Interim Joint Committee on Appropriations and Revenue


Budget Review Subcommittee on General Government,

Finance, and Public Protection


Minutes of the<MeetNo1> 1st Meeting

of the 2006 Interim


<MeetMDY1> November 28, 2006


The<MeetNo2> 1st meeting of the Budget Review Subcommittee on General Government, Finance, and Public Protection of the Interim Joint Committee on Appropriations and Revenue was held on<Day> Tuesday,<MeetMDY2> November 28, 2006, at<MeetTime> 10:30 AM, in<Room> Room 171 of the Capitol Annex. Representative Royce W. Adams, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Jack Westwood, Co-Chair; Representative Royce W. Adams, Co-Chair; Senator Elizabeth Tori; Representatives Thomas M. McKee, Tanya G. Pullin, Charles L Siler, and Jim Wayne.


Guests:  Richie Farmer, Commissioner; Lanny Arnold, Assistant Director, Division of Regulation and Inspection; Michael Judge, Executive Director, Agriculture Marketing; and Stewart Gritton, County Fair Coordinator, Division of Shows and Fairs; Kentucky Department of Agriculture.


LRC Staff:  Randy Smith and Spring Emerson.



Chairman Adams started by saying that this being the first meeting of the 2006 Interim, the members felt there was a need to have an update from the Department of Agriculture on the new programs that were instituted during the last budget session.  He then invited Commissioner Richie Farmer to come forward.


Commissioner Farmer thanked the members for the opportunity to come before the committee, and expressed his wishes that everyone had a happy Thanksgiving holiday.  He continued with an overview of issues facing the Department of Agriculture, including the expanding amount of work being mandated with fewer personnel positions and less money.  He added that a good deal of cross-training has been done in an effort to increase efficiency. 


Representative McKee asked for an explanation of the consequences of biodiesel fuel test failures.   Lanny Arnold replied that the biodiesel sample is not a blend, such as the 2% to 5% blends found at the gas pumps.   He stated that when there is a failed test, the manufacturer is notified and will cease distribution until the formula is corrected.   Commissioner Farmer explained that gasoline tests at the pump are different than the biodiesel testing, which is not performed at the pump but at the production site.


Representative McKee asked when Kentucky's lab will be in operation.  Commissioner Richie replied that the appropriated funds will not be made available until July 1, 2007, adding that if all goes as planned , they are looking at October or November of 2007.


Representative McKee asked if there is a reason that there is no longer a match of funds from the Governor's Office of Agricultural Policy (GOAP) for the All-Terrain Vehicle (ATV) Safety Program.  Commissioner Farmer replied that he believes it to be because the funds for the Ag Development Board are dwindling, as well as the commitments already made to the Beginning Farmer Program, etc.  Commissioner Farmer then invited Mike Judge forward to elaborate. 


Mr. Judge explained that there is some hesitation for the Ag Development Board to fund educational-type programs, which the ATV Safety Program falls under.   Commissioner Farmer added that other alternatives will be sought after as well.  Representative McKee asked if ATV manufacturers contribute to safety education.  Commissioner Farmer replied that there is interest, and that every available option will be explored.  Chairman Adams stated that all options should be explored before the 2008 Session of the General Assembly, when budget issues will be addressed.


Mr. Judge stated that several pilot efforts have been conducted in the past year for the ATV Safety Program, and it has been so successful that requests continue to come in.  He added that there is tremendous support for the program from ATV manufacturers who are willing to loan equipment, as well as from first responders and fire departments in counties and communities throughout the state that provide locations, people and time for safety demonstrations and training efforts.    Mr. Judge added that similar agreements have been reached with mower manufacturers who loan lawnmowers for the Lawnmower Safety Program.


Chairman Adams commented that ATV safety is a growing problem and ATVs are being used more widely now than ever before, and as a result accidents will continue to increase.  Commissioner Farmer stated that more information on the ATV Safety Program will be provided to the committee at a later date.


Senator Tori asked if accident statistics have changed since funds were first requested for the ATV Safety Program.  Commissioner Farmer replied that the statistics provided were figures from last year, and Kentucky still remains the nation's leader in ATV-related deaths.  Senator Tori asked if they are on the increase.  Commissioner Farmer replied in the affirmative, explaining that with the sales of ATVs still high, there has been a continual increase over the past several years.


Senator Tori inquired about the possibility of instituting drivers' testing on ATVs similar to that of what is in place for motorcycles.  Mr. Judge replied that it has not been proposed.  He went on to say that the operator training portion of the Safety Program is similar, but there is no certification process involved. 


