MISSISSIPPI LEGISLATURE

2005 Regular Session

To: Appropriations

By: Representative Denny, Beckett, Ellington, Formby, Mayhall, Moore, Snowden, Wells-Smith

House Bill 1226

AN ACT TO AMEND SECTION 43-13-407, MISSISSIPPI CODE OF 1972, TO DIRECT THE BOARD OF DIRECTORS OF THE HEALTH CARE TRUST FUND AND EXPENDABLE FUND AND THE DIVISION OF MEDICAID TO EMPLOY PRIVATE COUNSEL AS NECESSARY TO PETITION THE MISSISSIPPI SUPREME COURT OR PROPER TRIAL COURT TO ORDER THE TRANSFER OF CERTAIN TOBACCO SETTLEMENT MONIES FROM THE ACCOUNT OF THE PARTNERSHIP FOR A HEALTHY MISSISSIPPI, INC., TO THE HEALTH CARE EXPENDABLE FUND, AND TO ORDER THAT ALL FUTURE ANNUAL DIVERSIONS OF TOBACCO SETTLEMENT MONIES INTO THAT ACCOUNT BE PAID INTO THE HEALTH CARE EXPENDABLE FUND; TO AMEND SECTION 43-13-405, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT ALL TOBACCO SETTLEMENT INSTALLMENT PAYMENTS SHALL BE DEPOSITED INTO THE HEALTH CARE TRUST FUND EXCEPT AS OTHERWISE PROVIDED BY STATUTE; TO AMEND SECTIONS 27-103-103, 27-104-13 AND 31-17-123, MISSISSIPPI CODE OF 1972, TO CLARIFY THAT COURT-ORDERED PAYMENTS TO ANY STATE AGENCY SHALL BE CONSIDERED "STATE-SOURCE SPECIAL FUNDS" AND SUBJECT TO BUDGETING AND LEGISLATIVE APPROPRIATION; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 43-13-407, Mississippi Code of 1972, is amended as follows:

43-13-407. (1) In accordance with the purposes of this article, there is established in the State Treasury the Health Care Expendable Fund, into which shall be transferred from the Health Care Trust Fund the following sums:

(a) In fiscal year 2005, Two Hundred Sixteen Million Dollars ($216,000,000.00);

(b) In fiscal year 2006, One Hundred Eighty-six Million Dollars ($186,000,000.00);

(d) In fiscal year 2008, One Hundred Six Million Dollars ($106,000,000.00);

(e) In fiscal year 2009, Sixty-six Million Dollars ($66,000,000.00);

(f) In fiscal year 2010 and each fiscal year thereafter, a sum equal to the average annual amount of the dividends, interest and other income, including increases in value of the principal, earned on the funds in the Health Care Trust Fund during the preceding four (4) fiscal years.

(2) In any fiscal year in which interest, dividends and other income from the investment of the funds 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 (1)(f) of this section, the State Treasurer shall transfer from tobacco settlement installment payments an amount that is sufficient to fully fund the amount of the annual transfer.

(3) (a) On March 6, 2002, the State Treasurer shall transfer the sum of Eighty-seven Million Dollars ($87,000,000.00) from the Health Care Trust Fund into the Health Care Expendable Fund. In addition, at the time the State of Mississippi receives thetobacco settlement installment payments for each of the calendar years 2002 and 2003, the State Treasurer shall deposit the full amount of each of those installment payments into the Health Care Expendable Fund.

(b) If during any fiscal year after March 6, 2002, the general fund revenues received by the state exceed the general fund revenues received during the previous fiscal year by more than five percent (5%), the Legislature shall repay to the Health Care Trust Fund one-third (1/3) of the amount of the general fund revenues that exceed the five percent (5%) growth in general fund revenues. The repayment required by this paragraph shall continue in each fiscal year in which there is more than five percent (5%) growth in general fund revenues, until the full amount of the funds that were transferred and deposited into the Health Care Expendable Fund under the provisions of paragraph (a) of this subsection have been repaid to the Health Care Trust Fund.

(4) All income from the investment of the funds in the Health Care Expendable Fund shall be credited to the account of the Health Care Expendable Fund. Any funds in the Health Care Expendable Fund at the end of a fiscal year shall not lapse into the State General Fund.

(5) The funds in the Health Care Expendable Fund shall be available for expenditure under specific appropriation by the Legislature beginning in fiscal year 2000, and shall be expended exclusively for health care purposes.

(6) The provisions of subsection (1) of this section may not be changed in any manner except upon amendment to that subsection by a bill enacted by the Legislature with a vote of not less than three-fifths (3/5) of the members of each house present and voting.

