Senate Bill 1998e1

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  1                      A bill to be entitled

  2         An act relating to state revenue; amending s.

  3         215.5601, F.S.; defining the term

  4         "participating manufacturer"; revising

  5         legislative intent; specifying procedures by

  6         which a tobacco manufacturer may become a

  7         participating manufacturer; providing for

  8         signatories to a specified settlement agreement

  9         to be participating manufacturers; providing

10         for funds received from participating

11         manufacturers to be deposited into the Tobacco

12         Settlement Clearing Trust Fund; providing for a

13         portion of unappropriated funds to be deposited

14         into the Lawton Chiles Endowment Fund; amending

15         s. 210.02, F.S.; imposing a surtax on

16         cigarettes not manufactured by a participating

17         manufacturer, as defined by the act; providing

18         for calculating the amount of the surtax;

19         amending s. 210.20, F.S.; providing for the

20         deposit of proceeds of the surtax; creating s.

21         215.5603, F.S.; creating the Tobacco Settlement

22         Financing Corporation; defining terms;

23         providing membership, powers, duties, and

24         functions of the corporation; providing for the

25         purchase of insurance and for the issuance of

26         bonds; providing a limitation on liability;

27         providing powers of the Department of Banking

28         and Finance with respect to the corporation;

29         providing for severability; providing an

30         effective date.

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  1  Be It Enacted by the Legislature of the State of Florida:

  2

  3         Section 1.  Section 215.5601, Florida Statutes, is

  4  amended to read:

  5         215.5601  Lawton Chiles Endowment Fund.--

  6         (1)  SHORT TITLE.--This section may be cited as the

  7  "Lawton Chiles Endowment Fund."

  8         (2)  DEFINITIONS.--As used in this section:

  9         (a)  "Board" means the State Board of Administration

10  established by s. 16, Art. IX of the State Constitution of

11  1885 and incorporated into s. 9(c), Art. XII of the State

12  Constitution of 1968.

13         (b)  "Endowment" means the Lawton Chiles Endowment

14  Fund.

15         (c)  "Earnings" means all income generated by

16  investments and the net change in the market value of assets.

17         (d)  "Participating manufacturer" means any

18  manufacturer of tobacco products which meets the requirements

19  of subsection (4).

20         (e)(d)  "State agency" or "state agencies" means the

21  Department of Health, the Department of Children and Family

22  Services, the Department of Elderly Affairs, or the Agency for

23  Health Care Administration, or any combination thereof, as the

24  context indicates.

25         (3)  LEGISLATIVE INTENT.--It is the intent of the

26  Legislature to:

27         (a)  Provide a perpetual source of funding for the

28  future of state children's health programs, child welfare

29  programs, community-based health and human services

30  initiatives, and biomedical research activities.

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  1         (b)  Ensure that enhancement revenues will be available

  2  to finance these important initiatives.

  3         (c)  Use funds received from the Tobacco Settlement

  4  Clearing Trust Fund moneys to ensure the financial security of

  5  vital health and human services programs.

  6         (d)  Encourage the development of community-based

  7  solutions to strengthen and improve the quality of life of

  8  Florida's most vulnerable citizens.

  9         (e)  Provide funds for cancer research and

10  public-health research for diseases linked to tobacco use.

11         (f)  Provide tobacco manufacturers the opportunity to

12  voluntarily participate in mitigating the impact of the use of

13  tobacco on the residents of this state.

14         (4)  PARTICIPATING MANUFACTURERS; QUALIFICATIONS.--

15         (a)1.  A tobacco manufacturer may become a

16  participating manufacturer by entering into an agreement with

17  the Attorney General which provides for the following:

18         a.  Elimination of the manufacturer's outdoor

19  advertising and transit advertisements at the earlier of the

20  expiration of applicable contracts or 4 months after the date

21  the final list of outdoor advertising signs is supplied to the

22  Attorney General. The manufacturer shall provide a final list

23  of all its outdoor advertising signs and transit

24  advertisements to the Attorney General within 45 days after

25  entering the agreement.

