HB 401 -- TOBACCO SETTLEMENT PAYMENT SECURITIZATION

CO-SPONSORS:  Pratt, Bearden, Icet, Byrd, Hanaway, Phillips,
Crowell, Schaaf, Yates

COMMITTEE ACTION:  Voted "do pass" by the Special Committee on
Bonding Authority by a vote of 4 to 3.

This bill makes changes to the authorization allowing
securitization through the sale of bonds of a portion of the
state's annual tobacco settlement payments.

Under current law, a limit of $175 million of the bond proceeds
could be used in any one fiscal year.  Any unused amount could be
carried forward and be cumulatively added to the next fiscal
year's expenditure allowance of $175 million.  The bill changes
this provision by capping Fiscal Year 2003 expenditures of the
proceeds at $100 million and limiting future expenditures to no
more than $300 million in any subsequent fiscal year.

The bill also clarifies the law allowing concurrent authority to
the Board of Public Buildings to issue bonds for securitization
with the Tobacco Settlement Financing Authority and requires all
proceeds from the bond sale to be deposited in the Tobacco
Securitization Settlement Trust Fund.

The bill contains an emergency clause.

FISCAL NOTE:  No impact on state funds.

PROPONENTS:  Supporters say that the bill clarifies how bonds
backed by tobacco securitization payments can be issued and how
much of the proceeds from the bonds can be spent in any one
fiscal year.

Testifying for the bill was Representative Pratt.

OPPONENTS:  There was no opposition voiced to the committee.

OTHERS:  Others testifying on the bill say they want to avoid
cuts or withholdings, are in favor of securitization, don't want
any options closed off, and would rather see cuts next year than
withholdings this year.  The Missouri State Teachers Association
stated that it was concerned with limiting bond proceeds to $100
million this year.

Others testifying on the bill were Missouri Council of School
Administrators; Missouri School Boards Association; Cooperating
School Districts of Greater St. Louis; Missouri Association of
Secondary Principals; and Missouri State Teachers Association.

Bill Tucker, Deputy Director of Research

Missouri House of Representatives
Last Updated July 25, 2003 at 10:11 am