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Current Status Bill Number:View additional legislative information at the LPITS web site.4761 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:20000309 Primary Sponsor:Seithel All Sponsors:Seithel, Robinson, J. Brown, Easterday, Littlejohn, Simrill, Stuart and Woodrum Drafted Document Number:l:\council\bills\dka\3740mm00.doc Residing Body:House Current Committee:Ways and Means Committee 30 HWM Subject:Tobacco Health Care Funds Act, Agriculture, Treasurers, State; Medical, Board of Directors created; Commissions History Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ ------ 20000328 Scrivener's error corrected House 20000309 Introduced, read first time, 30 HWM referred to Committee Versions of This Bill Revised on March 28, 2000 - Word format
TO AMEND CHAPTER 30, TITLE 46, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE TOBACCO ECONOMY, BY ADDING ARTICLE 5 SO AS TO ESTABLISH A HEALTH CARE TRUST FUND, SEPARATE AND DISTINCT FROM THE STATE GENERAL FUND, INTO WHICH MUST BE DEPOSITED THE MONIES FROM THE SETTLEMENT OF THE LAWSUIT AGAINST TOBACCO COMPANIES BY THE STATE OF SOUTH CAROLINA, INCLUDING INCOME FROM THE INVESTMENT OF THOSE MONIES; TO PROVIDE THAT THE TRUST FUND REMAIN INVIOLATE AND NEVER BE EXPENDED, WITH CERTAIN EXCEPTIONS; TO ESTABLISH A HEALTH CARE EXPENDABLE FUND INTO WHICH MUST BE TRANSFERRED ANNUALLY CERTAIN MONIES FROM THE HEALTH CARE TRUST FUND; TO PROVIDE THAT THE MONIES IN THE HEALTH CARE EXPENDABLE FUND BE AVAILABLE FOR APPROPRIATION BY THE GENERAL ASSEMBLY, AND BE EXPENDED EXCLUSIVELY FOR HEALTH CARE PURPOSES; TO ESTABLISH A BOARD OF DIRECTORS TO MANAGE THE HEALTH CARE TRUST FUND AND THE HEALTH CARE EXPENDABLE FUND, TO PROVIDE FOR ITS MEMBERSHIP AND ITS POWERS AND DUTIES, TO PROVIDE THAT THE BOARD INVEST THE MONIES IN THE FUNDS IN ANY OF THE INVESTMENTS AUTHORIZED FOR INVESTMENT BY THE STATE OF SOUTH CAROLINA, AND TO PROVIDE FOR RELATED POWERS AND DUTIES OF THE BOARD.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. It is declared by the General Assembly that the funds received by the State of South Carolina from tobacco companies in settlement of a certain lawsuit brought against those companies by the State of South Carolina, or as a result of the settlement of any lawsuit brought against tobacco companies by another state, must be applied toward improving the health and health care of the citizens of this State. It is the intent of the General Assembly by this article to provide the manner and means necessary to carry out those purposes.
SECTION 2. Chapter 30, Title 46 of the 1976 Code is amended by adding:
Section 46-30-510. This article may be cited as the 'Tobacco Health Care Funds Act'.
Section 46-30-520. When used in this article, unless the context requires otherwise:
(1) 'Health care trust fund' means the trust fund established by Section 46-30-530 for the deposit of the monies received by the State of South Carolina as a result of the tobacco settlement, including income from the investment of those monies.
(2) 'Health care expendable fund' means the fund established by Section 46-30-540 for the annual transfer of certain monies from the Health Care Trust Fund that are available for appropriation by the General Assembly.
(3) 'Income' means all interest and dividends derived from the investment of any tobacco settlement monies and any capital gains from the sale or exchange of those investments.
(4) 'Tobacco settlement' means the settlement of any case brought against tobacco companies by this State or another state.
Section 46-30-530. (A) There is established the Health Care Trust Fund, separate and distinct from the state general fund, into which must be deposited two hundred eighty million dollars of the monies received by the State of South Carolina as a result of the tobacco settlement as of the end of fiscal year 2000, and all tobacco settlement installment payments made in subsequent years for which the use or purpose for expenditure is not restricted by the terms of the settlement, except as otherwise provided in Section 46-30-540(B). All income from the investment of the monies in the health care trust fund must be credited to the account of the Health Care Trust Fund. The monies in the Health Care Trust Fund at the end of the fiscal year may not lapse into the state general fund.
(B) The Health Care Trust Fund must remain inviolate and may never be expended, except as provided in this article. The General Assembly must appropriate from the Health Care Trust Fund such sums as necessary to recoup any monies lost as a result of any of the following actions:
(1) the federal Health Care Finance Administration, or other agency of the federal government, is successful in recouping tobacco settlement funds from the State of South Carolina;
(2) the federal share of funds for the support of the South Carolina Medicaid Program is reduced directly or indirectly as a result of the tobacco settlement;
(3) federal funding for any other program is reduced as a result of the tobacco settlement; or
(4) tobacco cessation programs are mandated by the federal government or court order.