26         b.  Support of the state's efforts to mitigate the

27  impact of the use of tobacco through annual payments to the

28  state. On January 1 of each year, the Division of Alcoholic

29  Beverages and Tobacco of the Department of Business and

30  Professional Regulation shall calculate the payment amount,

31  which is due by January 31 of that year. The payment amount


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  1  shall be based on the number of cigarette packages delivered

  2  to wholesale dealers for sale in this state by the

  3  manufacturer from January 1 until December 31 of the prior

  4  year. The payment amount per package shall be calculated as

  5  the total annual payment due to the state pursuant to the

  6  settlement agreement in the case of The State of Florida et

  7  al., v. American Tobacco Company et al., divided by the total

  8  number of packages delivered to wholesale dealers for sale in

  9  this state by the four settling manufacturers during the

10  previous 12 months, rounded to the nearest tenth of a cent.

11         2.  Cigarettes produced by each manufacturer that fully

12  complies with the agreement entered into with the Attorney

13  General under subparagraph 1. and makes the annual payment by

14  January 31 are exempt from the surtax on cigarettes imposed

15  under s. 210.02(6) for the subsequent 12-month period.

16         (b)  All tobacco manufacturers that are signatories to

17  the settlement agreement entered on August 25, 1997, in the

18  case of The State of Florida et al., v. American Tobacco

19  Company et al., and the settlement agreement entered on March

20  15, 1996, in the case of State of West Virginia, State of

21  Florida, State of Mississippi, Commonwealth of Massachusetts,

22  and State of Louisiana v. Brooke Group Ltd. and Liggett Group,

23  Inc., are participating manufacturers. Cigarettes produced by

24  each such manufacturer that fully complies with the applicable

25  settlement agreement and makes the annual payment required

26  under the agreement by December 31 are exempt from the surtax

27  on cigarettes imposed under s. 210.02(6) for the subsequent

28  12-month period.

29         (c)  Funds received from participating manufacturers

30  shall be deposited into the Department of Banking and Finance

31  Tobacco Settlement Clearing Trust Fund.


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  1         (5)(4)  LAWTON CHILES ENDOWMENT FUND; CREATION;

  2  PURPOSES AND USES.--

  3         (a)  There is created the Lawton Chiles Endowment Fund,

  4  to be administered by the State Board of Administration. The

  5  endowment shall serve as a clearing trust fund not subject to

  6  termination pursuant to s. 19(f), Art. III of the State

  7  Constitution and shall be funded by settlement moneys received

  8  from the Tobacco Settlement Clearing Trust Fund industry. The

  9  endowment fund shall be exempt from the service charges

10  imposed by s. 215.20.

11         (b)  Funds from the endowment shall be distributed by

12  the board to trust funds of the state agencies in the amounts

13  indicated by reference to the legislative appropriations for

14  the state agencies, except as otherwise provided in this

15  section.

16         (c)  The state agencies shall use the funds from the

17  endowment to enhance or support increases in clients served or

18  in program costs in health and human services program areas.

19         (d)  The Secretary of Health, the Secretary of Children

20  and Family Services, the Secretary of Elderly Affairs, and the

21  Director of Health Care Administration shall conduct meetings

22  to discuss program priorities for endowment funding prior to

23  submitting their budget requests to the Executive Office of

24  the Governor and the Legislature. The purpose of the meetings

25  shall be to gain consensus for priority requests and

26  recommended endowment funding levels for those priority

27  requests. An agency head may not designate a proxy for these

28  meetings.

29         (e)  Funds from the endowment may not be used to

30  supplant existing revenues.

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  1         (f)  When advised by the Revenue Estimating Conference

  2  that a deficit will occur with respect to the appropriations

  3  from the Tobacco Settlement Clearing Trust Fund in any fiscal

  4  year, the Governor shall develop a plan of action to eliminate

  5  the deficit. Before implementing the plan of action, the

  6  Governor must comply with the provisions of s. 216.177(2). In

  7  developing the plan of action, the Governor shall, to the

  8  extent possible, preserve legislative policy and intent, and,

  9  absent any specific directions to the contrary in the General

10  Appropriations Act, any reductions in appropriations from the

11  Tobacco Settlement Clearing Trust Fund for a fiscal year shall

12  be prorated among the purposes for which funds were

13  appropriated from the Tobacco Settlement Clearing Trust Fund

14  for that year.

15         (6)(5)  ADMINISTRATION OF THE ENDOWMENT.--

16         (a)  The board is authorized to invest and reinvest

17  funds of the endowment in those securities listed in s.

18  215.47, in accordance with the fiduciary standards set forth

19  in s. 215.47(9) and consistent with an investment plan

20  developed by the executive director and approved by the board.

21  Costs and fees of the board for investment services shall be

22  deducted from the earnings accruing to the endowment.

