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Third Substitute S.B. 15
Representative Jeff Alexander proposes to substitute the following bill:
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USE OF TOBACCO SETTLEMENT REVENUES
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2000 GENERAL SESSION
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STATE OF UTAH
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Sponsor: L. Steven Poulton
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AN ACT RELATING TO THE TOBACCO SETTLEMENT ACCOUNT; CREATING THE
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TOBACCO SETTLEMENT ENDOWMENT AND RENAMING THE TOBACCO
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SETTLEMENT ACCOUNT; APPORTIONING TOBACCO SETTLEMENT FUNDS BETWEEN
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THE ACCOUNT AND THE ENDOWMENT; REQUIRING THAT FUNDS IN THE TOBACCO
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SETTLEMENT RESTRICTED ACCOUNT BE ALLOCATED EACH YEAR IN THE
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FOLLOWING ORDER: $5,500,000 FOR THE CHILDREN'S HEALTH INSURANCE
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PROGRAM, $3,000,000 FOR TOBACCO AND SUBSTANCE ABUSE PREVENTION,
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$3,000,000 FOR THE DRUG COURT PROGRAM, AND $4,000,000 FOR THE UNIVERSITY
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OF UTAH HEALTH SCIENCES CENTER; IMPOSING AN ANNUAL REPORTING
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REQUIREMENT; DIRECTING THE APPROPRIATION OF FUNDS FOR FISCAL YEAR
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2000-01; REPEALING THE HOSPITAL PROVIDER ASSESSMENT; PROVIDING AN
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EFFECTIVE DATE; AND PROVIDING A COORDINATING CLAUSE TO ALLOCATE
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TOBACCO SETTLEMENT FUNDS TO A CONSTITUTIONALLY CREATED TRUST FUND.
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This act affects sections of Utah Code Annotated 1953 as follows:
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AMENDS:
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26-40-102, as enacted by Chapter 360, Laws of Utah 1998
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26-40-103, as last amended by Chapters 21 and 61, Laws of Utah 1999
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63-97-101, as enacted by Chapter 78, Laws of Utah 1999
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ENACTS:
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52-7-12.1, Utah Code Annotated 1953
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63-97-301, Utah Code Annotated 1953
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RENUMBERS AND AMENDS:
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63-97-201, (Renumbered from 63-97-102, as enacted by Chapter 78, Laws of Utah 1999)
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REPEALS:
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26-40-111, as enacted by Chapter 360, Laws of Utah 1998
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26-40-112, as last amended by Chapter 78, Laws of Utah 1999
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26-40-113, as enacted by Chapter 360, Laws of Utah 1998
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26-40-114, as enacted by Chapter 360, Laws of Utah 1998
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
26-40-102
is amended to read:
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26-40-102. Definitions.
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As used in this chapter:
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[(1) "Assessment" means the hospital provider assessment established in Section
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26-40-111
.]
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[(2)] (1) "Child" means a person who is under 19 years of age.
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[(3)] (2) "Eligible child" means a child who qualifies for enrollment in the program as
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provided in Section
26-40-105
.
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[(4)] (3) "Enrollee" means any child enrolled in the program.
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[(5) "Freestanding ambulatory surgical facility" means an urban or rural nonhospital-based
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or nonhospital-affiliated licensed facility, as defined in Section
26-21-2
, as an ambulatory surgical
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facility, with an organized professional staff that provides surgical services to patients who do not
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require an inpatient bed.]
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[(6) (a) "Hospital" means any general acute hospital, as defined in Section
26-21-2
,
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operating in this state.]
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[(b) "Hospital" does not include:]
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[(i) a residential care or treatment facility, as defined in Subsections
62A-2-101
(16), (17),
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and (19);]
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[(ii) the Utah State Hospital;]
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[(iii) any rural hospital that operates outside of a metropolitan statistical area, a
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metropolitan area, or an urbanized area as designated by the U.S. Bureau of Census; or]
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[(iv) any specialty hospital operating in this state, as defined in Section
26-21-2
, that is
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engaged exclusively in rendering psychiatric or other mental health treatment.]
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[(7) "Hospital-based ambulatory surgical facility" means an urban or rural on-hospital
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campus or hospital-affiliated licensed facility with an organized professional staff that provides
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surgical services to patients who do not require an inpatient bed.]
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[(8)] (4) "Plan" means the department's plan submitted to the United States Department
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of Health and Human Services pursuant to 42 U.S.C. Sec. 1397ff.
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[(9)] (5) "Program" means the Utah Children's Health Insurance Program created by this
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chapter.
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Section 3.
Section
26-40-103
is amended to read:
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26-40-103. Creation and administration of the Utah Children's Health Insurance
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Program.