(7) The Board of Directors for the Health Care Trust Fund and the Health Care Expendable Fund shall employ private counsel as necessary to file any petition, writ or other civil action with the Mississippi Supreme Court under its original jurisdiction or a trial court of proper jurisdiction, that is necessary to (a) set aside the order of the Chancery Court of Jackson County, Mississippi, in the case of In Re Mike Moore, Attorney General, Ex Rel. State of Mississippi Tobacco Litigation, Cause No. 94-1429, that directed tobacco litigation payments to the Partnership for a Healthy Mississippi, Inc., and (b) immediately transfer not less than Forty Million Dollars ($40,000,000.00) of the tobacco settlement monies from the account of the Partnership for a Healthy Mississippi, Inc., to the Health Care Expendable Fund, and (c) order that all future annual diversions of tobacco settlement monies into that account shall likewise be paid into the Health Care Expendable Fund. The Division of Medicaid, Office of the Governor, may employ private counsel as necessary to join as a party to that petition or action. If the Attorney General intervenes in objection to the transfer of those funds as contemplated by this subsection, the Board of Directors for the Health Care Trust Fund and Expendable Fund shall employ private counsel as necessary to proceed against any person or persons who may have violated their fiduciary duty to the trust fund by advocating the court order directing the annual diversion of tobacco settlement monies to the Partnership for a Healthy Mississippi, Inc.

(8) Subsections (1), (2), (4) and (5) of this section shall stand repealed on July 1, 2009.

SECTION 2. Section 43-13-405, Mississippi Code of 1972, is amended as follows:

43-13-405. (1) In accordance with the purposes of this article, there is established in the State Treasury the Health Care Trust Fund, into which shall be deposited Two Hundred Eighty Million Dollars ($280,000,000.00) of the funds received by the State of Mississippi as a result of the tobacco settlement as of the end of fiscal year 1999, and all tobacco settlement installment payments made in subsequent years * * *, except as otherwise provided in Section 43-13-407(2), (3) and (7). All income from the investment of the funds in the Health Care Trust Fund shall be credited to the account of the Health Care Trust Fund. The funds in the Health Care Trust Fund at the end of a fiscal year shall not lapse into the State General Fund.

(2) The Health Care Trust Fund shall remain inviolate and shall never be expended, except as provided in this article. The Legislature shall appropriate from the Health Care Trust Fund such sums as are necessary to recoup any funds lost as a result of any of the following actions:

(a) The federal Centers for Medicare and Medicaid Services, or other agency of the federal government, is successful in recouping tobacco settlement funds from the State of Mississippi;

(b) The federal share of funds for the support of the Mississippi Medicaid Program is reduced directly or indirectly as a result of the tobacco settlement;

(d) Tobacco cessation programs are mandated by the federal government or court order.

(3) This section shall stand repealed on July 1, 2006.

SECTION 3. Section 27-103-103, Mississippi Code of 1972, is amended as follows:

27-103-103. (1) For the purpose of Sections 27-103-101 through 27-103-139 and 27-104-1 through 27-104-27, the term "state general fund agency" or "general fund agency" shall mean any agency, department, institution, board or commission of the State of Mississippi which is supported in whole or in part by appropriations from the General Fund; but such term shall not include the Legislature.

(2) For the purposes of Sections 27-103-101 through 27-103-139 and 27-104-1 through 27-104-27, the term "state special fund agency" or "special fund agency" shall mean any agency, department, institution, board or commission of the State of Mississippi which receives no appropriation from the General Fund, but which is supported entirely from special fund sources, by appropriation, or otherwise, but such term shall not include the State Highway Department; nor shall such term include the Mississippi Industries for the Blind.

(3) For the purposes of Sections 27-103-101 through 27-103-139 and 27-104-1 through 27-104-27, the term "state agency" shall mean any general fund agency or special fund agency as defined in this section, or the State Highway Department, or the Division of State Aid Road Construction of the State Highway Department as is evident from the context wherein it is used.

(4) For the purposes of Sections 27-103-101 through 27-103-139 and 27-104-1 through 27-104-27, the term "special funds" shall mean all revenues and/or income other than appropriations from the State General Fund which are received, collected by, or available for the support of or expenditure by any state general fund agency or special fund agency or the State Highway Department or the Division of State Aid Road Construction of the State Highway Department, whether such funds be derived from taxes or fees collected by or for such general fund agency or special fund agency or the State Highway Department or the Division of State Aid Road Construction of the State Highway Department, as the case may be, or from any other types of revenue from any other source.

(5) For the purposes of Sections 27-103-101 through 27-103-139 and 27-104-1 through 27-104-27, the term "special funds" shall include revolving funds and all funds received from the United States government by any state general fund agency or special fund agency, but shall not include any revolving fund established prior to July 1, 1984, for the purpose of paying or retiring any indebtedness as is authorized by statute.

