Senate Bill No. 420
(By Senator Dittmar, Anderson, Ross and Hunter)
[Introduced February 7, 2000; referred to the Committee
on Agriculture; and then to the Committee on Finance.]
A BILL to amend and reenact section one, article nine-b, chapter
sixteen of the code of West Virginia, one thousand nine
hundred thirty-one, as amended; to further amend said article
by adding thereto a new section, designated section five; and
to amend article one, chapter nineteen of said code by adding
thereto a new section, designated section four-d, all relating
to providing that a compelling state interest exists in
providing tobacco farmers with financial assistance to make
the transformation from raising tobacco to raising other cash
crops; renaming the West Virginia rural rehabilitation fund
the agribusiness development loan fund; and earmarking five
million dollars to be loaned to tobacco farmers at a loan rate of three percent per annum to be used to convert to other
Be it enacted by the Legislature of West Virginia:
That section one, article nine-b, chapter sixteen of the code
of West Virginia, one thousand nine hundred thirty-one, as amended,
be amended and reenacted; that said article be further amended by
adding thereto a new section, designated section five; and that
article one, chapter nineteen of said code be amended by adding
thereto a new section, designated section four-d, all to read as
CHAPTER 16. PUBLIC HEALTH.
ARTICLE 9B. IMPLEMENTING TOBACCO MASTER SETTLEMENT AGREEMENT.
§16-9B-1. Findings and purpose.
(a) Cigarette smoking presents serious public health concerns
to the state and to the citizens of the state. The surgeon general
has determined that smoking causes lung cancer, heart disease and
other serious diseases, and that there are hundreds of thousands of
tobacco-related deaths in the United States each year. These
diseases most often do not appear until many years after the person
in question begins smoking.
(b) Cigarette smoking also presents serious financial concerns for the state. Under certain health-care programs, the
state may have a legal obligation to provide medical assistance to
eligible persons for health conditions associated with cigarette
smoking, and those persons may have a legal entitlement to receive
such medical assistance.
(c) Under these programs, the state pays millions of dollars
each year to provide medical assistance for these persons for
health conditions associated with cigarette smoking.
(d) It is the policy of the state that financial burdens
imposed on the state by cigarette smoking be borne by tobacco
product manufacturers rather than by the state to the extent that
such manufacturers either determine to enter into a settlement with
the state or are found culpable by the courts.
(e) On the twenty-third day of November, one thousand nine
hundred ninety-eight, leading United States tobacco product
manufacturers entered into a settlement agreement, entitled the
"master settlement agreement", with the state. The master
settlement agreement obligates these manufacturers, in return for
a release of past, present and certain future claims against them
as described therein, to pay substantial sums to the state (tied in
part to their volume of sales); to fund a national foundation devoted to the interests of public health; and to make substantial
changes in their advertising and marketing practices and corporate
culture, with the intention of reducing underage smoking.
(f) It would be contrary to the policy of the state if
tobacco product manufacturers who determine not to enter into such
a settlement could use a resulting cost advantage to derive large,
short-term profits in the years before liability may arise without
ensuring that the state will have an eventual source of recovery
from them if they are proven to have acted culpably. It is thus in
the interest of the state to require that such manufacturers
establish a reserve fund to guarantee a source of compensation and
to prevent such manufacturers from deriving large, short-term
profits and then becoming judgment-proof before liability may
(g) In view of the injurious properties of tobacco to the
public health, a compelling public interest exists in providing
financial assistance to tobacco farmers operating in this state to
ease their transition from raising tobacco to raising other cash
crops that present a comparable opportunity for financial reward
without presenting those enormous societal costs associated with
§16-9B-5. Dedication of funds to agribusiness loan fund.
Five million dollars of the funds received from the tobacco
master settlement agreement are hereby dedicated to the
agribusiness loan fund, renamed and continued under section four-d,
article one, chapter nineteen of this code.
CHAPTER 19. AGRICULTURE.
ARTICLE 1. DEPARTMENT OF AGRICULTURE.
§19-1-4d. Rural rehabilitation fund to be continued and renamed
agribusiness development fund; dedication of loan
funds; authority of commissioner to make loans to
(a) The revolving fund heretofore existing in the state
treasury and designated fund number one thousand four hundred
eight, known as the West Virginia rural rehabilitation fund, is
hereby continued and renamed the "agribusiness development loan
fund." The five million dollars dedicated pursuant to the
provisions of section five, article nine-b, chapter sixteen, in
addition to the funds heretofore existing in the West Virginia
rural rehabilitation fund, shall be preserved in trust and
designated for use by the commissioner to enable tobacco farmers to
make the transition from raising tobacco to establish an agribusiness or to convert from one type of agribusiness to
another type of agribusiness.
(b) The commissioner is hereby authorized to make loans at a
rate of three percent per annum to farmers holding or leasing
tobacco allotments in order to afford those farmers an opportunity
to convert the tobacco allotment to a suitable and economically
acceptable substitute agricultural allotment.
NOTE: The purpose of this bill is to provide for loans to
tobacco farmers to convert to other cash crops. The bill provides
that a compelling state interest exists in providing tobacco
farmers with financial assistance to make the transformation from
raising tobacco to raising other cash crops. It also renames the
West Virginia Rural Rehabilitation Fund the "Agribusiness
Development Loan Fund" and earmarks five million dollars from that
fund to be loaned to tobacco farmers at a loan rate of three
percent per annum to be used to convert to other crops.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
Section five, article nine-b, article sixteen and section
four-d in article one, chapter nineteen are new; therefore,
strike-throughs and underscoring have been omitted.