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Tobacco Settlement Agreement Fund Oversight Committee


Minutes of the<MeetNo1> 1st Meeting of 2004


<MeetMDY1> January 6, 2004


The<MeetNo2> 1st meeting of the Tobacco Settlement Agreement Fund Oversight Committee was held on<Day> Tuesday,<MeetMDY2> January 6, 2004, at<MeetTime> 10:00 AM, 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 David Boswell, Daniel Kelly, and Joey Pendleton; Representatives Adrian Arnold and Thomas McKee.


Guests:  Michael Plumley, Office of the Attorney General;  Keith Rogers, David Bratcher, Joel Neaveill, Sandy Gardner, Stephen Yates, and Maggie May, Governor's Office of Agriculture Policy; Karen Jones, Kentucky Agency for Substance Abuse Policy; Shana Herron, Community Farm Alliance; Gayle and Sheila Arnold; Gay Dwyer, ketnucky Retail Federation; and Jitter Allen and Dan Ison, Altria Group.


LRC Staff:  Dan Risch, Biff Baker, Lowell Atchley, and Kelly Blevins.


LRC Intern: Chris Grant, Kentucky State University.


Senator Vernie McGaha, Chairperson, asked for and received approval of the minutes of the December 8, 2003 meeting.


Next, Mr. Keith Rogers, the newly appointed Executive Director of the Governor's Office of Agriculture Policy, and Mr. David Bratcher presented the projects from the December meeting of the Agricultural Development Board. Of particular note was a project submitted by the Licking River Valley Resource Conservation and Development Office. The project sought funding to purchase heavy equipment that would be shared by farmers to repair farm ponds. Mr. Rogers pointed out that the project had been denied when first submitted to the Board. However, after the committee commented on the potential value of such a project, the Board reconsidered the application and approved it.


Representative Arnold then asked Mr. Rogers to explain the recent action of the Governor to transfer $17 million from agriculture funds for the purpose of assisting in making up a budget shortfall. Mr. Rogers explained that the Governor transferred $17 million from the Kentucky Agriculture Finance Corporation. He said the intent was that the money would be returned to the Corporation after a state bond is issued. Several members expressed concern that the bonds may not be issued and the money not returned. Also, a concern was expressed about the public perception that the state was going into debt to pay for operating costs.


Next, Mr. Michael Plumley, an Assistant Attorney General, addressed the committee about the state's enforcement of the tobacco master settlement agreement legislation requiring nonparticipating manufacturers to either pay into a state escrow fund or become a participating manufacturer. A summary of his report is on file with the committee materials in the LRC library.


The meeting adjourned at approximately 11:20 a.m.