The Florida Senate

215.5601  Lawton Chiles Endowment Fund.--

(1)  SHORT TITLE.--This section may be cited as the "Lawton Chiles Endowment Fund."

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

(a)  "Board" means the State Board of Administration established by s. 16, Art. IX of the State Constitution of 1885 and incorporated into s. 9(c), Art. XII of the State Constitution of 1968.

(b)  "Endowment" means the Lawton Chiles Endowment Fund.

(c)  "Earnings" means all income generated by investments and the net change in the market value of assets.

(d)  "State agency" or "state agencies" means the Department of Health, the Department of Children and Family Services, the Department of Elderly Affairs, or the Agency for Health Care Administration, or any combination thereof, as the context indicates.

(3)  LEGISLATIVE INTENT.--It is the intent of the Legislature to:

(a)  Provide a perpetual source of funding for the future of state children's health programs, child welfare programs, children's community-based health and human services initiatives, elder programs, and biomedical research activities.

(b)  Ensure that enhancement revenues will be available to finance these important programs and initiatives.

(c)  Use tobacco settlement moneys to ensure the financial security of vital health and human services programs for children and elders.

(d)  Encourage the development of community-based solutions to strengthen and improve the quality of life of Florida's most vulnerable citizens, its children and elders.

(e)  Provide funds for cancer research and public-health research for diseases linked to tobacco use.

(4)  LAWTON CHILES ENDOWMENT FUND; CREATION; PURPOSES AND USES.--

(a)  There is created the Lawton Chiles Endowment Fund, to be administered by the State Board of Administration. The endowment shall serve as a clearing trust fund not subject to termination pursuant to s. 19(f), Art. III of the State Constitution and shall be funded by settlement moneys received from the tobacco industry and by moneys received from the sale of the state's right, title, and interest in and to the tobacco settlement agreement, including the right to receive payments under such agreement. The endowment fund shall be exempt from the service charges imposed by s. 215.20.

(b)  Funds from the endowment that are available for legislative appropriation pursuant to subsection (6) shall be transferred by the board to the Tobacco Settlement Clearing Trust Fund, created in s. 17.41, in the amounts provided for in this paragraph.

1.  For fiscal year 2000-2001, funds shall be distributed based on legislative appropriations.

2.  For fiscal year 2001-2002 and beyond, funds shall be distributed annually as follows:

a.  Fifty percent shall be deposited into a separate account in the Department of Children and Family Services Tobacco Settlement Trust Fund to be appropriated pursuant to paragraph (8)(a);

b.  Thirty-three and one-half percent shall be deposited into the Biomedical Research Trust Fund in the Department of Health to be appropriated pursuant to paragraph (8)(b), if such a trust fund is created by law; otherwise, the funds shall be deposited into the Department of Health Tobacco Settlement Trust Fund; and

c.  The remaining funds shall be deposited into a separate account in the Department of Elderly Affairs Tobacco Settlement Trust Fund to be appropriated pursuant to paragraph (8)(a).

(c)  Subject to legislative appropriations, state agencies shall use distributions from the endowment fund to enhance services for children and elders or to support biomedical research initiatives pursuant to s. 215.5602.

(d)  No later than October 1 of each year, the Secretary of Health, the Secretary of Children and Family Services, and the Secretary of Health Care Administration shall develop a list of the top five funding priorities for children's services eligible for funding from the endowment funds, and the Secretary of Health, the Secretary of Elderly Affairs, and the ¹Director of Health Care Administration shall develop a list of the top five funding priorities for elder services eligible for funding from the endowment funds. No later than November 15 of each year, the list for children's services must be submitted to the advisory council for children's services created in paragraph (9)(a), and the list for elder services must be submitted to the advisory council for elder services created in paragraph (9)(b). The purposes of using the advisory councils are to evaluate the funding priorities of the agencies, to evaluate the request against the mission and goals of the agencies, to allow for public input and advocacy, and to gain consensus for priority requests and recommended endowment funding levels for those priority requests.

(e)  Funds distributed from the endowment fund may not be used to supplant existing revenues.

