TALLAHASSEE -- The state House of Representatives passed a bill Wednesday to give Florida leaders leeway to trade half of the state's tobacco billions for other investments.

The 88-29 vote sent the bill to the Senate, which has rejected the strategy as too risky and too expensive. "We have a long way to go in negotiating between the two chambers," said Rep. Carlos Lacasa, R-Miami, who is shepherding the bill. "And those negotiations will commence today." Lawmakers don't have a lot of time to work out a compromise: The two-month legislative session is scheduled to end Friday. Under a 1997 settlement with the tobacco industry, Florida is supposed to get as much as half a billion dollars a year -- forever. The estimate over 25 years is $13 billion. But concerns have surfaced -- stoked by statements from cigarette-makers -- that new lawsuits against the industry, including a massive class-action lawsuit pending in Miami, could bankrupt the companies. Gov. Jeb Bush suggested that lawmakers consider giving the state the authority to sell bonds with some of the tobacco money in order to diversify and protect the settlement, which Florida has largely dedicated to services for children and the elderly. The House measure (CS-HB 1721) does just that. Lacasa explained the House bill simply: "The bill authorizes the sale of bonds," he said. "Those bonds would be paid by tobacco settlement payments, which we receive on an annual basis. Whatever remaining amounts after bond payments will be used for appropriations." The Senate has taken a different approach with a package of bills it passed Tuesday, including one that would set up a task force to study proposals on how to protect the tobacco dollars. Another bill would cap the bond amount the companies would have to put up to appeal the damages in the Miami class-action suit at $100 million or 10 percent of their net worth. Another Senate measure is designed to protect the tobacco principal with a proposed constitutional amendment that would have to be approved by voters. Under the amendment, the interest could be spent, but the principal could be used only in emergencies. The Senate also passed a bill to levy a wholesale tax on all cigarette companies except those paying Florida as part of the settlement. The idea is to keep companies from going out of business only to be replaced by new companies selling cigarettes that don't have to pay into the settlement. Rep. Debbie Wasserman Schultz, D-Weston, cited a Senate study that said the diversification envisioned in the House bill could cost as much as $12 billion. "I don't think that's a real good deal," Schultz said. Lacasa said he couldn't imagine where Schultz got that figure, saying he was "completely confident" the state would make money -- maybe as much as $5 billion over the next 32 years. Even if the tobacco companies stay in business forever, it makes sense to diversify the investments, Lacasa said. "No one in their right mind would have a portfolio worth half a billion dollars a year from one source, making one payment a year on (Dec. 31) each year," he said. "If we can securitize these proceeds, we can then use it in our portfolio in a diverse way."

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