Chairman Adams stated that a bill was passed in 1996 requiring users of personal watercraft to complete a Safe Boating Course, and suggested that perhaps the ATV Safety Program could be patterned after that, especially for the younger age groups.  Commissioner Farmer mentioned there is also a Hunter Safety Course in place for ages 10 and up that includes a certification.  Chairman Adams stated that with the growing numbers of ATVs in use, this issue will need to be addressed.


Senator Westwood asked how Kentucky's fuel testing compares with other states.  Mr. Arnold replied that after the January 1, 2006 ban on the gasoline additive methyl tertiary butyl ether (MTBE), there were still trace amounts of MTBE left in some tanks, but when re-tested at a later date, that had been cleaned out.  He added that Kentucky is now at only a two or three percent failure rate.  Commissioner Farmer stated that of 31 failures, 26 of them were due to the presence of  MTBE.


Commissioner Farmer stated that a big concern is a lack of funding for testing when it is needed.  He added that there have been 8,000 to 10,000 samples tested per year, and the new lab will be capable of testing 20,000 samples. 


Representative Siler asked if fines are administered for noncompliance.  Commissioner Farmer replied in the affirmative, adding that fines are issued and shutdowns occur as a result.  Representative Siler asked if those fines go directly into the agency's budget.  Commissioner Farmer replied that the moneys go directly into the General Fund.


Representative Siler inquired about the Animal Shelter Program.  Commissioner Farmer asked Deputy Commissioner Mark Farrow to come forward.  Mr. Farrow stated that grants have been made available to various counties for construction and renovations of animal shelters, and the grantees have done an excellent job.  He went on to say that there is still a tremendous need, and there is a much larger number of counties that have never applied for a construction grant than there should be.  He added that information will be provided to the committee outlining the counties that are in compliance, those that have received grants, and those that have not.  Mr. Farrow stated that effective July 1, 2007, minimum standards must be met, and while there is no civil or criminal penalty, citizens may take action against the Fiscal Court.  He stated that the $5 million would have gone a long way toward getting other counties in compliance.


Chairman Adams stated that the projects vetoed by the Governor in the 2006-2008 Budget may be revisited in 2008, and expressed his wishes that the Animal Shelters will be one of them.  He added that with this deadline fast approaching, this is desperately needed, and education is important because most are not aware of the deadline, especially with other needs more pressing.  Mr. Farrow stated that even if the money becomes available, there are still hardships in some counties due to other needs. 


Senator Tori inquired about the involvement, if any, in regional farmer's markets that are being formed throughout the state.  Commissioner Farmer replied that the Department has been involved in helping conduct feasibility studies for the regional farmer's markets.  Senator Tori asked who funds those studies.  Mr. Judge replied that they were funded by the Governor's Office of Agricultural Policy (GOAP) through the Ag Development Board grants, one in Fayette County and one in Jefferson County.  He added that the Department of Agriculture has one person on staff dedicated to working with farmer's markets as a whole, not just issues of regional development.  There is also a process in place to help set up a state association of farmer's markets.  Senator Tori asked who the contact person is.  Commissioner Farmer replied that the contact person is Janet Eaton.  He went on to say that local farmer's markets have really thrived over the past few years because of the Kentucky Proud program and the Department of Agriculture's involvement in helping them. 


Senator Tori asked if the association will require dues or fees.  Mr. Judge replied in the affirmative, adding that they have worked very hard to keep them at a minimum.  He added that Ms. Eaton is also in favor of keeping participant's fees very minimal as well. 


Representative Wayne suggested that the ATV Safety Program should be an inter-agency campaign, and expressed his concern that the Department of Transportation and the Department of Fish and Wildlife are not involved in the program, as well as other agencies and community groups.  Commissioner Farmer stated that citizens are being educated and awareness is being raised.


Representative Wayne inquired about the PACE (Purchase Agricultural Conservation Easements) program and the monitoring of it.  Mr. Judge replied that currently, as of the last PACE Board meeting on November 7th, there are 88 farms totaling 20,927 acres as purchased easements in the program, with an additional 29 easements for 33,819 acres that were donated to the program, making a total inventory of 117 easements for 24,746 acres.  There are 633 applications pending, for a total of over 123,000 acres.  Representative Wayne asked how many people are monitoring the 24,746 acres already acquired.  Mr. Judge replied there is one person monitoring the acreage once per year.  Representative Wayne asked what is required in the monitoring process.  Mr. Judge replied that the land is visually inspected annually to ensure that no encroachments, such as additional buildings or roads, have been constructed which are prohibited by the easement agreement.  Representative Wayne asked if one person is enough.  Mr. Judge replied that at this time, one person is enough to perform the monitoring for the existing program.  Commissioner Farmer added that if more easements are purchased and the program continues, more personnel would be needed.