23         (b)  The endowment shall be managed as an annuity. The

24  investment objective shall be long-term preservation of the

25  real value of the principal and a specified regular annual

26  cash outflow for appropriation, as nonrecurring revenue. The

27  schedule of annual cash outflow shall be included within the

28  investment plan adopted pursuant to paragraph (a).

29         (c)  The board shall establish a separate account for

30  the funds of the endowment. The board shall design and operate

31  an investment portfolio that maximizes the financial return to


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  1  the endowment, consistent with the risks inherent in each

  2  investment, and that is designed to preserve an appropriate

  3  diversification of the portfolio.

  4         (d)  No later than February 15, 2000, the board shall

  5  report on the financial status of the endowment to the

  6  Governor, the Speaker of the House of Representatives, the

  7  President of the Senate, the chairs of the respective

  8  appropriations and appropriate substantive committees of each

  9  chamber, and the Revenue Estimating Conference. Thereafter,

10  the board shall make a status report to such persons no later

11  than August 15 and February 15 of each year.

12         (e)  Accountability for funds from the endowment which

13  have been appropriated to a state agency and distributed by

14  the board shall reside with the state agency. The board is not

15  responsible for the proper expenditure or accountability of

16  funds from the endowment after distribution to a state agency.

17         (f)  The board may collect a fee for service from the

18  endowment no greater than that charged to the Florida

19  Retirement System.

20         (7)(6)  AVAILABILITY OF FUNDS.--

21         (a)  Funds from the endowment shall not be available

22  for appropriation to a state agency until July 1, 2000.

23  Beginning July 1, 2000, the maximum annual amount of endowment

24  funds that may be appropriated shall be in accordance with the

25  following, based on earnings averaged over 3 years:

26         1.  Beginning July 1, 2000, no more than a level of

27  spending representing earnings at a rate of 3 percent.

28         2.  Beginning July 1, 2001, no more than a level of

29  spending representing earnings at a rate of 4 percent.

30         3.  Beginning July 1, 2002, no more than a level of

31  spending representing earnings at a rate of 5 percent.


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  1         4.  Beginning July 1, 2003, and thereafter, no more

  2  than a level of spending representing earnings at a rate of 6

  3  percent.

  4         (b)  The Legislature may not appropriate more than 85

  5  percent of the revenue that is received from participating

  6  manufacturers or pursuant to s. 210.02 in any fiscal year and

  7  made available for appropriation in the subsequent fiscal

  8  year. Revenue received from participating manufacturers or

  9  pursuant to s. 210.02 in any fiscal year which is not

10  appropriated by the Legislature shall be deposited into the

11  Lawton Chiles Endowment Fund.

12         (c)(b)  Notwithstanding the provisions of s. 216.301

13  and pursuant to s. 216.351, all unencumbered balances of

14  appropriations as of June 30 or undisbursed balances as of

15  December 31 shall revert to the endowment's principal.

16         (8)(7)  ENDOWMENT PRINCIPAL; APPROPRIATION OF

17  EARNINGS.--The following amounts are appropriated from the

18  Department of Banking and Finance Tobacco Settlement Clearing

19  Trust Fund to the Lawton Chiles Endowment Fund for Health and

20  Human Services:

21         (a)  For fiscal year 1999-2000, $1.1 billion;

22         (b)  For fiscal year 2000-2001, $200 million;

23         (c)  For fiscal year 2001-2002, $200 million; and

24         (d)  For fiscal year 2002-2003, $200 million; and.

25         (e)  For all subsequent fiscal years, a minimum of $25

26  million.

27         Section 2.  Section 210.02, Florida Statutes, is

28  amended to read:

29         210.02  Cigarette tax imposed; collection.--

30         (1)  An excise or privilege tax, in addition to all

31  other taxes of every kind imposed by law, is imposed upon the


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  1  sale, receipt, purchase, possession, consumption, handling,

  2  distribution, and use of cigarettes in this state, in the

  3  following amounts, except as hereinafter otherwise provided,

  4  for cigarettes of standard dimensions:

  5         (a)  Upon all cigarettes weighing not more than 3

  6  pounds per thousand, 16.95 mills on each cigarette.

  7         (b)  Upon all cigarettes weighing more than 3 pounds

  8  per thousand and not more than 6 inches long, 33.9 mills on

  9  each cigarette.

10         (c)  Upon all cigarettes weighing more than 3 pounds

11  per thousand and more than 6 inches long, 67.8 mills on each

12  cigarette.

