aside for education, transition to alternative crops and general hardship. Health advocates, who wanted more money to fund community health programs, said that they could live with the compromise because there was a chance they would not get anything otherwise.
Most state proposals call for
establishing trust funds on everything from childrens health care to water
development. "The trust fund approach seems to be pretty popular because the amount
is up in the air," said Joy Johnson Wilson, director of the health committee for the
National Conference of State Legislatures. "(With) a trust fund, youre not
creating anything new, but it gives you a place to put the money."
Louisiana considered proposals for a Tobacco Settlement Trust Fund, a Louisiana Smoke-Free Health Fund, and a fund in the state Department of Treasury for each public school district. Some bills would put part of the money in a trust fund and spend only the earnings. State Commissioner of Administration Mark Drennen expects the state to divide the money among a trust fund, research and an anti-tobacco program. "But, how much will depend on what happens with all our other revenue sources," he said.
A 1999 Utah law created a restricted account within the general fund to receive all funds from the settlement. Funds in the account may only be used as directed by the Legislature through appropriation.
Also in the West, Wyoming created a trust fund similar to Utahs. Wyomings new fund will accept revenue from the tobacco settlement as well as other funds. Only the Legislature can appropriate the trust funds and then only for purposes related to the improvement of public health.
Hawaii's Tobacco Prevention and Control Trust Fund will be "a separate fund of a nonprofit entity having a board of directors and qualifying under section 501(c)(3) of the Internal Revenue Code of 1986, as amended, into which shall be deposited twenty-five percent of moneys received" (see Hawaii SB 1034, Act 304 of 1999).
Nebraska established a trust fund in 1998, before the settlement was reached. It started the Excellence in Health Care Trust Fund with some of the states Medicaid money. The legislation limited spending to annual interest on the principal.
North Dakota House Majority Leader John Dorso backed a new law that created a Water Development Trust Fund. The trust fund will receive tobacco dollars until there is enough money to pay the interest and principal on any bonds sold to finance state water projects and make such bonds more marketable. The law allocates 10 percent of the settlement to fund health programs, 45 percent toward water development and 45 percent toward public schools.
Special boards and committees
Kansas adopted legislation (H
2558) that reserves the tobacco settlement money in a trust fund for spending on children.
The new law requires that settlement money be used to provide additional funding for
programs and other purposes beneficial to the physical and mental health, welfare, safety
and overall well-being of children in Kansas. The first transfer to the fund of $45
million will take place on July 1, 1999, or as soon thereafter as money is available.
A 1999 West Virginia law created the State Tobacco Growers Settlement Board. The board reached a settlement with the leading U.S. tobacco product manufacturers for the exclusive benefit of state tobacco growers. The board also will determine how funds allocated to the national tobacco community trust will be distributed among state tobacco growers to compensate them for adverse effects of the settlement. Along with the creation of the board, West Virginia created a special settlement fund for the deposit of 50 percent of the tobacco money appropriated by the Legislature for Medicaid and other health-related programs.
Louisianas Revenue Estimating Conference approved using up to $110 million from the tobacco settlement for balancing next years state operating budget. However, the action by the conference, comprised of top state officials and a college economics professor, did not relieve any pressure on lawmakers in deciding on next years $13.2 billion budget.
Gov. Mike Huckabee plans to call a special session this summer to discuss how to spend Arkansas $1.62 billion settlement. "I think all of us feel a real sense of responsibility to put something in motion that addresses what is a long-term problem and a long-term solution to get out of it," he said. Also, Huckabee wanted the House and Senate interim committees on Public Health, Welfare and Labor to meet after the end of the legislative session to develop a specific, long-term plan for spending the money.
Several states will receive
extra funds for their role in the settlement with the tobacco industry. However, the
states will not begin collecting the money until 2008, and it will end in 2017. A panel of
three former attorneys general from California, Oregon and Tennessee decided how to divvy
up the newly created $8.6 billion fund based on the extent of a states contribution
to the litigation or resolution of the lawsuit.
New Yorks share is the largest at $471 million, and Californias is next at $445 million. Other states that will receive the bonus include Arizona, Connecticut, Hawaii, Maryland, Oklahoma, Vermont and Washington.
In addition to their original share of the settlement windfall, tobacco-growing states will receive an additional $5.15 billion trust fund from the tobacco industry. According to the Associated Press, these states include Kentucky, Maryland, North Carolina, Pennsylvania, South Carolina, Tennessee and Virginia. The distribution plan will use the 1998 basic quota system set by the U.S. Department of Agriculture, according to North Carolina Attorney General Mike Easley and other officials. "Its the most equitable way and what our farm groups want here. All states come out pretty much even with that," Easley said.
North Carolina, the largest flue-cured tobacco-state, and Kentucky, the top burley tobacco producer, would receive the biggest shares under the proposal. The fund was created to aid tobacco farmers expected to be squeezed by the higher cigarette prices and curbs on tobacco promotion that are a part of the $206 billion multistate settlement.
Although specifics have not been nailed down, states have taken the windfall settlement seriously. All concerned groups (including farmers and health advocates) have given their recommendations and state officials have responded. As payments from the overall settlement start next year, we will see how states further divide the proceeds.
Finally, in May 1999 Congress passed Title I, Chapter 11; Sec. 3031 of H.R. 1141 (Emergency Supplemental Appropriations) to amend the Social Security Act to prohibit treatment of funds recovered or paid from tobacco companies to a state, in a comprehensive or individual state settlement or court judgment, as an overpayment under Medicaid. The provision allows states to use such funds for any expenditures they deem appropriate, but prohibits certain payments for administrative expenses incurred in pursuing such tobacco litigation. The bill was signed by the President on May 21, 1999.
State Legislation - Links to Full-Text
* This symbol indicates that the full text of this legislation is available in the paper copy of this supplement. Readers should note that some of the legislation listed below could easily fit under more than one category. The status of each bill is the latest information that CSG could obtain as of 07/21/99.
|AID TO TOBACCO FARMERS|
|Tuition Assistance||Connecticut||PB 537||1999|
|Tobacco Community Development Board||Georgia||HB 872||1999|
|Grants to Develop New Commodities or Subsidize Farm Losses Due to Reduced Tobacco Production||Indiana||HB 1759||1999|
|Grants to Owners of Tobacco Production Rights||Indiana||HB 1454||1999|
|*Tobacco Growers Assistance and Diversification||Kentucky||SB 247||1998|
|Exempt Tobacco Settlement Payments||North Carolina||SB 794||1999|
|Tobacco Funds for Alternatives Research||North Carolina||HB 479||1999|
|Family Farm Relief Fund||South Carolina||GB 309||1999|
|Tobacco Indemnification and Community Revitalization Commission and Fund, Settlement Fund; Agriculture||South Carolina||GB 714||1999|
|Scholarships for Tobacco Farmers||Tennessee||HB 803||1999|
|*Tobacco Indemnification and Community Revitalization Commission and Fund||Virginia||Chapter 880||1999|
|Tobacco Growers Settlement Board||West Virginia||SB 697||1999|
|*State Debt Reduction Fund||New York||S 1217||1999|
|Commission to Study Paying Down State Debt||Rhode Island||S 284||1999|
|Children First Program||Alabama||HB 92||1999|
|Endowment for Youth Fund||Kansas||Senate Substitute for HB 2558||1999|
|Education Quality Trust Fund||Louisiana||HB 1331||1998|
|Tobacco Use Prevention and Control Foundation||New York||A 6897||1999|
|Recruiting and Training Faculty||Oregon||S 1105||1999|
|Special Education, Recreation Trails and Cancer Research||Pennsylvania||HB 1326||1999|
|*Youth Smoking Prevention Fund||South Carolina||SB 894||1999|
|Secondhand Smoke||Virginia||HB 2631||1999|
|Tobacco Prevention and Control||Washington||Senate Substitute Bill 5516||1999|
|HEALTH CARE (GENERAL)|
|School Nurses||Arkansas||SB 750||1999|
|Pharmacy Access Fund||Louisiana||HB 898||1999|
|Rural Health Care Initiatives||Louisiana||SB 374||1999|
|Smoke-free Health Fund||Louisiana||HB 362||1999|
|Tobacco Prevention, and Local Public Health Endowment, Medical Education Endowment||Minnesota||Chapter 245||1999|
|*Health Care Trust Fund||Mississippi||HB 519||1999|
|Basic Breathing Screening||Missouri||HB 1029||1999|
|*Excellence in Health Care Trust||Nebraska||LB 324||1999|
|Hospital Charity Care Subsidy Payments||New Jersey||SB 1839||1999|
|Health Programs||Oregon||HB 2007||1999|
|Interstate Compact for Cancer Research||Pennsylvania||HR 188||1999|
|Funds for Education, Children and Public Health and Emergency Medical Services and Trauma||Texas||HB 1676||1999|
|Emergency Medical Services||Washington||SB 5755||1999|
|*Fund for Medically Uninsured and Under-served People||California||AB 887||1999|
|Connecticut Health Care Insurance Act||Connecticut||Substitute HB 7030||1999|
|Health Care Benefits for the Uninsured||Illinois||HB 234||1999|
|*Tobacco Settlement Fund Allocations to Local Governments||California||AB 112||1999|
|MASTER SETTLEMENT AGREEMENT|
|Sanctions for Manufacturers that Do Not Participate in the Tobacco Master Settlement Agreement||California||SB 822||1999|
|Implementing the Tobacco Master Settlement Agreement||Idaho||Chapter 7||1999|
|* Tobacco Manufacturers Responsibility Act||Utah||HB 132||1999|
|*Treatment for Mental Disabilities||Pennsylvania||HB 1481||1999|
|Community Mental Health Centers||Rhode Island||H 6215||1999|
|Retrofitting Hospitals to Meet Seismic Safety Standards||California||AB 1227||1999|
|*Elderly Affairs||Florida||S 1968||1999|
|War Veterans Homes||Louisiana||HB 2107||1999|
|Water Development Trust Fund||North Dakota||HB 1475||1999|
|Funds for Infrastructure Development||Texas||SB 1695||1999|
|*Income Tax Credits||Georgia||HB 204||1999|
|Return Proceeds to Taxpayers||Massachusetts||SB 1635||1999|
|Reduction of Property Tax||Washington||SB 5426||1999|
|TRUST FUNDS/ACCOUNTS (GENERAL)|
|Tobacco Settlement Special Fund (Rainy Day Funds)||Hawaii||SB 1034||1999|
|Cigarette Restitution Fund||Maryland||Chapter 173||1999|
|*Non-Profit Corporation to Distribute State Tobacco Settlement Funds||North Carolina||Session Law 2||1999|
|Tobacco Settlement Permanent Trust Account Administration||Texas||HB 1161||1999|
|Tobacco Coordination Provisions||Utah||HB 375||1999|
|Tobacco Settlement Account||Utah||SB 173||1999|
|Tobacco Settlement Trust Fund||Wyoming||Enrolled Act 87||1999|
State Legislation - Abstracts
AID TO TOBACCO FARMERS
Status: died in committee in April 1999.
This bill would amend state law to establish a tuition assistance program for students who have a B average or higher to attend state institutions of higher education and to fund the program with money from the tobacco settlement.
Tobacco Community Development Board
Status: signed into law as Public Act 361 in April 1999.
This Act creates the Georgia
Tobacco Community Development Board and authorizes the board to determine an equitable
allocation of private trust funds among tobacco growers and tobacco quota owners. It
authorizes the board to certify to private trustees instructions for payment of private
trust funds to eligible tobacco growers and tobacco quota owners.
Grants to Develop New Commodities or Subsidize Farm Losses Due to Reduced Indiana Tobacco Production
Status: died in committee in January. 1999.
This bill appropriates from the tobacco lawsuit settlement $20,000,000 for each of the next 25 years to the department of agriculture to make grants to develop new farm commodities in tobacco producing counties or to subsidize tobacco farmers for losses due to reduced tobacco production.
Grants to Owners of Tobacco Production Rights
Status: died in committee in January 1999.