(6) For the purposes of Sections 27-103-101 through 27-103-139 and 27-104-1 through 27-104-27, the term "special funds" shall include any court-ordered settlement payments or other payments received by any state general fund agency or special fund agency as the result of litigation.

SECTION 4. Section 27-104-13, Mississippi Code of 1972, is amended as follows:

27-104-13. The State Fiscal Officer shall have the right to disapprove or reduce and revise such estimates of general funds and state-source special funds for any general fund or special fund agency, and for the "administration and other expenses" budget of the State Highway Department, in an amount not to exceed five percent (5%) if he finds that funds will not be available within the period for which the budget is drawn, or if he finds that the requested expenditures, or any part thereof, are not authorized by law, and such action shall be reported to the Legislative Budget Office. The State Fiscal Officer may, upon his determination of need based upon a finding that funds will not be available within the period for which the budget is drawn, transfer funds as provided in Section 27-103-203, from the Working Cash-Stabilization Reserve Fund to the General Fund to supplement the general fund revenue. In the event that the estimates of general funds and state-source special funds of all general fund and special fund agencies, and of the "administration and other expenses" budget of the State Highway Department, have been reduced by five percent (5%), additional reductions may be made but shall consist of a uniform percentage reduction of general funds and state-source special funds to all general fund and special fund agencies, and to the "administration and other expenses" budget of the State Highway Department. Any state-source special funds reduced under the provisions of this section shall be transferred to the State General Fund upon requisitions for warrants signed by the respective agency head and said transfer shall be made within a reasonable period to be determined by the State Fiscal Officer.

For the purpose of this section, "state-source special funds" shall be construed to mean any special funds in any agency derived from any source, including any court-ordered settlement payments or other payments received by a state general fund agency or special fund agency as the result of litigation, but shall not include the following special funds: special funds derived from federal sources, from local or regional political subdivisions, or from donations; special funds held in a fiduciary capacity for the benefit of specific persons or classes of persons; self-generated special funds of the state institutions of higher learning or the state junior colleges; special funds of Mississippi Industries for the Blind, the State Port at Gulfport, Yellow Creek Inland Port, Pat Harrison Waterway District, Pearl River Basin Development District, Pearl River Valley Water Management District, Tombigbee River Valley Water Management District, Yellow Creek Watershed Authority, or Coast Coliseum Commission; special funds of the Department of Wildlife, Fisheries and Parks derived from the issuance of hunting or fishing licenses; and special funds generated by agencies whose primary function includes the establishment of standards and the issuance of licenses for the practice of a profession within the State of Mississippi.

SECTION 5. Section 31-17-123, Mississippi Code of 1972, is amended as follows:

31-17-123. The intent of the Legislature is to authorize borrowing funds under the provisions of Sections 31-17-101 through 31-17-123 to offset any temporary cash flow deficiencies and should not be construed to authorize the borrowing of any funds in an amount which cannot be repaid during the fiscal year in which such funds are borrowed. The State Tax Commission and University Research Center, utilizing all available revenue forecast data, shall annually develop a general fund revenue estimate to be adopted by the Legislative Budget Office as of the date of sine die adjournment. If, at the end of October, or at the end of any month thereafter of any fiscal year, the revenues received for the fiscal year shall fall below ninety-eight percent (98%) of the Legislative Budget Office general fund revenue estimate at the date of sine die adjournment, the State Fiscal Officer shall reduce allocations of general funds and state-source special funds to general fund and special fund agencies and to the "administration and other expenses" budget of the State Highway Department in an amount necessary to keep expenditures within the sum of actual general fund receipts including any transfers to the General Fund from the Working Cash-Stabilization Reserve Fund for the fiscal year. The State Fiscal Officer may, upon his determination of need based on the revenue shortfall, transfer funds as provided in Section 27-103-203, from the Working Cash-Stabilization Reserve Fund to the General Fund to supplement the general fund revenue. State-source special funds in an amount equal to any reduction made under the provisions of this section shall be transferred to the State General Fund upon requisitions for warrants signed by the respective agency head and such transfer shall be made within a reasonable period to be determined by the State Fiscal Officer. No agency's allocation shall be reduced in an amount to exceed five percent (5%); however, in the event that the allocations of general funds and state-source special funds to all general fund and special fund agencies and to the "administration and other expenses" budget of the State Highway Department have been reduced by five percent (5%), any additional reductions required to be made hereunder shall consist of a uniform percentage reduction of general funds and state-source special funds to all general fund and special fund agencies, and to the "administration and other expenses" budget of the State Highway Department. Any receipt from loans authorized by Sections 31-17-101 through 31-17-123 shall not be included as revenue receipts. The State Fiscal Officer shall immediately send notice of any action taken under authority of this section to the Legislative Budget Office.

SECTION 6. This act shall take effect and be in force from and after its passage.