The House Banking and Insurance Committee will hold a public hearing on Tuesday on House Bill 5108 – Funding the Tobacco Cessation Initiative.
Also known as the “Rainy Day B Bill,” this legislation would transfer $5 million/year of interest from the Rainy Day B Fund to the WV Department of Health for tobacco cessation initiatives.
In 1998 Four major U.S. tobacco companies and a select group of states signed a Master Settlement Agreement (the “MSA”). The MSA was the result of the largest civil settlement in U.S. history. Under the MSA, the major tobacco companies provided the settling states with $246 billion over a 25-year period.
West Virginia anticipated receiving $1.7 billion of payments over 25 years. Instead of waiting to receive those annual payments, the State chose to raise a lump sum amount by selling their rights to the future tobacco settlement payments via a bond issuance.
West Virginia securitized its future Master Settlement Agreement (MSA) payments and established a Revenue Shortfall Reserve Fund—Part B (Rainy Day Fund—Part B) in 2006 with the cash balance of the West Virginia Tobacco Settlement Medical Trust Fund.
The balance of this fund is currently $636 million. The fund averages interest growth of $5 million/month, so this legislation would take one month of interest each year to fund tobacco cessation initiatives.
This bill has been introduced for multiple years but has never received a public hearing. The American Cancer Society Cancer Action Network lobbies yearly to have this bill introduced and will testify in support of the bill at the public hearing.
