By KEITH STRANGE
Two securitization bills pending in the General Assembly's finance committees could mean the difference between life and death for Southside's economy.
Southside legislators are concerned that tobacco-commission money could be appropriated by the General Assembly for use in the state general fund if action is not taken.
"(Securitization) removes the money from budget considerations, and in a year like this it's particularly relevant. I think that its self-evident to think that with the state budget as it stands, this money could be targeted," said Clarke Hogan, R- Halifax.
If passed, the legislation will guarantee the securitization of funds from the Tobacco Master Settlement Agreement to generate funds that could be used for long-term revitalization efforts for the region.
Both Hawkins and Hogan agree that there is a good chance that the legislation will go through.
"I think that this year securitization stands a very good chance of passing, all the arguments against it have passed (with the last election)," Hawkins said.
The Master Settlement Agreement was reached between the Commonwealth and leading tobacco product manufacturers in November of 1998 and the final judgement was entered in the Circuit Court of Richmond on February 23, 1999.
Under the current agreement, Virginia would receive annual payments from the settlement fund for the next 23 years.
If securitization passes, the bonds created from the tobacco product manufacturers would be sold on the open market in order to allow banks to issue loans for long-term projects.
"The tobacco commission would float bonds for $400 million and the tobacco settlement would provide the debt service for the bonds," Hogan said. "The state would then sell the bonds on the open market and the tobacco commission would receive the proceeds from the sell."
Securitization would ensure a lump-sum payment via the sell of these bonds, and place control of the money in the hands of the tobacco commission, out of reach of the General Assembly.
The bill (House Bill No. 698) currently before the House of Representatives is sponsored by delegates Byron, Carrico, Hogan, Hurt, Kilgore and Wright; and senators Hawkins and Ruff.
Senate Bill No. 457 is sponsored by Hawkins, Puckett, Ruff and Wampler; and delegate Wright.
The bills have each been referred to the finance committees in the House and Senate, but haven't been seen on the docket as of yet.
"They should be put on the committee docket pretty soon," Hogan said.
Each bill suggests that the sell of proceeds on the open market is imperative, and both want to use the funds generated by the securitization to help fund the Technology Initiative in Tobacco-Dependent Localities fund.
"We are all working together for a chance to pass the securitization legislation," said Senator Charles Hawkins, R-Pittsylvania.
He said that the settlement agreement money could be the only access to capital for Southside.
"We're trying to put in place a whole new identity for Southside through economic development plans and programs," said the senator.
Hawkins added that money from the fund could be used to further revitalization efforts in the region, such as the e-58 project to provide fiber-optic cable along highway 58.
Hogan said that the money would be used for essentially the same type of projects.
"We would use the funds for economic development projects as well as payments to the tobacco growers.
"I would like to see some of the funds used for putting together an infrastructure for the revitalization of the economy," he added.
"We need to take control of our destiny," Hawkins added.
Hawkins said that Southside legislators have plans for the region, but those plans hinge on receipt of the tobacco money via securitization.
"Securitization will allow us to secure loans enabling us to begin long-term revitalization efforts," Hogan said.
"We have a few things rolling and need to keep control of the money," Hawkins said.
The money should not be used for funding any pet projects, Hogan added.
"We need to look at the long-term big picture.
"There has been a paradigm shift in the economy, and here in Southside we are at ground zero. This money will give us the chance to fight back," Hogan said.
"Securitization is a method of funding where we can take the money and set it aside, using the interest to guarantee a flow of income for the region," Hawkins added.
Without the income generated by securitization, no income is available to continue the projects.
"This is the only access to new capital that we have," he said. "For this type of long-term investment, we can't count on any money for the region (from outside sources)."
"This will give us access to large amounts of money, even though it will only be 55 to 60 percent of the total money Virginia is set to receive," Hawkins added.
The bills have clauses that allow for money from the endowment to be deposited into the Technology Initiative in Tobacco-Dependent Localities Fund, for the purposes of granting tax credits and offering grants for the localities.
"If we use the money generated by securitization carefully and thoughtfully it could save us," Hogan said.
Hawkins agrees.
"If we don't do something to revitalize the economy in Southside, we are going to die.
"With this money, we may be able to make a difference," the senator said.
Hogan said that after the vote in the General Assembly, we could expect to see income in the region in 12 to 18 months.
"It will definitely make the money we're getting more usable for us," he said.