This bill appropriates a total of 30 percent of the tobacco lawsuit settlement for the next 25 years.Twenty percent is appropriated to the department of agriculture to make grants to those that own rights to tobacco production on January 1, 1999. Ten percent is appropriated to Purdue University for development of new crops to replace tobacco.
Tobacco Growers Assistance and Diversification
SB 247 (enrolled version)
Status: signed into law by Governor on April 14, 1998.
This Act establishes in the
State Treasury a permanent and perpetual fund to be known as the "Agricultural
Diversification and Development Fund" to which shall be credited any increase in the
cigarette excise tax subsequent to the effective date of this Act; gifts; bequests;
endowments; grants from the United States government, its agencies and instrumentalities;
any funds from the tobacco settlement agreement or related federal legislation for tobacco
farmers or tobacco-dependent communities specifically appropriated to this fund by the
General Assembly from the fund created in Section 3 of this Act; and funds received from
any other sources, public or private. The fund shall be administered by the Agricultural
Diversification and Development Council created under Section 1 of this Act.
This Act establishes in the State Treasury a permanent and perpetual fund to be known as the "Tobacco Settlement Agreement Fund" to which shall be credited any funds designated to the Commonwealth from the tobacco settlement agreement or related federal legislation. Any funds designated to the Commonwealth from the settlement agreement or related federal legislation shall not be expended until appropriated by the General Assembly. The General Assembly's highest priority for distributing any funds from this account shall be for tobacco farmers and tobacco-impacted communities and health-related areas.
The money in the agricultural diversification and development fund under Section 2 of this Act shall be distributed to one (1) or more of the following:
(1) The state's owners of the tobacco basic quota based on the percentage of each owner's tobacco basic quota compared to the state's total tobacco basic quota as certified by the United States Department of Agriculture;
(2) The state's individuals or entities growing tobacco based on the percentage of tobacco basic quota being raised by the individual or entity, compared to the state's total tobacco basic quota as certified by the United States Department of Agriculture;
(3) The Department of Agriculture to be used for marketing, agricultural diversification, and development as provided in Section 6 of this Act;
(4) The Purchase of Agricultural Conservation Easement Corporation created in KRS 262.900 to 262.920;
(5) The University of Kentucky and Kentucky State University extension service programs and the University of Kentucky College of Agriculture to carry out the duties and responsibilities as provided in Section 7 of this Act; and
(6) Owners of tobacco quotas, tobacco growers, and tobacco-dependent communities to be determined by the Agricultural Diversification and Development Council.
Exempt Tobacco Settlement Payments
Status: referred to Judiciary I Committee in April 1999.
This bill exempts payments under phase I and phase II of the tobacco settlement agreement from execution except for debts incurred for farming operations in calendar years 1999 and 2000.
Tobacco Funds for Alternatives Research
Status: assigned to Education Subcommittee in April 1999.
This bill appropriates tobacco settlement funds for university-based research on alternatives to tobacco for farmers.
Family Farm Relief Fund
General Bill 309
Status: pending in Agriculture and Natural Resources Committee as of 07/20/99. This bill will probably carry over into the second part of the current legislative session, which reconvenes in January 2000.
This bill creates a Special Family Farm Relief Fund to receive a third of South Carolina's settlement proceeds derived from the tobacco litigation settlement to be utilized to ease the transition for small farmers from tobacco farming to some other form of agricultural staple.
Tobacco Indemnification and Community Revitalization Commission and Fund, South Carolina Settlement Fund; Agriculture
General Bill 714
Status: pending in Senate Agriculture and Natural Resources Committee as of 07/20/99. This bill will probably carry over into the second part of the current legislative session, which reconvenes in January 2000.
This bill establishes the
Tobacco Indemnification and Community Revitalization Commission and Fund. It provides for
the distribution of the money received by the state pursuant to the Master Settlement
Agreement with tobacco product manufacturers and amends state law to establish the South
Carolina Tobacco Settlement Foundation.
The bill directs that the commission should use the money in the fund to indemnify tobacco growers and warehouses from the adverse economic effects of the Master Settlement Agreement and to revitalize tobacco dependent communities.
Scholarships for Tobacco Farmers
Status: introduced in House and referred to Finance Committee in February 1999. The Senate version (SB 1499) was left in Senate Finance Committee as of 07/20/99. The Senate version will carry over to the next legislative session.
This bill allocates a minimum of $1,000,000 annually from the funds received by the state pursuant to the Attorneys General master tobacco settlement agreement for the term of such agreement, to a scholarship fund for active tobacco farmers and their immediate family members. The money allocated to the scholarship fund shall be used exclusively for tuition and ancillary expenses associated with obtaining a postsecondary education. The Commissioner of Agriculture is authorized to promulgate rules and regulations to effectuate the purposes of the bill.
Tobacco Indemnification and Community Revitalization Commission and Fund
Status: CH 880, Laws of 1999
This Act establishes the Tobacco Indemnification and Community Revitalization Commission to administer funds received by the Tobacco Indemnification and Community Revitalization Fund. The Fund shall receive 50 percent of the funds received by the Commonwealth pursuant to the tobacco Master Settlement Agreement. The Commission shall use the money in the Fund to make payments to tobacco farmers and for projects in tobacco dependent communities. The bill also creates the Virginia Tobacco Settlement Fund, to receive 10 percent of the funds received by the Commonwealth under the Master Settlement Agreement. This Fund shall be administered by the Virginia Tobacco Settlement Foundation. This Fund will be used to finance efforts to limit the use of tobacco products by minors.
Tobacco Growers Settlement Board
SB 697 (enrolled version)
Status: enacted into law in March 1999.
This Act creates a "state
tobacco growers settlement board" consisting of three members: the governor,
the attorney general and the commissioner of agriculture or their designees. The duties
and responsibilities of the state tobacco grower board include:
(a) The consummation of a settlement with leading United States tobacco product manufacturers for the exclusive benefit of state tobacco growers;
(b) The execution of all necessary written agreements relative to the national tobacco community trust to ensure state tobacco growers receipt of funds directly from the trust;
(c) Consultation with tobacco growers within the state in order to determine how funds allocated by the national tobacco community trust shall be distributed among state tobacco growers to compensate them for the adverse effects of decreased consumption, demand and price for cigarettes;
(d) The submission of a plan to the national tobacco community trust identifying state tobacco growers and the distribution of trust funds to state tobacco growers; and
(e) The certification of instructions annually to the national tobacco community trust regarding distribution of funds from the trust directly to the state tobacco growers during the twelve year payment period, beginning in 1999.
State Debt Reduction Fund
Status: amended and pending in Finance Committee as of 07/20/99.
The bill establishes the New York State Tobacco Settlement Debt Reduction Fund. It provides that such fund shall consist of all money obtained by the state from tobacco settlements negotiated with the tobacco industry or the federal government and requires all such money to be used for the sole purpose of reducing the general obligation indebtedness of the state.
Commission to Study Paying Down State Debt
Status: died in Senate Finance Committee in March 1999.
This resolution creates a nine (9) member special legislative commission whose purpose it shall be to study the feasibility of using the tobacco settlement proceeds to pay down the state debt and who shall report back to the Legislature no later than February 2, 2000 and whose life shall expire on April 2, 2000.
Children First Program
HB 92 (enrolled version)
Status: signed into law as 98-382
This Act establishes the
Children First Trust Fund within the State Treasury, contingent upon the receipt of
tobacco revenues, as defined, and provides for the management and administration of the
fund by the Alabama Juvenile Justice Coordinating Council. The Act appropriates the fund
for allocations to the Department of Public Health, the State Board of Education, the
Department of Human Resources, the Children's Trust Fund, the State Multiple Needs
Children's Fund, the Department of Mental Health and Mental Retardation, the
Administrative Office of Courts, the Department of Youth Services, the Department of
Public Safety, the Alcoholic Beverage Control Board, and the Department of Forensic
Sciences. The Act provides for oversight by the Permanent Joint Legislative Oversight
Committee of the Children First Trust Fund.
This Act creates and continuously appropriates the Children First Trust Fund within the State Treasury, under the management, administration, and oversight of the Alabama Juvenile Justice Coordinating Council and the permanent Joint Legislative Oversight Committee of the Children First Trust Fund, to provide allocations for prevention, treatment, education, rehabilitation, and punishment programs for children.
The fund would consist of revenues received from additional taxes levied on tobacco products pursuant to an unspecified Act of the 1998 Regular Session.
This Act annually allocates 21 percent of the fund to the Department of Public Health for the Children's Health Insurance Program and for education programs for tobacco control among children.
This legislation annually allocates 20 percent of the fund to the State Board of Education for the operation of alternative schools and for the administration of the School Safety Enhancement Program. Each local board of education would be required to submit an alternative school plan to the State Board of Education. The State Board of Education would review the local programs and submit an annual report regarding the effectiveness of the programs to the council.
The law annually allocates 18 percent of the fund to the Alabama Department of Human Resources for distribution to increase foster care basic monthly maintenance rates, to Alabama Child Care Management Agencies to fund certain child care programs, to provide funds for adoption assistance, to increase basic rates and fund services through licensed shelter care and residential foster homes, and to recruit and maintain additional therapeutic foster homes.
This Act annually allocates 4 percent of the fund to the Children's Trust Fund for distribution to fund grants for programs of home visitation for prevention of abuse and neglect of newborn infants until they reach school age and to fund grants for certain other community-based programs.
This law annually allocates 4 percent of the fund to the State Multiple Needs Children's Fund to be allocated by the Alabama Children's Services Facilitation Team for mental health treatment and other rehabilitation services for multiple needs children.
The Act annually allocates 2 percent of the fund to the Alabama Department of Mental Health and Mental Retardation to provide services to children and families in crisis.
This Act annually allocates 8 percent of the fund to the Administrative Office of Courts to unify and upgrade the juvenile justice system and improve the delivery of services to children who have been referred to the juvenile court by converting certain juvenile probation officers and support staff to state employee status pursuant to the Juvenile Probation Services Improvement Act, and would further provide additional juvenile probation officer positions. This law requires an annual report to be filed jointly by each presiding juvenile judge and chief probation officer regarding the services provided by the juvenile probation staff to the children under their supervision with the Administrative Office of Courts.
This law annually allocates 15 percent of the fund to the Department of Youth Services to fund secure beds, community-based alternatives to commitment, including boot camps, wilderness programs and detention subsidies, and would provide for an annual accounting of the distribution of funds to be filed with the council.
The legislation annually allocates 5 percent of the fund to the permanent Joint Legislative Oversight Committee on Community Services Grants for the awarding of Alabama community service grants to each Senate and House district for use in identified Children First programs.
This Act annually allocates 1 percent of the fund to the Alcoholic Beverage Control Board for youth access enforcement.
This Act annually allocates 2 percent of the fund to the Office of Prosecution Services, to fund juvenile court prosecutors.
Endowment for Youth Fund
Senate Substitute for HB 2558
Status: enacted into law in May 1999.
This Act establishes in the
state treasury the Kansas endowment for youth fund which shall constitute a trust fund and
shall be invested, managed and administered in accordance with the provisions of this Act
by the board of trustees of the Kansas public employees retirement system.
The law directs that all of the money received by the state pursuant to the tobacco litigation settlement agreements entered into by the attorney general on behalf of the state of Kansas, or pursuant to any judgment rendered, regarding the litigation against tobacco industry companies and related entities, shall be deposited in the state treasury and credited to the Kansas endowment for youth fund. All such money shall constitute an endowment which shall remain credited to the Kansas endowment for youth fund except as provided in this section or in section 2 and amendments thereto for transfers to the children's initiatives fund. Expenditures may be made from the Kansas endowment for youth fund for the payment of the operating expenses of the Kansas children's cabinet and the board of trustees, including the expenses of investing and managing the money, which are attributable to the Kansas endowment for youth fund.
