Kentucky Revised Statutes Title VI. Financial Administration § Appendix A, Pt. X 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 2024-2025 is $97,800,000 and in fiscal year 2025-2026 is $93,100,000. 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) Environmental Stewardship Program: Included in the above General Fund (Tobacco) appropriation is $2,000,000 in each fiscal year for the Environmental Stewardship Program. Mandated reports shall be submitted pursuant to Part III, 24. of this Act.

(2) Conservation District Local Aid: Included in the above General Fund (Tobacco) appropriation is $1,000,000 in each fiscal year for the Division of Conservation to provide direct aid to local conservation districts. Mandated reports shall be submitted pursuant to Part III, 24. of this Act.

(1) Early Childhood Development Program: Included in the above General Fund (Tobacco) appropriation is $9,800,000 fiscal year 2024-2025 and $9,500,000 in fiscal year 2025-2026 for the Early Childhood Development Program. Mandated reports shall be submitted pursuant to Part III, 24. of this Act.

(2) Early Childhood Adoption and Foster Care Supports: Included in the above General Fund (Tobacco) appropriation is $2,000,000 in each fiscal year for the Early Childhood Adoption and Foster Care Supports Program. Mandated reports shall be submitted pursuant to Part III, 24. of this Act.

(1) HANDS Program, Healthy Start, Early Childhood Mental Health, and Early Childhood Oral Health: Included in the above General Fund (Tobacco) appropriation is $5,634,000 in fiscal year 2024-2025 and $5,980,000 in fiscal year 2025-2026 for the Health Access Nurturing Development Services (HANDS) Program, $700,000 in each fiscal year for Healthy Start initiatives, $700,000 in each fiscal year for Early Childhood Mental Health, $700,000 in each fiscal year for Early Childhood Oral Health, and $500,000 in each fiscal year for Lung Cancer Screening. Mandated reports shall be submitted pursuant to Part III, 24. of this Act.

(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 $1,300,000 in each fiscal year for substance abuse prevention and treatment for pregnant women with a history of substance abuse problems. Mandated reports shall be submitted pursuant to Part III, 24. of this Act.

(1) Office of Drug Control Policy: Included in the above General Fund (Tobacco) appropriation is $2,804,000 in fiscal year 2024-2025 and $3,000,000 in fiscal year 2025-2026 for the Office of Drug Control Policy. Mandated reports shall be submitted pursuant to Part III, 24. of this Act.

(2) Restorative Justice: Included in the above General Fund (Tobacco) appropriation is $233,500 in fiscal year 2024-2025 and $250,000 in fiscal year 2025-2026 to support the Restorative Justice Program administered by the Volunteers of America. Mandated reports shall be submitted pursuant to Part III, 24. of this Act.

(1) Cancer Research and Screening: Included in the above General Fund (Tobacco) appropriation is $5,843,200 in fiscal year 2024-2025 and $6,250,000 in fiscal year 2025-2026 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. Mandated reports shall be submitted pursuant to Part III, 24. of this Act.