During the 2001 flue-cured tobacco marketing season, the traditional method of marketing tobacco changed dramatically.
Nearly 80 percent of all tobacco marketed was via direct contract with the manufacturer.
"This change jeopardizes the auction marketing system, the price support program, and the export market share," said Andrew Q. Shepherd, Director of Stabilization for District 10, which includes Halifax County.
"There is a chance of the auction marketing system dying, and with the auction system the price support system will die as well, " he said yesterday.
"In order to keep the price support system alive, we have to keep the auction system in place," he said.
Stabilization felt it was necessary to gather information and study ways to preserve the system in order to protect the tobacco program and preserve the export market share.
"It was evident that unless we stepped in, there would be no auction system left," Shepherd said.
Stabilization initiated two marketing centers during the 2001 season, one in Wilson, N.C. and the other in Statesboro Ga.
The pilot marketing centers were a success this year, according to Stabilization officials.
"Contract prices averaged only 2 cents higher than the average price of gross sales at Stabilization's two pilot marketing centers," said Stabilization's General Manager Lioniel Edwards.
Stabilization's Board of Directors decided to expand the marketing centers in 2002 as a result of the success of the two pilot programs.
Farmers will not be charged a commission to auction their product at Stabilization's centers.
"We're not going to make any money operating these centers, it's not intended to make any money," Shepherd said.
"We just want to keep a viable auction system in place for the producers," he added.
The grade of the tobacco will be guaranteed by Stabilization through the use of USDA graders.
It is not mandatory to have graders inspect tobacco that is sold through private contract.
"Some companies don't want a USDA inspector for obvious reasons," Shepherd said.
He said that without some protection like the graders, the growers can be taken advantage of .
"One of the problems with contracting is that you have three or four buyers and thousands of sellers," he added.
"There is a matter of illegal pesticides used by some producers, and when a neutral third party grades the tobacco, there is consistency.
Shepherd feels that having graders in place is ultimately beneficial for the growers.
"The majority of growers are not able to tell what they have grade-wise, and a third-party grader is beneficial to all farmers," Shepherd continued.
Stabilization's centers will be strategically located to give all farmer-members access in each flue-cured belt.
As a marketing service for members, there will be no warehouse charges, auction fees, or commissions deducted from the sale proceeds.
"The only deductions from sales proceeds will be no-net cost assessments, the USDA grading fees and state authorized check-off fees."
Sales at the centers will be conducted as traditional auctions, with flexible farm delivery times and support for the sale in order for the farmer to get maximum returns for their product.
A spokesman for Stabilization said that the centers would be operated with the highest standards for good business practices and integrity.
"In the past all warehouses weren't operated with the highest scruples," Shepherd said. "We just want the farmers to know that they can have 100 percent confidence in the product this year," he continued.
One of the centers will be operated in Danville.
Holland's Warehouse announced last Thursday that it would not be open for private auctions because of the low profit potential.
Stabilization Warehouse to operate in Danville
Danny Robertson, owner of Holland's Warehouse, said that instead of operating in the 2002 marketing season, he would be working for Stabilization that is auctioning out of Motley's Warehouse in Danville.
"We didn't make hardly anything last year," Robertson said.
"We are not going to be able to operate at all next year. We just can't without making a profit."
The only auctioning system that will be held in Danville next year will be held by Stabilization.
"We will be funding these warehouses with interest accrued from the retained earnings that farmers have paid into Stabilization since the 1940's," Shepherd said.
He noted that using the interest wouldn't take any principle away from the farmers.
Meeting to be held in South Boston
Stabilization will be holding its annual District 10 meeting for tobacco farmers January 30 at the American Legion Post on Jeffress Blvd. at 2 p.m.
The future of the auction system is slated to be discussed at the meeting.
"I see this as a very important issue within the price support system," Shepherd said.

