Colorado Legislative Council Staff
NO FISCAL IMPACT
April 17, 1999
Janis Baron (303-866-3523)
TITLE: CONCERNING TOBACCO LITIGATION SETTLEMENT MONEYS, AND, IN CONNECTION THEREWITH, REPLACING THE TOBACCO LITIGATION SETTLEMENT FUND WITH THE TOBACCO LITIGATION SETTLEMENT CASH FUND, CREATING THE TOBACCO LITIGATION SETTLEMENT TRUST FUND, AND AUTHORIZING INVESTMENT OF TOBACCO LITIGATION SETTLEMENT MONEYS HELD IN ESCROW FOR THE STATE IN ACCORDANCE WITH THE ESCROW AGREEMENT ENTERED INTO IN CONNECTION WITH THE MASTER SETTLEMENT AGREEMENT.
Summary of Assessment
The bill eliminates the Tobacco Litigation Settlement Fund, as enacted by SB 99-172, signed by the Governor on April 1, 1999, and replaces it with the Tobacco Litigation Settlement Cash Fund. Additionally, the bill creates the Tobacco Litigation Settlement Trust Fund. Both funds are created in the State Treasury. Moneys credited to the Cash Fund and the Trust Fund are not included in state fiscal year spending for purposes of Section 20 of Article X of the State Constitution. The bill specifies that all tobacco litigation settlement moneys not credited to the Trust Fund shall be credited to the Cash Fund, and that the General Assembly may appropriate any moneys in the Cash Fund as authorized by law in accordance with the terms of the tobacco litigation settlement. Any unencumbered moneys remaining in the Cash Fund at the end of any fiscal year shall be transferred to the Trust Fund. Stipulations of the Tobacco Litigation Settlement Trust Fund include the following:
• the purpose of the Trust Fund is to ensure that a permanent source of tobacco litigation settlement moneys is available to fully fund any programs and funds authorized by law to be funded with such moneys;
• interest earned on moneys in the Trust Fund shall be retained in the Trust Fund until such time as the State Auditor certifies that actuarially sound projections of future interest earnings indicate that such interest will be sufficient to fully fund such programs and funds;
• specifies that all moneys included in the first payment made to the state pursuant to the tobacco litigation settlement, 20 percent of the moneys included in subsequent payments, and any unencumbered moneys remaining in the Cash Fund at the end of any fiscal year shall be credited to the Trust Fund;
• specifies that the principal of the Trust Fund shall not be expended or appropriated for any purpose, but that the General Assembly may appropriate the interest earned on the Trust Fund as authorized by law in accordance with the terms of the tobacco litigation settlement.
Colorado's share of the total $206 billion pay-out by tobacco companies is identified at $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. Per the provisions of this bill, the entire amount of that initial payment will be deposited to the Trust Fund.
The bill creates two repositories for moneys the state anticipates receiving as a result of the tobacco litigation settlement agreement. This bill will not affect state or local government revenue or expenditures. Therefore, the bill is assessed as having no fiscal impact. The bill creates two repositories for moneys the state anticipates receiving as a result of the tobacco litigation settlement agreement.