By John Lyon
Arkansas News Bureau

LITTLE ROCK — State lawmakers said Thursday they may propose changing the initiated act voters approved in 2000 establishing how Arkansas spends money from a national settlement with tobacco companies.

Members of a House and Senate subcommittee on health services, meeting for the first in a series of meetings to review the state’s use of tobacco settlement money, said their review will include a look at possible “tweaks” to the Arkansas Tobacco Settlement Proceeds Act.

Those tweaks could include tapping into or capping off a $125 million fund the Arkansas Tobacco Settlement Commission has in reserve in case of a decrease in funding, said the subcommittee’s Senate chairman, Sen. Bill Pritchard, R-Elkins.

“That’s a lot of money that’s just sitting there,” Pritchard told reporters after the meeting.

To make changes to the reserve fund, the Legislature would have to amend the 2000 initiated act, which would require at least a two-thirds vote of both the House and Senate.

Aaron Black, executive director of the Arkansas Tobacco Settlement Commission, said the reserve fund is important to have for emergencies.

“It is for the potential that if there was an event that was significant, that greatly reduced the programs where they said, ‘We cannot operate on the funds received from the MSA (master settlement agreement),’ then basically the Legislature and governor could look at that trust fund to … make ends meet for a while,” Black said.

Lawmakers also talked about possibly ending the state’s $360,000-a-year contract with RAND Corp. to provide biennial evaluations of health programs funded with settlement money.

“I think it would be an advantage for this subcommittee to look at, how long are we going to need an independent evaluator?” said Sen. Tracy Steele, D-North Little Rock, who sat in on part of the meeting but is not a member of the health services subcommittee.

Pritchard said he believes the Tobacco Settlement Proceeds Act authorizes the hiring of an independent evaluator but does not require it.

Black said he believes the “spirit” of the law is for the state to employ an independent evaluator. He noted that the state has been paying RAND with interest from tobacco settlement money, not the settlement money itself.

Pritchard said he expects the panel to meet eight to 10 times to take an in-depth look at how money from Arkansas’ $1.6 billion share of the national settlement approved a decade ago is being spent. The state has received $446 million from the settlement to date, including $57 million this year. Under the settlement spending act, the money pays for smoking prevention and cessation programs, biosciences research, public health needs and expansion of Medicaid services.

If the panel does decide it favors amending the initiated act, Pritchard said the change would not be proposed until the next regular session in 2011. Some budgeting changes could be proposed during next year’s fiscal session, however, he said.

“We’re going to look at the whole thing, each individual program. How much money are they getting, and are they accomplishing their mission?” Pritchard said.