Tobacco Settlement Agreement Fund Oversight Committee




<MeetMDY1> February 7, 2008


The<MeetNo2> Tobacco Settlement Agreement Fund Oversight Committee meeting was held on<Day> Thursday,<MeetMDY2> February 7, 2008, at<MeetTime> 5:45 PM, in<Room> Room 131 of the Capitol Annex. Senator Carroll Gibson, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Carroll Gibson, Co-Chair; Senators David E. Boswell, Joey Pendleton; Representatives Royce W. Adams, Charlie Hoffman, Tom McKee, and Rick Rand.


Guests:  Mr. Roger Thomas, Executive Director, Governor's Office of Agricultural Policy; Mr. Tim Hughes, Mr. Joel Neaveill, and Ms. Jennifer Marsh, Governor's Office of Agricultural Policy; Mr. Mac Stone, Director, Department of Agriculture Division of Value-added Plant Production.


LRC Staff:  Lowell Atchley and Lindsey Murphy, Committee Assistant


The Committee approved the minutes of the December 2007 meeting without objection, on motions respectively by Senator Boswell and Senator Pendleton.  The Committee also approved the minutes of the January meeting without objection, on motions respectively by Senator Pendleton and Senator Boswell.


Following roll call, House committee members chose their co-chairs to preside over upcoming meetings. Representative Hoffman made the motion to nominate Representative Rick Rand as House co-chair; Representative McKee seconded the motion. A motion was then made by Representative McKee that nominations cease and seconded by Representative Hoffman.


In opening remarks as the new committee co-chair, Representative Rand, said he was pleased to be joining the committee. He stressed the importance of the committee and also its importance to farmers.


Next, Co-chair Gibson asked officials with the Governor's Office of Agricultural Policy to come to the table. They included Mr. Roger Thomas, GOAP Executive Director, Joel Neaveill, Director of Operations, and Mr. Tim Hughes, Deputy Executive Director. Before beginning his testimony, Mr. Thomas introduced Ms. Jennifer Marsh, the new GOAP General Counsel, who was seated in the audience.


Mr. Neaveill reviewed the model and non-model projects for the committee. Non-model projects included: Mercer County Board of Education, $12,850 to construct and equip a greenhouse at Mercer County High School; Mercer County Board of Education, $10,000 for a farm education project; Spencer County Board of Education, $15,000 to construct and equip a food processing lab at Spencer County High School; and Fayette County Rural Management Board, $100,000 to be used for the purchase of conservation easements on rural farmland.


Mr. Thomas reviewed several projects for which the board denied funding. A company called Voice, Video and Data Services Inc. had sought funds in some counties to administer a rural broadband wireless Internet program aimed at tobacco farmers. But the board did not approve the projects because of a low priority noted in each county.


Responding to Co-chair Rand, Mr. Hughes noted that a previous program to offer broadband services through counties had attracted little interest. Currently applicants could seek funds for technology improvements through a technology model program offered by county councils.


Co-chair Rand mentioned the haphazard nature of broadband service in rural counties. He stressed the importance of the agency assisting in extending broadband service to rural counties. Also, Mr. Thomas touched on his experience with broadband in his previous position with the Kentucky Dairy Development Council.


In a final project discussion, Mr. Thomas noted the board pended the Robertson County Conservation District project to administer an emergency hay transportation program. The project cost was $25,000. The board pended the project to allow exploration of a comprehensive approach to the demand for hay brought on by the drought of 2007. Mr. Thomas said discussions were currently under way with various people to come up with a statewide drought response plan.


Mr. Thomas responded to Co-chair Rand that officials probably could have reacted sooner to last summer's drought, but he said that was no reflection on anyone. He said hindsight was always beneficial. He said they would like to look at long term drought solutions for rural Kentucky. He mentioned one idea, that of a water impoundment program.


Mr. Hughes complimented the work of Mr. Rogers when he was in the Legislature, and the General Assembly, in the passage of HB 611, which set up the structure for using Master Settlement Agreement funds in rural development. Mr. Hughes mentioned some of the model programs that granted money for forage improvement and hay storage. He also mentioned the Beef Network (an Agricultural Development Fund grant recipient) the Kentucky Cattleman's Association, and the University of Kentucky were meeting last July on drought issues.


Next, the speakers provided the committee with a chart depicting Agricultural Development Fund moneys awarded to a number of communities in the state to construct, upgrade, promote, or study farmers' markets. Mr. Hughes said the board had set aside $2 million in 2005 under a competitive farmers' market program. He said the board had anticipated three or four regional markets being established with the use of the funds, but most farmers' market projects had been community-based and in the $50,000 to $100,000 range. Responding to Co-chair Gibson, Mr. Hughes said the board could move the remaining funds into another account, but he said the board liked the community market concept. He said the board had earlier allowed farmers' market funding applicants to seeking matching funds from county based agricultural organizations in addition to regular county funds.


Mr. Rogers and Co-chair Gibson also discussed the idea of locating farmers' markets in college campuses. The co-chair said he had mentioned the idea to officials with Western Kentucky University. He stressed the positive aspects of the markets on college campuses, making nutritional local farm products available for students and faculty.


Next, the farmers' market discussion continued with the appearance before the committee of Mr. Mac Stone, Director, Department of Agriculture Division of Value-added Plant Production.


Mr. Stone briefed the committee on information contained in a booklet about Kentucky farmers' markets. According to his report, the number of markets has increased, more and more farmers were taking advantage of the markets, and gross sales at markets had increased over a four-year period. According to Mr. Stone, many types of products were sold at the markets. In 2007, there were 39 permanent market facilities in Kentucky. A total of 55 markets in 51 counties participated in Farmers' Market Nutrition Program, which benefited people under the WIC program. The Department of Agriculture played a significant role in the Good Agricultural Practices Program (GAP), which aimed to educate producers on how to reduce food contamination. A Farmers' Market Association was formed, with 30 markets participating. Also, Mr. Stone mentioned the farmers' market temporary food service permit, approved by the 2007 General Assembly, had allowed farmers to add value to their products by being able to produce ready-to-eat meals at markets.


Co-chair Rand asked about the possibility locating a farmers' market at a commercial orchard in his home county. Mr. Stone responded that markets need to have a permanent location and be registered for regulatory purposes. He said a market could be located on private property. Co-chair Rand said he might follow up on that idea.


As the meeting ended, Senator Pendleton alluded to the annual report received from the Kentucky Tobacco Research and Development Center at the University of Kentucky. Senator Pendleton mentioned the work being done there, particularly in the area of developing a plant-based drug for cervical cancer. The senator noted that the center received funding from a half-cent tax on cigarette packs. He said they should be mindful that if the General Assembly raises the cigarette tax, consumption might drop, thus affecting the center's funding.


Documents distributed during the Committee meeting are available with meeting materials in the LRC Library. The meeting ended at approximately 5:45 p.m.