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(1) There is created the Utah Children's Health Insurance Program to be administered by
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the department in accordance with the provisions of:
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(a) this chapter; and
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(b) the State Children's Health Insurance Program, 42 U.S.C. Sec. 1397aa et seq.
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(2) The department shall:
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(a) prepare and submit the state's children's health insurance plan before May 1, 1998, and
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any amendments to the federal Department of Health and Human Services in accordance with 42
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U.S.C. Sec. 1397ff; and
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(b) make rules in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
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Act regarding:
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(i) eligibility requirements consistent with Subsection
26-18-3
(6);
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(ii) program benefits;
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(iii) the level of coverage for each program benefit;
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(iv) cost-sharing requirements for enrollees, which may not:
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(A) exceed the guidelines set forth in 42 U.S.C. Sec. 1397ee; or
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(B) impose deductible, copayment, or coinsurance requirements on an enrollee for
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well-child, well-baby, and immunizations; and
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(v) the administration of the program[; and].
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[(vi) the provider assessment, including:]
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[(A) the factor for the assessment;]
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[(B) the administration, collection, and enforcement of the assessment, including:]
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[(I) auditing a provider's records; and]
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[(II) imposing penalties for failure to pay the assessment as required; and]
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[(C) reducing the amount of the assessment to the extent funds are deposited into the
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Hospital Provider Assessment Account created in Section
26-40-112
as a result of private
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contributions to the program.]
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(3) Before July 1, 2001, the Governor's Office of Planning and Budget shall study the
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effectiveness of the department's administration of the program and report any findings to:
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(a) the Health and Human Services Interim Committee of the Legislature;
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(b) the Health Policy Commission; and
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(c) the department.
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Section 2.
Section
51-7-12.1
is enacted to read:
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51-7-12.1. Deposit or investment of Tobacco Settlement Endowment -- Authorized
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deposits and investment -- Asset manager.
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(1) Notwithstanding the requirements of Section
51-7-11
, monies in the Tobacco
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Settlement Endowment established by Section
63-97-301
shall be deposited or invested only in
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the following:
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(a) any deposit or investment authorized by Section
51-7-11
;
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(b) equity securities, including common and preferred stock issued by corporations listed
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on a major securities exchange, in accordance with the following criteria applied at the time of
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investment:
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(i) the treasurer may not invest more than 5%, determined on a cost basis, of the total
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endowment assets in the securities of any one issuer;
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(ii) the treasurer may not invest more than 25%, determined on a cost basis, of the total
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endowment assets in a particular industry;
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(iii) the treasurer may not invest more than 5%, determined on a cost basis, of the total
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endowment assets in securities of corporations that have been in continuous operation for less than
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three years;
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(iv) the endowment may not hold in excess of 5% of the outstanding voting securities of
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any one corporation; and
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(v) at least 75% of the corporations in which investments are made under Subsection (1)(b)
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must appear on the Standard and Poor's 500 Composite Stock Price Index;
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(c) fixed-income securities, including bonds, notes mortgage securities, zero coupon
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securities, and convertible securities issued by domestic corporations rated A or higher by Moody's
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Investor's Service, Inc. or by Standard and Poor's Corporation in accordance with the following
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criteria applied at the time of investment:
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(i) the treasurer may not invest more than 5%, determined on a cost basis, of the total
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endowment assets in the securities of any one issuer;
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(ii) the treasurer may not invest more than 25%, determined on a cost basis, of the total
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endowment assets in a particular industry;
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(iii) the treasurer may not invest more than 5%, determined on a cost basis, of the total
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fund assets in the securities of corporations that have been in continuous operation for less than
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three years; and
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(iv) the dollar-weighted average maturity of fixed-income securities acquired under
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Subsection (1)(c), may not exceed ten years;
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(d) fixed-income securities issued by agencies of the United States and
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government-sponsored organizations, including mortgage-backed pass-through certificates and
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mortgage-backed bonds;
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(e) shares of an open-end diversified management investment company established under
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the Investment Companies Act of 1940; and
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(f) shares of or deposits in a pooled-investment program.
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(2) (a) No more than 65% of the total fund assets of any of this endowment, on a cost
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basis, may be invested in common or preferred stocks at any one time.
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(b) At least 35% of the total assets of this endowment shall be invested in fixed-income
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securities authorized by Subsections (1)(a), (c), and (d).
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(3) The treasurer shall use appropriate investment strategies to protect the principal of the
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endowment administered under this section during periods of financial market volatility.
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(4) (a) The treasurer may employ professional asset managers to assist in the investment
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of assets of the endowment.
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(b) The treasurer may provide compensation to asset managers from earnings generated
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by the funds' investments.
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(5) The council shall give suggestions, advice, and opinions to the treasurer in regard to
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this section.
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Section 4.
Section
63-97-101
is amended to read:
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CHAPTER 97. TOBACCO SETTLEMENT FUNDS
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63-97-101. Title.
