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SPONSOR: |
Aragon |
DATE
TYPED: |
3/3/03 |
HB |
|
||
SHORT
TITLE: |
Abolish
Tobacco Settlement Fund |
SB |
298/aSFC/aHCPAC |
||||
|
ANALYST: |
Smith |
|||||
REVENUE
Estimated Revenue |
Subsequent Years Impact |
Recurring or Non-Rec |
Fund Affected |
|
FY03 |
FY04 |
|
|
|
42,900.0 |
37,200.0 |
|
Recurring |
General Fund |
6,550.0 |
|
|
Nonrecurring |
General Fund |
(42,900.0) |
(37,200.0) |
|
Recurring |
Tobacco Settlement Permanent Fund |
(6,550.0) |
|
|
Nonrecurring |
Tobacco Settlement Program Fund |
(Parenthesis
( ) Indicate Revenue Decreases)
LFC Files
SUMMARRY
Synopsis of Bill, as amended
Senate Bill 298, as amended, diverts all the tobacco settlement payments from the tobacco settlement permanent fund to the general fund for
FY03 and FY04. Beginning in FY05, the diversion ceases and 50 percent of the
revenues will again be transferred to the tobacco settlement program fund.
Additionally, the unappropriated balance in the tobacco settlement program fund
is also transferred to the general fund.
SB298/a
also specifies that the tobacco settlement permanent fund is a reserve fund and
may be expended like other general fund reserve accounts when authorized by the
general appropriations act. No
additional appropriations or distributions from the tobacco settlement permanent
fund are permitted without a three-fifths vote of the legislature.
FISCAL IMPLICATIONS
This bill does not
actually appropriate the corpus of the permanent fund; it merely enables future
transfers and allows the inclusion of the permanent fund in the calculation of
reserve levels.
OTHER SUBSTANTIVE ISSUES
Permanent fund balances are invested by the State Investment Council in a diversified portfolio of stocks and bonds. Annual returns have been mostly negative since inception; cumulative losses total $5.5 million. Policymakers should anticipate further losses in FY 2003; November fund pricing implies a loss of $5.7 million, or 9.6 percent, since the beginning of the fiscal year.
SS/njw:yr