13         (2)  The description of cigarettes contained in

14  paragraphs (a), (b), and (c) of subsection (1) are hereby

15  declared to be standard as to dimensions for taxing purposes

16  as provided in this law and should any cigarette be received,

17  purchased, possessed, sold, offered for sale, given away, or

18  used of a size other than of standard dimensions, the same

19  shall be taxed at the rate of 1.41 cents on each such

20  cigarette.

21         (3)  When cigarettes as described in paragraph (1)(a)

22  are packed in varying quantities of 20 cigarettes or less,

23  except manufacturer's free samples authorized under s.

24  210.04(9), the following rate shall govern:

25         (a)  Packages containing 10 cigarettes or less require

26  a 16.95-cent tax.

27         (b)  Packages containing more than 10 but not more than

28  20 cigarettes require a 33.9-cent tax.

29         (4)  When cigarettes as described in paragraph (1)(b)

30  are packed in varying quantities of 20 cigarettes or less,

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  1  except manufacturer's free samples authorized under s.

  2  210.04(9), the following rates shall govern:

  3         (a)  Packages containing 10 cigarettes or less require

  4  a 33.9-cent tax.

  5         (b)  Packages containing more than 10 but not more than

  6  20 cigarettes require a 67.8-cent tax.

  7         (5)  When cigarettes as described in paragraph (1)(c)

  8  are packed in varying quantities of 20 cigarettes or less,

  9  except manufacturer's free samples authorized under s.

10  210.04(9), the following rates shall govern:

11         (a)  Packages containing 10 cigarettes or less require

12  a 67.8-cent tax.

13         (b)  Packages containing more than 10 but not more than

14  20 cigarettes require a 135.6-cent tax.

15         (6)  Beginning February 1, 2001, an additional surtax

16  shall be added to the amounts otherwise provided in this

17  section. The division shall calculate the surtax on January 1

18  of each year, and the surtax shall apply on February 1. The

19  surtax per package shall be calculated as the total annual

20  payment due to the state pursuant to the settlement agreement

21  in the case of The State of Florida et al., v. American

22  Tobacco Company et al., divided by the total number of

23  packages of cigarettes delivered to wholesale dealers for sale

24  in this state by the four settling manufacturers during the

25  previous 12 months, rounded to the nearest tenth of a cent.

26         (7)(6)  This tax shall be paid by the dealer to the

27  division for deposit and distribution as hereinafter provided

28  upon the first sale or transaction within the state, whether

29  or not such sale or transfer be to the ultimate purchaser or

30  consumer.  The seller or dealer shall collect the tax from the

31  purchaser or consumer, and the purchaser or consumer shall pay


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  1  the tax to the seller.  The seller or dealer shall be

  2  responsible for the collection of the tax and the payment of

  3  the same to the division. All taxes are due not later than the

  4  10th day of the month following the calendar month in which

  5  they were incurred, and thereafter shall bear interest at the

  6  rate of 1 percent per month. If the amount of tax due for a

  7  given period is assessed without allocating it to any

  8  particular month, the interest shall begin with the date of

  9  the assessment.  Whenever cigarettes are shipped from outside

10  the state to anyone other than a distributing agent or

11  wholesale dealer, the person receiving the cigarettes shall be

12  responsible for the tax on said cigarettes and the payment of

13  same to the division.

14         (8)(7)  It is the legislative intent that the tax on

15  cigarettes shall be uniform throughout the state.

16         Section 3.  Section 210.20, Florida Statutes, is

17  amended to read:

18         210.20  Employees and assistants; distribution of

19  funds.--

20         (1)  The division under the applicable rules of the

21  Department of Management Services shall have the power to

22  employ such employees and assistants and incur such other

23  expenses as may be necessary for the administration of this

24  part, within the limits of an appropriation for the operation

25  of the Department of Business and Professional Regulation as

26  may be authorized by the General Appropriations Act.

