The Oklahoma Tobacco Settlement Endowment Trust Fund Board of Directors funded the $436,904 budget of a separate tobacco fund investment panel during its first meeting in Oklahoma City on Wednesday, the Tulsa World reported from its capitol bureau.
Oklahoma voters created the endowment trust fund in November to ensure that most of the state's payment from a 1998 tobacco litigation settlement will be spent for health-related purposes.
Oklahoma became the 14th state to file a lawsuit against the tobacco industry. The August 1996 lawsuit asked for restraints against the industry and damages for funds spent for treatment of smoking-related illnesses.
Oklahoma was one of 46 states involved in a 1998 settlement and will receive about $2.29 billion over the next 25 years.
The trust fund presently totals $50 million, with $651,619.39 in interest earnings. In the fund's first year, which ends in June 2002, half of Oklahoma's tobacco settlement money for that year will be deposited into the fund.
Each year after that, the fund's share of the tobacco money will grow 5 percent until it reaches 75 percent by the fiscal year ending June 30, 2007. The state Legislature will appropriate the other 25 percent of the tobacco money.
After 10 years, the trust fund will have about $600 million in it, Attorney General Drew Edmondson said. The fund itself will remain intact, while the investment earnings can be spent.
Trust fund investment earnings can go to research and treatment to combat cancer and other tobacco-related diseases; tobacco prevention and cessation programs; health care services for children; education programs for children; health programs for senior citizens; and administrative expenses to run the fund.
The trust fund board is required to develop a multi-year strategy for use of the fund's earnings by Jan. 1.
State elected officials appointed the seven board members, all of whom have shown expertise in public or private health care, or programs related to or for the benefit of youth or senior citizens.
The tobacco trust fund was one of the most significant occurrences in state history, Edmondson said. He said the tobacco industry had deliberately targeted children as a ``replacement market.''
``We know that 3,000 children start smoking every day and that one-third of them will die prematurely due to a tobacco-related illness,'' Edmondson said. ``That's why we filed the lawsuit.''
According to a report by the National Conference of State Legislatures, 36 percent of tobacco settlement revenues received by participating states have gone for health services. But only 5 percent has gone into prevention programs.
The board agreed to hold a series of meetings this fall to get input from various interest groups and state agencies on how to use the money.
State Treasurer Robert Butkin heads the separate investment panel, which received the board's first allocation. Butkin asked for the money to hire financial advisers, fund managers and a custodial bank to handle the fund's assets.
The board elected Dr. Robert McCaffree of Oklahoma City as chairman and Marvin R. Apple of Tahlequah as vice chairman.