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This chapter is known as the "Tobacco Settlement [Account] Funds."
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Section 5.
Section
63-97-201
, which is renumbered from Section 63-97-102 is renumbered
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and amended to read:
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Part 2. Tobacco Settlement Restricted Account
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[63-97-102]. 63-97-201. Creation of Tobacco Settlement Restricted Account.
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(1) There is created within the General Fund a restricted account known as the Tobacco
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Settlement Restricted Account.
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(2) The account shall earn interest.
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[(2)] (3) The account shall consist of:
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(a) until July 1, 2003, 50% of all funds of every kind that are received by the state that are
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related to the settlement agreement that the state entered into with leading tobacco manufacturers
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on November 23, 1998[.];
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[(3) Funds in the account may only be used as directed by the Legislature through
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appropriation.]
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(b) on and after July 1, 2003, 40% of all funds of every kind that are received by the state
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that are related to the settlement agreement that the state entered into with leading tobacco
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manufacturers on November 23, 1998; and
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(c) interest earned on the account.
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(4) To the extent that funds will be available for appropriation in a given fiscal year, those
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funds shall be appropriated from the account in the following order:
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(a) $5,500,000 to the Department of Health for the Children's Health Insurance Program
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created in Section
26-40-103
;
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(b) $2,000,000 to the Department of Health for alcohol, tobacco, and other drug prevention,
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reduction, cessation, and control programs that promote unified messages and make use of media
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outlets, including radio, newspaper, billboards and televison, and with a preference in funding
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given to tobacco-related programs;
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(c) $1,000,000 to the Department of Health to be distributed to local health departments
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to continue tobacco prevention, reduction, cessation, and control programs;
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(d) $297,600 to the Administrative Office of the Courts and $1,991,300 to the Department
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of Human Services for the statewide expansion of the drug court program;
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(e) $77,400 to the Board of Pardons, $108,700 to the Department of Corrections, and
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$525,000 to the Department of Human Service for a drug board pilot program;
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(f) $4,000,000 to the State Board of Regents for the University of Utah Health Sciences
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Center to benefit the health and well-being of Utah citizens through in-state research, treatment,
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and educational activities; and
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(g) any remaining funds as directed by the Legislature through appropriation.
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(5) (a) If tobacco funds in dispute for attorneys fees are received by the state, those funds
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shall be divided and deposited in accordance with Subsection (3) and Section
63-97-301
.
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(b) The amount appropriated to the Department of Health for alcohol, tobacco, and other
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drug programs described in Subsection (4)(b), including the funding preference for tobacco-related
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programs, shall be increased by up to $2,000,000 in a given fiscal year to the extent that funds in
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dispute for attorneys fees are available to the state for appropriation from the account.
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(6) Each state agency identified in Subsection (4) shall provide an annual report on the
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program and activities funded under Subsection (4) to:
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(a) the Health and Human Services Interim Committee no later than September 1; and
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(b) the Health and Human Services Joint Appropriations Subcommittee.
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Section 6.
Section
63-97-301
is enacted to read:
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Part 3. Tobacco Settlement Endowment.
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63-97-301. Tobacco Settlement Endowment.
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(1) There is created within the General Fund a restricted account known as the Tobacco
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Settlement Endowment.
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(2) Monies in the account shall be deposited or invested pursuant to Section
51-7-12.1
.
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(3) The account shall consist of:
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(a) until July 1, 2003, 50% of all funds of every kind that are received by the state that are
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related to the settlement agreement that the state entered into with leading tobacco manufacturers
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on November 23, 1998;
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(b) on and after July 1, 2003, 60% of all funds of every kind that are received by the state
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that are related to the settlement agreement that the state entered into with leading tobacco
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manufacturers on November 23, 1998;
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(c) capital gains on assets in the account; and
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(d) interest and dividends earned on investments.
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(4) Tobacco settlement funds and capital gains in the account pursuant to Subsections
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(3)(a), (b), and (c) shall be treated as principal and may not be appropriated for any purpose, but
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shall remain in the account for the purpose of earning interest and dividends to be appropriated in
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accordance with Subsection (5).
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(5) (a) 50% of the interest and dividends earned annually on the account shall remain in
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the account and be deposited or invested as principal.
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(b) Any annual interest earned on the account that remains after Subsection (6)(a) may be
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appropriated by the Legislature.
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Section 7. Repealer.
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This act repeals:
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Section 26-40-111, Provider assessment.
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Section 26-40-112, Hospital Provider Assessment Account.
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Section 26-40-113, Intergovernmental transfers.
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Section 26-40-114, Repeal of assessment.
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Section 8. Appropriation.
