1. (a) Purpose. The comptroller is required by Government Code, §403.1041, to administer the Tobacco Settlement Permanent Trust Account (trust account) and manage the assets of the trust account with the advice of and in consultation with the Tobacco Settlement Permanent Trust Account Investment Advisory Committee (investment advisory committee). The comptroller is also required to adopt rules necessary to implement the comptroller's duties under Government Code, §403.1041, including rules distinguishing the net earnings of the trust account that may be distributed from earnings used for investment expenses and from the money and assets that are the corpus of the trust account. A rule adopted by the comptroller under this subsection must be submitted to the investment advisory committee and may not become effective before the investment advisory committee approves the rule. If the investment advisory committee disapproves a proposed rule, the investment advisory committee is required to provide the comptroller the specific reasons that the rule was disapproved.

2. (b) Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

   1. (1) Actual distribution amount--the amount determined pursuant to §18.2 of this title (relating to Trust Account Distributions);
   2. (2) adjusted current earnings--current earnings less investment expenses;
   3. (3) average market value of the trust account--calculated using the most recent twenty (20) calendar quarter end market values;
   4. (4) corpus--the cumulative value of all contributions to the trust account, plus, all inflation adjustments;
   5. (5) current earnings--the sum of interest and dividend income, income from real estate and private equity investments, and total returns produced by investments designated by the governing investment policy as substitutes for fixed income earned by the trust account during the calendar year;
   6. (6) distribution stabilization account--a separate account consisting of the amounts transferred pursuant to §18.2 of this title (relating to Trust Account Distributions). These amounts are accounted for separately from the corpus and will not be part of the corpus;
   7. (7) inflation adjustment--for any calendar year, the dollar amount achieved by multiplying the inflation adjustment factor by the value of the corpus as of the beginning of such year;
   8. (8) inflation adjustment factor--the average annual percentage change in the United States Consumer Price Index for All Urban Consumers (CPI-U) for the most recent 12 quarters as published by the United States Bureau of Labor Statistics;
   9. (9) investment advisory committee--the Tobacco Settlement Permanent Trust Account Investment Advisory Committee as defined by Government Code, §403.1041;
   10. (10) investment expenses--investment related expenses, not to exceed amounts established by the Texas Legislature, including, but not limited to, custodial fees, and fees for investment management, administration, investment consultants, or auditors;
   11. (11) net earnings--the year-end market value of the trust account less the corpus value and the distribution stabilization account balance;
   12. (12) political subdivision--the meaning assigned by Government Code, §403.1041; and
   13. (13) trust account--the Tobacco Settlement Permanent Trust Account as defined by Government Code, §403.1041.

Source Note:The provisions of this §18.1 adopted to be effective November 16, 2000, 25 TexReg 11292; amended to be effective March 27, 2003, 28 TexReg 2618; amended to be effective March 6, 2006, 31 TexReg 1454.