The Attorney General says legislation must be passed to protect as much as $1-billion in future tobacco settlement payments, but Republican legislative leaders want more information.
Attorney General Chris Koster (D) says he’s reached an agreement to preserve a $50-million tobacco payment to Missouri for 2003, plus future payments, but it’s contingent on passage of a bill to stop tobacco companies that weren’t part of the settlement from recouping payments into an escrow fund, or the allocable share fund.
Those companies were required to pay into the fund in case they get sued, but can recoup the money after a time if not sued. Koster says they are recouping payments under a “loophole” that all other states in the settlement have closed, and that only existed because of a drafting error in the law.
A bill to repeal the allocable share fund has been called for since 2002.
Republicans say they’re not prepared to file a bill until they know more about the agreement Koster says has been reached. The last time a repeal was proposed, Senator Kurt Schaefer (R-Columbia) carried it in 2014. He says he’s not sure there’s a settlement.
“If there is a settlement agreement I think we need to see it. I think we need to see what the requirements are as far as what would have to be in legislation. We haven’t seen that yet,” said Schaefer.
Senate president Ron Richard (R-Joplin) says until the legislature studies that agreement, it’s not prepared to take up the issue.
“Not at this time … we haven’t even had our attorneys look at it,” said Richard. “I think what the senator’s saying is we don’t even know what the deal is.”
The 2003 payment was reduced under an arbitration decision in 2013. Koster’s office is still challenging that ruling in a case now pending before the state Supreme Court.
Schaefer says the legislature still has questions about whether due diligence is being done by the Attorney General’s office in regard to prosecution, as required by the tobacco settlement.
“Remember we lost that arbitration for the year 2003 because the attorney general at the time did not diligently enforce the settlement agreement. It’s not because the state didn’t have allocable share,” said Schaefer. “The finding of that arbitration is that the attorney general did not diligently enforce the settlement agreement and there’s a multitude of reasons why they found that. That’s an issue that doesn’t have anything to do with allocable share.”
Schaefer isn’t sure that the legislature should count on that $50-million payment in the budget it’s crafting now, for the fiscal year that begins July 1.
“I would assume that would be an issue for [next year’s legislative session], but we have to see the terms of how fast that would be paid. Again, that would be part of the settlement we haven’t seen,” said Schaefer.