RD348 - Virginia Tobacco Indemnification and Community Revitalization Commission Annual Report Fiscal Year 2008


Executive Summary:
I. Background - The Commission is the designated recipient of one-half of the Commonwealth's share of the National Tobacco Settlement revenue. In two separate bond issues (May 2005 and May 2007) the Commission securitized its entire share of the Settlement and received slightly more than $1 billion, in aggregate, which is held by the State Treasurer pending further instruction from the Commission. Approximately $335.1 million of this sum has already been committed or disbursed.

II. Compensation to Farmers - From its inception through the end of fiscal year 2008, the Commission has made available for indemnification $247.1 million, leaving a remaining obligation of $61.8 million for losses through 2002, the effective year of the federal tobacco quota buyout. Actual amounts paid are determined by verification forms submitted to the Commission by producers and quota owners.

III. Economic Revitalization - The Commission approached this phase of its mission by developing a strategic plan that identifies four primary areas of economic need within the tobacco-dependent region. The four areas are (1) Technology, (2) Education, (3) Innovation, and (4) Regional Economic Development. The Commission created a subcommittee for each area, budgeted resources for each committee, and empowered each committee to determine how best to address the specific area of need for which the committee was formed. The committees each invited proposals from public entities, subjected the proposals to a review process, and voted on the level of grant funding for each proposal. A summary of the work of each committee is shown below.

Technology - The Commission awarded grants totaling $19.1 million to entities engaged in the installation and utilization of high-speed fiber networks in Southside and Southwest Virginia. Broadband deployment is the Commission's largest single economic development effort. To date, nearly 1,700 miles of fiber-optic "backbone" have been constructed in southern and southwestern Virginia.

Education - Grants totaling $14.0 million were awarded this fiscal year for educational projects, including $3.9 million to the tobacco region's eight community colleges and $3.8 million in scholarships and loans for tobacco region residents who are attending four-year degree-granting institutions.

Innovation - The Commission committed grants totaling $22.2 million to fund projects in agriculture, business development, research, and job incentives. These grants were made in three categories, (1) agri-business, (2) job-creation incentives, and (3) special projects.

Economic Development - The Commission awarded grants totaling $36.6 million for improvements to industrial sites, training facilities, water and sewer infrastructure, and tourism venues, all designed to expand and diversify the economic base, create employment opportunities, and generate revenue for local entities in the tobacco region.

A copy of the Commission's 2008 Annual Report is attached as additional information.