Health Care Trust Fund; reestablish and transfer $1 billion into.

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To: Public Health and Human
Services; Appropriations A
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Representative Scott

HOUSE BILL NO. 663

AN ACT TO REENACT AND AMEND SECTION 43-13-405, MISSISSIPPI 1
CODE OF 1972, WHICH WAS REPEALED BY OPERATION OF LAW IN 2017, TO 2
ESTABLISH THE HEALTH CARE TRUST FUND IN THE STATE TREASURY, INTO 3
WHICH SHALL BE DEPOSITED ALL TOBACCO SETTLEMENT INSTALLMENT 4
PAYMENTS MADE TO THE STATE EXCEPT AS OTHERWISE PROVIDED IN SECTION 5
41-113-11; TO PROVIDE THAT THE TRUST FUND SHALL REMAIN INVIOLATE 6
AND SHALL NEVER BE EXPENDED, EXCEPT AS OTHERWISE PROVIDED BY LAW; 7
TO AMEND SECTION 43-13-407, MISSISSIPPI CODE OF 1972, TO CONFORM 8
TO THE PRECEDING SECTION; TO BRING FORWARD SECTION 41-113-11, 9
MISSISSIPPI CODE OF 1972, TO WHICH CREATED THE TOBACCO CONTROL 10
PROGRAM FUND, FOR THE PURPOSE OF POSSIBLE AMENDMENT; TO DIRECT THE 11
STATE TREASURER, IN CONJUNCTION WITH THE STATE FISCAL OFFICER, TO 12
TRANSFER THE SUM OF ONE BILLION DOLLARS FROM THE CAPITAL EXPENSE 13
FUND TO THE HEALTH CARE TRUST FUND; AND FOR RELATED PURPOSES. 14
WHEREAS, in 1994, the Mississippi Attorney General filed a 15
landmark lawsuit against the tobacco industry to recoup funds 16
spent by the State of Mississippi to treat smoking-related 17
illnesses, and in 1997 the lawsuit was settled, which guaranteed 18
the State of Mississippi $4 Billion over the first 25 years with 19
annual payments of $100 Million or more continuing in perpetuity; 20
and 21
WHEREAS, in 1999, the Legislature enacted House Bill No. 519, 22
which created the Health Care Trust Fund for the deposit of all 23
monies received from the tobacco industry as a result of the 24
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tobacco settlement, with a long-term vision of having an 25
ever-growing source of money to spend on health care in 26
Mississippi for generations to come; and 27
WHEREAS, House Bill No. 519 mandated that the trust fund 28
"shall be inviolate and shall never be expended" except as allowed 29
in the bill, and the expectation was that the principal of the 30
trust fund would continue to increase year by year from the annual 31
settlement payments and investment earnings, and the Legislature 32
would expend only those earnings exclusively for health care 33
purposes in the state while leaving the principal untouched; and 34
WHEREAS, however, not long after the creation of the trust 35
fund, the Legislature slowly began to break the initial promise of 36
the trust fund, as it began transferring monies from the fund to 37
fill holes in the budget, and in 2005 passed legislation to take 38
$240 Million from the trust fund to cover a Medicaid deficit, 39
along with a commitment to replenish that amount to the trust 40
fund; and 41
WHEREAS, each year legislators and the Governor balked at 42
making the repayments to the trust fund while at the same time 43
whittling away more and more money from the fund to pay for other 44
pressing budget matters, and the Legislature never did repay the 45
trust fund for those monies and it ultimately repealed the pledge 46
to make the repayments; and 47
WHEREAS, when Governor Haley Barbour took office in 2004, 48
there was more than $630 Million in the fund, but when he left 49
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office in 2012, the fund had dwindled to only $50 Million, and at 50
the recommendation of the Governor, who said it was clear that the 51
trust fund was never going to be used the way it was envisioned, 52
the Legislature enacted a four-year schedule to fully deplete the 53
fund and then repealed the fund a few years later; and 54
WHEREAS, while a lot of the money received from the tobacco 55
settlement was expended for health care purposes, and the State of 56
Mississippi still receives an annual payment from the tobacco 57
settlement that is expended for a variety of health care purposes, 58
the original vision and promise of having an inviolate trust fund 59
that would grow to a massive amount and provide a perpetual 60
continuous source of money for health care has been lost; and 61
WHEREAS, Mississippi continues to have major health care 62
issues that could have been addressed in part with monies from the 63
trust fund, so the Legislature should take action to restore that 64
vision and expectation of 1999 by reestablishing the Health Care 65
Trust Fund and transferring a substantial sum into the trust fund 66
to provide a new principal that can be invested and provide a new 67
source of funds to be used for improving the health care in the 68
state; NOW, THEREFORE, 69
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 70
SECTION 1. Section 43-13-405, Mississippi Code of 1972, 71
which was repealed by operation of law in 2017, is reenacted (and 72
amended) as follows: 73
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43-13-405. (1) In accordance with the purposes of this 74
article, there is established in the State Treasury the Health 75
Care Trust Fund, into which shall be deposited Two Hundred Eighty 76
Million Dollars ($280,000,000.00) of the funds received by the 77
State of Mississippi as a result of the tobacco settlement as of 78
the end of fiscal year 1999, and all tobacco settlement 79
installment payments made in subsequent years for which the use or 80
purpose for expenditure is not restricted by the terms of the 81
settlement, except as otherwise provided in * * * Section 82
41-113-11. All income from the investment of the funds in the 83
