Bevin's veto removes Volkswagen Mitigation Trust funds from General Fund

03/28/2017 06:05 PM

With a line-item veto, Gov. Matt Bevin removed several sentences capturing funds from the Volkswagen Mitigation Trust Agreement, setting up a showdown with the General Assembly over who controls the purse strings and the fact that the trust fund is not yet operational.

At question are several lines of text inside House Bill 471, the funding measure for charter schools. On page 16 of the 17-page bill, lawmakers in the state Senate inserted language in the appropriation measure which instructs the trust funds be appropriated only with the authority of the legislative branch.

“All funds received from the environmental mitigation trust established by Volkswagen pursuant to the partial consent decree shall be held in a trust and agency account,” reads that portion of HB 471. “These funds shall not be expended or appropriated without the express authority of the General Assembly.”

Senate budget committee chairman Sen. Chris McDaniel, R-Taylor Mill, told Spectrum News the language in the bill does not have anything to do with charter schools, but that the intent is to ensure the General Assembly appropriates state funds.

“The Constitution is very clear that it’s the job of the General Assembly to appropriate the funds,” McDaniel said in a phone interview. “We believe that holds true with the potential VW settlement monies. That being said there’s no guarantee that we’re going to get anything this year, and even when the monies come in it’s pretty restrictive on what the monies could be used on anyway.

“The general consensus was it would be prudent to provide guidance that we wanted it parked like that for the balance of the interim.”

Bevin’s veto message to the legislature speaks to the restrictive nature of the funds, adding that his administration will ensure they’re spent appropriately.

“It is the intent of the Administration to adhere to the specific agreement to the greatest benefit of the Commonwealth,” Bevin wrote. “By vetoing this language, the commonwealth will not necessarily delay the potential benefits.”

Attorney General Andy Beshear handled a portion of the litigation against Volkswagen which agreed to pay the state nearly $3.5 million in civil penalties for violating the Kentucky Consumer Protection Act, according to a press release at the time.

The settlement also included more than $19 million in an Environmental Mitigation Trust funded by Volkswagen. That fund will be handled by the state’s Energy and Environment Cabinet. According to the agency, those funds are highly restrictive in what they can be spent towards.

However, the agency said they have not yet filed a Beneficiary Mitigation Plan to outline how the funds will be used. Linda Brewer, a program manager with the Energy and Environment Cabinet, said the cabinet has not yet released a draft plan for public review.

Brewer said the agency was trying to keep individuals informed on movements in the case. She said the cabinet did not have to file a plan until the trust is established.


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