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H.B. 290

             1     

TOBACCO PREVENTION FUNDING

             2     
2001 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Karen W. Morgan

             5      This act modifies the distribution of tobacco settlement funds. This act makes amendments
             6      necessary to comply with Utah Constitution Article XXII, Section 4. This act appropriates
             7      50% of the annual interest and dividends earned by the permanent state trust fund for
             8      tobacco settlement monies to the Department of Health for alcohol, tobacco, and other drug
             9      prevention, reduction, cessation, and control programs. This act provides an effective date.
             10      This act affects sections of Utah Code Annotated 1953 as follows:
             11      AMENDS:
             12          63-97-301, as enacted by Chapter 351, Laws of Utah 2000
             13      Be it enacted by the Legislature of the state of Utah:
             14          Section 1. Section 63-97-301 is amended to read:
             15           63-97-301. Permanent state trust fund.
             16          (1) Until July 1, 2003, 50% of all funds of every kind that are received by the state that are
             17      related to the settlement agreement that the state entered into with leading tobacco manufacturers
             18      on November 23, 1998, shall be deposited into the permanent state trust fund created by and
             19      operated under Utah Constitution Article XXII, Section 4.
             20          (2) On and after July 1, 2003, 60% of all funds of every kind that are received by the state
             21      that are related to the settlement agreement that the state entered into with leading tobacco
             22      manufacturers on November 23, 1998, shall be deposited into the permanent state trust fund
             23      created by and operated under Utah Constitution Article XXII, Section 4.
             24          (3) Funds in the permanent state trust fund shall be deposited or invested pursuant to
             25      Section 51-7-12.1 .
             26          (4) (a) [Fifty percent of] In accordance with Utah Constitution Article XXII, Section 4, the
             27      interest and dividends earned annually from the permanent state trust fund shall [remain in the


             28      fund to] be deposited in the General Fund. Beginning fiscal year 2000-01 there shall be transferred
             29      on an ongoing basis from the General Fund to the permanent state trust fund created under Utah
             30      Constitution Article XXII, Section 4, an amount equal to 50% of the interest and dividends earned
             31      annually from the permanent state trust fund. The amount transferred into the fund under this
             32      Subsection (4)(a) shall be treated as principal.
             33          (b) [Any] Beginning fiscal year 2001-02, any annual interest or dividends earned from the
             34      permanent state trust fund that remain in the General Fund after Subsection (4)(a) [may] shall be
             35      appropriated [by the Legislature] on an ongoing basis from the General Fund to the Department
             36      of Health for the purposes set forth in Subsection 63-97-201 (4)(b).
             37          Section 2. Effective date.
             38          This act takes effect on July 1, 2001.




Legislative Review Note
    as of 2-1-01 3:09 PM


The amendments in Subsection 63-97-301(4) of this bill address a constitutional conflict that
happened when the permanent state trust fund was approved by the voters in November 2000 and
became law on January 1, 2001. That new constitutional provision requires the income from the
state trust fund to be deposited into the state's General Fund. The current statute does not deposit
the interest income into the General Fund. The current statute retains fifty percent of the interest
and dividends in the state trust fund to be treated as principal. The amendments to Subsection 63-
97-301(4) in this bill maintain the intent of the 2000 Legislature to retain fifty percent of the
interest as principal, but does so by transferring it on an ongoing basis from the General Fund to
the permanent state trust fund.

Office of Legislative Research and General Counsel


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