Oklahoma would ultimately deposit 75 percent of its annual tobacco payments into a special trust fund administered by two panels of private citizens, under a bill given final approval by the State Senate Friday.
HB 2022 by Senate President Pro Tempore Stratton Taylor would ask voters to amend the Oklahoma Constitution to establish the Tobacco Settlement Endowment Trust Fund and guidelines for its administration.
"A trust fund will allow the state to put a substantial share of its tobacco funds into a special nest egg to benefit not just this generation, but generations to come. It will provide a great investment for our future," said Senator Taylor.
Under the provisions of the proposed constitutional amendment, a growing percentage of tobacco funds would be deposited into the trust fund each fiscal year, beginning at 50 percent of the annual tobacco payment in FY '02. The annual deposit would increase each year in 5 percent increments, eventually capping out at 75 percent of the total annual tobacco payment in FY '07.
"When the program is fully implemented, we'll be putting the lion's share of the tobacco payments into a savings account for the people. I think that's in keeping with the sentiments of a majority of Oklahomans," said Senator Taylor.
Two citizen member boards would be created to oversee the trust fund - one to invest the proceeds to maximize interest earnings and one to identify worthy programs on which to spend interest earnings. The measure would also set parameters on the type of programs that could be eligible for such trust fund expenditures.
"I think it makes good common sense to put private citizens in charge of managing and allocating the tobacco funds. The best way to ensure that the tobacco settlement money benefits everyone is by giving the people control of the purse strings," said Senator Taylor.
The board charged with investing tobacco funds would consist of the State Treasurer and four members appointed by Governor, the Speaker, the Senate President Pro Tempore and the State Auditor and Inspector. The panel that administers the trust fund and makes spending decisions will consist of seven members appointed by the Governor, the Speaker, the Senate President Pro Tempore, the Attorney General, the State Treasurer, the State Auditor and Inspector and the State Superintendent of Public Instruction. The legislation stipulates that both boards are bipartisan with members from all areas of the state.
"When it comes to investing and spending the tobacco settlement, I think it's critical that we bring as many viewpoints to the table as possible. That will help ensure that we get the best bang for our buck," said Senator Taylor.
Under the measure, trust fund interest earnings could be spent on several different kinds of initiatives, including research and treatment of tobacco-related diseases; tobacco cessation and prevention programs; health care for children and the elderly; and other efforts designed to enhance the lives of children such as common education, higher education and after-school programs.
"I think health and education programs will provide the most long-term benefits to the state of Oklahoma. The investments will make a difference not just for the children of today, but for their children as well," said Senator Taylor.