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Current Status Bill Number:View additional legislative information at the LPITS web site.714 Type of Legislation:General Bill GB Introducing Body:Senate Introduced Date:19990414 Primary Sponsor:Elliott All Sponsors:Elliott, McGill, Rankin, Land, Glover, Saleeby and Leatherman Drafted Document Number:l:\council\bills\bbm\9191som99.doc Companion Bill Number:3828 Residing Body:Senate Current Committee:Agriculture and Natural Resources Committee 01 SANR Subject:Tobacco Indemnification and Community Revitalization Commission and Fund, Settlement Fund; Agriculture History Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ Senate 19990414 Introduced, read first time, 01 SANR referred to Committee Versions of This Bill
TO AMEND TITLE 46, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO AGRICULTURE, BY ADDING CHAPTER 30, SO AS TO ESTABLISH THE TOBACCO INDEMNIFICATION AND COMMUNITY REVITALIZATION COMMISSION AND FUND, AND TO PROVIDE FOR ITS MEMBERSHIP, DUTIES, AND TO PROVIDE FOR THE DISTRIBUTION OF THE MONIES RECEIVED BY THE STATE PURSUANT TO THE MASTER SETTLEMENT AGREEMENT WITH TOBACCO PRODUCT MANUFACTURERS; AND TO AMEND TITLE 44, RELATING TO HEALTH, BY ADDING CHAPTER 126, SO AS TO ESTABLISH THE SOUTH CAROLINA TOBACCO SETTLEMENT FOUNDATION AND FUND AND TO PROVIDE FOR ITS MEMBERSHIP, DUTIES, AND THE DISTRIBUTION OF MONIES RECEIVED BY THE STATE PURSUANT TO THE MASTER SETTLEMENT AGREEMENT WITH THE TOBACCO PRODUCT MANUFACTURERS.
Whereas, tobacco is the largest dollar farm-produced crop in South Carolina with production of 101,500,000 pounds; and
Whereas, farms in the South Carolina production area and in the tobacco producing belt of the southeast cannot survive with a drastic change in the tobacco program; and
Whereas, farms in the tobacco belt are historically small because of the income intensity per acre of tobacco; and
Whereas, these small family farms do not own the land acreage to survive on the income from grains, soybeans, or other farm commodities without tobacco; and
Whereas, with the loss of the family farm producing tobacco, America would also lose the production of other farm commodities on this farm as well; and
Whereas, the loss of farm production would likely increase the cost of food and fiber for every American consumer; and
Whereas, reduction of farm commodities will have a negative impact on our nation's international trade balance; and
Whereas, America could ultimately lose adequate food and fiber production from American soil to assure nutrition and clothing for a healthy nation at an affordable price; and
Whereas, many tobacco producers recognize there may be a health-related problem with the use of tobacco products; and
Whereas, the proposed cure of the health-related problem with no financial consideration of the farmers could effectively and eventually put them completely out of business; and
Whereas, the tobacco industry is now negotiating a settlement with the federal government as well as the attorneys general from several states. Now, therefore,
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Title 46 of the 1976 Code is amended by adding:
Section 46-30-10. As used in this chapter:
(1) 'Active tobacco producer' means a person who is the actual producer, as determined by the United States Department of Agriculture (USDA), of tobacco on a farm where tobacco is produced pursuant to a tobacco farm marketing quota or farm acreage allotment for the 1998 crop year as established under the Agriculture Adjustment Act of 1938, 7 U.S.C., Section 1281, and other provisions of law.
(2) 'Commission' means the Tobacco Indemnification and Community Revitalization Commission created pursuant to Section 46-30-20.
(3) 'Economic loss' means a loss of investment in specialized equipment and barns and lost tobacco production opportunities associated with a decline in quota.
(4) 'Fund' means the Tobacco Indemnification and Community Revitalization Fund established pursuant to Section 46-30-60.
(5) 'Master Settlement Agreement' means the settlement agreement and related documents between the State and leading United States tobacco product manufacturers dated November 23, 1998.
(6) 'Quota holder' means a farm owner or the person who has an equitable interest in the farm on January 1, 1998 or later, for which a tobacco farm marketing quota or farm acreage allotment was established under the Agriculture Adjustment Act of 1938, 7 U.S.C., Section 1281, and other provisions of law.
(7) 'Tobacco farmer' means a person who is an active flue-cured tobacco producer, a quota holder, or both.
(8) 'Tobacco growing regions' means any county in South Carolina that has tobacco production or tobacco marketing quotas.