(f)  When advised by the Revenue Estimating Conference that a deficit will occur with respect to the appropriations from the tobacco settlement trust funds of the state agencies in any fiscal year, the Governor shall develop a plan of action to eliminate the deficit. Before implementing the plan of action, the Governor must comply with the provisions of s. 216.177(2). In developing the plan of action, the Governor shall, to the extent possible, preserve legislative policy and intent, and, absent any specific directions to the contrary in the General Appropriations Act, any reductions in appropriations from the tobacco settlement trust funds of the state agencies for a fiscal year shall be prorated among the purposes for which funds were appropriated from that Tobacco Settlement Trust Fund for that year.

(5)  ADMINISTRATION OF THE ENDOWMENT.--

(a)  The board is authorized to invest and reinvest funds of the endowment in those securities listed in s. 215.47, in accordance with the fiduciary standards set forth in s. 215.47(9) and consistent with an investment plan developed by the executive director and approved by the board. Costs and fees of the board for investment services shall be deducted from the earnings accruing to the endowment.

(b)  The endowment shall be managed as an annuity. The investment objective shall be long-term preservation of the real value of the principal and a specified regular annual cash outflow for appropriation, as nonrecurring revenue. The schedule of annual cash outflow shall be included within the investment plan adopted pursuant to paragraph (a).

(c)  The board shall establish a separate account for the funds of the endowment. The board shall design and operate an investment portfolio that maximizes the financial return to the endowment, consistent with the risks inherent in each investment, and that is designed to preserve an appropriate diversification of the portfolio.

(d)  No later than August 15 and February 15 of each year, the board shall report on the financial status of the endowment to the Governor, the Speaker of the House of Representatives, the President of the Senate, the chairs of the respective appropriations and appropriate substantive committees of each chamber, and the Revenue Estimating Conference.

(e)  Accountability for funds from the endowment which have been appropriated to a state agency shall reside with the state agency. The board is not responsible for the proper expenditure or accountability of funds from the endowment after transfer to the Tobacco Settlement Clearing Trust Fund.

(f)  The board may collect a fee for service from the endowment no greater than that charged to the Florida Retirement System.

(6)  AVAILABILITY OF FUNDS.--

(a)  Funds from the endowment shall not be available for appropriation to a state agency until July 1, 2000. Beginning July 1, 2000, the maximum annual amount of endowment funds that may be appropriated shall be in accordance with the following, based on earnings averaged over 3 years:

1.  Beginning July 1, 2000, no more than a level of spending representing earnings at a rate of 3 percent.

2.  Beginning July 1, 2001, no more than a level of spending representing earnings at a rate of 4 percent.

3.  Beginning July 1, 2002, no more than a level of spending representing earnings at a rate of 5 percent.

4.  Beginning July 1, 2003, and thereafter, no more than a level of spending representing earnings at a rate of 6 percent.

(b)  Notwithstanding the provisions of s. 216.301 and pursuant to s. 216.351, all unencumbered balances of appropriations as of June 30 or undisbursed balances as of December 31 shall revert to the endowment's principal.

(7)  ENDOWMENT PRINCIPAL.--The endowment shall receive moneys from the sale of the state's right, title, and interest in and to the tobacco settlement agreement and from amounts transferred from the Department of Banking and Finance Tobacco Settlement Clearing Trust Fund. Amounts to be transferred from the clearing trust fund shall be in the following amounts for the following fiscal years:

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

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

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

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

Amounts to be transferred pursuant to paragraphs (b), (c), and (d) shall be reduced by an amount equal to the lesser of $200 million or the amount the endowment receives in that fiscal year pursuant to the sale of the state's right, title, and interest in and to the tobacco settlement agreement.

(8)  APPROPRIATIONS OF THE ENDOWMENT EARNINGS.--Beginning with fiscal year 2001-2002:

(a)  Appropriations by the Legislature to the Department of Children and Family Services or the Department of Elderly Affairs from the endowment earnings distributed to those departments shall be from a category called Lawton Chiles Endowment Fund Programs. The departments shall distribute such appropriations pursuant to any directions or limitations provided for in the General Appropriations Act and consistent with this section.

(b)  Appropriations by the Legislature to the Department of Health from the endowment earnings distributed to the department shall be from a category called Florida Biomedical Research Program. The department shall spend such funds in accordance with s. 215.5602.

(9)  LAWTON CHILES ENDOWMENT FUND ADVISORY COUNCILS.--There are established the Lawton Chiles Endowment Fund Advisory Councils, the purpose of which is to evaluate and rank for legislative consideration recommendations submitted to the councils by the agencies for evaluation under paragraph (4)(d).