The legislation directs that all money credited to the Kansas endowment for youth fund shall be invested to provide an ongoing source of investment earnings available for periodic transfer to the children's initiatives fund in accordance with this Act. All expenditures from the Kansas endowment for youth fund shall be made in accordance with appropriation acts upon warrants of the director of accounts and reports issued pursuant to vouchers approved by the chairperson of the board of trustees of the Kansas public employees retirement system.
Education Quality Trust Fund
Status: died in committee in May 1999.
Present law establishes the Louisiana
Education Quality Trust Fund as a permanent trust fund within the state treasury. Sources
of deposits into this fund include certain federal revenues associated with mineral
production and leasing activity on the Outer Continental Shelf, plus interest and other
earnings on such deposits. Money in the trust fund is not available for appropriation.
This proposed law retains present law and provides that of the money received by the state from the Master Settlement Agreement executed November 23, 1998, and approved by consent decree and final judgment entered in the case Richard P. Ieyoub v. Philip Morris, Incorporated, et al., No. 98-6473 on the docket of the 14th Judicial District for the parish of Calcasieu, state of Louisiana, (Settlement Agreement), after allocation of funds to the Bond Security and Redemption Fund and the Children's Health Insurance Program Support Fund, 50 percent of the funds remaining from any Settlement Agreement revenues from shall be deposited in and credited to the Louisiana Education Quality Trust Fund. Proposed law provides for establishment of the Tobacco Settlement Fund, hereinafter the "fund," as a special fund in the state treasury.
It also provides that the source of the money deposited into the fund shall be 50 percent of money remaining from amounts received by the state under the Settlement Agreement, after allocation of money received from such source to the Bond Security and Redemption Fund and the Children's Health Insurance Program Support Fund. Interest earnings associated with investment of the fund shall be deposited in and credited to the fund.
This proposed law authorizes appropriations from the fund for the following purposes:
(1) No more than 40 percent for the provision of medical treatment for citizens with tobacco-related illnesses.
(2) No more than 40 percent for educational and promotional efforts for the cessation and prevention of tobacco use.
(3) No more than 20 percent for counter-marketing to discourage tobacco use, for enforcement of laws relating to tobacco products, and for analysis of the results of efforts supported by expenditures from the fund.
This proposed law prohibits use of money appropriated from the fund for displacing, replacing, or supplanting appropriations from the state general fund or any other source for any of these specified purposes or activities.
Tobacco Use Prevention and Control Foundation
Status: amended and pending in Codes Committee as of 07/20/99.
This bill establishes a tobacco use prevention and control foundation to serve as an expert, independent entity to undertake, promote and administer programs and activities to prevent tobacco use among young people and to reduce tobacco use among all populations as rapidly as possible.
Recruiting and Training Faculty
Status: pending in Ways and Means Committee as of 07/20/99.
This bill directs the Oregon Health Sciences University Board of Directors to enter into an agreement with a community foundation to create an Oregon Health Sciences University Intellectual Capital Fund. It specifies that fund may be used for recruiting and retaining faculty who conduct research in specified areas. It transfers interest on money received by state from Master Settlement Agreement of 1998 to Oregon Health Sciences University public corporation.
Special Education, Recreation Trails and Cancer Research
Status: pending in House Appropriations Committee as of 07/20/99.
This bill requires that the General Assembly appropriate a third of the tobacco settlement money for for school funding for special education reimbursement, a third for Open Space and Greenway Trails, and a third to cancer research facilities and substance abuse treatment facilities.
Youth Smoking Prevention Fund
Status: pending in Senate Medical Affairs Committee as of of 07/20/99. This bill will probably carry over into the second part of the current legislative session, which will reconvene in January 2000.
This legislation allocates a
percentage of the money the state will receive under the Master Settlement Agreement to
fund youth smoking prevention efforts. It establishes a grant program to be administered
by an independent Youth Smoking Prevention Commission to fund such prevention efforts,
including anti-smoking media campaigns directed at youth, school and community-based youth
education and development programs, and increased enforcement and education of youth
The bill provides that a Commission must develop a State Plan for Youth Smoking Prevention to include criteria for evaluating grant requests as well as identifying the types of programs eligible for funding. Such programs, at a minimum, include the 4 prevention efforts mentioned above. The bill requires funding for an annual statewide student-based survey to measure cigarette use and behaviors towards cigarette use by students. In addition, reports by grantees and the Commission must be provided for ongoing monitoring and evaluation of the success of the program.
Status: died in committee.
This bill requires any public or private entity utilizing any money received by the Commonwealth pursuant to the settlement agreement with tobacco product manufacturers, as a condition to receiving such funds, to establish and maintain policies to support the reduction of tobacco use and reduce exposure to secondhand smoke. It declares that the state board of health shall establish criteria for determining whether an entity's policies support the reduction of tobacco use and reduce exposure to secondhand smoke and monitor the distribution of such money to ensure that the recipients of such funds are in compliance with the provisions of this section.
Tobacco Prevention and Control
Senate Substitute Bill 5516
Status: passed Senate in March 1999. Returned to Senate Rules in April 1999. This bill will carry over to the 2000 session.
This bill creates a Tobacco
Prevention and Control Program within the state department of health. The program is
administered in consultation with a Tobacco Prevention and Control Advisory Board
consisting of 18 members including: the Attorney General, two members from the House of
Representatives and two members from Senate, one member from the Governor's policy staff,
two members representing populations at risk for tobacco use, three members of a
nongovernmental tobacco control group, a tribal representative, two members under age 18,
two members from the local public health community, one representative from the Department
of Health and a designee from the Office of the Superintendent of Public Instruction.
The department must develop a sustainable, long-term, comprehensive tobacco control program that integrates public education, cessation, school and community programs, enforcement measures against illegal tobacco sales and a mechanism for ongoing monitoring and evaluation.
The department must conduct an inventory of current programs, use the public health system, conduct research on programs elsewhere with high success rates and include long-term outcome measures. The department must develop a plan to increase access to smoking cessation programs for high-risk groups, including pregnant women and adults. The department must develop a plan for reducing access to tobacco products on Indian reservations.
The department must report back to the Legislature by December 1, 1999, on the initial phase of the plan with projected expenditures through June 30, 2001. A second report is due on September 30, 2000, with long range plan and expenditures for tobacco control. The Tobacco Prevention and Control Advisory Board is directed to assist the secretary in developing, selecting and evaluating strategies for tobacco prevention and control efforts that are administered by the program. The Attorney General or designee serves as chair of the board for the initial two-year term. Thereafter the board selects a chair from among its members.
HEALTH CARE (GENERAL)
Status: died in committee.
This bill directs that money from a Tobacco Settlement Trust fund can be used for grants to schools to provide school nurses to meet the nurse to student ratio of the Department of Education.
Pharmacy Access Fund
Status: died in committee in May 1999.
Present law creates the
Children's Health Insurance Program Support Fund and provides for the disposition of any
money received by the state as a result of any Act of Congress implementing a tobacco
industry settlement, or as a result of any settlement or judgment related to same. It
provides for the use of up to $10,000,000 per year of such money to the degree to which
the funds are allowed under the Act of Congress, agreement, judgment or settlement to be
used to support health insurance coverage for children. It provides that such funds used
to support health insurance coverage for children will be deposited by the treasurer into
the Children's Health Insurance Program Support Fund.
This proposed law retains present law and creates the "Pharmacy Access Fund," hereinafter the "fund," as a special fund within the state treasury. It provides that the source of money in the fund shall be money received by the state as a result of the Master Settlement Agreement (tobacco settlement). It requires that $25,000,000 of such tobacco settlement money remaining each year after the required deposit of money into the Bond Security and Redemption Fund and the Children's Health Insurance Program Support Fund (R.S. 46:977) be deposited into the Pharmacy Access Fund.
The proposed law provides that money in the fund are available for appropriation by the Legislature exclusively for the support and provision of outpatient pharmacy services for indigent or needy citizens of Louisiana through the institutions of the healthcare services division of the Louisiana State University Medical Center. It further provides that any money remaining in the fund at the end of the fiscal year shall remain in the fund. Money in the fund shall be invested by the treasurer in the same manner as the money in the state general fund and interest earned shall be credited to the fund.
The proposed law authorizes the chancellor of the health care services division of the Louisiana State University Medical Center to set the eligibility criteria for participation in the pharmacy program supported by the fund.
Rural Health Care Initiatives
Status: died in committee in May 1999.
Present law requires the
Department of Health and Hospitals (DHH) to establish primary health care clinics in each
of the rural parishes throughout the state upon the availability of 100 percent federal
funds and to promulgate rules to implement present law in accordance with the APA.
Proposed law requires the establishment of pilot programs of rural primary health care clinics, rural health care initiatives, and health initiatives in medically under-served areas from a portion of money received by the state each year from the tobacco settlement.
Effective upon signature of the governor or lapse of time for gubernatorial action, but not until the passage of a constitutional amendment authorizing the expenditure of tobacco settlement fund for use in rural health care initiative and medically under-served areas.
A committee amendment changes the bills purpose from establishing primary health care clinics in rural parishes to establishing pilot programs of rural primary health care clinics, rural health care initiatives and health initiatives in medically under-served areas.
Smoke-free Health Fund
Status: died in committee in May 1999.
This proposed constitutional
amendment provides for establishment of the Tobacco Settlement Trust Fund, (Trust Fund),
as a special permanent trust fund in the state treasury, as well as the Louisiana
Smoke-free Health Fund, (Health Fund), as a special fund in the state treasury.
The constitutional amendment provides that the source of money deposited into these funds shall be money received by the state from the Master Settlement Agreement executed November 23, 1998, and approved by Consent Decree and Final Judgment entered in the case Richard P. Ieyoub v. Philip Morris, Incorporated, et al., No. 98-6473 on the docket of the 14th Judicial District for the Parish of Calcasieu, State of Louisiana, (Settlement Agreement). It provides that after allocation of money received from the Settlement Agreement to the Bond Security and Redemption Fund, the treasurer shall deposit in and credit to the Trust Fund 25 percent of such settlement proceeds, with the remaining 75 percent of settlement proceeds being deposited in and credited to the Health Fund. This allocation of Settlement Agreement proceeds may only be changed by law enacted by two-thirds vote of each house of the Legislature.
The amendment provides that dividend income, interest earnings, and realized capital gains associated with investment of the Trust Fund and the Health Fund shall be deposited in and credited to the respective funds. Once the balance of the Trust Fund reaches $2 billion, then future Settlement Agreement proceeds will cease to be deposited into the Trust Fund, and will instead be deposited into and credited to the state general fund, with dividend and interest income and realized capital gains on investment of the Trust Fund credited to the Health Fund. The state treasurer is required to invest the money in the Trust Fund, up to 35 percent of which may be invested in stock and procedures for investment of both funds shall be provided by law.
This proposed constitutional amendment prohibits appropriation from the Trust Fund. Appropriations from the Health Fund may be made for expenses incurred in the investment and management of the Trust Fund and money available in the Health Fund may be appropriated annually for the following purposes:
(1) No more than 60 percent for the provision of grants for research by Louisiana universities for research centered on cancer, genetics, and public health and for the direct provision of treatment for citizens with tobacco-related illnesses.
(2) No more than 30 percent for the direct provision of health care and health services for children.
(3) No more than 10 percent for support of educational efforts for prevention of tobacco usage by children and for enforcement of laws relating to the sale and usage of tobacco products.
It prohibits money appropriated from the Health Fund from being used in displacing, replacing, or supplanting appropriations from the state general fund for any of these specified purposes or activities.
The proposed amendment would be submitted to the voters at the gubernatorial primary election in 1999.
Tobacco Prevention, and Local Public Health Endowment, Medical Education Minnesota Endowment Article 11, Chapter 245 of the 1999 Omnibus Health & Human Services Bill
Status: signed into law on May 25, 1999.
Article 11 of the 1999 Omnibus
Health & Human Services Act sets aside $968 million in tobacco settlement proceeds
Minnesota will receive by 2001 and creates two endowments. Interest earned from the
endowments, up to 5 percent, will be available for tobacco prevention and other vital
public health efforts. The principal is left untouched.
