Tobacco Settlement Agreement Fund Oversight Committee




<MeetMDY1> August 8, 2006


The<MeetNo2> Tobacco Settlement Agreement Fund Oversight Committee meeting was held on<Day> Tuesday,<MeetMDY2> August 8, 2006, at<MeetTime> 1:00 p.m., in<Room> Room 169 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 Carolyn Belcher, Co-Chair; Senators Charlie Borders, David E. Boswell, Joey Pendleton, and Richie Sanders Jr; Representatives Adrian K. Arnold, James R. Comer Jr, Charlie Hoffman, Thomas M. McKee, Tommy Turner, and Rep. Don Pasley.


Guests:  Alfred M. Cohen, M.D., Director and CEO, Markey Cancer Center, University of Kentucky; Donald Miller, M.D. Ph.D., Director, Brown Cancer Center, University of Louisville; Julie McPeak, Executive Director, Office of Insurance; D.J. Wasson, Insurance Program Manager, Office of Insurance; Irene Centers, Program Manager, Tobacco Prevention and Cessation Program; Keith Rogers, Executive Director of the Governor’s Office of Agricultural Policy; and Brian Furnish, Deputy Director, Governor’s Office of Agricultural Policy.


LRC Staff:  Lowell Atchley, Clark Baird, and Susan Spoonamore, Committee Assistant.


Minutes of the July 11, 2006 meeting were approved, without objection, by voice vote, upon motion made by Senator Boswell and seconded by Senator Borders.


Chairman McGaha introduced the first two speakers, Dr. Alfred Cohen, director of the Markey Cancer Center at the University of Kentucky, and Dr. Donald Miller, director of the Brown Cancer Center at the University of Louisville.


During their respective testimony, the speakers described the cooperative efforts between the two universities in lung cancer research. According to the doctors, Markey had 38 lung cancer researchers and Brown had 20. There were none at either university in 2000. They stated that both universities were pursuing National Cancer Institute designation, which would help bolster their infrastructure.


Dr. Cohen said their goal was “obviously early detection” of cancer, and he described some of the early detection efforts. Dr. Cohen said they had established a clinical trials network that involved partnerships with 24 medical centers throughout the state. Dr. Miller told the committee that the Brown Cancer Center scientists were making discoveries in cancer research based on the tobacco settlement funding. He said they had two treatments in early-phase trials and were working on five or six new cancer drugs. According to the doctors, both universities were being prudent in their use of tobacco settlement funds.


Chairman McGaha said it was “remarkable” to see the two schools have about 60 people employed in lung cancer research in a six-year period.


Senator Boswell asked if they were able to receive any benefit from the old tobacco research institute. Dr. Cohen responded they had on one area – using small animals such as mice in assessing the effects on smoking on cardio-vascular systems and lungs.


Responding to Representative McKee, Dr. Cohen described some of their work in early detection. He said they were looking into the question whether CAT scans are good early detection devices, and were attempting to determine if bodily proteins are a good early detector.


Representative Don Pasley personally thanked Dr. Cohen for their treatment of his mother, who succumbed to cancer.


Responding to Representative Hoffman, Dr. Cohen said some of the abnormalities being detected by CAT scans in the region might actually be caused by the fungus that is prevalent in the Ohio River Valley.


Next, the committee received an update from Julie McPeak, Executive Director of the Office of Insurance, who reported on the status of the Kentucky Access high-risk insurance program, and on the Health Care Improvement Authority.


Ms. McPeak stated that Kentucky Access had approved 7,314 applications, and as of June 30, 2006, the program had 3,695 active enrollees.  The program had $41,909,044 in net assets at the end of the same period.  She also stated that even with the 5 and 4 percent premium increases in 2005 and 2006 respectively, she did not anticipate needing a second assessment in coming months. She told the committee the program might need some statutory or regulatory changes related to benefit plan options. She also said they were reviewing efficiencies in drug costs.


