COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 4827-10
Bill No.: Truly Agreed to and Finally Passed HS for HCS for SS#2 for SB 1191
Subject: Bonds: Tobacco Settlement
Type: Original
Date: May 24, 2002
FISCAL SUMMARY
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| General Revenue | $532,634,279 | ($4,000) | ($4,000) |
| Healthy Families Trust | $0 | ($43,000,000) | ($43,000,000) |
| Total Estimated
Net Effect on All State Funds |
$532,634,279 | ($43,004,000) | ($43,004,000) |
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2003 | FY 2004 | FY 2005 |
| Local Government | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 3 pages.
ASSUMPTION
Officials of the Office of Administration's Division of Budget and Planning, the Office of the Governor, the Office of the Attorney General, the Office of the State Treasurer, the House of Representatives and the Senate, in responses to a similar proposal, stated either that the proposal would not affect their agency or that their agency could accomplish duties under terms of this proposal with existing resources.
Officials of the Office of Administration - Division of Accounting, in response to a similar proposal, computed ongoing costs to the Healthy Families Trust Fund of $43,000,000 per year beginning in FY 2004 based on the following assumptions: Bond Issue Amount of $584,255,000; 21-Year Maturity; 5.321% Average Interest Rate; Debt Service Reserve Fund from bond proceeds; Cost of Issuance paid from bond proceeds; Bonds sold in second half of FY 2003; and receipt in General Revenue of all net bond proceeds for permissible expenditures in FY 2003.
| FISCAL IMPACT - State Government | FY 2003 | FY 2004 | FY 2005 |
| GENERAL REVENUE FUND | |||
| Income - Bond Sale Proceeds | $532,673,669 | $0 | $0 |
| Costs - Bond Issue Costs | ($39,390) | ($4,000) | ($4,000) |
| ESTIMATED NET EFFECT ON GENERAL REVENUE FUND | $532,634,279 | ($4,000) | ($4,000) |
| HEALTHY FAMILIES TRUST FUND | |||
| Cost - Bond Receipts Pledge | $0 | ($43,000,000) | ($43,000,000) |
| ESTIMATED NET EFFECT ON HEALTHY FAMILIES TRUST FUND | $0 | ($43,000,000) | ($43,000,000) |
| FISCAL IMPACT - Local Government | FY 2003 | FY 2004 | FY 2005 |
| $0 | $0 | $0 |
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
DESCRIPTION
This proposal would establish a Tobacco Settlement Financing Authority which would implement and administer securitization of a portion of the state's share of payments received under terms of the Master Settlement Agreement with certain tobacco companies.
The proposal would also establish a joint committee of the General Assembly, the Advisory Committee on Tobacco Securitization, which would study and recommend financial advisors, investment bankers and professional advisors to the Tobacco Settlement Financing Authority.
This act contains an emergency clause and would go into effect upon the Governor's signature or May 24, 2002, whichever occurs later.
This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space. This legislation would not affect Total State Revenue.
SOURCES OF INFORMATION
Office of Administration - Division of Accounting
Mickey Wilson, CPA
Acting Director
May 24, 2002