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House redirects part of tobacco settlement to rainy-day fund for one year to shore up bond rating
Summary
House Bill 330 redirects the 30% portion of the tobacco settlement that otherwise would go to the permanent trust into the state rainy-day fund for one fiscal year (estimated $8,021,000) to improve bond-rating access; the House approved the one‑year diversion 68–6.
The Utah House on March 1 passed House Bill 330 to temporarily divert a portion of tobacco-settlement receipts from the permanent tobacco trust to the state's rainy-day fund for one fiscal year.
Representative Peterson, the floor sponsor, said the change would move the 30% share normally earmarked for the permanent trust into the rainy-day account for fiscal 2004–05, an amount he estimated at approximately $8,021,000. He said the shift is intended to make the state’s fund balances accessible to bond-rating agencies and thereby avoid a downgrade or reduced access to capital; he emphasized that programs funded under earlier budgetary actions (e.g., HB260) would remain intact.
Opponents pressed procedural and policy concerns about taking trust-dedicated funds at a late hour in the session. Representative McGee said the Legislature has made a deliberative decision over several years about the trust fund’s uses and said he could not support a change introduced late in the session. Supporters replied that the diversion is for a single year and could be reversed, and sponsors stressed the move would improve the state’s balance sheet and bond metrics.
After amendment technical fixes (Representative Bigelow asked to correct an inadvertent two-year reference to a one-year diversion), the House passed the bill 68 yes to 6 no. Sponsors said the funds could be returned to the tobacco trust later and that the action aimed to improve short-term fiscal posture.
The bill now moves to the Senate for consideration.