Clarifying a point for Representative Arnold, Ms. McPeak said the number of approved applications compared to the number of active enrollees took into account gaining members, but also losing members for a variety of reasons.


Turning to the Health Care Improvement Authority board, Ms. McPeak said she expected the Auditor to criticize the authority for poor meeting attendance and lack of quorums at board meetings. She said they hoped to increase their attendance and might explore teleconferencing as a means to allow some members to take part in meetings. Responding to Representative Comer, she said they averaged about six (out of 15) board members consistently attending meetings.


Co-chair Belcher asked for a listing of the vacancies on the board. Ms. McPeak stated that she would get a list of the vacancies to the committee.


Chairman McGaha suggested using proxies for the regular appointees to the board of the authority.


Chairman McGaha next asked Irene Centers, Program Manager of the Tobacco Prevention and Cessation Program to report on the activities of program. Ms. Centers stated that 71 percent of Kentuckians do not smoke, and an average of 44 percent of adult smokers in Kentucky tried to quit last year.  She reported that 27 percent of live births in Kentucky last year were to women who smoked during pregnancy.


Ms. Centers reviewed some of the strategies to reduce tobacco use among adults and young people, including messages in the media, increasing the cost of tobacco products, using health care provider education, and telephone counseling. She said 91 percent of FY 05 MSA funds were allocated to local health departments for assorted smoke cessation and prevention programs. Tobacco Prevention and Cessation was allocated about $2.2 million in FY 07, down from $2.7 million in FY 06.


Representative McKee asked about the prevalence of second-hand smoke. Ms. Centers said she had no data for Kentucky. She mentioned that health departments had distributed information on smoking outside buildings and smoke-free workplaces.


Co-Chair Belcher initiated a discussion regarding smoke-free schools. Ms. Centers noted that while principals and superintendents might say their schools were smoke-free, students would dispute those claims. She said they were working on a resource guide for schools wanting to adopt model policies. Co-Chair Belcher said school no-smoking policies needed to be stressed.


Mr. Keith Rogers, Executive Director, Governor’s Office of Agricultural Policy and Mr. Brian Furnish, Deputy Director of the Governor’s Office of Agricultural Policy, presented the monthly report of state and county projects reviewed at the previous Agricultural Development Board (ABD) meeting.


The committee discussed the award of $146,360 in state matching funds to the University of Kentucky for an agricultural leadership program. Mr. Rogers told Representative McKee that UK would establish the agenda for the program and that Philip Morris was no long a sponsor. Senator Pendleton observed that the program would require an average of $7,300 per pupil in tobacco funds. Mr. Furnish noted that, with the UK commitment, the per-pupil average would be about $16,000 per student. He mentioned travel expenses would be a costly part of the training course.


The committee also spent some time discussing the award of $2,068,170 in state agricultural development funds to the Kentucky Dairy Development Council to set up three initiatives, one which set aside $2 million in matching funds to pay production bonuses to dairy farmers. Mr. Rogers said the approximately 1,200 dairy farmers in Kentucky would be eligible for some facet of the funds.


Senator Pendleton, a former dairy farmer, asked about a possible impact on the dairy conference at UK. Mr. Rogers said he believed the KDDC and UK would be working together on dairy issues. The senator also suggested the KDDC and its partners be given credit in some manner for the production bonuses, which would be listed on producer checks coming from milk companies.


Senator Pendleton also expressed some concerns about young dairy farmers not qualifying for the incentive bonuses because of no linkage to tobacco production or dependency on the crop. (The incentive program required farmers to have participated in the Phase II program, to receive buyout payments, or to be the son or daughter of a person who was tobacco dependent.) In continuing discussion about tobacco dependency, Representative Arnold observed noted that the ADB was following the tenets of House Bill 611.


Representative Arnold asked if public interest had waned in any model programs. Mr. Rogers said none had reached their peak, although interest in some programs might have declined, but had increased in other model programs.


Documents distributed during the committee session are available with meeting materials in the LRC Library.


The meeting adjourned at approximately 2:45 p.m.