27         (2)  As collections are received by the division from

28  such cigarette taxes, it shall pay the same into a trust fund

29  in the State Treasury designated "Cigarette Tax Collection

30  Trust Fund" which shall be paid and distributed as follows:

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  1         (a)  The division shall from month to month certify to

  2  the Comptroller the amount derived from the cigarette tax

  3  imposed by s. 210.02(1)-(5) s. 210.02, less the service

  4  charges provided for in s. 215.20 and less 0.9 percent of the

  5  amount derived from the cigarette tax imposed by s. 210.02,

  6  which shall be deposited into the Alcoholic Beverage and

  7  Tobacco Trust Fund, specifying the amounts to be transferred

  8  from the Cigarette Tax Collection Trust Fund and credited on

  9  the basis of 5.8 percent of the net collections to the

10  Municipal Financial Assistance Trust Fund, 32.4 percent of the

11  net collections to the Revenue Sharing Trust Fund for

12  Municipalities, 2.9 percent of the net collections to the

13  Revenue Sharing Trust Fund for Counties, and 29.3 percent of

14  the net collections for the funding of indigent health care to

15  the Public Medical Assistance Trust Fund.

16         (b)  The division shall from month to month certify to

17  the Comptroller the amount derived from the cigarette surtax

18  imposed by s. 210.02(6), and that amount shall be transferred

19  from the Cigarette Tax Collection Trust Fund and credited to

20  the Department of Banking and Finance Tobacco Settlement

21  Clearing Trust Fund.

22         (c)(b)  The division shall from month to month certify

23  to the Comptroller the amount derived from the cigarette tax

24  imposed by s. 210.02 on all cigarettes sold at retail on any

25  property of the Inter-American Center Authority, created by

26  chapter 554, and such amount, less the service charge provided

27  for in s. 215.20, shall be paid to said Inter-American Center

28  Authority by warrant drawn by the Comptroller upon the State

29  Treasury, which amount is hereby appropriated monthly out of

30  such Cigarette Tax Collection Trust Fund.

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  1         (d)(c)  Beginning January 1, 1999, and continuing for

  2  10 years thereafter, the division shall from month to month

  3  certify to the Comptroller the amount derived from the

  4  cigarette tax imposed by s. 210.02, less the service charges

  5  provided for in s. 215.20 and less 0.9 percent of the amount

  6  derived from the cigarette tax imposed by s. 210.02 which

  7  shall be deposited into the Alcoholic Beverage and Tobacco

  8  Trust Fund, specifying an amount equal to 2.59 percent of the

  9  net collections, and that amount shall be paid to the Board of

10  Directors of the H. Lee Moffitt Cancer Center and Research

11  Institute, established under s. 240.512, by warrant drawn by

12  the Comptroller upon the State Treasury. These funds are

13  hereby appropriated monthly out of the Cigarette Tax

14  Collection Trust Fund, to be used for the purpose of

15  constructing, furnishing, and equipping a cancer research

16  facility at the University of South Florida adjacent to the H.

17  Lee Moffitt Cancer Center and Research Institute.  In fiscal

18  years 1999-2000 and thereafter with the exception of fiscal

19  year 2008-2009, the appropriation to the H. Lee Moffitt Moffit

20  Cancer Center and Research Institute authorized by this

21  paragraph shall not be less than the amount which would have

22  been paid to the H. Lee Moffitt Cancer Center and Research

23  Institute for fiscal year 1998-1999 had payments been made for

24  the entire fiscal year rather than for a 6-month period

25  thereof.

26         (3)  After all distributions hereinabove provided for

27  have been made, the balance of the revenue produced from the

28  tax imposed by this part shall be deposited in the General

29  Revenue Fund.

30         Section 4.  Section 215.5603, Florida Statutes, is

31  created to read:


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  1         215.5603  Tobacco Settlement Financing Corporation.--

  2         (1)  DEFINITIONS.--As used in this section, the term:

  3         (a)  "Bond" means any bond, debenture, note,

  4  certificate, or other obligation of financial indebtedness

  5  issued by the corporation under this section.

  6         (b)  "Corporation" means the Tobacco Settlement

  7  Financing Corporation created by this section.

  8         (c)  "Department" means the Department of Banking and

  9  Finance or its successor.

10         (d)  "Insurance" means a contract whereby one

11  undertakes to indemnify another or pay or allow a specified

12  amount or a determinable benefit upon determinable

13  contingencies.

14         (e)  "Purchase agreement" means a contract between the

15  corporation and the state, acting by and through the

16  department, in which the state sells to the corporation any or

17  all of the state's right, title, and interest in and to the

18  tobacco settlement agreement, including, but not limited to,

19  the moneys to be received thereunder.

20         (f)  "Tobacco settlement agreement" means the

21  settlement agreement, as amended, entered into by the state

22  and participating cigarette manufacturers in settlement of

23  State of Florida et al. v. American Tobacco Co., Case No.

24  95-1466AH (Fla. 15th Cir. Ct. 1996).

