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The Florida Senate

2011 Florida Statutes

Title XIV TAXATION AND FINANCE
Chapter 215 FINANCIAL MATTERS: GENERAL PROVISIONS Entire Chapter
SECTION 5601
Lawton Chiles Endowment Fund.
F.S. 215.5601
1215.5601 Lawton Chiles Endowment Fund.—
(1) LEGISLATIVE INTENT.—It is the intent of the Legislature to:
(a) Provide a perpetual source of enhanced funding for state children’s health programs, child welfare programs, children’s community-based health and human services initiatives, elder programs, and biomedical research activities related to tobacco use.
(b) Use tobacco settlement moneys as the source of enhanced funding to ensure the financial security of vital health and human services programs for children and elders.
(c) Ensure that enhancement revenues will be available to help finance these important programs and initiatives.
(d) Provide funds to help support public-health and biomedical research for the prevention, diagnosis, treatment, and cure of diseases related to tobacco use by creating an annual and perpetual source of funding for biomedical research in the state in order to expand the foundation of biomedical knowledge relating to the prevention, diagnosis, treatment, and cure of diseases related to tobacco use, including cancer, cardiovascular disease, stroke, and pulmonary disease; improve the quality of the state’s academic health centers by bringing the advances of biomedical research into the training of physicians and other health care providers; and increase the state’s per capita funding for biomedical research by undertaking new initiatives in biomedical research which will attract additional funding from outside the state while also stimulating economic activity in the state in areas related to biomedical research, such as the research and production of pharmaceuticals, biotechnology, and medical devices.
(e) Encourage the development of community-based solutions to strengthen and improve the quality of life of Florida’s most vulnerable citizens, its children and elders.
(2) DEFINITIONS.—As used in this section, the term:
(a) “Board” means the State Board of Administration established by s. 16, Art. IX of the State Constitution of 1885 and incorporated into s. 9(c), Art. XII of the State Constitution of 1968.
(b) “Endowment” means the Lawton Chiles Endowment Fund.
(c) “Earnings” means all income generated by investments and the net change in the market value of assets.
(d) “State agency” or “state agencies” means the Department of Health, the Department of Children and Family Services, the Department of Elderly Affairs, or the Agency for Health Care Administration, or any combination thereof, as the context indicates.
(3) LAWTON CHILES ENDOWMENT FUND; CREATION; PRINCIPAL.—
(a) There is created the Lawton Chiles Endowment Fund, to be administered by the State Board of Administration. The endowment shall serve as a clearing trust fund, not subject to termination under s. 19(f), Art. III of the State Constitution. The endowment fund shall be exempt from the service charges imposed by s. 215.20.
(b) The endowment shall receive moneys from the sale of the state’s right, title, and interest in and to the tobacco settlement agreement as defined in s. 215.56005, including the right to receive payments under such agreement, and from accounts transferred from the Department of Financial Services Tobacco Settlement Clearing Trust Fund established under s. 17.41. Amounts to be transferred from the Department of Financial Services Tobacco Settlement Clearing Trust Fund to the endowment shall be in the following amounts for the following fiscal years:
1. For fiscal year 1999-2000, $1.1 billion;
2. For fiscal year 2000-2001, $200 million;
3. For fiscal year 2001-2002, $200 million;
4. For fiscal year 2002-2003, $200 million; and
(c) Amounts to be transferred under subparagraphs (b)2., 3., and 4. may be reduced by an amount equal to the lesser of $200 million or the amount the endowment receives in that fiscal year from the sale of the state’s right, title, and interest in and to the tobacco settlement agreement.
(d) For fiscal year 2001-2002, $150 million of the existing principal in the endowment shall be reserved and accounted for within the endowment, the income from which shall be used solely for the funding for biomedical research activities as provided in s. 215.5602. The income from the remaining principal shall be used solely as the source of funding for health and human services programs for children and elders as provided in subsection (5). The separate account for biomedical research shall be dissolved and the entire principal in the endowment shall be used exclusively for health and human services programs when cures have been found for tobacco-related cancer, heart, and lung disease.
(4) ADMINISTRATION.—
(a) The board may invest and reinvest funds of the endowment in accordance with s. 215.47 and consistent with an investment policy statement developed by the executive director and approved by the board.
2(b) The endowment shall be managed as an annuity. The investment objective is the long-term preservation of the real value of the net contributed principal and a specified regular annual cash outflow for appropriation, as nonrecurring revenue. From the annual cash outflow, a pro rata share shall be used solely for biomedical research activities as provided in paragraph (3)(d), until such time as cures are found for tobacco-related cancer and heart and lung disease. Five percent of the annual cash outflow dedicated to the biomedical research portion of the endowment shall be reinvested and applied to that portion of the endowment’s principal, with the remainder to be spent on biomedical research activities consistent with this section. The schedule of annual cash outflow must be included within the investment plan adopted under paragraph (a). Withdrawals other than specified regular cash outflow are considered reductions in contributed principal for the purposes of this subsection.
(c) In accordance with s. 215.44, the board shall include separate sections on the financial status of the endowment in its annual investment report to the Legislature.
(d) Accountability for funds from the endowment which have been appropriated to a state agency and distributed by the board shall reside with the state agency. The board is not responsible for the proper expenditure of or accountability concerning funds from the endowment after distribution to a state agency.
(e) Costs and fees of the board for investment services shall be deducted from the earnings accruing to the endowment. Fees for investment services shall be no greater than fees charged to the Florida Retirement System.
(5) AVAILABILITY OF FUNDS; USES.—
