PRINTER'S NO. 317
No. 299 Session of 2001
INTRODUCED BY CALTAGIRONE, BELFANTI, BISHOP, BUXTON, CAWLEY,
DALEY, DeLUCA, FEESE, GEORGE, GRUCELA, HALUSKA, HERMAN,
HUTCHINSON, LEDERER, McCALL, MELIO, ORIE, READSHAW, SHANER,
SOLOBAY, STABACK, TIGUE, TRAVAGLIO, YOUNGBLOOD, CORRIGAN,
BELARDI, FRANKEL, CAPPELLI AND KAISER, JANUARY 31, 2001
REFERRED TO COMMITTEE ON APPROPRIATIONS, JANUARY 31, 2001
AN ACT
1 Establishing the Tobacco Settlement Fund and the Tobacco
2 Settlement Board; and providing for powers and duties of the
3 board.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Short title.
7 This act shall be known and may be cited as the Tobacco
8 Settlement Fund Act.
9 Section 2. Definitions.
10 The following words and phrases when used in this act shall
11 have the meanings given to them in this section unless the
12 context clearly indicates otherwise:
13 "Board." The Tobacco Settlement Board established by this
14 act.
15 "Fund." The Tobacco Settlement Fund established by this act.
16 "Master Settlement Agreement." The settlement agreement and
17 related documents entered into on November 23, 1998, by the
1 Commonwealth and leading United States tobacco product
2 manufacturers and approved by the court in Commonwealth v.
3 Philip Morris, April Term 1997, No. 2443 (C.P. Philadelphia
4 County), on January 13, 1999.
5 Section 3. Tobacco Settlement Fund.
6 (a) Establishment.--There is hereby established within the
7 State Treasury a trust fund to be known as the Tobacco
8 Settlement Fund. The moneys of the fund shall consist of all
9 moneys received by the Commonwealth under the Master Settlement
10 Agreement and all interest earned thereon.
11 (b) Preservation of fund.--Each payment received by the
12 Commonwealth under the Master Settlement Agreement shall be
13 deposited into the fund and may not be expended from the fund.
14 Interest earned on those payments may be expended from the fund,
15 provided that:
16 (1) the expenditure of such interest may not occur until
17 one year from the effective date of this act; and
18 (2) an act of the General Assembly appropriates such
19 interest for a specific purpose.
20 (c) Custodian.--The State Treasurer shall be the custodian
21 of the fund.
22 (d) Control and management.--The members of the board shall
23 be the trustees of the fund. Regardless of any other provision
24 of law governing the investments of funds under the control of
25 an administrative board of the State government, the trustees
26 shall have exclusive control and management of the fund and full
27 power to invest the same in accordance with the provisions of
28 this section, subject, however, to the exercise of that degree
29 of judgment, skill and care under the circumstances then
30 prevailing which persons of prudence, discretion and
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1 intelligence, who are familiar with such matters, exercise in
2 the management of their own affairs not in regard to
3 speculation, but in regard to the permanent disposition of the
4 funds, considering the probable income to be derived therefrom
5 as well as the probable safety of their capital. The trustees
6 shall have the power to hold, purchase, sell, lend, assign,
7 transfer or dispose of any of the securities and investments in
8 which any of the moneys in the fund shall have been invested as
9 well as of the proceeds of said investments, including any
10 directed commissions which have accrued to the benefit of the
11 fund as a consequence of the investments, and of any moneys
12 belonging to the fund, subject in every case to meeting the
13 standard of prudence set forth in this subsection.
14 (e) Fiduciary status of board.--The members of the board
15 shall stand in a fiduciary relationship to the Commonwealth
16 regarding the investments and disbursements of any of the moneys
17 of the fund and shall not profit either directly or indirectly
18 with respect thereto. The board may, when possible and
19 consistent with its fiduciary duties imposed by this subsection
20 or other law, including its obligation to invest and manage the
21 fund, consider whether an investment in any project or business
22 enhances and promotes the general welfare of this Commonwealth
23 and its citizens, including, but not limited to, investments
24 that increase and enhance the employment of Commonwealth
25 residents, encourage the construction and retention of adequate
26 housing and stimulate further investment and economic activity
27 in this Commonwealth.
28 (f) Vehicles for authorized investments.--The board in its
29 prudent discretion may make any investments which meet the
30 standard of prudence set forth in subsection (d) by becoming a
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1 limited partner in partnerships that will hold such investments;
2 or by acquiring shares or units of participation or otherwise
3 participating beneficially in bank collective trusts or in the
4 separate accounts of any insurance company authorized to do
5 business in this Commonwealth; or by acquiring stocks or shares
6 or units of participation or otherwise participating
7 beneficially in the fund of any corporation or trust organized
8 or created and existing under the laws of the United States or
9 of any state, district or territory thereof, which fund is
10 maintained for and consists of assets of employees' benefit
11 trusts, including governmental plans as defined in § 414(d) of
12 the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C.
13 § 1 et seq.) or which meet the requirements for qualification
14 under § 401 of that code, provided that, in any such case, the
15 liability of the fund shall be limited to the amount of its
16 investment.
17 (g) Legislative declaration concerning certain authorized
18 investments.--The General Assembly finds and declares that
19 authorized investments of the fund made by or on behalf of the
20 board under this section whereby the board becomes a joint owner
21 or stockholder in any company, corporation or association are
22 outside the scope of the original intent of and therefore do not
23 violate the prohibition set forth in section 8 of Article VIII
24 of the Constitution of Pennsylvania.
25 Section 4. The Tobacco Settlement Board.
26 (a) Status and membership.--The board shall be an
27 independent administrative board and shall consist of six
28 members, two of whom shall be appointed by the president pro
29 tempore of the Senate, two of whom shall be appointed by the
30 Speaker of the House of Representatives and two of whom shall be
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1 appointed by the Governor. Of the two members appointed by the
2 President pro tempore of the Senate, one must be recommended by
3 the Minority Leader of the Senate. Of the two members appointed
4 by the Speaker of the House of Representatives, one must be
5 recommended by the Minority Leader of the House of
6 Representatives. Each member of the board may appoint a duly
7 authorized designee to act in that member's stead.
8 (b) Terms.--Each member of the board shall serve for a term
9 of three years.
10 (c) Oath of office.--Each member of the board shall take an
11 oath of office that he will, so far as it devolves upon him,
12 diligently and honestly, administer the affairs of the board and
13 that he will not knowingly violate or willfully permit to be
14 violated any of the provisions of law applicable to this act.
15 Such oath shall be subscribed by the member taking it and
16 certified by the officer before whom it is taken and shall be
17 immediately filed in the Office of the Secretary of the
18 Commonwealth.
19 (d) Corporate power and legal advisor.--For the purposes of
20 this act, the board shall possess the power and privileges of a
21 corporation. The Attorney General of the Commonwealth shall be
22 the legal advisor of the board.
23 Section 4. Effective date.
24 This act shall take effect in 60 days.
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