25         (2)  CORPORATION CREATION AND AUTHORITY.--

26         (a)  The Tobacco Settlement Financing Corporation is

27  created as a special purpose, not-for-profit, public benefits

28  corporation for the purpose of:

29         1.  Developing a plan which is subject to the review,

30  modification, and approval of the Legislature, by which it

31  will purchase any or all of the state's right, title, and


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  1  interest in and to the tobacco settlement agreement and will

  2  issue bonds to pay the purchase price therefor. The sale of

  3  bonds is subject to ratification by law. Funds generated by

  4  the sale of the bonds shall be used to provide funding for the

  5  Lawton Chiles Endowment Fund; or

  6         2.  Purchasing insurance, subject to the review,

  7  modification, and approval of the Legislature, to insure the

  8  state against the loss of proceeds from the tobacco settlement

  9  agreement.

10         (b)  The corporation shall be governed by a board of

11  directors consisting of the Governor, the Treasurer, the

12  Comptroller, the Attorney General, two directors appointed

13  from the membership of the Senate by the President of the

14  Senate, and two directors appointed from the membership of the

15  House of Representatives by the Speaker of the House of

16  Representatives. On January 7, 2003, the board shall include

17  the Chief Financial Officer in place of the Treasurer and the

18  Comptroller.

19         (c)  The corporation shall have all the powers of a

20  corporate body under the laws of this state, including, but

21  not limited to, the powers of corporations under chapter 617,

22  to the extent not inconsistent with or restricted by the

23  provisions of this section, including, but not limited to, the

24  power to:

25         1.  Adopt, amend, and repeal bylaws not inconsistent

26  with this section.

27         2.  Sue and be sued.

28         3.  Adopt and use a common seal.

29         4.  Acquire, purchase, hold, lease, and convey real and

30  personal property, contract rights, general intangibles,

31  revenues, moneys, and accounts as is proper or expedient to


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  1  carry out the purposes of the corporation and this section and

  2  to assign, convey, sell, transfer, lease, or otherwise dispose

  3  of such property.

  4         5.  Elect or appoint and employ such officers, agents,

  5  and employees as the corporation deems advisable to operate

  6  and manage the affairs of the corporation, which officers,

  7  agents, and employees may be employees of the state or of the

  8  state officers and agencies represented on the board of

  9  directors of the corporation.

10         6.  Make and execute any and all contracts, trust

11  agreements, trust indentures, and other instruments and

12  agreements necessary or convenient to accomplish the purposes

13  of the corporation and this section, including, but not

14  limited to, investment contracts approved by the Legislature,

15  swap agreements, liquidity facilities, or the purchase, as

16  approved by the Legislature, of insurance or reinsurance.

17         7.  Select, retain, and employ professionals,

18  contractors, or agents, which may include the Division of Bond

19  Finance of the State Board of Administration and the Division

20  of State Purchasing of the Department of Management Services,

21  as are necessary or convenient to enable or assist the

22  corporation in carrying out the purposes of the corporation.

23         8.  Do any act or thing necessary or convenient to

24  carry out the purposes of the corporation subject to the

25  review, modification, and approval of the Legislature as

26  provided herein.

27         (d)  With the approval of at least six of its

28  directors, the corporation may plan to purchase insurance to

29  insure the state, for 7 years, against the loss of 50 percent

30  of the revenues to be paid to the state pursuant to the

31  tobacco settlement agreement. The total premium paid for this


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    CS for CS for SB 1998                          First Engrossed



  1  insurance may not exceed $200 million. The plan is subject to

  2  review, modification, and approval of the Legislature.

  3  Purchase of insurance is subject to legislative approval.

  4         (e)  With the approval of at least six of its

  5  directors, the corporation may develop a plan to enter into

  6  one or more purchase agreements with the department pursuant

  7  to which the corporation will purchase any or all of the

  8  state's right, title, and interest in and to the tobacco

  9  settlement agreement and will execute and deliver any other

10  documents necessary or desirable to effectuate such purchase.

11  The plan is subject to review, modification, and approval of

12  the Legislature. Sale of all or part of the state's right,

13  title, and interest in and to the tobacco settlement agreement

14  is subject to approval by the Legislature.