Virgilina residents are pressing ahead with plans to meet with the Board of Supervisors and other key officials.
"We're going full throttle toward implementing our plan and improving standards in the school," Virgilina Mayor John Youngk said.
"We want to work with the local principal, the PTO and parents. We're congealing into a well-focused group with a mission statement.
"We're already working with the Board of Supervisors to put together development plans for the town."
Youngk said the publicity that has been generated about Virgilina and its efforts to save its community school is paying off.
"I've had two businesses that have contacted me in the past day saying they want to come to Virgilina and rent some property," he said late Thursday.
"We've gotten a lot of publicity and I think it has helped. We've got to look at what opportunities come to us and investigate every single one of them."
As far as Virgilina Elementary School is concerned, Youngk said the goal is simple.
"Our goal is to grow the enrollment to where we can bring the cost per student down to less than the county's average cost per student," Youngk said.
"We also want to raise the standards of academic excellence in the school. One of the things we can bring to the table is the support of the parents and the support of the community here.
The community wants to investigate grants.
"We want to look into getting grant money to restore historic school buildings. It could help bring money to improve the school that, if the school board had it, they could do it themselves."
The goal, Youngk said, is to make Virgilina Elementary School one of the top schools around.
"We don't simply want it to be the best school in the county," he said. "We want it to be the best it can possibly be."
The plan Virgilina residents proposed to the Halifax County School Board in its plea to be allowed to keep the school open contained specific enrollment targets.
Virgilina officials set a target enrollment of 100 students for the upcoming 2002-2003 school year, a target of 120 students for the 2003-2004 school year and a target of 140 students for the 2004-2005 school year.
Youngk says he sees no reason why the 100-student target for the coming school year cannot be reached.
"We've already gone from 82 (students) to 93," he said.
"And, that's without having added any students by any of the methods we had proposed."
Youngk admitted that another attempt may be made to close the school should Virgilina residents fail in their attempt to development the community and meet enrollment targets, Youngk said it could become an issue.
"If we can't grow the town, I think it's an issue," he said.
"Can you keep the school together having just 82 students? I don't think we ever argued that you could.
"A lot of the phenomena that caused the decreases in enrollment were things that were not in our control," Youngk continued.
"They resulted from decisions made almost exclusively by the school board.
"If we don't meet our target, we don't have much credibility," he added.
There is also another element, the financial support of the Board of Supervisors who passed a resolution asking the school board not to close the school.
If the Board of Supervisors comes up short on the financial end of things and or Virgilina Elementary School's enrollment doesn't hit the targets set by Virgilina residents, the issue of closing Virgilina Elementary School could rear itself again next year.
Carl Furches, one of Virgilina Elementary School's most staunch supporters, said last week that if the money and numbers fall short, the issue will likely come up again.
"I'm in favor of keeping the local community schools," Furches said.
"But, if the numbers don't come up, I wouldn't be surprised if another attempt is made to close the school."

South Boston Town Council has finished its deliberations to help resolve the Dixie Inc. controversy.
A letter outlining council's suggestions and recommendations will be addressed to Dixie Inc. Board President Robert Hatcher Jr., according to Mayor Glen Abernathy.
Abernathy also confirmed that a meeting of council scheduled for tonight to release those recommendations has been cancelled.
Council's recommendations will be made public after receipt of its letter by Hatcher.
Abernathy said at the beginning of council's deliberations in December that it was not on a "witch hunt," and that its stated purpose and goal was to "make a good program better."
Councilmen held two public meetings, one to hear concerns from parents and coaches of youth involved in the Dixie Inc.baseball programs and one to hear the Board of Dixie Inc. and its supporters, before deciding on its course of action.
The first group had expressed concerns they were left "out of the loop" when it came to operational and financial decisons regarding the individual leagues under the umbrella of Dixie Inc.
Supporters of Dixie Inc., in their presentation to council, defended their operation as one conducted in the public's best interest and one conducted with the input of parents and coaches.