(a) Funds from the endowment which are available for legislative appropriation shall be transferred by the board to the Department of Financial Services Tobacco Settlement Clearing Trust Fund, created in s. 17.41, and disbursed in accordance with the legislative appropriation.
1. Appropriations by the Legislature to the Department of Health from endowment earnings from the principal set aside for biomedical research shall be from a category called the James and Esther King Biomedical Research Program and shall be deposited into the Biomedical Research Trust Fund in the Department of Health established in s. 20.435.
2. Appropriations by the Legislature to the Department of Children and Family Services, the Department of Health, or the Department of Elderly Affairs from endowment earnings for health and human services programs shall be deposited into each department’s respective Tobacco Settlement Trust Fund as appropriated.
(b) In order to ensure that the expenditure of funds earned from the Lawton Chiles Endowment Fund will be used for the purposes intended by the Legislature, the Legislature shall establish line item categories for the state agencies describing the designated use of the appropriated funds as provided in the General Appropriations Act.
(c) The secretaries of the state agencies and the State Surgeon General shall conduct meetings to discuss priorities for endowment funding for health and human services programs for children and elders before submitting their legislative budget requests to the Executive Office of the Governor and the Legislature. The purpose of the meetings is to gain consensus for priority requests and recommended endowment funding levels for those priority requests. No later than September 1 of each year, the secretaries of the state agencies and the State Surgeon General shall also submit their consensus priority requests to the Lawton Chiles Endowment Fund Advisory Council created in subsection (6).
(d) Subject to legislative appropriations, state agencies shall use distributions from the endowment to enhance or support increases in clients served or to meet increases in program costs in health and human services program areas. Funds distributed from the endowment may not be used to supplant existing revenues.
(e) Notwithstanding s. 216.301 and pursuant to s. 216.351, all unencumbered balances of appropriations from each department’s respective Tobacco Settlement Trust Fund as of June 30 or undisbursed balances as of September 30 shall revert to the endowment’s principal. Unencumbered balances in the Biomedical Research Trust Fund shall be managed as provided in s. 20.435(8)(b).
(6) ADVISORY COUNCIL.—The Lawton Chiles Endowment Fund Advisory Council is established for the purpose of reviewing the funding priorities of the state agencies, evaluating their requests against the mission and goals of the agencies and legislative intent for the use of endowment funds, and allowing for public input and advocacy.
(a) The advisory council shall consist of 15 members, including:
1. The director of the United Way of Florida, Inc., or his or her designee;
2. The director of the Foster Parents Association, or his or her designee;
3. The chair of the Department of Elderly Affairs Advisory Council, or his or her designee;
4. The president of the Florida Association of Area Agencies on Aging, or his or her designee;
5. The State Long-Term Care Ombudsman, or his or her designee;
6. The state director of the Florida AARP, or his or her designee;
7. The director of the Florida Pediatric Society, or his or her designee;
8. A representative of the Guardian Ad Litem Program, appointed by the Governor;
9. A representative of a child welfare lead agency for community-based care, appointed by the Governor;
10. A representative of an elder care lead agency for community-based care, appointed by the Governor;
11. A representative of a statewide child advocacy organization, appointed by the Governor;
12. One consumer caregiver for children, appointed by the Governor;
13. One person over the age of 60 years to represent the interests of elders, appointed by the Governor;
14. One person under the age of 18 years to represent the interests of children, appointed by the Governor; and
15. One consumer caregiver for a functionally impaired elderly person, appointed by the Governor.
(b) Before November 1 of each year, the advisory council shall advise the Governor and the Legislature as to its recommendations with respect to the priorities submitted by the secretaries of the state agencies and the State Surgeon General with respect to endowment funding for health and human services programs for children and elders. The responsibilities of the advisory council include:
1. Evaluating the value of programs and services submitted by the state agencies as they relate to the overall enhancement of services to children and elders;
2. Developing criteria and guiding principles for ranking the priorities submitted by the state agencies;
3. Providing recommendations with respect to funding levels for the programs ranked by the advisory council;
4. Participating in periodic evaluation of programs funded by the endowment to determine the need for continued funding; and
5. Soliciting input from child and elder advocacy organizations, community stakeholders, providers, and the public with respect to statewide child and elder needs and the effectiveness of program service delivery systems.
(c) Members of the advisory council shall serve without compensation, but may receive reimbursement as provided in s. 112.061 for per diem and travel expenses incurred in the performance of their official duties. The Department of Children and Family Services shall provide staff and other administrative assistance reasonably necessary to assist the advisory council in carrying out its responsibilities. Administrative costs of the advisory council shall be charged equally to endowment funds deposited in the Department of Children and Family Services and the Department of Elderly Affairs Tobacco Settlement Trust Funds.
History.—s. 1, ch. 99-167; s. 3, ch. 2000-128; s. 1, ch. 2000-255; s. 5, ch. 2000-305; s. 3, ch. 2001-73; s. 224, ch. 2003-261; s. 3, ch. 2003-414; s. 7, ch. 2004-2; s. 7, ch. 2004-71; s. 3, ch. 2004-282; s. 8, ch. 2005-152; s. 13, ch. 2008-6; s. 4, ch. 2008-19; ss. 48, 49, ch. 2008-153; s. 3, ch. 2009-2; s. 2, ch. 2009-47; ss. 53, 56, ch. 2009-82; s. 60, ch. 2010-153; ss. 67, 68, ch. 2011-47.
1Note.—Section 4, ch. 2009-2, provides that “[i]t is the intent of the Legislature that the repayment of the distribution from the Lawton Chiles Endowment Fund will begin in the first year that recurring General Revenue Fund receipts are estimated to exceed the prior year’s recurring General Revenue Fund receipts by 5 percent. In addition, it is the intent of the Legislature that, from the growth in general revenue receipts, up to $150 million may be used to repay the fund in each year.”
2Note.—

