NOTE:  As provided in LFC policy, this report is intended only for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used for other purposes.

 

The most recent FIR version (in HTML & Adobe PDF formats) is available on the Legislative Website.  The Adobe PDF version includes all attachments, whereas the HTML version does not.  Previously issued FIRs and attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

 

 

F I S C A L   I M P A C T   R E P O R T

 

 

SPONSOR:

Coll

 

DATE TYPED:

2/10/03

 

HB

262

 

SHORT TITLE:

Tobacco Settlement Permanent Fund Distribution

 

SB

 

 

 

ANALYST:

Smith

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

 

 

 

 

21,450.0

 

Recurring

 

Tobacco Settlement Program Fund

 

(21,450.0)

 

Recurring

 

Tobacco Settlement Permanent Fund

 

 

 

 

 

(Parenthesis ( ) Indicate Revenue Decreases)

 

SOURCES OF INFORMATION

 

Conflicts with SB298 and HB244

 

Responses Received From

 

DFA

 

SUMMARY

 

     Synopsis of Bill

 

This bill would change the amount of funds transferred from the tobacco settlement permanent fund to the tobacco settlement program fund to 100% percent of the amount received each year.  Current law provides that 50% of the amount received each year to be transferred from the permanent fund to the program fund and thereby made available for appropriation.  The Legislature is allowed by law to appropriate money only from the program fund.  The bill requires the LFC to report to the legislature no later than January 18, 2005 about the impact of the distribution change.

 

     Significant Issues

 

This is an initiative of the Legislative Finance Committee.

 

CONFLICT

 

This bill conflicts with SB298 and HB244. The Executive proposals abolish all the tobacco funds and divert the revenue to the general fund.

 

OTHER SUBSTANTIVE ISSUES

 

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/prr