Anthony Owen and Shamoni Faulkner combined to hit four out of five free throw attempts in the final 44 seconds to give Halifax County a 62-55 win over Franklin County Friday night in Rocky Mount.
The win over Franklin County, which entered the game tied for tenth place in last week's state Associated Press Group AAA Prep Basketball Poll, snapped a two-year losing streak that the Comets have suffered at the hands of the Eagles.
It was the eighth win in a row for the Comets and extended the Comets' overall season record to 11-2 and to 2-1 in Western Valley District action.
"It feels good to be up in the district," said Comets coach Garrett Dillard.
"This is the first time we've been up in the district in the win column. We're definitely no worse than in third place by ourselves or possibly in second (place).
"We're in a position now where we can just try to keep winning and hopefully keep ourselves in position where we can have a chance at the championship."
Halifax County had three players in double figures with Owen leading the way with 17 points.
Lymon Gregory followed with a dozen points and Faulkner chipped in 11 points.
Andrew Witko scored eight points in the contest and Freddie Jeffress added seven points.
The Comets had a few hairy moments late in the game after having had a good start to the final eight minutes of action.
However, they were able to take care of business at critical points in the final minute and a half ofg the game to get the win.
A basket from Gregory gave the Comets a 10-point 48-38 lead with 6:39 left in the game, their largest margin of the contest.
Halifax still appeared to have a comfortable lead after Faulkner hit both ends of a one-and-one opportunity at the charity stripe to put the Comets up 55-46 with 1:46 left in the game.
But, the Eagles' Brent Childress, who was fouled while getting off a three-point shot, hit three free throws and Sean Preston, who was fouled after coming up a with steal a few seconds later, hit two free throws to bring the Eagles to with four points.
After Faulkner failed to hit the front end of a one-and-one opportunity on the next Comets' possession, the Eagles' W.T. Montgomery, who was fouled by the Comets' Sterling Williams, converted a one-and-one opportunity with 44.1 seconds left to make it a two-point game.
However, the Comets made their free throws down the stretch when they were needed the most.
Owen hit one of two free throw attempts with 42.2 seconds left to play. Witko came up with the rebound on the missed shot and passed the ball back outside to Faulkner who was almost immediately fouled.
Faulkner made those two free throws and hit two more on the ensuing Comets' possession to give Halifax a 60-53 edge with 21.6 seconds to play.
Preston connected for Franklin County with seven seconds left to make it a five-point game and Gregory put the final touches on the Comets' win with a slam dunk with 3.1 seconds left.
"We made it tough on ourselves," Dillard said.
"We got up by seven and made a couple of mistakes down the stretch. But the one thing I commend these guys on is, this year, we've won the tight ball games.
"We had the one with Notre Dame Academy (in overtime) that we did not win," added Dillard, "but, since then, we've won every tight ball game.
"We've done the right things," Dillard continued.
"Witko got the rebound and kicked it back out and Shamoni and Anthony made the free throws down the stretch. We're doing the right things to win ball games."
Halifax County had a good overall game, hitting 46 percent of its shots from the floor and 72 percent of its free throws.
The Comets also did a good job on the boards, claiming 20 rebounds in the game.
Witko and Faulkner led the team with four rebounds each while Gregory and Jeffress each had three boards.
The Comets came up with nine steals in the game and forced Franklin County to turn the ball over 14 times.
Halifax County led 17-11 after the first eight minutes with the help of seven points from Owen and three field goals by Jeffress.
The Comets led all of the game with the exception of one span in the second quarter in which the Comets went almost three minutes without a basket and the Eagles went on an 11-0 run that took them from an eight-point deficit to a three-point 24-21 lead with 3:40 left in the first half.
The Comets trailed 26-23 when Faulkner hit a layup off of a steal with 2:46 left in the half and followed it with a three-pointer on the next Comets' possession to allow the Comets to regain the lead.
Witko capped the Comets' brief 7-0 spurt with a basket to put the Comets up 30-26 with 1:31 left in the half.
The Eagles closed to within a basket but a 15-footer by Owen with six seconds left gave the Comets a 32-28 lead at the halftime break.
A 5-0 run by the Comets in the final two and a half minutes of the third quarter that came from a free throw from Jeffress, a layup by Danny Whitlock and a layup by Gregory off of a feed from Faulkner put the Comets up 45-38 at the end of the third quarter to set the stage for the final eight minutes.