15         (f)  Subject to the review, modification, and approval

16  by the Legislature, the corporation may issue bonds payable

17  from and secured by amounts payable to the corporation from

18  proceeds of the tobacco settlement agreement. The corporation

19  is additionally authorized to issue bonds to refund previously

20  issued bonds and to deposit the proceeds of such bonds as

21  provided in the documents authorizing the issuance of such

22  bonds. Upon legislative approval of the issuance of bonds, the

23  corporation is authorized, to do all things necessary or

24  desirable in connection with the issuance of the bonds,

25  including, but not limited to, establishing debt service

26  reserves or other additional security for the bonds, providing

27  for capitalized interest, and executing and delivering any and

28  all documents and agreements. The total principal amount of

29  bonds issued by the corporation shall not exceed $3 billion.

30  The principal amount of bonds issued in any single fiscal year

31  shall not exceed $1.5 billion, beginning with the 2000-2001


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    CS for CS for SB 1998                          First Engrossed



  1  fiscal year. The limitation on the principal amount of bonds

  2  does not apply the bonds issued to refund previously issued

  3  bonds. The term of any such bonds shall not exceed 40 years,

  4  and the rate of interest on such bonds may not exceed 10

  5  percent. The corporation may sell bonds through competitive

  6  bidding or negotiated contracts, whichever method of sale is

  7  determined by the corporation to be in the best interest of

  8  the corporation.

  9         (g)  The corporation does not have the power to pledge

10  the credit, the general revenues, or the taxing power of the

11  state or of any political subdivision of the state. The

12  obligations of the department and the corporation under the

13  purchase agreement and under any bonds shall not constitute a

14  general obligation of the state or a pledge of the faith and

15  credit or taxing power of the state. The bonds shall be

16  payable from and secured by payments received under the

17  tobacco settlement agreement, and neither the state nor any of

18  its agencies shall have any liability on such bonds. Such

19  bonds shall not be construed in any manner as an obligation of

20  the state or any of its agencies, the department, the State

21  Board of Administration or entities for which it invests

22  funds, or board members or their respective agencies.

23         (h)  Notwithstanding any other provision of law, any

24  pledge of or other security interest in revenues, money,

25  accounts, contract rights, general intangibles, or other

26  personal property made or created by the corporation resulting

27  from the authority granted by law shall be valid, binding, and

28  perfected from the time such pledge is made or other security

29  interest attaches without any physical delivery of the

30  collateral or further act, and the lien of any such pledge or

31  other security interest shall be valid, binding, and perfected


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    CS for CS for SB 1998                          First Engrossed



  1  against all parties having claim of any kind in tort, in

  2  contract, or otherwise against the corporation irrespective of

  3  whether such parties have notice of such claims. No instrument

  4  by which such a pledge or security interest is created nor any

  5  financing statement need be recorded or filed.

  6         (i)  The corporation may validate any bonds issued

  7  pursuant to this section and the security for payment

  8  therefor, as provided in chapter 75. The validation

  9  proceedings may be brought only in the circuit court for Leon

10  County. The notice required under s. 75.06 must be published

11  in Leon County, and the petition and order of the circuit

12  court shall be served only on the State Attorney for the

13  Second Judicial Circuit. The provisions of ss. 75.04(2) and

14  75.06(2) shall not apply to validation proceedings brought

15  under this paragraph. The validation of the first bonds issued

16  pursuant to this section may be appealed to the Supreme Court,

17  and the Court shall process such appeal expeditiously.

18         (j)  The state covenants with the holders of bonds of

19  the corporation that the state will not limit or alter the

20  authority or the rights under this section vested in the

21  corporation to fulfill the terms of any agreements, including

22  the terms of any purchase agreement, or in any way impair the

23  rights and remedies of such bondholders as long as any such

24  bonds remain outstanding unless adequate provision has been

25  made for the payment of such bonds pursuant to the documents

26  authorizing such bonds.

27         (k)  The corporation shall not take any action that

28  will materially and adversely affect the rights of holders of

29  any bonds issued under this section as long as such bonds are

30  outstanding.

31


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    CS for CS for SB 1998                          First Engrossed



  1         (l)  As long as the corporation has any bonds

  2  outstanding, the corporation may not file a voluntary petition

  3  under chapter 9 of the federal Bankruptcy Code or such

  4  corresponding chapter or sections as are in effect from time

  5  to time, and neither any public officer nor any organization,

  6  entity, or other person may authorize the corporation, while

  7  bonds are outstanding, to be or become a debtor under chapter

  8  9 of the federal Bankruptcy Code or such corresponding chapter

  9  or sections as are in effect from time to time.

