Tobacco Settlement Agreement Fund Oversight Committee


Minutes of the<MeetNo1> 5th Meeting

of the 2003 Interim


<MeetMDY1> September 9, 2003


The<MeetNo2> 5th meeting of the Tobacco Settlement Agreement Fund Oversight Committee was held on<Day> Tuesday,<MeetMDY2> September 9, 2003, at<MeetTime> 1:30 PM, in<Room> Room 131 of the Capitol Annex. Senator Vernie McGaha, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Vernie McGaha, Co-Chair; Representative Roger Thomas, Co-Chair; Senators Charlie Borders, David Boswell, and Joey Pendleton; Representatives Adrian Arnold, Carolyn Belcher, James Comer, Thomas McKee, and Tommy Turner.


Guests:  Gene Royalty, David Bratcher, and Joel Neaveille, Agricultural Development Board; Jeff Harper, Kentucky Farm Bureau; Cassia Herron and Ed Nelson, Community Farm Alliance; Commissioner Billy Ray Smith, Mark Farrow, Ann Stewart, Harvey Mitchell, Bill Burnette, and Ira Linville Department of Agriculture; David Sparrow, University of Kentucky College of Agriculture; Dean M. Wallace, Council for Burley Tobacco; and Sam Crawford, Jefferson County Farm Bureau.


LRC Staff:  Dan Risch, DeVon Hankins, and Kelly Blevins.


Senator Vernie McGaha, Co-Chair, asked for and received a motion and second to approve the minutes of the August 12 meeting. The motion passed.


Mr. Gene Royalty and Mr. David Bratcher presented the August project applications considered by the Agricultural Development Board for funding from the Agricultural Development Fund. The information about the projects is on file with the meeting materials in the LRC library.


Mr. Bratcher was asked by Senator Boswell to explain why county councils sometimes choose to place a low priority on projects. Mr. Bratcher said that projects seeking county funds must first be reviewed by a county council. He surmised that once a project receives a low priority, an applicant may not pursue the application further but sometimes an applicant simply leaves the application and the council forwards it to the Agricultural Development Board. In response to a question from Senator McGaha, Mr. Royalty said all projects submitted to a county council are sent to the Agricultural Development Board, unless the applicant withdraws the application. Mr. Royalty also explained that if the board denies a project that would qualify for a different funding source, the applicant is encouraged to reapply seeking funding from that source.


Representative Roger Thomas observed that a project, which had been denied, requesting money to place milk dispensers in schools could be expected to benefit dairy farmers. Mr. Royalty replied by saying that it is not possible at the present time to be assured that Kentucky dairy farmers' products would be sold in the dispensers.


Representative Tom McKee pointed out that the denied project which would have purchased a sheep's foot roller to be used to stop pond leaks could help a farm to increase farm income. For example, by being assured of a reliable water source in his fields, a farmer would have more flexibility in pasturing cattle. Senator Charlie Borders agreed with Representative McKee and requested that the board review the issue.


Representative Roger Thomas, Co-Chair, next introduced representatives of the Lexington/Fayette Urban County Government to talk about their Purchase of Development Rights (PDR) program. Ms. Margaret Graves and Mr. Frank Penn, Chair and Vice-Chair respectively of the Lexington Rural Land Management Board gave the presentation assisted by Mr. Maner Ferguson and Mr. Billy Van Pelt, program administrators. On file with the meeting materials in the LRC library are the handouts provided by the presenters which include their powerpoint presentation, informational brochures on selling development rights and the conservation easement agreement summary, a Lexington-Herald Leader editorial by a participant in the program, an analysis of the farms growing tobacco in the PDR program, and a map showing the locations of the farms in the program.


Ms. Graves explained that the goal of the program is to protect the agricultural economy of Fayette County by conserving farm land. By purchasing from willing farm owners a permanent easement requiring land to be kept for farm use, the program seeks to conserve a core of 50,000 acres of farmland. At the present, 72 farms, representing 9,882 acres, are entered in the program. Sixty-six of these farms hold basic tobacco quota of 514,838 pounds. Finally of the $15 million of tobacco settlement money  allocated to the PDR program, $12, 035, 981 have been used or obligated and has been matched by either federal or local money at a ratio of one for one and sometimes two to one.


The last agenda item related to the state farmland preservation program, Purchase of Agriculture Conservation Easements (PACE). This program is similar to the Fayette County program and allows farmers to voluntarily place their land into an easement solely to be used as farmland. Department of Agriculture Commissioner Billy Ray Smith, and Mr. Ira Linville and Mr. Bill Burnette from the Department explained the program. Their comments are on file with the meeting materials in the LRC library. To date, easements have been placed on 60 farms and 11, 893 acres at a cost of $10, 059, 137. Mr. Linville pointed out that the success of the program can largely be attributed to the $10 million allocated from tobacco settlement money to the program. Finally, Mr. Linville said a yearly allocation of $2 to $3 million would be the optimum amount to capture federal money made available to these programs.


The meeting adjourned at approximately 3:40 pm.