OKPOLICY.ORG
TSET is an endowment trust established with payments from the 1998 Master Settlement Agreement (MSA) between 46 states and the tobacco industry.
In November 2000, with passage of State Question 692, Oklahoma became the first and only state to direct its tobacco settlement payments into a constitutionally-protected trust fund. Under the measure, 75 percent of Oklahoma’s annual payment is now deposited in the Tobacco Settlement Endowment Trust (TSET), with the remainder divided between legislative appropriations (18.75 percent) and the Attorney General Office’s Evidence Fund (6.25 percent). To ensure that the Trust grows over time and provides an ongoing and sustainable funding stream, TSET is allowed to spend only certified investment earnings.
A total of $77.7 million was allocated in FY 2024, an increase of $26.8 million compared to FY 2022.
TSET is governed by two boards: a five-member Board of Investment that oversees the investment of funds to the Trust and a seven-member Board of Directors that allocates the endowment’s earnings to programs that promote health and well-being under one of five categories of allowable expenditures. The Legislature voted in 2025 to change the terms of service of TSET’s Board of Directors, but the legislation was struck down by the Oklahoma Supreme Court.
The size of the tobacco companies’ annual MSA payment to Oklahoma fluctuates; in FY 2024 the payment was just $62.0 million, while historically it has ranged from $65 million to $110 million. The Endowment has grown to $2.09 billion as of June 30, 2025.