(9) 'Warehouse' means a suitable building, structure, or other protected enclosure for which a license under federal law has been issued for the sale of domestic United States produced tobacco for the current marketing year.
Section 46-30-20. There is created the Tobacco Indemnification and Community Revitalization Commission. The commission is vested with all of the politic and corporate powers as provided in this chapter. The commission is established for the purposes of administering the monies in the Tobacco Indemnification and Community Revitalization Fund and distributing the monies for the purposes provided in this chapter, including using monies in the fund to:
(1) indemnify tobacco growers and warehouses from the adverse economic effects of the Master Settlement Agreement; and
(2) revitalize tobacco dependent communities. The commission has only those powers enumerated in Section 46-30-40.
Section 46-30-30. (A) Notwithstanding the provisions of Section 8-13-770, the commission is composed of eleven members as follows:
(1) two members of the House of Representatives to be appointed by the Speaker of the House of Representatives;
(2) two members of the Senate to be appointed by the President Pro Tempore of the Senate;
(3) four active flue-cured tobacco farmers, two to be appointed by the Speaker and two to be appointed by the President Pro Tempore;
(4) the Commissioner of Agriculture or his designee;
(5) a representative of the South Carolina Farm Bureau Federation appointed by the Farm Bureau; and
(6) one member of the general public appointed by the Governor.
With the exception of the Commissioner of Agriculture, all members of the commission shall reside in the tobacco growing regions of the State.
(B) Members serve for a term of four years and until their successors are appointed and qualify. A vacancy in the commission must be filled in the same manner as the original appointment for the remainder of the unexpired term. No member is eligible to serve more than two successive four-year terms; however, two additional terms may be served by a member appointed to fill a vacancy when the remainder of that term was three years or less.
(C) The members of the commission shall elect a chairman and vice chairman. The chairman shall be a legislative member. A majority of members of the commission serving at any one time constitutes a quorum for the transaction of business.
(D) Members of the commission serve without pay but are allowed the usual mileage, per diem, and subsistence as provided by law for members of state boards, committees, and commissions.
(E) Members of the commission and its employees are subject to the provisions of the Ethics, Government Accountability and Campaign Reform Act, Chapter 13 of Title 8 of the 1976 Code and the Lobbyist Reform Act, Chapter 17 of Title 2 of the 1976 Code.
Section 46-30-40. (A) The commission has the following powers:
(1) adopt and use an official seal;
(2) make bylaws for the management and regulation of its affairs;
(3) maintain its office in Columbia;
(4) accept, hold, and administer monies distributed to the commission pursuant to the Master Settlement Agreement and other money, securities, or other property appropriated, given, or bequeathed to the commission, absolutely or in trust, for the purposes for which the commission is created;
(5) distribute the monies in the fund for the purposes provided in this chapter;
(6) make and execute contracts and all other instruments and agreements necessary or convenient for the exercise of its powers and functions;
(7) invest its funds as provided in this chapter or permitted by applicable law; and
(8) do any lawful act necessary or appropriate to carry out the powers granted or reasonably implied in this chapter.
(B) The commission shall distribute one-sixth of the monies deposited in the fund, concurrently with the deposit of monies into the fund under the Master Settlement Agreement, to the South Carolina Tobacco Settlement Fund established pursuant to Section 44-126-70.
(C) The commission shall distribute the remaining available monies in the fund as follows:
(1) indemnify tobacco farmers in the State for the decline or elimination of tobacco quota based on the basic flue-cured quota as allocated by the USDA for the crop year 1997. The commission shall compensate these tobacco farmers in an amount equal to the total lost asset value in quota incurred annually by them. The commission also shall compensate an active tobacco farmer for the economic loss resulting from any annual quota reduction. The compensation for loss is personal to the tobacco farmer who actually suffers the loss and does not attach to the farm or to the quota. The total asset loss in quota and economic losses for active tobacco producers in South Carolina is estimated to be 1.4 billion dollars. The commission shall make the payments from settlement dollars received into the fund, after taking into account on a dollar-for-dollar basis funds received for this purpose by the tobacco farmer from Phase II of the Master Settlement Agreement;
(2) indemnify the tobacco warehouses in the State by setting aside a pro rata share of all monies that go to the tobacco farmer from the tobacco settlement for the warehouses' compensation;
(3) subject to the affirmative vote of two-thirds of the membership of the commission, promote economic growth and development in tobacco dependent communities, in order to assist these communities in reducing their dependency on tobacco and tobacco-related business; and
(4) monies distributed to tobacco farmers and warehouses are exempt from state taxes.