The larger endowment - Tobacco Prevention and Local Public Health Endowment - will be funded with $590 million, or 61 percent of the total available. Of this, interest earnings from $395 million, projected to be approximately $20 million per year by 2003, will go for statewide tobacco prevention initiatives directed at youth. Local Public Health is funded at $195 million. Interest earnings from this amount, projected to be approximately $10 million per year, will be divided evenly between: local prevention efforts focusing on tobacco in conjunction with other high-risk behaviors facing youth; and grants to community health boards for youth health promotion and prevention activities which are non-tobacco related.
The Medical Education Endowment is funded with the remaining $378 million, or 39 percent of the total. A portion of the interest earned will be used to help fund the clinical training of medical health professionals at clinical sites throughout the state. The remaining interest earnings will be used to help fund the University of Minnesotas Academic Health Center, which includes colleges and schools in the fields of medicine, nursing, dentistry, pharmacy and public health, as well as the School of Medicine in Duluth.
Health Care Trust Fund
Status: enacted into law in April 1999.
This Act establishes a health
care trust fund in the state treasury into which shall be deposited the funds from the
settlement of the lawsuit against tobacco companies by the state of Mississippi, including
income from the investment of those funds. It provides that the trust fund shall remain
inviolate and shall never be expended, with certain exceptions.
This law establishes a health care expendable fund in the state treasury into which shall be transferred annually certain money in the health care trust fund and provides that the funds in the health care expendable fund shall be expended exclusively for health care purposes.
The law establishes a board of directors to invest the funds in the health care trust fund and the health care expendable fund; provides for the membership of the board and prescribe its powers and duties.
This Act also provides that the board shall invest the funds in the health care trust fund and the health care expendable fund in any of the investments authorized for the Mississippi prepaid affordable college tuition program.
Basic Breathing Screening
Status: bill died in committee in April 1999.
This bill directs that beginning January 1, 2001, and ending June 1, 2004, school boards are required to provide a free, basic breathing screening by a qualified health care provider for each second- and sixth-grader and to report the results to the child's parents. School boards are also required annually to report to the state department of health the number of students screened and the number of referrals for examination by a physician that resulted from the screening. The department will present this information to the General Assembly in January 2004. The screening will be funded by tobacco settlement money.
Excellence in Health Care Trust
Status: enacted into law in April 1999.
This Act amends state law to
create The Nebraska Tobacco Settlement Trust Fund.
The fund shall include revenue received from a settlement or judgment awarded to the State of Nebraska as a result of tobacco-related litigation for compensation for the costs of treating smoking-related illnesses. The Department of Health and Human Services Finance and Support shall remit such revenue to the State Treasurer for credit to the fund. Subject to the terms and conditions of the settlement or judgment, the interest investment income on the revenue shall be transferred to the Excellence in Health Care Trust Fund to be used for grants or loan guarantees.
The law directs that any money in the Nebraska Tobacco Settlement Trust Fund available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion.
It directs that:
(1) The Department of Health and Human Services Finance and Support shall administer the distribution of the money in the Nebraska Health Care Trust Fund as provided in this section.
(2) The department shall:
(a) Direct the State Treasurer to transfer the first forty million dollars placed in the fund, plus interest the investment income accruing prior to the transfer, to the Nursing Facility Conversion Cash Fund;
(b) Direct the State Treasurer to transfer the next twenty-five million dollars placed in the Nebraska Health Care Trust Fund, plus interest investment income accruing prior to the transfer, to the Children's Health Insurance Cash Fund; and
(c) Beginning January 15, 1999, direct the treasurer to transfer only the interest investment income accruing on the money in the Nebraska Health Care Trust Fund in excess of the first sixty-five million dollars placed in the fund to the Excellence in Health Care Trust Fund.
(3) If there is an unanticipated reduction in federal Medicaid funds pursuant to the generation of revenue from governmental nursing facilities, the department may use money placed in the Nebraska Health Care Trust Fund for Medicaid expenses where the unanticipated reduction occurred.
The Act directs that:
(1) Beginning January 15, 1999, the Excellence in Health Care Trust Fund shall be used for:
(a) awarding grants or making loan guarantees for conversion of nursing facilities to assisted-living facilities or other alternatives to nursing facility care,
(b) awarding grants for public health services which focus on health education, preventive health measures, and environmental health, assessment, and assurance, including services for reservation or service areas of federally recognized Native American tribes in Nebraska and organizations that focus on the health of minority groups,
(c) awarding grants for activities related to the design, maintenance, or enhancement of the statewide trauma system, support of emergency medical services programs, and support for the emergency medical services programs for children,
(d) awarding grants for conversion of hospitals in rural areas of the state to limited-service rural hospitals,
(e) awarding grants for education, recruitment, and retention of primary care professionals, behavioral health professionals, and nurses for medically under-served areas,
(f) awarding grants for health infrastructure development which is supportive of telemedicine capability, including, but not limited to, high-speed data and medical information transmission,
(g) awarding grants for the development and expansion of community-based aging services designed to promote the independent living status of and delay institutional care for elderly people, including, but not limited to, personal care, respite care, homemaker care, and chore and transportation services, and
(h) the state's matching share for children's health insurance under Title XXI of the federal Social Security Act in excess of the funds.
The law directs that no more than one-half of the money in the Excellence in Health Care Trust Fund may be used for conversion projects and no funds shall be used for abortion, abortion counseling, referral for abortion or school-based health clinics.
Hospital Charity Care Subsidy Payments
Status: pending in Senate Health Committee. The legislature will reconvene in the Fall of 1999.
This bill establishes the
"New Jersey Tobacco Settlement Trust Fund" as the depository for money received
by New Jersey under the nationwide tobacco settlement of November 23, 1998. The money in
this trust fund are to be dedicated to health-related purposes, and shall be expended only
upon appropriation by the Legislature for these purposes.
The bill specifies that the money in the trust fund shall be annually appropriated by the Legislature, from the balance in the trust fund as of June 30 of each year, to the Health Care Subsidy Fund and used to fund hospital charity care subsidy payments in an amount which, when added to the annual sum allocated for charity care subsidies pursuant to N.J.S.A.26:2H-18.59 (i.e., currently $320 million), shall be sufficient to cover all of the documented hospital charity care costs reported to the Department of Health and Senior Services for the preceding fiscal year, or the entire balance in the trust fund as of June 30 of each year, whichever amount is less.
HB 2007 (A-Engrossed version)
Status: passed House in June 1999. Senate amended as B-Engrossed and passed that version on July 9, 1999. House did not concur with Senate amendments. Bill was still pending in both House and Senate as of 07/20/99.
This bill establishes a Health Security Fund consisting of money paid by tobacco products manufacturers under Master Settlement Agreement. It defines health programs to include transportation of elderly and disabled, housing for disabled people and low income families, and certain other programs.
Interstate Compact for Cancer Research
Status: pending in House Rules Committee as of 07/20/99.
This resolution recommends that the governor allocate a portion of Pennsylvania's tobacco settlement proceeds to establish and fund a compact with other states for cancer research.
Funds for Education, Children and Public Health and Emergency Medical Texas Services and Trauma
Status: enacted into law in 1999.
This Act creates a Permanent
Fund for Tobacco Education and Enforcement as a dedicated account in the general revenue
fund. The fund is composed of:
(1) money transferred to the fund at the direction of the Legislature;
(2) gifts and grants contributed to the fund; and
(3) the available earnings of the fund.
The available earnings of the fund may be appropriated to the Texas Department of Health for programs to reduce the use of cigarettes and tobacco products in this state, including:
(1) smoking cessation programs;
(2) enforcement of laws relating to distribution of cigarettes or tobacco products to minors or use of cigarettes or tobacco products by minors;
(3) public awareness programs relating to use of cigarettes and tobacco products, including general educational programs and programs directed toward youth; and
(4) specific programs for communities traditionally targeted, by advertising and other means, by companies that sell cigarettes or tobacco products.
The legislation enables the state department of health to contract with another entity to perform all or a part of the functions described above or to award grants to community organizations, public institutions of higher education or political subdivisions to enable the organizations, institutions or political subdivisions to perform all or a part of those functions.
To ensure the most efficient, effective and rapid delivery of services, the state board of health shall give high priority and preference to existing, effective state programs that do not otherwise receive money from an endowment program funded by money received under the Comprehensive Settlement Agreement and Release filed in the case styled The State of Texas v. The American Tobacco Co., et al., No. 5-96CV-91, in the United States District Court, 2-23 Eastern District of Texas.
The Act creates a Permanent Fund for Children and Public Health as a dedicated account in the general revenue fund to the Texas Department of Health for the purpose of developing and for improving health outcomes for children and the public and for providing grants to local communities to address specific public health priorities, including sickle cell anemia, diabetes, high blood pressure, cancer, heart attack, stroke, keloid tissue and scarring, and respiratory disease and for providing grants to local communities for essential public health services as defined in state law.
This legislation establishes a Permanent Fund for Emergency Medical Services and Trauma Care. The Texas Department of Health may establish programs to provide emergency medical services and trauma care in this state, may contract with another entity to establish those programs, or may award grants to political subdivisions to establish or support those programs. The department may consolidate any grant program established under this section with other grant programs relating to the provision of emergency medical services and trauma care.
Money from this fund and the aforementioned Children and Public Health Fund may also be appropriated to pay any amount of money that the federal government determines that the state should repay to the federal government or that the federal government should recoup from the state in the event of national legislation regarding the subject matter of the case styled The State of Texas v. The American Tobacco Co., et al., No. 5-96CV-91, in the United States District Court, Eastern District of Texas.
Emergency Medical Services
Status: left in Senate Ways & Means Committee in April 1999. This bill will carry over to the 2000 session.
This bill creates the
emergency medical services assistance account in the state treasury. Into this account
shall be placed all money received by the state under the settlement of the state's legal
action against tobacco product manufacturers, exclusive of costs and attorneys' fees. On
the first day of the months of January, April, July and October of each year, the state
treasurer shall distribute the funds in the emergency medical services assistance account
to the counties on the basis of population as last determined by the office of financial
Provides that funds distributed from the emergency medical services assistance account under this Act shall be used only for the provision of emergency medical care or emergency medical services, including related personnel costs, training for such personnel, and related equipment, supplies, vehicles and structures needed for the provision of emergency medical care or emergency medical services, or for distribution by the county to emergency medical service districts, cities or towns, public hospital districts, urban emergency medical service districts or fire protection districts within the county for the provision of emergency medical care or emergency medical services.
Fund for Medically Uninsured and Under-served People
Status: pending in Assembly committee as of 07/21/99.
This bill would create the Access to Health Care Services Fund in the State Treasury as a repository of a portion of the revenue received by the state from a federal tobacco settlement. The money in the fund would be continuously appropriated to the State Department of Health Services for purposes of providing health services to medically uninsured and under-served people in California; and reimbursing primary care clinics certified by the State Department of Health Services.
Connecticut Health Care Insurance Act
Substitute HB 7030
Status: died on House calendar.
This bill establishes the
Connecticut Health Care Trust (the "Trust") to provide health care, including
long-term care, for eligible state residents. A resident and his dependents are eligible
if he has lived in the state for at least one year and he, or his employer, has paid all
required taxes. The bill creates new health care payroll and income taxes. It also creates
the Connecticut Health Care Trust Fund (the "fund") to pay for health care
services and other specified items.
The bill places the Trust in the Department of Social Services (DSS) for administrative purposes only. It (1) specifies the Trust's powers and responsibilities; (2) establishes a board of trustees to govern it; (3) requires the board to appoint an executive director; (4) establishes four divisions [planning, development, and research; consumer; benefits; and quality control); and (5) establishes three statewide advisory councils (consumer, professional and health care organizations (HCOs)].
Under the bill, an individual and his dependents are eligible for health benefits if: (1) he has resided in Connecticut for at least one year, (2) his employer has paid its required payroll taxes for him for at least six months, and (3) he has paid any required self-employment health care taxes for at least six months.