Mary Benner Henderson

Mary Benner Henderson, 72, of Halifax died at her home on Canterbury Drive on January 17.
Mrs. Henderson was born in Harvey, Ind. on May 8, 1929. She was the widow of Edgar 'Buster' Henderson Jr. and earlier of Benjamin M. Benner, both of Halifax.
Survivors include four daughters, Cyd Lindley of South Boston, Carol Gravitt and Heidi Martin, both of Halifax, and Gail Rheinheimer of Roanoke; two stepsons, Steve Henderson of Halifax and Stuart Henderson of Forest; one granddaughter and 11 grandsons; one step-grandson; one step-granddaughter and one great-granddaughter.
Mrs. Benner was a member of Halifax United Methodist Church, where she was the organist for years. She served as a deputy clerk of the Halifax County Circuit Court and was a legal assistant for Gravitt and Gravitt before her retirement.
Friends and family attended a memorial celebration for Mrs. Henderson held at Halifax United Methodist Church on January 19. She will be buried alongside her husband and parents in Dowagiac Memorial Gardens in Dowagiac, Mi.
Those wishing to give memorials are asked to consider the Halifax United Methodist Church Memorial Fund or other charity of choice.

Mary Yeaman Lovelace

Mrs. Mary Yeaman Lovelace of 3045 Cowford Rd., Halifax, died January 18, 2002 at Halifax Regional Hospital. She was born in Halifax County September 12, 1929 and was 72 years old.
Mrs. Lovelace was the daughter of William Moses Yeaman and Matie Wilkerson Yeaman and was married to Daniel (Pete) Lovelace, Jr.
She was a member of Liberty United Church of Christ.
Survivors include her husband; one son, Daniel (Pete) Lovelace III and his wife, Joy, of South Boston; one daughter, Rebecca L. Faulkner and her husband Bill of Midlothian; two granddaughters, Ginger New of South Boston and Katrina Fisher of Charlotte, N.C.; two sisters, Elizabeth Perkins of Nathalie and Winnie Young of Hampton.
Graveside services will be held today at Liberty United Church of Christ cemetery at 2:00 p.m. with the Rev. Dwight Moore conducting.
The family will receive friends at the home of the deceased.

John Alvin Toombs

John Alvin Toombs of 1246 Grubby Rd., Halifax died January 20, 2002 at Halifax Regional Hospital. He was born in Halifax County November 12, 1919 and was 82 years old.
He was the son of Johnnie Thomas Toombs and Fannie Mae Ferrell Toombs and was married to Areta Saunders Toombs.
Mr. Toombs is survived by his wife; two daughters, Jo Anne Williams and husband Ray of Midlothian, and Shirley Wood and husband Dale of Halifax; two grandchildren, David Williams of Midlothian and Amy Wood of Halifax; and one brother, Curtis William Toombs of Halifax.
Services will be held tomorrow at 2:00 p.m. at Powell Funeral Home Chapel with the Rev. Lewis Wall conducting. Burial will take place in Oak Ridge Cemetery.
The family will receive friends at Powell Funeral Home tonight from 7:00 until 8:30 p.m. and other times at the home of the deceased.

Richard Allen Edmondson, Jr.

Richard Allen Edmondson, Jr. of 2000 Jeffress Trail, Alton, died January 17 Halifax Rgional Hospital at the age of 40.
He was born in Halifax County June 29, 1961 and was the son of Richard A. Edmondson, Sr. and Helen Thompson Edmondson. He was married to Dinetta Martin Edmondson.
Survivors of Mr. Edmondson include his wife; one daughter, Mallory Shant'e Edmondson; his mother, Helen T. Edmondson of Halifax; his father and stepmother, Richard Edmondson Sr. and Sharon Graves Edmondson of Halifax; two sisters, Brenda Coleman of Crystal Hill and Felicia Baugh of Cary, N.C.; his father- and mother-in-law, Learly Martin and Martha Martin of Alton; two brothers-in-law and four sisters-in-law.
Funeral services will be held today at 11:00 a.m. at Jeffress Funeral Home Chapel with Brother Phillip Lewis officiating. Burial will follow in the Halifax Memorial Gardens.
The family will receive friends at the home of Mr. and Mrs. Phillip Lewis, 601 Gravitt St. and at the home of Helen Edmondson, 2073 Leigh Wood Trail, Halifax.