Proposal to protect tobacco funds awaits Senate action

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Posted on Feb 19 2001
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Measures that would install extra protection on use of funds from the settlement agreement with tobacco industry players are now awaiting action from the upper chamber of the CNMI Legislature following its passage at the House of Representatives.

House Bill 12-290, authored by Representatives Malua Peter and Brigida Ichihara, has been sitting in the Senate for over one month now.

It seeks to establish a Master Settlement Agreement Trust Fund for initial deposits received by the CNMI from a settlement agreement with tobacco manufacturing companies on a lawsuit filed by 46 American states and four territories, including the Commonwealth.

Money received from this agreement, which started coming in 1999, will be deposited in the Trust Fund until the Legislature determines the appropriate programs to which the funds will be allocated, according to HB 12-290.

The proposed measure gives the finance secretary the authority to place the settlement money in short-term investment instruments that include certificates of deposit to ensure funding availability by the beginning of each fiscal year.

“The CNMI secretary of finance shall have fiduciary responsibility for the CNMI Tobacco Settlement Agreement in the General Fund, or in any other manner commingle the funds of the CNMI, its departments, agencies or instrumentality,” the bill reads.

The proposed measure came amid concerns raised by lawmakers on the use of over $800,000 received by the CNMI government from the multi-billion dollar tobacco settlement agreement.

House Ways and Means Committee chair Rep. Antonio M. Camacho has called Finance Secretary Lucy Dlg. Nielsen to shed light on the matter following an earlier inquiry from Ms. Peter.

Ms. Peter has expressed concern that while the money has yet been appropriated by the Legislature, the government has already spent the funds handed over to the Commonwealth since 1999.

The two-year payments, however, are now gone since they were used by the Department of Finance to cut the deficit in the general fund.

Ms. Nielsen previously opposed provision in HB 12-290 that would include the payments from the past two years in the proposed trust fund.

Since December 1999, the Commonwealth government has received about $815,254.94 in five separate remittances. CNMI’s share from the settlement totals to $30 million whose payment is to be spread in 25 years.

These are all part of the $206-billion master tobacco settlement agreement with giant US cigarette manufacturers in exchange for dropping of the lawsuits over health costs on treating sick smokers.

Under the deal, CNMI will receive payment annually beginning 1999 until 2024 ranging from half-a-million dollars to $700,000 from tobacco companies.

The settlement also requires the industry to set up a charitable foundation aimed at reducing smoking among teens as well as to finance a $1.45 billion national public education for tobacco control.

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