The bill makes a state resident and his dependents of at least two years eligible for long-term care (a term that the bill does not define) if he is able to show that: (1) he has been employed full-time for two years (or part-time for more than two years) by an employer that has paid all required payroll taxes; (2) he has lived in the state and paid all required payroll and income taxes for at least two years; or (3) he is eligible for long-term care under Medicaid or Medicare, or any other federal law.
The bill specifies that individuals who are not eligible for long-term care under its provisions may still be eligible for care to the same extent that they would have been before its enactment.
The bill establishes a Connecticut Health Care Trust Fund. Apparently, the fund will be within the Trust. It must be funded with state funds currently spent on health care through the Medicaid program, indigent care payments and state health care-related administrative costs; taxes imposed on items that contribute to increased health care costs; employer, family, and individual taxes; grants; donations, gifts, and bequests; rebates; fund investment income; any remaining state tobacco settlement funds; and General Assembly appropriations.
The bill requires the Trust to maximize all federal funding sources for health care services. The executive director must obtain any needed waivers, exemptions or legislation so that all current federal payments for health care, including Medicare, are paid directly to the fund. (Medicare is a purely federal program that makes payments to providers, hospitals and individuals. The state receives no payments under it.)
The bill requires the state to pay the fund the amount it currently pays for health care services and administrative functions that the Trust assumes under the bill. It specifies that the cost is annually altered through negotiations between the executive director, the director of the budget (although the bill does not identify who this is), and the General Assembly.
The bill requires surtaxes to be imposed on tobacco products, alcohol, gasoline and facilities operating within the state that generate air or water pollution (the bill does not define what levels constitute air or water pollution). The General Assembly must determine taxes, in conjunction with the executive Trust's director. The identified items may be taxed to the extent that they can reasonably be determined to contribute to health care costs.
The bill requires all employers to pay premiums, in the form of a health care payroll tax. Taxes begin with the enactment of the Trust's benefit plan. Presumably the Department of Revenue Services (DRS) determines when the enactment begins. Premiums must be similar to, or less than, the average contributions that employers make toward their employees' health benefits as of the bill's effective date, but must be adjusted to a rate less than the national health care inflation or deflation.
Families or individuals receiving benefits must pay premiums collected through the state income tax and the tax amount must be determined on a sliding scale basis as determined by the Trust in consultation with the DSS. However, families and individuals earning less than 185 percent of the federal poverty level do not pay health care income or payroll taxes.
Workers' premiums must be less than the amount they would pay through an employer or private insurance plan for comparable benefits. Medicare-eligible individuals' premiums must be less than the cost of private insurance for non-Medicare covered services.
Health Care Benefits for the Uninsured
Status: did not pass the Legislature in 1999.
This bill creates the Tobacco
Litigation Settlement Distribution Act and the Tobacco Litigation Settlement Distribution
Fund. It provides that all unrestricted proceeds received by the state under the tobacco
litigation settlement agreement shall be deposited into the Tobacco Litigation Settlement
The bill requires all unrestricted proceeds to be used for public health purposes, and requires that at least 90 percent of the unrestricted proceeds be used to provide health care services or health care benefit coverage to people in the State who do not have health insurance or other health care benefit coverage.
It provides that restricted proceeds received under the settlement shall be placed in separate special funds and used only for the purposes specified in the settlement agreement.
Tobacco Settlement Fund Allocations to Local Governments
Status: passed Assembly and pending in Senate Health and Human Services Committee as of 07/21/99.
Existing state law:
(1) Provides that in the matter of the coordinated Tobacco Cases, the parties reached a settlement through a memorandum of understanding that allocates 50 percent of the California share of the recovery to California cities and counties.
(2) Allows counties to finance construction projects through issuance of "certificates of participation" or "lease revenue bonds."
(3) Provides that if the county fails to make payment on such debt, for any reason, payment in the amount required shall be made from Vehicle License Fees.
This bill provides that tobacco settlement money allocated to cities and counties shall be available to cities and counties for any purpose. Specifically, this bill:
(1) Provides that the entire amount of the money allocated to cities and counties pursuant to the memorandum of understanding from settlement of the coordinated tobacco litigation shall be available to cities and counties for any purpose.
(2) Allows the governing body of a city, county, or city and county to, by resolution, deposit tobacco settlement money into a State Treasury special Tobacco Litigation Settlement Fund for the following uses:
a. The principal and interest from the fund shall be available to cities and counties to guarantee payment for financing capital improvement projects.
b. Security for certificates of participation for local capital projects.
The bill essentially gives local government unfettered discretion over the use of funds received under the settlement of the tobacco litigation.
MASTER SETTLEMENT AGREEMENT
Sanctions for Manufacturers that Do Not Participate in the Tobacco Master Settlement Agreement SB
Status: passed Senate. Pending in Assembly Appropriations Committee as of 07/21/99.
Existing law provides for
various programs for the reduction in the inappropriate use of cigarettes and tobacco
Under existing law, certain tobacco product manufacturers have entered into an agreement with the federal government and participating states regarding the allocation of funds on the basis of tobacco products sold within each state.
This bill would specify that any tobacco product manufacturer selling cigarettes to consumers within the state shall either become a participating manufacturer under the terms of the settlement agreement entered into by the states and certain tobacco manufacturers and perform its financial obligations under the settlement, or place an amount of funds, calculated on the basis of units of tobacco products sold, into an escrow fund.
The bill specifies that the funds in the escrow fund shall be used to pay a judgment or settlement on any released claim against the tobacco product manufacturer by the state or be released to the tobacco product manufacturer in certain circumstances. The bill would authorize the Attorney General to bring a civil action on behalf of the state against any tobacco product manufacturer that fails to place the funds into escrow, and would specify penalties for any knowing violation of the requirement to place the funds into escrow.
Implementing the Tobacco Settlement Master Agreement
Status: enacted as Chapter 7, Laws of 1999.
This Act adds to existing law
to implement the Tobacco Settlement Master Agreement regarding litigation between various
states and the major tobacco companies so that Idaho can receive funding from the
On November 23, 1998, Idaho entered into a historic settlement agreement with leading United States tobacco manufacturing companies. The agreement requires these manufacturers, in part, to pay substantial sums of money to the State of Idaho and to make substantial changes in their advertising and marketing practices and corporate culture, with the intention of reducing underage smoking. It would be contrary to the policy of the State of Idaho if tobacco manufacturers who determine not to enter into such a settlement could use a resulting cost advantage to derive large, short-term profits in the years before liability may arise without ensuring that the State will have an eventual source of recovery from them if they are proven to have acted culpably. It is thus in the interest of the State of Idaho to require that such manufacturers establish a reserve fund to guarantee a source of compensation and to prevent them from deriving large, short term profits and then becoming judgment-proof before liability may arise.
This legislation addresses that concern by requiring tobacco product manufacturers to either become a participating manufacturer under the November 23, 1998, settlement agreement or annually contribute into a qualified escrow account an amount of money based upon cigarette sales for the previous year. The qualified escrow account shall be at the manufacturer's selection. Money in the account not released to satisfy a judgment obtained against the manufacturer shall revert back to the manufacturer 25 years after it was first deposited.
Tobacco Manufacturers Responsibility Act
Status: enacted into law in 1999.
This Act enacts the model tobacco settlement statute to protect the state against a potential reduction in tobacco settlement money as a result of a decline in the market share of settling tobacco manufacturers.
Treatment for Mental Disabilities
Status: pending in House Appropriations Committee as of 07/20/99.
This bill directs that 25 percent of the tobacco litigation master settlement agreement funds are to be utilized for salaries of direct care staff who work with people who are diagnosed with mental disabilities in community-based mental health/mental retardation programs.
Community Mental Health Centers
Status: died in House Finance Committee in April 1999.
This act appropriates two million dollars ($2,000,000) annually to the eight Rhode Island community mental health centers out of funds available under the master settlement agreement with participating tobacco manufacturers.
Retrofitting Hospitals to Meet Seismic Safety Standards
Status: pending in Assembly Appropriations Committee as of 07/21/99.
Under existing law, the Office of Statewide Health Planning and Development is responsible for reviewing and approving seismic evaluation reports, compliance schedules and construction documents that are developed by hospital owners and for the field review of construction for work done for purposes of seismic safety in hospitals. Existing law requires the office to develop regulations as they apply to the administration of seismic standards for retrofit designs, construction and field reviews for the purposes of provisions governing seismic safety in hospitals.
Existing law requires the California Building Standards Commission to adopt seismic retrofit building standards and procedures for reviewing requests and granting delays to hospitals that demonstrate a need for more time. Existing law requires, within three years after the adoption of the standards by the commission, owners of all general acute care hospitals to prepare a plan and compliance schedule for each building under the office's jurisdiction which indicates, among other things, the phasing out of or retrofit of non-complying structures and systems.
This bill would state the intent of the Legislature that funding received by the state from the settlement reached on November 14, 1998, between tobacco companies and the State of California be expended to provide funding for retrofitting hospitals.
This bill would establish the Hospital Retrofit Fund and state the intent of the Legislature to allocate money in the fund to the Office of Statewide Health Planning and Development to make grants to hospitals for the purpose of retrofitting the hospitals to meet seismic retrofit building standards.
The bill would require the transfer, to the fund, of money received by the state pursuant to the Master Settlement Agreement reached by the tobacco companies and the states' attorneys general.
Status: approved by Governor on 05/26/99, enacted as Chapter No. 99-200.
Currently, funds being
received under the settlement of Florida vs. American Tobacco Company, Case No.
95-1466AH, are being deposited in the State Treasury to the credit of an Escrow Account or
to the Grants and Donations Trust Fund in the Department of Health. Currently, the
Department of Health transfers funds appropriated by the Legislature to the various
departments into existing trust funds.
The Act creates the Department of Elderly Affairs Tobacco Settlement Trust Fund. Funds credited to the trust fund are to consist of funds disbursed, by non-operating transfer, from the Department of Banking and Finance Tobacco Settlement Clearing Trust Fund in amounts equal to the annual appropriations. The Act provides for the reversion of funds to the Department of Banking and Finance Tobacco Settlement Clearing Trust Fund. The trust fund is effective on July 1, 1999 and will be terminated on July 1, 2003, unless terminated sooner by action of the Legislature.
War Veterans Homes Fund
Status: died in committee.
Present law creates the
Children's Health Insurance Program Support Fund and provides for the disposition of any
money received by the state as a result of the state's settlement with the tobacco
industry. It provides that up to $10,000,000 per year of such money, to the degree to
which the funds are allowed under settlement to be used to support health insurance
coverage for children. It provides that such funds used to support health insurance
coverage for children will be deposited by the treasurer into the Children's Health
Insurance Program Support Fund.
This proposed law retains present law and creates the "War Veterans Homes Fund," as a special fund within the state treasury. It provides that the source of money in the fund shall be money received by the state from the tobacco settlement. It requires that in Fiscal Years 2001 and 2002, the treasurer shall deposit into the fund $5,000,000 of such tobacco settlement proceeds remaining each year after the required deposit of money into the Bond Security and Redemption Fund and the Children's Health Insurance Support Fund (R.S. 46:977).
The proposed law provides that money in the fund is available for appropriation exclusively for the Department of Veterans Affairs to be used for construction of three war veterans homes. It provides that any money remaining in the fund at the end of the fiscal year shall remain in the fund. Money in the fund shall be invested by the treasurer in the same manner as money in the state general fund, and interest earned shall be credited to the state general fund.
Water Development Trust Fund
Status: enacted into law in April 1999.
This Act creates a tobacco
settlement trust fund in the state treasury. The fund consists of the tobacco settlement
dollars obtained by the state under the master settlement agreement. All money received by
the state pursuant to the judgment and all money received by the state for enforcement of
the judgment must be deposited in the fund. Interest earned on the fund must be credited
to the fund and deposited in the fund.
The principal and interest of the fund must be allocated as follows:
1. Transfers to a community health trust fund to be administered by the state department of health. The state department of health may use funds as appropriated for community-based public health programs and other public health programs, including programs with emphasis on preventing or reducing tobacco usage in this state. Transfers under this subsection must equal 10 percent of total annual transfers from the tobacco settlement trust fund.
