Full Senate Approves Sen. Taylor's Tobacco Trust Fund Bill

Legislation establishing a special savings account for Oklahoma's tobacco settlement funds has been approved by the full State Senate. SB 1404 by Senator Stratton Taylor passed on a 45-1 vote Monday.

"I think the vote demonstrates that there is strong support for the idea of creating a special tobacco savings account for the people of Oklahoma. We're trying to set up a mechanism that will allow the state to put a substantial share of its tobacco funds into a special nest egg - one that
benefits not just this generation, but generations to come," said Senator Taylor, Senate President Pro Tempore.

Even though no agreement has been reached on the ultimate use of Oklahoma's $2.3 billion tobacco settlement, Senator Taylor believes the state needs to begin the process of structuring a special tobacco trust fund. In an effort to get such discussions underway, he introduced SB 1404 - legislation that would create such a special savings account.

Under Senator Taylor's proposal, the trust fund would be administered by a seven-member board of directors appointed by a variety of state officials. The panel would be a bipartisan body of highly qualified individuals representing all parts of the state.

"The Oklahomans I've talked to want a lot of people involved in the process, instead of a single person calling the shots on how the state invests or spends the tobacco settlement money. I think it's important to have a variety of viewpoints and regions represented on the board, and that's what my legislation proposes," said Senator Taylor.

Under Taylor's proposal, the following guidelines would govern the board and its appointees:

• Board members would be appointed by the Governor, the Senate President Pro
  Tempore, the Speaker of the House, the Attorney General, the State
  Treasurer, the State Auditor and Inspector and the Superintendent of Public
  Instruction;
  
  
• At least one appointee would come from each congressional district, but no
  more than two appointees could come from any one such district;
  
  
• No more than four appointees could come from the same political party;
  
  
• Appointees shall have experience in public or private finance, investment
  funds management, the health care industry or children's programs;
  
  
• Appointees shall meet quarterly to oversee management of Trust Fund
  investments;
  
  
• Appointees may review proposals and make recommendations to the Legislature
  regarding how interest from the Trust Fund should be spent.

Currently, Oklahoma's annual share of its $2.3 billion tobacco settlement is deposited directly into the state general revenue account. The state will receive the annual payments for the next 25 years. Several state officials have talked about creating a trust fund for a portion of the money, but no official action has been taken yet.

"I think almost everyone supports the concept of a tobacco trust fund, but we still have to work through a number of questions related to its creation. This is a once-in-a-lifetime opportunity and we need to examine it thoroughly before we make any final decision," said Senator Taylor.

The legislation now goes to the State House for consideration.