H.B. 260 Enrolled

TOBACCO FUND ALLOCATION AMENDMENTS
2004 GENERAL SESSION
STATE OF UTAH
Sponsor: Jack A. Seitz

LONG TITLE
General Description:
This bill amends the percentage of tobacco settlement funds deposited in the restricted
account and in the permanent state trust fund.
Highlighted Provisions:
This bill:
. changes the percentage of tobacco revenue deposited into the Tobacco Settlement
Restricted Account to 70% of the revenues received by the state from July 1, 2004
through July 1, 2006, and to 55% after July 1, 2006; and
. changes the percentage of tobacco revenue deposited into the state's permanent state
trust fund to 30% of the revenue received by the state from July 1, 2004 until July 1,
2006, and to 45% after July 1, 2006.
Monies Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
63-97-201, as last amended by Chapter 323, Laws of Utah 2003
63-97-301, as last amended by Chapter 323, Laws of Utah 2003

Be it enacted by the Legislature of the state of Utah:
Section 1. Section 63-97-201 is amended to read:
63-97-201. Creation of Tobacco Settlement Restricted Account.

(1) There is created within the General Fund a restricted account known as the "Tobacco
Settlement Restricted Account."
(2) The account shall earn interest.
(3) The account shall consist of:
(a) until July 1, 2003, 50% of all funds of every kind that are received by the state that are
related to the settlement agreement that the state entered into with leading tobacco manufacturers
on November 23, 1998;
(b) on and after July 1, 2003 and until July 1, 2004, 80% of all funds of every kind that
are received by the state that are related to the settlement agreement that the state entered into
with leading tobacco manufacturers on November 23, 1998;
(c) on and after July 1, 2004 and until July 1, [2007, 50%] 2006, 70% of all funds of
every kind that are received by the state that are related to the settlement agreement that the state
entered into with leading tobacco manufacturers on November 23, 1998;
(d) on and after July 1, [2007, 40%] 2006, 55% of all funds of every kind that are
received by the state that are related to the settlement agreement that the state entered into with
leading tobacco manufacturers on November 23, 1998; and
(e) interest earned on the account.
(4) To the extent that funds will be available for appropriation in a given fiscal year, those
funds shall be appropriated from the account in the following order:
(a) $7,000,000 to the Department of Health for the Children's Health Insurance Program
created in Section 26-40-103 and for restoration of dental benefits in the Children's Health
Insurance Program;
(b) $4,000,000 to the Department of Health for alcohol, tobacco, and other drug
prevention, reduction, cessation, and control programs that promote unified messages and make
use of media outlets, including radio, newspaper, billboards, and television, and with a preference
in funding given to tobacco-related programs;
(c) $193,700 to the Administrative Office of the Courts and $1,296,300 to the
Department of Human Services for the statewide expansion of the drug court program;

- 2 -

(d) $77,400 to the Board of Pardons, $81,700 to the Department of Corrections, and
$350,900 to the Department of Human Services for a drug board pilot program;
(e) $4,000,000 to the State Board of Regents for the University of Utah Health Sciences
Center to benefit the health and well-being of Utah citizens through in-state research, treatment,
and educational activities; and
(f) any remaining funds as directed by the Legislature through appropriation.
(5) (a) If tobacco funds in dispute for attorneys fees are received by the state, those funds
shall be divided and deposited in accordance with Subsection (3) and Section 63-97-301 .
(b) The amount appropriated from the Tobacco Settlement Restricted Account to the
Department of Health for alcohol, tobacco, and other drug programs described in Subsection
(4)(b), including the funding preference for tobacco-related programs, shall be increased by up to
$2,000,000 in a given fiscal year to the extent that funds in dispute for attorneys fees are available
to the state for appropriation from the account.
(6) Each state agency identified in Subsection (4) shall provide an annual report on the
program and activities funded under Subsection (4) to:
(a) the Health and Human Services Interim Committee no later than September 1; and
(b) the Health and Human Services Joint Appropriations Subcommittee.
Section 2. Section 63-97-301 is amended to read:
63-97-301. Permanent state trust fund.
(1) Until July 1, 2003, 50% of all funds of every kind that are received by the state that
are related to the settlement agreement that the state entered into with leading tobacco
manufacturers on November 23, 1998, shall be deposited into the permanent state trust fund
created by and operated under Utah Constitution Article XXII, Section 4.
(2) On and after July 1, 2003 and until July 1, 2004 20% of the funds of any kind received
by the state that are related to the settlement agreement that the state entered into with leading
tobacco manufacturers shall be deposited into the permanent state trust fund created by and
operated under Utah Constitution Article XXII, Section 4.
(3) On and after July 1, 2004 and until July 1, [2007 50%] 2006, 30% of all funds of any

- 3 -

kind received by the state that are related to the settlement agreement that the state entered into
with leading tobacco manufacturers shall be deposited into the permanent state trust fund created
by and operated under Utah Constitution Article XXII, Section 4.
(4) On and after July 1, [2007, 60%] 2006, 45% of all funds of every kind that are
received by the state that are related to the settlement agreement that the state entered into with
leading tobacco manufacturers on November 23, 1998, shall be deposited into the permanent state
trust fund created by and operated under Utah Constitution Article XXII, Section 4.
(5) Funds in the permanent state trust fund shall be deposited or invested pursuant to
Section 51-7-12.1 .
(6) (a) In accordance with Utah Constitution Article XXII, Section 4, the interest and
dividends earned annually from the permanent state trust fund shall be deposited in the General
Fund. There shall be transferred on an ongoing basis from the General Fund to the permanent
state trust fund created under Utah Constitution Article XXII, Section 4, an amount equal to 50%
of the interest and dividends earned annually from the permanent state trust fund. The amount
transferred into the fund under this Subsection (6)(a) shall be treated as principal.
(b) Any annual interest or dividends earned from the permanent state trust fund that
remain in the General Fund after Subsection (6)(a) may be appropriated by the Legislature.
(c) Any realized or unrealized gains or losses on investments in the permanent state trust
fund shall remain in the permanent state trust fund.

- 4 -