2. Transfers to the common schools trust fund to become a part of the principal of that fund. Transfers under this subsection must equal 45 percent of total annual transfers from the tobacco settlement trust fund.
3. Transfers to the water development trust fund to be used to address the long-term water development and management needs of the state. Transfers under this subsection must equal 45 percent of the total annual transfers from the tobacco settlement trust fund.
During each biennium, transfers that would be made to the common schools trust fund must instead be transferred to the water development trust fund until the state water commission certifies to the state treasurer that deposits in the water development trust fund during that biennium are sufficient to pay the principal and interest for that biennium on bonds. When that certification is received, the state treasurer shall determine the amount deposited in the water development trust fund during that biennium and transfers that would be made to the water development trust fund must instead be transferred to the common schools trust fund until deposits in the common schools trust fund during that biennium are equal to the amount deposited in the water development trust fund during that biennium or until the end of the biennium, whichever occurs first.
Funds for Infrastructure Development
Status: left in committee on April 13, 1999.
This bill directs the state
comptroller to transfer any amounts received by the state as proceeds of the tobacco
settlement that are pledged to the payment of principal or interest on a bond issued under
certain conditions into a separate vital infrastructure program account in the general
revenue fund. All payments of principal and interest on bonds issued under this bill shall
be made from that account.
The money in the fund would be used to underwrite bonds to finance programs that provide infrastructure for:
Income Tax Credits
Status: introduced in January 1999. The bill was read twice. The Legislature had adjourned as of 07/21/99, but the bill could carry over into the January 2000 session.
This bill provides for an income tax credit regarding certain tobacco settlement proceeds.
Return Proceeds to Taxpayers
Status: pending in Senate committee as of 07/21/99.
This bill provides for the return to the taxpayers of the proceeds from the nationwide tobacco settlement.
Reduction of Property Tax
Status: left in Senate Ways & Means Committee in April 1999. This bill will carry over to the 2000 session.
This bill provides for a reduction of the state property tax equivalent to money received under the state tobacco litigation settlement.
TRUST FUNDS/ACCOUNTS (GENERAL)
Tobacco Settlement Special Fund (Rainy Day Funds)
Status: enacted into law as Act 304 of 1999.
This Act establishes the
Hawaii tobacco settlement money law and the tobacco settlement special fund to be
administered by the department of health. It provides that 40 percent shall be
appropriated to the emergency and budget reserve fund, 35 percent to the department for
health related programs including the children's health insurance fund, and 25 percent to
the Hawaii tobacco prevention and control trust fund.
The law establishes the emergency and budget reserve fund (rainy day fund) within the state treasury system, to be administered by the director of finance. It directs that expenditures from the fund shall be a temporary supplement source of funding during times of emergency, economic downturn or unforeseen reduction in revenues. No expenditures shall be made from the fund except pursuant to appropriations approved by 2/3 vote of the members of each house of the Legislature.
The legislation provides that up to 10 percent of the department of health appropriated funds shall be transferred to the department of human services for the children's health insurance program. It authorizes fund expenditure for health promotion and disease prevention programs and requires the director to convene an advisory group, separate from the tobacco prevention and control advisory board.
The bill establishes the Hawaii tobacco prevention and control trust fund. It directs that funds shall be expended to reduce cigarette smoking and tobacco use among youth and adults through education and enforcement activities, to control and prevent chronic diseases where tobacco use is a risk factor. It establishes the tobacco prevention and control advisory board in the department to develop a strategic plan. It exempts the Hawaii tobacco settlement special fund and the emergency budget and reserve fund from transfers from special funds for central service expenses, and special fund reimbursements for departmental administrative expenses provisions.
Cigarette Restitution Fund
Status: enacted into law as Chapter 173 of 1999.
This Act establishes a Cigarette Restitution Fund to receive the states portion of tobacco settlement funds. According to the National Governors Association, this Act requires the funds to be spent through the annual budget process and requires the governor to include 90 percent of the funds in the proposed state budget.
Nonprofit Corporation to Distribute State Tobacco Settlement Funds
Status: enacted as Session Law 2 of 1999.
This Act creates a nonprofit
corporation pursuant to a court order for the purposes of receipt and distribution of
fifty percent of the funds received by the state in state of North Carolina v. Philip
Morris Incorporated, et al., including the manner, terms, and conditions of
appointment of the corporation's board of directors. The law conditionally assigns to the
nonprofit corporation the right, title and interest in the annual payments constituting 50
percent of North Carolina's state specific account.
The law expresses the intent of the General Assembly that tobacco production interests, tobacco manufacturing interests, tobacco-related employment interests, health interests, and economic development interests shall be represented on the corporation's board of directors. It also expresses the intent of the General Assembly to establish a trust fund to receive and distribute 25 percent of the tobacco litigation master settlement agreement funds for the benefit of tobacco producers, tobacco allotment holders and people engaged in tobacco-related businesses, including direct and indirect financial assistance and indemnification to these beneficiaries to the extent allowed by law and in accordance with criteria established by the trust fund's board of trustees.
Tobacco Settlement Permanent Trust Account (Administration)
Status: enacted into law in 1999.
This Act directs that the
state comptroller shall administer the Tobacco Settlement Permanent Trust Account in
consultation with an advisory committee.
In managing the assets of the account, the comptroller, with the advice of and in consultation with the advisory committee, may acquire, exchange, sell, supervise, manage, or retain, through procedures and subject to restrictions the comptroller establishes and in amounts the comptroller considers appropriate, any kind of investment that a person of ordinary prudence, discretion and intelligence, exercising the judgment and care under the circumstances prevailing at that time, would acquire or retain for the person's own account in the management of the person's affairs, not in regard to speculation but in regard to the permanent disposition of the person's money, considering the probable incomeas well as the probable safety of the capital.
Investment and management decisions concerning individual investments must be evaluated not in isolation but in the context of the investment portfolio as a whole and as part of an overall investment strategy consistent with the investment objectives of the account.
The account is a trust account with the comptroller and is composed of money paid to the account in accordance with the agreement, assets purchased with that money, the earnings of the account and any other contributions made to the account. The corpus of the account shall remain in the account and may not be distributed for any purpose. The money and other assets contained in the account are not a part of the general funds of the state.
The comptroller may appoint one or more commercial banks, depository trust companies or other entities to serve as a custodian of the account's assets.
Tobacco Coordination Provisions
Status: enacted into law in 1999.
This Act establishes the enforcement duties of the Department of Health. It incorporates key definitions from the Tobacco Settlement Agreement and establishes a process within the Tax Commission for tracking cigarettes sold in the state by tobacco manufacturers that did not participate in the agreement. This Act is a companion bill to HB 132, which enacted the Model Tobacco Settlement Statute.
Tobacco Settlement Account
SB 173 (enrolled version)
Status: enacted as Session Law Chapter: 78, 1999.
This Act creates within the General Fund a restricted account known as the Tobacco Settlement Account to receive all funds from the settlement. Funds in the account may only be used as directed by the Legislature through appropriation.
Tobacco Settlement Trust Fund
Enrolled Act 87, 1999 session
Status: enacted into law in 1999.
This Act establishes the
Wyoming Tobacco Settlement Trust Fund. The Wyoming Tobacco Settlement Trust Fund shall
(i) All funds received by the state of Wyoming as financial recovery under the terms of the master settlement agreement regarding litigation between several states and major tobacco manufacturers, which settlement agreement was approved by the state of Wyoming in November 1998; and
(ii) Any other funds appropriated or designated to the account by law or by gift from whatever source.
Funds deposited into the Wyoming tobacco settlement trust fund are intended to be inviolate and constitute a permanent or perpetual trust fund which shall be invested by the state treasurer as authorized by law and in a manner to obtain the highest return possible consistent with preservation of the corpus. Any earnings from investment of the corpus of the trust fund shall be credited by the state treasurer into a separate trust fund income account within the earmarked revenue fund.
Revenues deposited into the trust fund income account established under subsection (b) shall be expended:
(i) Only for purposes related to the improvement of the health of Wyoming's citizens including efforts to prevent tobacco use through school and community based programs; and
(ii) Only upon appropriation by the Legislature.
Tobacco Settlement Summary
The fund is established to carry out a nationwide sustained advertising and education program to counter youth tobacco use and educate consumers about tobacco-related diseases.
PUBLIC ACCESS TO DOCUMENTS AND COURT FILES
PRODUCT PLACEMENT AND SPONSORSHIP
DISSOLUTION OF TOBACCO-RELATED ORGANIZATIONS
FINANCIAL RECOVERY FOR THE STATES
GIFTS BASED ON PURCHASES
PROHIBITIONS ON AGREEMENTS TO SUPPRESS RESEARCH
MINIMUM PACK SIZE
COST RECOVERY AND ATTORNEY FEES
Source: National Association of Attorneys General (http://www.naag.org/settle.htm)
MODEL CONSENT DECREE
IN THE [XXXXXX] COURT OF THE STATE OF [XXXXXX]
IN AND FOR THE COUNTY OF [XXXXX]
STATE OF [XXXXXXXXXXX], : : Plaintiff, :
v. : :
[XXXXXX XXXXX XXXX], et al., :
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
CASE NO. XXXXXX
CONSENT DECREE AND FINAL JUDGMENT
WHEREAS, Plaintiff, the State of [name of Settling State], commenced this action on [date], [by and through its Attorney General [name]], pursuant to [her/his/its] common law powers and the provisions of [state and/or federal law];
WHEREAS, the State of [name of Settling State] asserted various claims for monetary, equitable and injunctive relief on behalf of the State of [name of Settling State] against certain tobacco product manufacturers and other defendants;
WHEREAS, Defendants have contested the claims in the States complaint [and amended complaints, if any] and denied the States allegations [and asserted affirmative defenses];
WHEREAS, the parties desire to resolve this action in a manner which appropriately addresses the States public health concerns, while conserving the parties resources, as well as those of the Court, which would otherwise be expended in litigating a matter of this magnitude; and
WHEREAS, the Court has made no determination of any violation of law, this Consent Decree and Final Judgment being entered prior to the taking of any testimony and without trial or final adjudication of any issue of fact or law;
NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED, AS FOLLOWS:
I. JURISDICTION AND VENUE
This Court has jurisdiction over the subject matter of this action and over each of the Participating Manufacturers. Venue is proper in this [county/district].
The definitions set forth in the Agreement (a copy of which is attached hereto) are incorporated herein by reference.
A. This Consent Decree and Final Judgment applies only to the Participating Manufacturers in their corporate capacity acting through their respective successors and assigns, directors, officers, employees, agents, subsidiaries, divisions, or other internal organizational units of any kind or any other entities acting in concert or participation with them. The remedies, penalties and sanctions that may be imposed or assessed in connection with a violation of this Consent Decree and Final Judgment (or any order issued in connection herewith) shall only apply to the Participating Manufacturers, and shall not be imposed or assessed against any employee, officer or director of any Participating Manufacturer, or against any other person or entity as a consequence of such violation, and there shall be no jurisdiction under this Consent Decree and Final Judgment to do so.
B. This Consent Decree and Final Judgment is not intended to and does not vest standing in any third party with respect to the terms hereof. No portion of this Consent Decree and Final Judgment shall provide any rights to, or be enforceable by, any person or entity other than the State of [name of Settling State] or a Released Party. The State of [name of Settling State] may not assign or otherwise convey any right to enforce any provision of this Consent Decree and Final Judgment.
IV. VOLUNTARY ACT OF THE PARTIES
The parties hereto expressly acknowledge and agree that this Consent Decree and Final Judgment is voluntarily entered into as the result of arms-length negotiation, and all parties hereto were represented by counsel in deciding to enter into this Consent Decree and Final Judgment.