10         (m)  The corporation may contract with the State Board

11  of Administration to serve as trustee with respect to bonds

12  issued by the corporation as provided by this section and to

13  hold, administer, and invest proceeds of such bonds and other

14  funds of the corporation and to perform other services

15  required by the corporation. The State Board of Administration

16  may perform such services and may contract with others to

17  provide any such services and to recover the costs and

18  expenses of providing such services.

19         (n)  The corporation shall not be deemed to be a

20  special district or a unit of local government. The provisions

21  of chapter 120, part I of chapter 287, and ss. 215.57-215.83

22  do not apply to the corporation, to any purchase agreements

23  entered into under this section, or to any bonds issued by the

24  corporation as provided in this section, except that

25  underwriters, financial advisors, and legal counsel must be

26  selected in a manner consistent with the rules adopted

27  pursuant to the State Bond Act for the selection of service

28  providers and underwriters.

29         (o)  In no event shall any of the benefits or earnings

30  of the corporation inure to the benefit of any private person.

31


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    CS for CS for SB 1998                          First Engrossed



  1         (p)  Unless such officer, employee, or agent acted

  2  outside the course and scope of her or his employment or acted

  3  in bad faith or with malicious purpose or in a manner

  4  exhibiting wanton and willful disregard of human rights,

  5  safety, or property, there shall be no liability on the part

  6  of, and no cause of action shall arise against, any board

  7  member of the corporation or any employee of the corporation

  8  or the state for any action taken by them in the performance

  9  of their duties under this section.

10         (q)  The corporation is exempt from taxation and

11  assessments of any nature whatsoever upon its income and any

12  property, assets, or revenues acquired, received, or used in

13  the furtherance of the purposes provided in this section.

14         (r)  The corporation and its corporate existence shall

15  continue until terminated by law; however, the corporation may

16  not be terminated while it has bonds outstanding unless

17  adequate provision is made for the payment of such bonds

18  pursuant to the documents authorizing the issuance of such

19  bonds. Upon termination of the corporation, all its rights and

20  assets in excess of its obligations shall pass to and be

21  vested in the Lawton Chiles Endowment Fund.

22         (s)  The Auditor General may conduct a financial audit

23  of the accounts and records of the corporation.

24         (3)  POWERS OF THE DEPARTMENT.--

25         (a)  The department is authorized, on behalf of the

26  state, to do all things necessary or desirable to assist the

27  corporation in the execution of its responsibilities, and may:

28         1.  Enter into one or more purchase agreements, which

29  may not take effect until ratified by law, to sell to the

30  corporation any or all of the state's right, title, and

31  interest in and to the tobacco settlement agreement;


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    CS for CS for SB 1998                          First Engrossed



  1         2.  Enter any administrative agreements with the

  2  corporation, which may not take effect until ratified by law,

  3  to fund the administration, operation, and expenses of the

  4  corporation from moneys appropriated for such purpose; and

  5         3.  Execute and deliver any and all other documents and

  6  agreements, which may not take effect until ratified by law,

  7  necessary or desirable in connection with the sale of any or

  8  all of the state's right, title, and interest in and to the

  9  tobacco settlement agreement to the corporation or the

10  issuance of the bonds by the corporation.

11         (b)  The state covenants with the holders of bonds of

12  the corporation that the state will not limit or alter the

13  authority or the rights under this section vested in the

14  department to fulfill the terms of any agreements, including

15  the terms of any purchase agreement, or in any way impair the

16  rights and remedies of such bondholders as long as any such

17  bonds remain outstanding, unless adequate provision has been

18  made for the payment of such bonds pursuant to the documents

19  authorizing such bonds.

20         (c)  Subject to the prior legislative approval set

21  forth in paragraph (2)(e), the department is authorized, on

22  behalf of the state, to make any covenant, representation, or

23  warranty necessary or desirable in connection with the sale of

24  any or all of the state's right, title, and interest in and to

25  the tobacco settlement agreement to the corporation or the

26  issuance of the bonds by the corporation.

27         Section 5.  If any provision of this act or its

28  application to any person or circumstance is held invalid, the

29  invalidity does not affect other provisions or applications of

30  the act which can be given effect without the invalid

31


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    CS for CS for SB 1998                          First Engrossed



  1  provision or application, and to this end the provisions of

  2  this act are severable.

  3         Section 6.  This act shall take effect upon becoming a

  4  law.

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