HCS SS#2 SB 1191 -- MISSOURI TOBACCO SETTLEMENT

SPONSOR:  Jacob (Graham)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Banks and
Financial Institutions by a vote of 11 to 7.

This substitute allows the state to sell a portion of its share
of tobacco settlement proceeds through the Missouri Tobacco
Settlement Authority, which is created by the substitute.  The
authority will consist of the Governor, Lieutenant Governor,
Attorney General, President Pro Tem of the Senate, and the
Speaker of the House of Representatives.  The Governor will be
authorized to sell or assign to the authority up to 30% of the
state's share of tobacco settlement proceeds.

Proceeds from bonds issued by the authority will be deposited in
the Tobacco Securitization Settlement Trust Fund.  Moneys in the
fund must be used solely for the payment of all amounts due the
state.  Within the fund is a qualified tax-exempt expenditure
account and a taxable expenditure account.  Net proceeds from
tax-exempt bonds will be deposited in the former account and used
to reimburse the state.  Net proceeds from taxable bonds will be
deposited in the latter account and transferred to the State
Treasurer for deposit in the General Revenue Fund.

Those amounts deposited in the General Revenue Fund will be used
solely for implementing the program plan which provides funds for
budget purposes to fund one-time expenditures, short-term revenue
shortfalls, and capital projects of any kind.

The authority will not have the power to agree to or pay any
expenses, reimbursements, insurance, or credit enhancements that
exceed 1.5% of the total sales price of the bonds or other
funding options.  The authority will dissolve no later than two
years from the date of the final payment of all outstanding bonds
and the satisfaction of all outstanding obligations of the
authority, except to the extent necessary to fulfill outstanding
covenants or provisions with bondholders or third parties.

The substitute also adds the Speaker of the House of
Representatives or the Speaker's designee and the President Pro
Tempore of the Senate or the President Pro Tempore's designee to
the Board of Public Buildings.

The substitute contains an emergency clause.

FISCAL NOTE:  Not available at time of printing.

PROPONENTS:  Supporters say that the state will never get the
full amount promised to it in the tobacco settlement; the state's
financial position has deteriorated and will continue to do so;
the substitute allows the state to sell up to 30% of the
settlement funds; and the money can only be used for qualified
expenditures, such as capital projects, one-time expenses, and to
repay the Rainy Day Fund and cash reserves.

Testifying for the bill were Senator Jacob; and Division of
Accounting, Office of Administration.

OPPONENTS:  There was no opposition voiced to the committee.

Mark Pioli, Legislative Analyst

Missouri House of Representatives
Last Updated October 11, 2002 at 9:04 am