V. INJUNCTIVE AND OTHER EQUITABLE RELIEF
Each Participating Manufacturer is permanently enjoined from:
A. Taking any action, directly or indirectly, to target Youth within the State of [name of Settling State] in the advertising, promotion or marketing of Tobacco Products, or taking any action the primary purpose of which is to initiate, maintain or increase the incidence of Youth smoking within the State of [name of Settling State].
B. After 180 days after the MSA Execution Date, using or causing to be used within the State of [name of Settling State] any Cartoon in the advertising, promoting, packaging or labeling of Tobacco Products.
C. After 30 days after the MSA Execution Date, making or causing to be made any payment or other consideration to any other person or entity to use, display, make reference to or use as a prop within the State of [name of Settling State] any Tobacco Product, Tobacco Product package, advertisement for a Tobacco Product, or any other item bearing a Brand Name in any Media; provided, however, that the foregoing prohibition shall not apply to (1) Media where the audience or viewers are within an Adult-Only Facility (provided such Media are not visible to people outside such Adult-Only Facility);
(2) Media not intended for distribution or display to the public; (3) instructional Media concerning non-conventional cigarettes viewed only by or provided only to smokers who are Adults; and (4) actions taken by any Participating Manufacturer in connection with a Brand Name Sponsorship permitted pursuant to subsections III(c)(2)(A) and III(c)(2)(B)(i) of the Agreement, and use of a Brand Name to identify a Brand Name Sponsorship permitted by subsection III(c)(2)(B)(ii).
D. Beginning July 1, 1999, marketing, distributing, offering, selling, licensing or causing to be marketed, distributed, offered, sold, or licensed (including, without limitation, by catalogue or direct mail), within the State of [name of Settling State], any apparel or other merchandise (other than Tobacco Products, items the sole function of which is to advertise Tobacco Products, or written or electronic publications) which bears a Brand Name. Provided, however, that nothing in this section shall (1) require any Participating Manufacturer to breach or terminate any licensing agreement or other contract in existence as of June 20, 1997 (this exception shall not apply beyond the current term of any existing contract, without regard to any renewal or option term that may be exercised by such Participating Manufacturer); (2) prohibit the distribution to any Participating Manufacturers employee who is not Underage of any item described above that is intended for the personal use of such an employee; (3) require any Participating Manufacturer to retrieve, collect or otherwise recover any item that prior to the MSA Execution Date was marketed, distributed, offered, sold, licensed or caused to be marketed, distributed, offered, sold or licensed by such Participating Manufacturer; (4) apply to coupons or other items used by Adults solely in connection with the purchase of Tobacco Products; (5) apply to apparel or other merchandise used within an Adult-Only Facility that is not distributed (by sale or otherwise) to any member of the general public; or (6) apply to apparel or other merchandise (a) marketed, distributed, offered, sold, or licensed at the site of a Brand Name Sponsorship permitted pursuant to subsection III(c)(2)(A) or III(c)(2)(B)(i) of the Agreement by the person to which the relevant Participating Manufacturer has provided payment in exchange for the use of the relevant Brand Name in the Brand Name Sponsorship or a third-party that does not receive payment from the relevant Participating Manufacturer (or any Affiliate of such Participating Manufacturer) in connection with the marketing, distribution, offer, sale or license of such apparel or other merchandise, or (b) used at the site of a Brand Name Sponsorship permitted pursuant to subsections III(c)(2)(A) or III(c)(2)(B)(i) of the Agreement (during such event) that are not distributed (by sale or otherwise) to any member of the general public.
E. After the MSA Execution Date, distributing or causing to be distributed within the State of [name of Settling State] any free samples of Tobacco Products except in an Adult-Only Facility. For purposes of this Consent Decree and Final Judgment, a "free sample" does not include a Tobacco Product that is provided to an Adult in connection with (1) the purchase, exchange or redemption for proof of purchase of any Tobacco Products (including, but not limited to, a free offer in connection with the purchase of Tobacco Products, such as a "two-for-one" offer), or (2) the conducting of consumer testing or evaluation of Tobacco Products with people who certify that they are Adults.
F. Using or causing to be used as a brand name of any Tobacco Product pursuant to any agreement requiring the payment of money or other valuable consideration, any nationally recognized or nationally established brand name or trade name of any non-tobacco item or service or any nationally recognized or nationally established sports team, entertainment group or individual celebrity. Provided, however, that the preceding sentence shall not apply to any Tobacco Product brand name in existence as of July 1, 1998. For the purposes of this provision, the term "other valuable consideration" shall not include an agreement between two entities who enter into such agreement for the sole purpose of avoiding infringement claims.
G. After 60 days after the MSA Execution Date and through and including December 31, 2001, manufacturing or causing to be manufactured for sale within the State of [name of Settling State] any pack or other container of Cigarettes containing fewer than 20 Cigarettes (or, in the case of roll-your-own tobacco, any package of roll-your-own tobacco containing less than 0.60 ounces of tobacco); and, after 150 days after the MSA Execution Date and through and including December 31, 2001, selling or distributing within the State of [name of Settling State] any pack or other container of Cigarettes containing fewer than 20 Cigarettes (or, in the case of roll-your-own tobacco, any package of roll-your-own tobacco containing less than 0.60 ounces of tobacco).
H. Entering into any contract, combination or conspiracy with any other Tobacco Product Manufacturer that has the purpose or effect of: (1) limiting competition in the production or distribution of information about health hazards or other consequences of the use of their products; (2) limiting or suppressing research into smoking and health; or (3) limiting or suppressing research into the marketing or development of new products. Provided, however, that nothing in the preceding sentence shall be deemed to (1) require any Participating Manufacturer to produce, distribute or otherwise disclose any information that is subject to any privilege or protection; (2) preclude any Participating Manufacturer from entering into any joint defense or joint legal interest agreement or arrangement (whether or not in writing), or from asserting any privilege pursuant thereto; or (3) impose any affirmative obligation on any Participating Manufacturer to conduct any research.
I. Making any material misrepresentation of fact regarding the health consequences of using any Tobacco Product, including any tobacco additives, filters, paper or other ingredients. Provided, however, that nothing in the preceding sentence shall limit the exercise of any First Amendment right or the assertion of any defense or position in any judicial, legislative or regulatory forum.
VI. MISCELLANEOUS PROVISIONS
A. Jurisdiction of this case is retained by the Court for the purposes of implementing and enforcing the Agreement and this Consent Decree and Final Judgment and enabling the continuing proceedings contemplated herin. Whenever possible, the State of [name of Settling State] and the Participating Manufacturers shall seek to resolve any issue that may exist as to compliance with this Consent Decree and Final Judgment by discussion among the appropriate designees named pursuant to subsection XVIII(m) of the Agreement. The State of [name of Settling State] and/or any Participating Manufacturer may apply to the Court at any time for further orders and directions as may be necessary or appropriate for the implementation and enforcement of this Consent Decree and Final Judgment. Provided, however, that with regard to subsections V(A) and V(I) of this Consent Decree and Final Judgment, the Attorney General shall issue a cease and desist demand to the Participating Manufacturer that the Attorney General believes is in violation of either of such sections at least ten Business Days before the Attorney General applies to the Court for an order to enforce such subsections, unless the Attorney General reasonably determines that either a compelling time-sensitive public health and safety concern requires more immediate action or the Court has previously issued an Enforcement Order to the Participating Manufacturer in question for the same or a substantially similar action or activity. For any claimed violation of this Consent Decree and Final Judgment, in determining whether to seek an order for monetary, civil contempt or criminal sanctions for any claimed violation, the Attorney General shall give good-faith consideration to whether: (1) the Participating Manufacturer that is claimed to have committed the violation has taken appropriate and reasonable steps to cause the claimed violation to be cured, unless that party has been guilty of a pattern of violations of like nature; and (2) a legitimate, good-faith dispute exists as to the meaning of the terms in question of this Consent Decree and Final Judgment. The Court in any case in its discretion may determine not to enter an order for monetary, civil contempt or criminal sanctions.
B. This Consent Decree and Final Judgment is not intended to be, and shall not in any event be construed as, or deemed to be, an admission or concession or evidence of (1) any liability or any wrongdoing whatsoever on the part of any Released Party or that any Released Party has engaged in any of the activities barred by this Consent Decree and Final Judgment; or (2) personal jurisdiction over any person or entity other than the Participating Manufacturers. Each Participating Manufacturer specifically disclaims and denies any liability or wrongdoing whatsoever with respect to the claims and allegations asserted against it in this action, and has stipulated to the entry of this Consent Decree and Final Judgment solely to avoid the further expense, inconvenience, burden and risk of litigation.
C. Except as expressly provided otherwise in the Agreement, this Consent Decree and Final Judgment shall not be modified (by this Court, by any other court or by any other means) unless the party seeking modification demonstrates, by clear and convincing evidence, that it will suffer irreparable harm from new and unforeseen conditions. Provided, however, that the provisions of sections III, V, VI and VII of this Consent Decree and Final Judgment shall in no event be subject to modification without the consent of the State of [name of Settling State] and all affected Participating Manufacturers. In the event that any of the sections of this Consent Decree and Final Judgment enumerated in the preceding sentence are modified by this Court, by any other court or by any other means without the consent of the State of [name of Settling State] and all affected Participating Manufacturers, then this Consent Decree and Final Judgment shall be void and of no further effect. Changes in the economic conditions of the parties shall not be grounds for modification. It is intended that the Participating Manufacturers will comply with this Consent Decree and Final Judgment as originally entered, even if the Participating Manufacturers obligations hereunder are greater than those imposed under current or future law (unless compliance with this Consent Decree and Final Judgment would violate such law). A change in law that results, directly or indirectly, in more favorable or beneficial treatment of any one or more of the Participating Manufacturers shall not support modification of this Consent Decree and Final Judgment.
D. In any proceeding which results in a finding that a Participating Manufacturer violated this Consent Decree and Final Judgment, the Participating Manufacturer or Participating Manufacturers found to be in violation shall pay the States costs and attorneys fees incurred by the State of [name of Settling State] in such proceeding.
E. The remedies in this Consent Decree and Final Judgment are cumulative and in addition to any other remedies the State of [name of Settling State] may have at law or equity, including but not limited to its rights under the Agreement. Nothing herein shall be construed to prevent the State from bringing an action with respect to conduct not released pursuant to the Agreement, even though that conduct may also violate this Consent Decree and Final Judgment. Nothing in this Consent Decree and Final Judgment is intended to create any right for [name of Settling State] to obtain any Cigarette product formula that it would not otherwise have under applicable law.
F. No party shall be considered the drafter of this Consent Decree and Final Judgment for the purpose of any statute, case law or rule of interpretation or construction that would or might cause any provision to be construed against the drafter. Nothing in this Consent Decree and Final Judgment shall be construed as approval by the State of [name of Settling State] of the Participating Manufacturers business organizations, operations, acts or practices, and the Participating Manufacturers shall make no representation to the contrary.
G. The settlement negotiations resulting in this Consent Decree and Final Judgment have been undertaken in good faith and for settlement purposes only, and no evidence of negotiations or discussions underlying this Consent Decree and Final Judgment shall be offered or received in evidence in any action or proceeding for any purpose. Neither this Consent Decree and Final Judgment nor any public discussions, public statements or public comments with respect to this Consent Decree and Final Judgment by the State of [name of Settling State] or any Participating Manufacturer or its agents shall be offered or received in evidence in any action or proceeding for any purpose other than in an action or proceeding arising under or relating to this Consent Decree and Final Judgment.
H. All obligations of the Participating Manufacturers pursuant to this Consent Decree and Final Judgment (including, but not limited to, all payment obligations) are, and shall remain, several and not joint.
I. The provisions of this Consent Decree and Final Judgment are applicable only to actions taken (or omitted to be taken) within the States. Provided, however, that the preceding sentence shall not be construed as extending the territorial scope of any provision of this Consent Decree and Final Judgment whose scope is otherwise limited by the terms thereof.
J. Nothing in subsection V(A) or V(I) of this Consent Decree shall create a right to challenge the continuation, after the MSA Execution Date, of any advertising content, claim or slogan (other than use of a Cartoon) that was not unlawful prior to the MSA Execution Date.
