TITLE: CONCERNING THE CREATION OF THE COLORADO HEALTH CARE TRUST FUND IN THE STATE TREASURY.

Fiscal Impact Summary	FY 1999/2000	FY2000/2001	FY 2008/2009FY2008/2009
State Revenues Cash Fund
State Expenditures Cash Fund Exempt			$ 8,880 $8,880
FTE Position Change	0.0 FTE	0.0 FTE	0.0 FTE0.0 FTE
Other State Impact: None
Effective Date: 90 Days Upon Adjournment
Appropriation Summary for FY 1999-2000: None Required
Local Government Impact: None

The bill, as amended by the Senate Finance Committee, dated February 23, 1999, creates the Colorado Health Care Trust Fund:

• the Trust Fund shall include: 1) any tobacco litigation settlement moneys that are not transferred to the Tobacco Litigation Settlement Fund, and 2) the investment earnings derived from the deposit and investment of moneys in the Trust Fund;

• the principal of the Trust Fund shall not be expended or appropriated for any purpose;

• the State Treasurer may deposit, redeposit, invest, and reinvest moneys in the Trust Fund;

• the State Treasurer may invest up to 25 percent of the portfolio of the Trust Fund in subsidized loans to financially needed public school districts, as approved by the State Board of Education, for immediate safety hazards or health concerns at existing school facilities; and

• no later than July 1, 2008, establishes a legislative committee (no more than 10 members) required to hold public hearings, receive testimony, and determine whether a public need for the continued existence of the Trust Fund is necessary.

• the Fund shall consist of any attorney fees and any tobacco litigation settlement moneys transferred to the State Treasurer in any given fiscal year — equal to the lesser of $33 million or the amount of settlement moneys transmitted to the State Treasurer in that fiscal year, and all interest derived from the deposit and investment of moneys in the Fund.

The bill neither increases nor decreases revenue. This amended bill Rather, it provides for the deposit of moneys the state will receive from the master tobacco settlement agreement. The tobacco settlement moneys are considered cash funds exempt.

Colorado's share of the total $206 billion pay-out by tobacco companies is $2.7 billion paid over 25 years until 2025. An initial payment of $32.9 million is anticipated no later than June 2000, during FY 1999-00. The tobacco settlement moneys are considered cash funds exempt. This amount of moneys will generate investment earnings of $1,809,500 to the Colorado Health Care Trust Fund during FY 2000-01, based upon an annual investment rate of 5.5 percent.

As amended, the bill declares that it is neither necessary nor prudent to spend more than a minor fraction of the tobacco litigation settlement moneys the state will receive. The bill limits the annual transfer of settlement moneys to the Tobacco Litigation Settlement Fund and requires that the principal of the Colorado Health Care Trust Fund shall not be expended or appropriated for any purpose.

FY 2008-09. The bill requires, no later than July 1, 2008, appointment of a legislative committee (no more than 10 members) to determine whether a public need for the continued existence of the Trust Fund is necessary. Members of the committee shall receive per diem and reimbursement for necessary expenses. Assuming 10 members attend 6 meetings at a rate of $148 per member, meeting costs are estimated at $8,880. The bill provides that reimbursement shall be from the Colorado Health Care Trust Fund — cash funds exempt moneys. The bill is silent on staff support for the legislative committee created in the bill.