Kentucky Revised Statutes Title VI. Financial Administration § Appendix A, Pt. X .State/Executive Branch Budget

(1) General Purpose: This Part prescribes the policy implementing aspects of the national settlement agreement between the tobacco industry and the collective states as described in KRS 248.701 to 248.727. In furtherance of that agreement, the General Assembly recognizes that the Commonwealth of Kentucky is a party to the Phase I Master Settlement Agreement (MSA) between the Participating Tobacco Manufacturers and 46 Settling States which provides reimbursement to states for smoking-related expenditures made over time.

(2) State's MSA Share: The Commonwealth's share of the MSA is equal to 1.7611586 percent of the total settlement amount. Payments under the MSA are made to the states annually in April of each year.

(3) MSA Payment Amount Variables: The total settlement amount to be distributed on each payment date is subject to change pursuant to several variables provided in the MSA, including inflation adjustments, volume adjustments, previously settled states adjustments, and the nonparticipating manufacturers adjustment.

(4) Distinct Identity of MSA Payment Deposits: The General Assembly has determined that it shall be the policy of the Commonwealth that all Phase I Tobacco Settlement payments shall be deposited to the credit of the General Fund and shall maintain a distinct identity as Phase I Tobacco Settlement payments that shall not lapse to the credit of the General Fund surplus but shall continue forward from each fiscal year to the next fiscal year to the extent that any balance is unexpended.

(5) MSA Payment Estimates and Adjustments: Based on the official estimates of the Consensus Forecasting Group, the amount of MSA payments expected to be received in fiscal year 2022-2023 is $108,400,000 and in fiscal year 2023-2024 is $102,200,000. It is recognized that payments to be received by the Commonwealth are estimated and are subject to change. If MSA payments received are less than the official estimates, appropriation reductions shall be applied as follows: after exempting appropriations for debt service, the Attorney General, and the Department of Revenue, 50 percent to the Agricultural Development Fund, 30 percent to the Early Childhood Development Fund, and 20 percent to the Health Care Improvement Fund. If MSA payments received exceed the official estimates, appropriation increases shall be applied as follows: after exempting appropriations for debt service, the Attorney General, and the Department of Revenue, 50 percent to the Agricultural Development Fund, 30 percent to the Early Childhood Development Fund, and 20 percent to the Health Care Improvement Fund.

(1) Debt Service: To the extent that revenues sufficient to support the required debt service appropriations are received from the Tobacco Settlement Program, those revenues shall be made available from those accounts to the appropriate account of the General Fund. All necessary debt service amounts shall be appropriated from the General Fund and shall be fully paid regardless of whether there is a sufficient amount available to be transferred from tobacco-supported funding program accounts to other accounts of the General Fund.

(2) General Fund (Tobacco) Debt Service Lapse: Notwithstanding Part X, (4) of this Act, $1,666,700 in fiscal year 2022-2023 and $1,498,900 in fiscal year 2023-2024 shall lapse to the General Fund.

(3) Appropriation of Unexpended Tobacco Debt Service: Any unexpended balance from the fiscal year 2022-2023 or fiscal year 2023-2024 General Fund (Tobacco) debt service appropriation in the Finance and Administration Cabinet, Debt Service budget unit, shall continue and be appropriated to the Department of Agriculture, Kentucky Office of Agricultural Policy.

(1) Tobacco Settlement Funds--Allocations: Notwithstanding KRS 248.711(2), and from the allocation provided therein, counties that are allocated in excess of $20,000 annually may provide up to four percent of the individual county allocation, not to exceed $15,000 annually, to the county council in that county for administrative costs.

(2) Counties Account: Notwithstanding KRS 248.703(1), included in the above General Fund (Tobacco) appropriation is $14,478,000 in each fiscal year for the counties account as specified in KRS 248.703(1)(a).

(3) State Account: Notwithstanding KRS 248.703(1), included in the above General Fund (Tobacco) appropriation is $26,140,600 in fiscal year 2022-2023 and $26,134,000 in fiscal year 2023-2024 for the state account as specified in KRS 248.703(1)(b).

(4) Farms to Food Banks: Included in the above General Fund (Tobacco) appropriation is $600,000 in each fiscal year to support the Farms to Food Banks Program. The use of the moneys provided by this appropriation shall be restricted to purchases of Kentucky-grown produce from Kentucky farmers who participate in the Farms to Food Banks Program.