(D) The commission shall undertake studies and gather information and data in order to determine:
(1) the economic consequences of the reduction in or elimination of quota for tobacco growers,
(2) the potential for alternative cash crops, and
(3) other matters the commission believes will affect tobacco growers in the State.
Section 46-30-50. The commission is authorized to employ an executive director who also shall be the secretary and who shall administer, manage, and direct the affairs and business of the commission, in accordance with the provisions of this chapter and subject to the policies, control, and direction of the commission. The commission may employ technical experts and other officers, agents, and employees, permanent and temporary, as it may require, and shall determine their qualifications, duties, and compensation. The actual expenses incurred in the performance of these duties must be paid from the fund.
Section 46-30-60. The commission shall establish a fund to be known as the Tobacco Indemnification and Community Revitalization Fund. The commission shall deposit into the fund sixty percent of the monies earmarked for use in the State under Phase I of the Master Settlement Agreement. Money in the fund must be used solely to implement the provisions of Section 46-30-40. The fund also consists of other monies received by the commission, from any source, for the purpose of implementing the provisions of Section 46-30-40.
Section 46-30-70. (A) The accounts and records of the commission showing the receipt and disbursement of funds from whatever source derived must be in the form as the Comptroller General prescribes.
(B) The accounts of the commission must be audited annually by the Comptroller General or his designee. Copies of the annual audit must be distributed to the Governor and to the chairmen of the House Ways and Means Committee and the Senate Finance Committee.
Section 46-30-80. The commission shall submit a report annually to the Governor and the General Assembly."
SECTION 2. Title 44 of the 1976 Code is amended by adding:
Section 44-126-10. As used in this chapter, unless the context clearly indicates otherwise:
(1) 'Board' means the Board of Trustees of the foundation appointed pursuant to Section 44-126-40.
(2) 'Director' means the director of the foundation appointed pursuant to Section 44-126-50.
(3) 'Foundation' means the South Carolina Tobacco Settlement Fund established pursuant to Section 44-126-20.
(4) 'Fund' means the South Carolina Tobacco Settlement Foundation created pursuant to Section 44-126-70.
Section 44-126-20. There is created the South Carolina Tobacco Settlement Foundation. The foundation is vested with all of the politic and corporate powers as provided in this chapter. The foundation is established for the purpose of administering the monies received pursuant to subsection (B) of Section 46-30-40 and distributing the monies for the purposes provided in this chapter, including using monies in the South Carolina Tobacco Settlement Fund to assist in financing efforts to restrict the use of tobacco products by minors through such means as educational and awareness programs on the health effects of tobacco use on minors and enforcement of laws restricting the distribution of tobacco products to minors. The foundation has only the powers enumerated in Section 44-126-30.
Section 44-126-30. The foundation is granted all powers necessary or appropriate to carry out and effectuate its corporate purposes including, without limitation, the following:
(1) adopt and use an official seal;
(2) have succession until dissolved by the General Assembly, in which event title to the properties of the foundation, both real and personal, insofar as consistent with existing contractual obligations and subject to all other legally enforceable claims or demands by or against the foundation, must pass to and become vested in the State;
(3) maintain its office in Columbia;
(4) accept, hold, and administer monies distributed to the foundation pursuant to subsection (B) of Section 46-30-40 and other money, securities, or other property appropriated, given, or bequeathed to the foundation, absolutely or in trust, for the purposes for which the foundation is created;
(5) distribute the monies in the fund to entities for use in restricting the use of tobacco products by minors in the State, on terms and in amounts as determined by the board;
(6) make and execute contracts and all other instruments and agreements necessary or convenient for the exercise of its powers and functions;
(7) appoint and prescribe the duties of officers, agents, employees, advisors, and consultants as are necessary to carry out its functions, and to fix and pay compensation to them for their services as the foundation determines;
(8) make bylaws for the management and regulations of its affairs;
(9) receive and accept aid, grants, contributions, and cooperation of any kind from any source for the purposes of this chapter subject to the conditions, acceptable to the foundation, upon which the aid, grants, contributions, and cooperation may be made;
(10) invest its funds as provided in this chapter or permitted by applicable law; and
(11) do any lawful act necessary or appropriate to carry out the powers granted or reasonably implied.