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(1) Fifty percent of the tobacco settlement funds in the Tobacco Settlement Account
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created by Section
63-97-201
as of June 30, 2000, shall be deposited into the Tobacco Settlement
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Endowment created by Section
63-97-301
on July 1, 2000.
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(2) Funds remaining in the Tobacco Settlement Account after Subsection (1) are
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appropriated for fiscal year 2000-01 in the following order:
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(a) $5,500,000 to the Department of Health for the Children's Health Insurance Program;
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(b) $2,000,000 to the Department of Health for alcohol, tobacco, and other drug prevention,
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reduction, cessation, and control programs as described in Section
63-97-201
, including the
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funding preference for tobacco-related programs;
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(c) $1,000,000 to the Department of Health to be distributed to local health departments
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to continue tobacco prevention, reduction, cessation, and control programs;
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(d) $297,600 to the Administrative Office of the Courts and $1,991,300 to the Department
241
of Human Services for the drug court program as provided in Section
63-97-201
;
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(e) $77,400 to the Board of Pardons, $108,700 to the Department of Corrections, and
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$525,000 to the Department of Human Service for a drug board pilot program; and
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(f) $4,000,000 to the State Board of Regents for the University of Utah Health Sciences
245
Center as provided in Section
63-97-201
.
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(3) If tobacco funds in dispute for attorneys fees are received by the state during fiscal year
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2000-01:
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(a) those funds shall be divided and deposited in accordance with Section
63-97-201
and
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63-97-301
; and
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(b) the amount appropriated to the Department of Health for alcohol, tobacco, and other
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drug programs described in Subsection (2)(b), including the funding preference for tobacco-related
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programs, shall be increased by up to $2,000,000 to the extent that funds in dispute for attorneys
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fees are available to the state for appropriation from the account created by Section
63-97-201
.
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(4) It is the intent of the Legislature that funds deposited into the Tobacco Settlement
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Account after July 1, 2000, and before July 1, 2001, may be used, as they become available, if
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necessary for the appropriation in Subsection (2).
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(5) The appropriation in this section is the only appropriation that may be made for
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tobacco settlement funds for fiscal year 2000-01.
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(6) Any funds remaining in the Hospital Providers Assessment Account as of June 30,
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2000, shall lapse into the General Fund.
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Section 9. Effective date.
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This act takes effect on July 1, 2000.
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Section 10. Coordination clause.
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(1) If this bill and H.B. 390, Endowment Fund for Tobacco Settlement Monies, both pass
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it is the intent of the Legislature that:
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(a) The amendments to Section
51-7-12.1
in H.B. 390 supercede the amendments to
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Section
51-7-12.1
in this bill and that the reference to "Section
63-97-102
" in Section
51-7-12.1
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in H.B. 390 be amended to read "
63-97-301
".
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(b) The renumbering and amendments to Section
63-97-102
in this bill supercede the
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amendments to Section
63-97-102
in H.B. 390.
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(2) If this bill passes and if S.J.R.14, Resolution Creating Constitutional Trust Fund,
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passes the Legislature and is approved by a majority of those voting at the next general election
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and thus becomes effective on January 1, 2001, it is the intent of the Legislature that effective as
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of January 1, 2001:
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(a) Section
63-97-301
be repealed and reenacted to read as follows:
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"63-97-301. Permanent state trust fund.
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(1) Until July 1, 2003, 50% of all funds of every kind that are received by the state that are
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related to the settlement agreement that the state entered into with leading tobacco manufacturers
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on November 23, 1998, shall be deposited into the permanent state trust fund created by and
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operated under Utah Constitution Article XXII, Section 4.
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(2) On and after July 1, 2003, 60% of all funds of every kind that are received by the state
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that are related to the settlement agreement that the state entered into with leading tobacco
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manufacturers on November 23, 1998, shall be deposited into the permanent state trust fund
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created by and operated under Utah Constitution Article XXII, Section 4.
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(3) Funds in the permanent state trust fund shall be deposited or invested pursuant to
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Section
51-7-12.1
.
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(4) (a) 50% of the interest and dividends earned annually from the permanent state trust
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fund shall remain in the fund to be treated as principal.
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(b) Any annual interest or dividends earned from the permanent state trust fund that remain
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after Subsection (4)(a) may be appropriated by the Legislature."
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(b) The reference to "the Tobacco Settlement Endowment established by Section
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63-97-301
" in Subsection
51-7-12.1
(1) be amended to read "the permanent state trust fund created
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by and operated under Utah Constitution Article XXII, Section 4".
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(c) Any and all funds in the Tobacco Settlement Endowment created in Section 6 of this
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bill shall be deposited into the permanent state trust fund created by and operated under Utah
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Constitution Article XXII, Section 4.
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(d) The Office of Legislative Research and General Counsel shall prepare the database for
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publication to reflect the statutory changes in Subsections (2)(a) and (b)."
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