A. Section 67, ch. 2011-47, reenacted and amended paragraph (4)(b) “[i]n order to implement the transfer of moneys to the General Revenue Fund from trust funds in the 2011-2012 General Appropriations Act.”

B. Section 68, ch. 2011-47, provides that “[t]he amendment to s. 215.5601[(4)](b), Florida Statutes, as carried forward by this act from chapter 2010-153, Laws of Florida, shall expire July 1, 2012, and the text of that subsection shall revert to that in existence on June 30, 2010, except that any amendments to such text enacted other than by this act shall be preserved and continue to operate to the extent that such amendments are not dependent upon the portions of text which expire pursuant to this section.” Section 60, ch. 2010-153, reenacted but did not amend paragraph (4)(b). Effective July 1, 2012, paragraph (4)(b), as amended by s. 68, ch. 2011-47, will read:

(b) The endowment shall be managed as an annuity. The investment objective shall be long-term preservation of the real value of the net contributed principal and a specified regular annual cash outflow for appropriation, as nonrecurring revenue. From the annual cash outflow, a pro rata share shall be used solely for biomedical research activities as provided in paragraph (3)(d), until such time as cures are found for tobacco-related cancer and heart and lung disease. Five percent of the annual cash outflow dedicated to the biomedical research portion of the endowment shall be reinvested and applied to that portion of the endowment’s principal, with the remainder to be spent on biomedical research activities consistent with this section. The schedule of annual cash outflow shall be included within the investment plan adopted under paragraph (a). Withdrawals other than specified regular cash outflow shall be considered reductions in contributed principal for the purposes of this subsection.