
[ Previous Section |
Next Section |
Contents ]
Tobacco Settlement Funds
Settling the Tobacco Lawsuit
In the late 1990's Louisiana joined in a nationwide suit to sue
the tobacco industry for the costs incurred to the states for
treating smoking related illnesses. In 1998, in an unprecedented
victory, the states won the suit and are now receiving payments in
perpetuity from the tobacco companies as specified in the Master
Settlement Agreement.
Trusting the Tobacco Settlement Proceeds
- The Louisiana Legislature proposed a constitutional
amendment to trust the monies received from the Master
Settlement Agreement similar to the manner in which the state
chose to trust monies received in the settlement agreement
between the State of Louisiana v. United States relative to
monies attributable to mineral production activities or
leasing activities on the Outer Continental Shelf. Monies from
that settlement are deposited in the Louisiana Education
Quality Trust Fund, commonly referred to as the 8(g)
settlement.
- The amendment to trust the tobacco settlement proceeds was
ratified by the Louisiana voters in October 1999.
The Trust Funds
The Millennium Trust
The Millennium Trust received and/or will receive the following
allocations from tobacco settlement proceeds:
- Fiscal 2000-2001, forty-five percent of the total monies
received that year.
- Fiscal Year 2001-2002, sixty percent of the total monies
received that year.
- Fiscal Year 2002-2003, and each year thereafter,
seventy-five percent of the total monies received that year.
For Fiscal Years 2001 through 2003, 10% of the total monies
received in the Millennium Trust will be credited to the Education
Excellence Fund for various educational purposes.
The Millennium Trust Fund is divided into three individual
funds:
- The Health Excellence Fund receives one-third of the
Settlement Agreement proceeds deposited each year into
Millennium Trust and one-third of all investment earnings on
the investment of the Millennium Trust. Appropriations from
the Health Excellence Fund are restricted to:
- Initiatives to ensure optimal development of Louisiana's
children through the provision of appropriate health care.
- The Education Excellence Fund receives one-third of
the Settlement Agreement proceeds deposited each year into
Millennium Trust and one-third of all investment earnings on
the investment of the Millennium Trust. Appropriations from
the Education Excellence Fund are restricted to:
- Initiatives and funding for public and private
elementary and secondary schools
- The TOPS Fund receives one-third of the Settlement
Agreement proceeds deposited each year into Millennium Trust
and one-third of all investment earnings on the investment of
the Millennium Trust. Appropriations from the TOPS Fund are
restricted to:
- Support of state programs for financial assistance for
students attending Louisiana institutions of postsecondary
education.
The Louisiana Fund
The Louisiana Fund receives all monies after deposits into the
Millennium Trust Fund.
Appropriations from the Louisiana Fund are restricted to:
- Initiatives to ensure the optimal development of Louisiana's
children through enhancement of educational opportunities and
the provision of appropriate health care, which includes but
is not limited to:
- Early childhood intervention programs targeting children
from birth through age four, including programs to reduce
infant mortality
- Support of state programs for children's health
insurance
- School-based health clinics, rural health clinics, and
primary care clinics
- Initiatives to benefit the citizens of Louisiana with
respect to health care through pursuit of innovation in
advances health care sciences, provision of comprehensive
chronic disease management services and expenditures for
capital improvements for state health care facilities.
- Provision of direct health care services for tobacco-related
illnesses. Initiatives to diminish tobacco-related injury and
death to Louisiana's citizens through educational efforts,
cessation assistance services, promotion of a tobacco-free
lifestyle, and enforcement of the requirements if the
Settlement Agreement by the Attorney General.
Securitization of the Tobacco Settlement Proceeds
- Act 1145 of the 2001 Regular Session provided for the
securitization of a portion of Louisiana's tobacco settlement.
The purpose of securitizing a portion of the monies was to
hedge the prospect of tobacco companies going bankrupt and the
State losing future prospective earnings.
- In November of 2001, the state executed the securitization
of 60% of tobacco settlement monies and netted approximately
$1.2 billion.
- All proceeds from the sale were deposited into the
Millennium Trust and allocated as specified in the
Constitution.
|