Creation of tobacco settlement trust account pushed

The House of Representatives is expected to vote by this week on the measure establishing a special account to keep money received by the CNMI under the multi-billion dollar tobacco settlement agreement.

Health and Welfare Committee chair Rep. Malua T. Peter, author of HB 12-290, said the government needs the legislation to set aside the payments remitted to the islands every year for future appropriation.

Ms. Peter, along with Ways and Means Committee chair Rep. Antonio M. Camacho, met last week with Finance Sec. Lucy DLG Nielsen to inquire what happened to the more than $800,000 already given to the CNMI since 1999.

The Saipan legislator earlier had expressed concern that while the initial payments have yet been appropriated, the government has already spent the funds.

The Department of Finance deposited the money in the general funds and used it to cut the budget deficit of the government since the Legislature failed to come up with a bill for specific allotment.

“The finance department can utilize the money in the absence of the legislation that we are working on right now,” Ms. Peter said yesterday, adding it will be one of the priority bills expected to be passed at the start of their regular session on Thursday.

“We need to have legislation to tell us how to use the money because we didn’t have that in the past and that’s why they put them into the general funds,” she added.

While the Department of Public Health wants the funds to finance a plan it drafted such as smoking prevention campaign and health costs payment, the House is looking at reserving them for appropriation each year.

Since December 1999, the island government has received about $815,254.94 in five separate payments. CNMI’s share totals to $30 million which will be remitted each year until 2024 ranging from half-a-million dollars up to $700,000.

These are all part of the $206-billion master tobacco settlement agreement with giant U.S. cigarette manufacturers in exchange for dropping of lawsuits brought by 46 states and four territories, including the CNMI, over health costs of treating sick smokers.

According to Ms. Peter, future payments will be covered by the proposed law to be allocated every fiscal year by the Legislature. “They can be used on anything that we see will be the critical need of the government,” she added.