Wednesday, May 30, 2001

Tobacco policy expands

The Associated Press

        FRANKFORT — A grower or farm owner who had a “vested interest” in tobacco production in any of the last three years can share in a national tobacco settlement, an oversight board decided Tuesday.

        So could the surviving spouse or other heirs if the grower died during the settlement period.

        That was the gist of a policy change approved by directors of the Kentucky Tobacco Settlement Trust Corp. The board is in charge of dividing millions of dollars cigarette companies are putting up to compensate growers for drastic cuts in leaf purchases.

        The money, to be paid over 12 years, is known among farmers as “Phase II” of a larger settlement with the states — a $246 billion reimbursement for treating smoking-related illnesses.

        In January, the board voted to limit compensation to “active producers” from 1998 through 2000. In hindsight, that created two potential problems, officials said:

        • It could discriminate against heirs of producers. Marshall Coyle, a board member from Owingsville, said he had heard numerous concerns about the effect on surviving spouses.

        • A grower who wanted to get out of the business in 2000 had to raise at least a token crop — as little as a single plant — to assure a share of compensation money for 1998 and 1999. “I think it was a potential problem,” said board member Jim Lacy of Campton. “We may have people in 2001 who want to grow one plant to protect them.”

        The modified policy would limit compensation to people who had a “vested interest” in tobacco production in 1998 or 1999 or 2000.

        John-Mark Hack, president of the corporation and Gov. Paul Patton's agriculture adviser, said the board is required to review its compensation policy each year.


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