K. If the Agreement terminates in this State for any reason, then this Consent Decree and Final Judgment shall be void and of no further effect.
VII. FINAL DISPOSITION
A. The Agreement, the settlement set forth therein, and the establishment of the escrow provided for therein are hereby approved in all respects, and all claims are hereby dismissed with prejudice as provided therein.
B. The Court finds that the person[s] signing the Agreement have full and complete authority to enter into the binding and fully effective settlement of this action as set forth in the Agreement. The Court further finds that entering into this settlement is in the best interests of the State of [name of Settling State].
LET JUDGMENT BE ENTERED ACCORDINGLY
DATED this _____ day of ______________, 1998.
Source: National Association of Attorneys General
Section __. Findings and Purpose.
(a) Cigarette smoking presents serious public health concerns to the State and to the citizens of the State.
The Surgeon General has determined that smoking causes lung cancer, heart disease and other serious diseases, and that there are hundreds of thousands of tobacco-related deaths in the United States each year. These diseases most often do not appear until many years after the person in question begins smoking.
(b) Cigarette smoking also presents serious financial concerns for the State. Under certain health-care programs, the State may have a legal obligation to provide medical assistance to eligible people for health conditions associated with cigarette smoking, and those people may have a legal entitlement to receive such medical assistance.
(c) Under these programs, the State pays millions of dollars each year to provide medical assistance for these people for health conditions associated with cigarette smoking.
(d) It is the policy of the State that financial burdens imposed on the State by cigarette smoking be borne by tobacco product manufacturers rather than by the State to the extent that such manufacturers either determine to enter into a settlement with the State or are found culpable by the courts.
(e) On _______, 1998, leading United States tobacco product manufacturers entered into a settlement agreement, entitled the "Master Settlement Agreement," with the State. The Master Settlement Agreement obligates these manufacturers, in return for a release of past, present and certain future claims against them as described therein, to pay substantial sums to the State (tied in part to their volume of sales); to fund a national foundation devoted to the interests of public health; and to make substantial changes in their advertising and marketing practices and corporate culture, with the intention of reducing underage smoking.
(f) It would be contrary to the policy of the State if tobacco product manufacturers who determine not to enter into such a settlement could use a resulting cost advantage to derive large, short-term profits in the years before liability may arise without ensuring that the State will have an eventual source of recovery from them if they are proven to have acted culpably. It is thus in the interest of the State to require that such manufacturers establish a reserve fund to guarantee a source of compensation and to prevent such manufacturers from deriving large, short-term profits and then becoming judgment-proof before liability may arise.
Section __. Definitions.
(a) "Adjusted for inflation" means increased in accordance with the formula for inflation adjustment set forth in Exhibit C to the Master Settlement Agreement.
(b) "Affiliate" means a person who directly or indirectly owns or controls, is owned or controlled by, or is under common ownership or control with, another person. Solely for purposes of this definition, the terms "owns," "is owned" and "ownership" mean ownership of an equity interest, or the equivalent thereof, of ten percent or more, and the term "person" means an individual, partnership, committee, association, corporation or any other organization or group of people.
(c) "Allocable share" means Allocable Share as that term is defined in the Master Settlement Agreement.
(d) "Cigarette" means any product that contains nicotine, is intended to be burned or heated under ordinary conditions of use, and consists of or contains (1) any roll of tobacco wrapped in paper or in any substance not containing tobacco; or (2) tobacco, in any form, that is functional in the product, which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette; or (3) any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in clause (1) of this definition. The term "cigarette" includes "roll-your-own" (i.e., any tobacco which, because of its appearance, type, packaging, or labeling is suitable for use and likely to be offered to, or purchased by, consumers as tobacco for making cigarettes). For purposes of this definition of "cigarette," 0.09 ounces of "roll-your-own" tobacco shall constitute one individual "cigarette."
(e) "Master Settlement Agreement" means the settlement agreement (and related documents) entered into on _______, 1998 by the State and leading United States tobacco product manufacturers.
(f) "Qualified escrow fund" means an escrow arrangement with a federally or State chartered financial institution having no affiliation with any tobacco product manufacturer and having assets of at least $1,000,000,000 where such arrangement requires that such financial institution hold the escrowed fundsprincipal for the benefit of releasing parties and prohibits the tobacco product manufacturer placing the funds into escrow from using, accessing or directing the use of the funds principal except as consistent with section ___(b)-(c) of this Act.
(g) "Released claims" means Released Claims as that term is defined in the Master Settlement Agreement.
(h) "Releasing parties" means Releasing Parties as that term is defined in the Master Settlement
(i) "Tobacco Product Manufacturer" means an entity that after the date of enactment of this Act directly (and not exclusively through any affiliate):
(1) manufactures cigarettes anywhere that such manufacturer intends to be sold in the United States, including cigarettes intended to be sold in the United States through an importer (except where such importer is an original participating manufacturer (as that term is defined in the Master Settlement Agreement) that will be responsible for the payments under the Master Settlement Agreement with respect to such cigarettes as a result of the provisions of subsections II(mm) of the Master Settlement Agreement and that pays the taxes specified in subsection II(z) of the Master Settlement Agreement, and provided that the manufacturer of such cigarettes does not market or advertise such cigarettes in the United States);
(2) is the first purchaser anywhere for resale in the United States of cigarettes manufactured anywhere that the manufacturer does not intend to be sold in the United States; or
(3) becomes a successor of an entity described in paragraph (1) or (2).
The term "Tobacco Product Manufacturer" shall not include an affiliate of a tobacco product manufacturer unless such affiliate itself falls within any of (1) - (3) above.
(j) "Units sold" means the number of individual cigarettes sold in the State by the applicable tobacco product manufacturer (whether directly or through a distributor, retailer or similar intermediary or intermediaries) during the year in question, as measured by excise taxes collected by the State on packs (or "roll-your-own" tobacco containers) bearing the excise tax stamp of the State. The [fill in name of responsible state agency] shall promulgate such regulations as are necessary to ascertain the amount of State excise tax paid on the cigarettes of such tobacco product manufacturer for each year.
Section __. Requirements.
Any tobacco product manufacturer selling cigarettes to consumers within the State (whether directly or through a distributor, retailer or similar intermediary or intermediaries) after the date of enactment of this Act shall do one of the following:
(a) become a participating manufacturer (as that term is defined in section II(jj) of the Master Settlement Agreement) and generally perform its financial obligations under the Master Settlement Agreement; or
(b) (1) place into a qualified escrow fund by April 15 of the year following the year in question the following amounts (as such amounts are adjusted for inflation) -- 1999: $.0094241 per unit sold after the date of enactment of this Act; 2000: $.0104712 per unit sold after the date of enactment of this Act; for each of 2001 and 2002: $.0136125 per unit sold after the date of enactment of this Act; for each of 2003 through 2006: $.0167539 per unit sold after the date of enactment of this Act; for each of 2007 and each year thereafter: $.0188482 per unit sold after the date of enactment of this Act.
(2) A tobacco product manufacturer that places funds into escrow pursuant to paragraph (1) shall receive the interest or other appreciation on such funds as earned. Such funds themselves shall be released from escrow only under the following circumstances --
(A) to pay a judgment or settlement on any released claim brought against such tobacco product manufacturer by the State or any releasing party located or residing in the State. Funds shall be released from escrow under this subparagraph (i) in the order in which they were placed into escrow and (ii) only to the extent and at the time necessary to make payments required under such judgment or settlement;
(B) to the extent that a tobacco product manufacturer establishes that the amount it was required to place into escrow in a particular year was greater than the States allocable share of the total payments that such manufacturer would have been required to make in that year under the Master Settlement Agreement (as determined pursuant to section IX(i)(2) of the Master Settlement Agreement, and before any of the adjustments or offsets described in section IX(i)(3) of that Agreement other than the Inflation Adjustment) had it been a participating manufacturer, the excess shall be released from escrow and revert back to such tobacco product manufacturer; or
(C) to the extent not released from escrow under subparagraphs (A) or (B), funds shall be released from escrow and revert back to such tobacco product manufacturer twenty-five years after the date on which they were placed into escrow.
(3) Each tobacco product manufacturer that elects to place funds into escrow pursuant to this subsection shall annually certify to the Attorney General [or other State official] that it is in compliance with this subsection. The Attorney General [or other State official] may bring a civil action on behalf of the State against any tobacco product manufacturer that fails to place into escrow the funds required under this section. Any tobacco product manufacturer that fails in any year to place into escrow the funds required under this section shall
(A) be required within 15 days to place such funds into escrow as shall bring it into compliance with this section. The court, upon a finding of a violation of this subsection, may impose a civil penalty [to be paid to the general fund of the state] in an amount not to exceed 5 percent of the amount improperly withheld from escrow per day of the violation and in a total amount not to exceed 100 percent of the original amount improperly withheld from escrow;
(B) in the case of a knowing violation, be required within 15 days to place such funds into escrow as shall bring it into compliance with this section. The court, upon a finding of a knowing violation of this subsection, may impose a civil penalty [to be paid to the general fund of the state] in an amount not to exceed 15 percent of the amount improperly withheld from escrow per day of the violation and in a total amount not to exceed 300 percent of the original amount improperly withheld from escrow; and
(C) in the case of a second knowing violation, be prohibited from selling cigarettes to consumers within the State (whether directly or through a distributor, retailer or similar intermediary) for a period not to exceed 2 years.
Each failure to make an annual deposit required under this section shall constitute a separate violation.
Source: National Association of Attorneys General
NATIONAL SETTLEMENT SHARES BY STATE/POPULATION
In November 1998, when the Attorneys
General and the tobacco companies reached a settlement of the states' lawsuits, the
tobacco companies agreed to pay $206 billion to the states. This money was divided up
among the states based on an allocation formula agreed upon by both parties.
In addition to this $206 billion, the settlement agreement called for the tobacco companies to pay an additional $8.61 billion over 10 years from 2008 - 2017 into a "strategic contribution fund" to reward the efforts of the Attorneys General for their work in the litigation, as well as for there contribution to a reaching the settlement agreement. In May 1999, a panel of former attorneys general decided how this additional money would be divided between the states.
The population numbers used for the per-capita page were taken from the census bureau's webpage. It is rounded off to the nearest thousand. That page address is: http://www.census.gov/statab/ranks/pg01.txt.
Source: Utah Attorney General's Office
National Settlement Shares
Total Payments to Each State Through 2025
|N. Mariana Islands||
|US Virgin Island||
Source: National Association of Attorneys General
STRATEGIC CONTRIBUTION AWARD RANKED BY POPULATION
|2. New York||$472,459,991.25||3|
|10. New Jersey||$245,122,619.56||9|
|21. West Virginia||$196,087,655.47||35|
|22. North Carolina||$167,232,447.80||11|
|26. North Dakota||$149,711,735.38||47|
|29. South Carolina||$114,703,541.71||26|
|31. Rhode Island||$94,320,469.30||43|
|34. New Mexico||$85,749,376.20||37|
|36. New Hampshire||$77,400,695.17||42|
|43. South Dakota||$65,000,000.00||46|
Source: Utah Attorney General's Office
STRATEGIC CONTRIBUTION AWARD PER CAPITA
|STATE||AWARD||POPULATION||PER CAPITA AWARD|
|3. North Dakota||$149,711,735.38||639,000||$234.29|
|6. West Virginia||$196,087,655.47||1,811,000||$108.27|
|8. Rhode Island||$94,320,469.30||988,000||$95.46|
|10. South Dakota||$65,000,000.00||738,000||$88.07|
|18. New Hampshire||$77,400,695.17||1,185,000||$65.31|
|27. New Mexico||$85,749,376.20||1,737,000||$49.36|
|31. New Jersey||$245,122,619.56||8,115,000||$30.20|
|32. South Carolina||$114,703,541.71||3,836,000||$29.90|
|33. New York||$472,459,991.25||18,175,000||$25.99|
|38. North Carolina||$167,232,447.80||7,546,000||$22.16|
Source: Utah Attorney General's Office