Health Care Trust Fund shall be credited to the account of the 84
Health Care Trust Fund. The funds in the Health Care Trust Fund 85
at the end of a fiscal year shall not lapse into the State General 86
Fund. 87
(2) The Health Care Trust Fund shall remain inviolate and 88
shall never be expended, except as provided in this article. The 89
Legislature shall appropriate from the Health Care Trust Fund such 90
sums as are necessary to recoup any funds lost as a result of any 91
of the following actions: 92
(a) The federal Centers for Medicare and Medicaid 93
Services, or other agency of the federal government, is successful 94
in recouping tobacco settlement funds from the State of 95
Mississippi; 96
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(b) The federal share of funds for the support of the 97
Mississippi Medicaid Program is reduced directly or indirectly as 98
a result of the tobacco settlement; 99
(c) Federal funding for any other program is reduced as 100
a result of the tobacco settlement; or 101
(d) Tobacco cessation programs are mandated by the 102
federal government or court order. 103
SECTION 2. Section 43-13-407, Mississippi Code of 1972, is 104
amended as follows: 105
43-13-407. (1) In accordance with the purposes of this 106
article, there is established in the State Treasury the Health 107
Care Expendable Fund, into which shall be transferred from the 108
Health Care Trust Fund * * * 109
a sum equal to the average annual amount of the dividends, 110
interest and other income, including increases in value of the 111
principal, earned on the funds in the Health Care Trust Fund 112
during the preceding four (4) fiscal years. 113
* * * 114
( * * *2) All income from the investment of the funds in the 115
Health Care Expendable Fund shall be credited to the account of 116
the Health Care Expendable Fund. Any funds in the Health Care 117
Expendable Fund at the end of a fiscal year shall not lapse into 118
the State General Fund. Any funds appropriated from the Health 119
Care Expendable Fund that are unexpended at the end of a fiscal 120
year shall lapse into the Health Care Expendable Fund. 121
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( * * *3) The funds in the Health Care Expendable Fund shall 122
be available for expenditure under specific appropriation by the 123
Legislature * * * and shall be expended exclusively for health 124
care purposes. 125
( * * *4) The provisions of subsection (1) of this section 126
may not be changed in any manner except upon amendment to that 127
subsection by a bill enacted by the Legislature with a vote of not 128
less than three-fifths (3/5) of the members of each house present 129
and voting. 130
( * * *5) If the State Treasurer, in consultation with the 131
Executive Director of the Department of Finance and 132
Administration, determines that there is a need to borrow funds to 133
offset any temporary cash-flow deficiencies in the Health Care 134
Expendable Fund created in this section, the Treasurer may borrow 135
those funds from any state-source special funds in the State 136
Treasury in amounts that can be repaid from the Health Care 137
Expendable Fund during the fiscal year in which the funds are 138
borrowed. The State Treasurer shall immediately notify the 139
Legislative Budget Office and the Department of Finance and 140
Administration of each transfer into and out of the Health Care 141
Expendable Fund. 142
* * * 143
SECTION 3. Section 41-113-11, Mississippi Code of 1972, is 144
brought forward as follows: 145
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41-113-11. (1) There is established in the State Treasury a 146
special fund to be known as the Tobacco Control Program Fund, 147
which shall be comprised of the funds specified in subsection (2) 148
of this section and any other funds that are authorized or 149
required to be deposited into the special fund. 150
(2) From the tobacco settlement installment payments that 151
the State of Mississippi receives during each calendar year, the 152
sum of Twenty Million Dollars ($20,000,000.00) shall be deposited 153
into the special fund. 154
(3) Monies in the fund shall be expended solely for the 155
purposes specified in this chapter. None of the funds in the 156
special fund may be transferred to any other fund or appropriated 157
or expended for any other purpose. 158
(4) All income from the investment of the funds in the 159
Tobacco Control Program Fund shall be credited to the account of 160
the Tobacco Control Program Fund. Any funds in the Tobacco 161
Control Program Fund at the end of a fiscal year shall not lapse 162
into the State General Fund. Any funds appropriated from the 163
Tobacco Control Program Fund that are unexpended at the end of a 164
fiscal year shall lapse into the Tobacco Control Program Fund. 165
However, beginning with fiscal year 2020, any funds appropriated 166
from the Tobacco Control Program Fund that are unexpended at the 167
end of the fiscal year shall lapse into the Health Care Expendable 168
Fund. 169
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ST: Health Care Trust Fund; reestablish and
transfer $1 billion into.
SECTION 4. On July 1, 2026, the State Treasurer, in 170
conjunction with the State Fiscal Officer, shall transfer the sum 171
of One Billion Dollars ($1,000,000,000.00) from the Capital 172
Expense Fund (Fund No. 6499C00000) to the Health Care Trust Fund 173
established in Section 43-13-405 as reenacted in Section 1 of this 174
act. 175
SECTION 5. This act shall take effect and be in force from 176
and after July 1, 2026. 177