Representative Wayne asked if the issue of Fairground Improvements could be another area where inter-agency involvement would be preferential.  Commissioner Farmer expressed his agreement that the Department of Agriculture is involved with more than just farming issues.  Representative Wayne stated that more cooperation between departments is needed, and that negative bureaucratic thinking needs to be countered with some positive creative thinking.  Commissioner Farmer expressed his willingness to cooperate with other agencies, stating that they would be happy to explore other options.


Representative Pullin commented that there is an excellent animal shelter in her district, and stated that the only request she has received from them is that they be provided with a pocket-size book for documenting fines, rather than the larger one they are currently using.  Commissioner Farmer relied that it has been duly noted.


Representative Pullin stated that in the past six months, the complaint she has most often received from farmers in her district is that ATV riders are trespassing on farmlands, ruining crops and making ruts.  She added that the local sheriff's department is very frustrated because the ATV riders cannot be caught or identified.  A suggestion was made to register and license ATVs.  Mr. Judge replied that the safety clinics include decorum.  Commissioner Farmer added that the ATV Safety Program is a pilot program and is being conducted on a trial basis due to a lack of funding.


Representative McKee expressed his concern regarding the PACE program, and the lack of understanding of the program.  He added that we are ultimately looking at the demise of the program because if it is not funded, there will be no matching federal dollars.  He stated that we must address the issue of disappearing farmland, adding that most development occurs on our best farmland.  Commissioner Farmer agreed that the issue needs to be addressed, and the time to preserve farmlands is now.


Representative Wayne remarked that the new federal law regarding preservation of farmland provides a revision in the federal tax credit to 100% over 15 years, rather than 15% over five years, which is a major boost to farmers.  He encouraged the Department of Agriculture advertise the federal revision in their newsletter.  Mr. Judge stated that even if donations are received, it is still a requirement to perform surveys, appraisals, and inspections, which requires that the PACE program have some funds to perform these functions.  Representative Wayne asked if those fees are paid for by the farmer.  Mr. Judge replied that they are not.  Representative Wayne commented that it could be something to consider, based on the revised federal tax credit.


Chairman Adams stated that two fairs in his district are relocating, and asked when they will find out if they are grant recipients.  Commissioner Farmer commented that they will hold meetings on  December 8 and December 15 to review applications.  Mr. Gritton came forward and added that applications were received by October 1st.  He went on to say that the meeting on December 8 will include discussion of procedures in the review of the grants, and the December 15 meeting will be to make final selections.  It is anticipated that selections will be made prior to the Kentucky Fairs annual meeting in January, so that official presentations can be made at that time.


Chairman Adams asked what percentage of the 51 applications were for relocation versus upgrades, and if there were a number of them relocating.  Mr. Gritton replied that only a very few are for relocations, adding that only two counties submitted applications for purchase of property. 


Chairman Adams asked for an update on the existing County Fair Program, and if needs are being met.  Mr. Gritton replied in the affirmative, explaining that if every county fair in Kentucky maxxed out their limits, there may be a problem, but at this point the existing program is meeting the needs of the county fairs.


Chairman Adams inquired as to how many county fairs participate in harness racing.   Mr. Gritton replied that there are seven fairs participating in harness racing, and there is talk of another being added this year in the eastern part of the state.  He added that most of the fairs that don't participate in harness racing are in the eastern part of the state.


Chairman Adams asked if there were any amusement ride related fatalities this year.  Mr. Gritton replied that there have been none this year.  Chairman Adams stated that it is very difficult to track all the carnivals that come into Kentucky, and commended the Department for doing a tremendous job.  Commissioner Farmer expressed his appreciation for the comments and thanked the members for what has been done to help the program.  Chairman Adams stated that this is one of many things the Department does and is taken for granted. 


Representative McKee remarked that the Kissell Brothers came in to testify in the past, and were in favor of the inspection process.  He asked if other amusement ride companies that have not been so gracious in accepting the new program, or if there has been resistance.  Commissioner Farmer replied that anytime things are changed, there may be some resistance, but Kentucky's fees are still relatively inexpensive compared to surrounding states.  He went on to say that the reputable companies understand that costs continue to increase and they will remain in compliance.


Representative McKee asked if there are enough carnivals servicing our fairs and if there has been any effort made to get more higher quality carnivals.  Commissioner Farmer replied that they do not actively recruit carnival companies.


Chairman Adams remarked that the Kentucky Association of Fairs would be glad to help locate carnivals for county fairs.  Mr. Arnold added that there exists a list of carnivals licensed in Kentucky which is made available to anyone requesting it.


Chairman Adams stated that there is interest in what the Department is doing and it is important to hear of the issues being addressed.  He thanked them for their cooperation.  Commissioner Farmer thanked the Chairman and the committee members for the opportunity to discuss these issues and expressed his appreciation for anything the committee can do to help with future concerns.


There being no further business, the meeting was adjourned at 11:50 A.M.