Section 44-126-40. (A) The foundation shall be governed and administered by a board of trustees. Notwithstanding the provisions of Section 8-13-770, the membership of the board is as follows:
(1) two members appointed by the Speaker of the House of Representatives from the membership of the House of Representatives, one representing rural interests and one representing urban interests;
(2) two members appointed by the President Pro Tempore of the Senate from the membership of the Senate, one representing rural interests and one representing urban interests; and
(3) eleven members appointed by the Governor subject to confirmation by the General Assembly, as follows:
(a) five designated representatives of public health agencies, such as, but not limited to: the American Cancer Society of South Carolina, the American Heart Association of South Carolina, the American Lung Association of South Carolina, the South Carolina Medical Association, and the South Carolina Nurses' Association; (b) four health professionals in the fields of oncology, cardiology, pulmonary medicine, and pediatrics; and
(c) two youths under the age of twenty-one.
(B) Members serve for a term of four years and until their successors are appointed and qualify. A vacancy in the board must be filled in the same manner as the original appointment for the remainder of the unexpired term. No member is eligible to serve more than two successive four-year terms; however, two additional terms may be served by a member appointed to fill a vacancy when the remainder of that term was three years or less.
(C) The members of the board shall elect a chairman and vice chairman. A majority of members of the board serving at any one time constitute a quorum for the transaction of business.
(D) Members of the board serve without pay but are allowed the usual mileage, per diem, and subsistence as provided by law for members of state boards, committees, and commissions.
(E) Members of the board and employees of the foundation are subject to the provisions of the Ethics, Government Accountability and Campaign Reform Act, Chapter 13 of Title 8 of the 1976 Code and the Lobbyist Reform Act, Chapter 17 of Title 2 of the 1976 Code.
Section 44-126-50. The foundation is authorized to employ a director, who shall also be the secretary of the board. The director is appointed by and serves at the pleasure of the board. The director administers, manages, and directs the affairs and business of the foundation in accordance with the provisions of this chapter, subject to the control and direction of the board. The board may employ technical experts and other officers, agents, and employees, permanent and temporary, as it may require, and shall determine their qualifications, duties, and compensation. The board may delegate to one or more of its agents or employees the administrative duties as it considers proper. The actual expenses incurred in the performance of these duties shall be paid from the fund.
Section 44-126-60. The board has the following duties:
(1) establish specific criteria and procedures governing decisions by the foundation to distribute the monies in the fund to entities for use in restricting the use of tobacco products by minors;
(2) establish requirements that every recipient of money distributed from the fund establish and maintain policies that restrict the use of tobacco products by minors, as provided in Section 44-126-80;
(3) evaluate the proposals for the use of the assets of the fund in accordance with the criteria established by the board and the provisions of this chapter; and
(4) evaluate the implementation and results of all efforts receiving support from the foundation.
Section 44-126-70. The foundation shall create a fund to be known as the South Carolina Tobacco Settlement Fund. The fund shall consist of the monies deposited to the fund pursuant to subsection (B) of Section 46-30-40. The fund also shall consist of monies appropriated by the General Assembly to the foundation, grants, and donations received by the foundation, and other monies received by the foundation and designated for deposit in the fund. Monies in the fund shall be used for the purposes of restricting the use of tobacco products by minors including, but not limited to, educational and awareness programs on the health effects of tobacco use on minors and enforcement of laws restricting the distribution of tobacco products to minors.
Section 44-126-80. The recipient of monies distributed from the fund pursuant to this chapter for the purpose of restricting the use of tobacco products by minors is required, as a condition precedent to the release of the monies to the entity, to establish and maintain policies restricting or preventing tobacco use by minors. The foundation shall:
(1) establish criteria for determining whether an entity's policies support the restriction of tobacco use by minors; and
(2) monitor the distribution of the monies to ensure that the recipients are in compliance with the provisions of this section.
Section 44-126-90. (A) The accounts and records of the foundation showing the receipt and disbursement of funds from whatever source derived must be in the form as the Comptroller General prescribes.
(B) The accounts of the foundation must be audited annually by the Comptroller General or his designee. Copies of the annual audit must be distributed to the Governor and to the chairmen of the House Ways and Means Committee and the Senate Finance Committee.
Section 44-126-100. The foundation shall submit a report annually to the Governor and the General Assembly. The report must include information regarding programs supported by the foundation and expenditures from the fund.
Section 44-126-110. (A) The exercise of the powers granted by this chapter must be in all respects for the benefit of the inhabitants of the State and for the promotion of their safety, health, welfare, knowledge, convenience, and prosperity.
(B) The foundation is performing an essential governmental function in the exercise of the powers conferred upon it by this chapter, and the property of the foundation and its income and operations are exempt from taxation or assessments upon property acquired or used by the foundation under the provisions of this chapter."
SECTION 3. This act takes effect upon approval by the Governor.
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