(a)  There is created within the Department of Children and Family Services the Lawton Chiles Endowment Fund Advisory Council for Children.

1.  The council shall consist of 13 members, including the director of the United Way of Florida, Inc., or a designee, the director of the Florida Federation of Community Foundations or a designee, the director of the Florida Foster Parents Association or a designee, and the director of the Florida Pediatric Association or a designee. The Governor shall appoint the remaining council members, including:

a.  An academic expert in child health policy.

b.  A representative of a children's services council.

c.  A representative of the Guardian Ad Litem Program.

d.  A representative of a child welfare lead agency for community-based care.

e.  A representative of a statewide child advocacy organization.

f.  A youth representing a statewide youth organization.

g.  A professional who has expertise in the area of child development.

h.  Two consumer caregivers of children.

2.  The council shall adopt internal organizational procedures, including procedures for the appointment of a chair, as necessary for its efficient organization.

3.  The department shall provide such staff, information, and other assistance as is reasonably necessary to assist the council in carrying out its responsibilities.

4.  Members of the council shall serve without compensation, but may receive reimbursement as provided in s. 112.061 for travel and other necessary expenses incurred in the performance of their official duties.

5.  Before February 1 of each year, the council shall advise the Legislature as to its ranking of the children's programs submitted by the agencies for evaluation under paragraph (4)(d). The responsibilities of the council may include, but are not limited to:

a.  Developing criteria and guiding principles for the ranking of programs to be recommended to the Legislature.

b.  Evaluating the value of programs or services submitted by the agencies as they relate to overall enhancement for children.

c.  Providing recommendations on the funding levels to be allocated for the ranked programs.

d.  Participating in periodic program evaluation to determine the need for continued funding.

e.  Soliciting appropriate input from children's advocates and community stakeholders, such as voluntary organizations, community-based care lead agencies, health care delivery systems, business and industry, government agencies, and children's service providers.

(b)  There is created within the Department of Elderly Affairs the Lawton Chiles Endowment Fund Advisory Council for Elders.

1.  The council shall consist of 13 members, including the director of the United Way of Florida, Inc., or a designee, the director of the Florida Federation of Community Foundations or a designee, the director of the Florida branch of the American Association of Retired Persons or a designee, the director of the Florida Council on Aging or a designee, and the State Long-Term Care Ombudsman or a designee. The Governor shall appoint the remaining council members, including:

a.  An academic expert in elder health policy.

b.  A professional who has experience with the delivery of home care services.

c.  A physician who is certified in geriatric medical care.

d.  A professional who has experience with the delivery of services in adult congregate care facilities.

e.  A professional who has experience with the delivery of services in a nursing home.

f.  Two persons who are over the age of 60 years to represent elders.

g.  One consumer caregiver for an elderly person.

2.  The council shall adopt internal organizational procedures, including the appointment of a chair, as necessary for its efficient organization.

3.  The department shall provide such staff, information, and other assistance as is reasonably necessary to assist the council in carrying out its responsibilities.

4.  Members of the council shall serve without compensation, but may receive reimbursement as provided in s. 112.061 for travel and other necessary expenses incurred in the performance of their official duties.

5.  Before February 1 of each year, the council shall advise the Legislature as to its ranking of the elder programs submitted by the agencies for evaluation under paragraph (4)(d). The responsibilities of the council may include, but are not limited to:

a.  Developing criteria and guiding principles for the ranking of programs to be recommended to the Legislature.

b.  Evaluating the value of programs or services submitted by the agencies as they relate to overall enhancement for elders.

c.  Providing recommendations on the funding levels to be allocated for the ranked programs.

d.  Participating in periodic program evaluation to determine the need for continued funding.

e.  Soliciting appropriate input from elder advocates and community stakeholders, such as voluntary organizations, community-based care lead agencies, health care delivery systems, business and industry, government agencies, and elder-service providers.

History.--s. 1, ch. 99-167; s. 3, ch. 2000-128; s. 1, ch. 2000-255; s. 5, ch. 2000-305.

¹Note.--The Secretary of Health Care Administration is the head of the Agency for Health Care Administration; see s. 20.42, as amended by s. 2, ch. 2000-305.