Distribution 10 Percent Higher Than 2010
The Tobacco Settlement Permanent Trust Account Investment Advisory Committee approved $51 million for the year 2011 tobacco settlement distribution, representing a 10 percent increase over the previous year’s amount. According to the distribution report published by the Department of State Health Services (DSHS), 162 counties received about $6.5 million in reimbursements.
Under the terms of a historic settlement negotiated in the summer of 1998, tobacco companies agreed to create a $2.275 billion fund for the benefit of "all hospital districts, other local political subdivisions owning and maintaining public hospitals, and counties of the State of Texas responsible for providing indigent care to the general public."
At the outset, $450 million of the nearly $2.3 billion was deposited into a "lump sum trust account" and distributed to local entities over a three-year period. The remainder, approximately $1.8 billion, was deposited into a "permanent trust account" with local entities receiving yearly disbursements each spring from investment earnings.
In response to the economic challenges faced in 2009, the Tobacco Settlement Permanent Trust Account Investment Advisory Committee recently recommended updates to rules related to the Tobacco Settlement Permanent Trust Account. The revised rules, Texas Administrative Code, 34 TAC §18.2, were effective on March 24, 2011, regarding trust account distributions.
“These measures taken by the Committee serve to safeguard the trust during economic downturns such as the one experienced in 2009,” Czepiel said.
DSHS certified the expenditure statements submitted by the eligible political subdivisions. According to the report identifying 2010 unreimbursed health care expenditures, hospital districts reported $2,302,486,440.16; eligible cities reported $3,069,098.10; and counties reported $337,646,819.40. Total expenditures reported by all eligible political subdivisions for 2010 were $2,643,202,357.66. The total 2011 distribution was $51 million.
For more information on the tobacco settlement, go to http://www.dshs.state.tx.us/tobaccosettlement/default.shtm.