(5) Kentucky Rural Mental Health and Suicide Prevention Program: Included in the above General Fund (Tobacco) appropriation is $500,000 in each fiscal year to support the Kentucky Rural Mental Health and Suicide Prevention Program known as the Raising Hope Initiative. The Department for Behavioral Health, Developmental and Intellectual Disabilities shall coordinate with the Kentucky Department of Agriculture, the University of Kentucky Southeast Center for Agricultural Health and Injury Prevention, and other entities to enhance awareness of the National Suicide Prevention Lifeline (988) in rural communities in Kentucky and to improve access to information on mental health issues and available treatment services. The Department for Behavioral Health, Developmental and Intellectual Disabilities shall provide cultural competency training to staff to address the unique mental health challenges affecting the state's rural communities. The Department for Behavioral Health, Developmental and Intellectual Disabilities shall also provide outreach, treatment, and other necessary services to improve the mental health outcomes of rural communities in Kentucky. The Department for Behavioral Health, Developmental and Intellectual Disabilities, in conjunction with the Kentucky Department of Agriculture and the University of Kentucky Southeast Center for Agricultural Health and Injury Prevention, shall apply for Federal Funds as provided by the Agriculture Improvement Act of 2018, 7 U.S.C. sec. 5936, to supplement the General Fund (Tobacco) appropriation provided above. The Department of Agriculture may utilize up to $50,000 in each fiscal year for program administration purposes. The Department of Agriculture shall coordinate with the Raising Hope Initiative partners to take custody of and maintain any intellectual property assets that were created or developed by any state agency in connection with the Raising Hope Initiative.

(1) Environmental Stewardship Program: Included in the above General Fund (Tobacco) appropriation is $2,500,000 in each fiscal year for the Environmental Stewardship Program.

(2) Conservation District Local Aid: Included in the above General Fund (Tobacco) appropriation is $900,000 in each fiscal year for the Division of Conservation to provide direct aid to local conservation districts.

(1) Early Childhood Development: Included in the above General Fund (Tobacco) appropriation is $1,400,000 in each fiscal year for the Early Childhood Advisory Council.

(1) Early Childhood Development Program: Included in the above General Fund (Tobacco) appropriation is $9,900,000 in each fiscal year for the Early Childhood Development Program.

(2) Early Childhood Adoption and Foster Care Supports: Included in the above General Fund (Tobacco) appropriation is $2,500,000 in each fiscal year for the Early Childhood Adoption and Foster Care Supports Program.

(1) HANDS Program, Healthy Start, Early Childhood Mental Health, and Early Childhood Oral Health: Included in the above General Fund (Tobacco) appropriation is $7,000,000 in each fiscal year for the Health Access Nurturing Development Services (HANDS) Program, $900,000 in each fiscal year for Healthy Start initiatives, $900,000 in each fiscal year for Early Childhood Mental Health, $900,000 in each fiscal year for Early Childhood Oral Health, and $500,000 in each fiscal year for Lung Cancer Screening.

(2) Folic Acid Program: General Fund (Tobacco) continuing appropriation reserves allotted to the Folic Acid Program shall be utilized by the Department for Public Health in each fiscal year to continue the Folic Acid Program.

(1) Substance Abuse Prevention and Treatment: Included in the above General Fund (Tobacco) appropriation is $1,400,000 in each fiscal year for substance abuse prevention and treatment for pregnant women with a history of substance abuse problems.

(1) Smoking Cessation Program: Included in the above General Fund (Tobacco) appropriation is $2,000,000 in each fiscal year for Smoking Cessation.

(1) Office of Drug Control Policy: Included in the above General Fund (Tobacco) appropriation is $3,000,000 in each fiscal year for the Office of Drug Control Policy.

(2) Restorative Justice: Included in the above General Fund (Tobacco) appropriation is $250,000 in each fiscal year to support the Restorative Justice Program administered by the Volunteers of America.

(1) Cancer Research and Screening: Included in the above General Fund (Tobacco) appropriation is $6,250,000 in each fiscal year for cancer research and screening. The appropriation in each fiscal year shall be equally shared between the University of Kentucky and the University of Louisville.