Section 46-30-540. (A) In accordance with the purposes of this article, there is established the Health Care Expendable Fund, into which must be transferred from the Health Care Trust Fund the following sums in fiscal year:
(1) 2001, fifty million dollars;
(2) 2002, fifty-five million dollars;
(3) 2003, sixty million five hundred thousand dollars;
(4) 2004, sixty-six million five hundred thousand dollars;
(5) 2005 and each subsequent year, a sum equal to the average annual amount of the income from the investment of the funds in the health care trust fund since July 1, 2000.
(B) In any fiscal year in which interest and dividends from the investment of the monies in the health care trust fund are not sufficient to fund the full amount of the annual transfer into the Health Care Expendable Fund as required in subsection (A), the State Treasurer shall transfer from tobacco settlement installment payments an amount that is sufficient to fund fully the amount of the annual transfer.
(C) All income from the investment of the monies in the Health Care Expendable Fund must be credited to the account of the Health Care Expendable Fund. The monies in the Health Care Expendable Fund at the end of the fiscal year may not lapse into the state general fund.
(D) The monies in the Health Care Expendable Fund are available for expenditure pursuant to specific appropriation by the General Assembly beginning in fiscal year 2001, and must be expended exclusively for health care purposes.
Section 46-30-550. (A) There is established a board of directors to invest the monies in the Health Care Trust Fund and the Health Care Expendable Fund. The board of directors consists of the following fourteen members:
(1) eight voting members: the State Treasurer, or his designee; the Attorney General, or his designee; and one member from each congressional district to be appointed by the Governor with the advice and consent of the Senate. Of the members appointed by the Governor:
(a) one member must be appointed for an initial term that expires March 1, 2001;
(b) one member must be appointed for an initial term that expires March 1, 2002;
(c) one member must be appointed for an initial term that expires March 1, 2003;
(d) one member must be appointed for an initial term that expires March 1, 2004;
(e) one member must be appointed for an initial term that expires March 1, 2005;
(f) one member must be appointed for an initial term that expires March 1, 2006.
Upon expiration of any of the initial terms of office, the Governor shall appoint successors by and with the advice and consent of the Senate for terms of five years from the expiration date of the previous term. A member appointed by the Governor is eligible for reappointment. Each member appointed by the Governor shall possess knowledge, skill, and experience in business or financial matters commensurate with the duties and responsibilities of the board of directors in administering the health care trust fund and the health care expendable fund.
(2) two nonvoting, advisory members of the Senate and one nonvoting, advisory representative of the health care community must be appointed by the Lieutenant Governor. They shall serve for the length of the term of the appointing official and are eligible for reappointment;
(3) two nonvoting, advisory members of the House of Representatives and one nonvoting, advisory representative of the health care community must be appointed by the Speaker of the House. They shall serve for the length of the term of the appointing official and are eligible for reappointment;
(4) a person appointed to fill a vacancy on the board of directors must be appointed in the same manner as for a regular appointment and shall serve for the remainder of the unexpired term only.
(B) Nonlegislative members of the board of directors shall serve without compensation, but must be reimbursed for each day's official duties of the board at the same per diem, subsistence, and mileage as provided by law to members of state boards, committees, and commissions. Legislative members of the board of directors shall receive the same per diem, subsistence, and mileage as for attending committee meetings when the General Assembly is not in regular session.
(C) The State Treasurer shall serve as chairman of the board of directors. The board of directors shall elect annually one member to serve as vice chairman of the board. The vice chairman shall act as chairman in the absence of or upon the disability of the chairman or if there is a vacancy in the office of chairman.
(D) All expenses of the board of directors in carrying out its duties and responsibilities pursuant to this article, including the payment of compensation as provided for in subsection (B) to nonlegislative members of the board, must be paid from funds appropriated to the Office of the State Treasurer for that purpose.
(E) The board of directors shall invest the funds in the Health Care Trust Fund and the Health Care Expendable Fund in any of the investments authorized for investments by the State of South Carolina.
(F) In furtherance of the powers granted under subsection (E), the board of directors has the powers to carry out the purposes and provisions of this article including, but not limited to, the powers to:
(1) contract for necessary goods and services, to employ necessary personnel, and to engage the services of consultants for administrative and technical assistance in carrying out its duties and responsibilities in administering the Health Care Trust Fund and the Health Care Expendable Fund;
(2) administer the Health Care Trust Fund and the Health Care Expendable Fund in a manner that is sound actuarially for meeting the obligations of this article and to establish a comprehensive investment plan for the purposes of this article, which shall specify the investment policies to be utilized by the board of directors in administering the funds;
(3) sell, assign, transfer, and dispose of any of the securities and investments of the Health Care Trust Fund and the Health Care Expendable Fund, except that any sale, assignment, or transfer must have the majority approval of the entire board; and
(4) prepare or cause to be prepared annually an appropriately detailed report giving an accounting of the Health Care Trust Fund and the Health Care Expendable Fund and a description of the financial condition of the funds at the close of each fiscal year, including recommendations for legislation regarding the investment authority of the board of directors over the funds. The report must be submitted to the Governor, the Senate Finance Committee, and the House Ways and Means Committee each fiscal year."
SECTION 3. This act takes effect upon approval by the Governor.
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