Tobacco Settlement Agreement Fund Oversight Committee




<MeetMDY1> April 15, 2009


The<MeetNo2> 2nd meeting of the Tobacco Settlement Agreement Fund Oversight Committee was held on<Day> Wednesday,<MeetMDY2> April 15, 2009, at<MeetTime> 10:00 AM, in<Room> Room 129 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; Representative Dottie Sims, Co-chair; Senators Charlie Borders, David E. Boswell, and Joey Pendleton; Representatives Royce W. Adams, James R. Comer Jr., Charlie Hoffman, Tom McKee, and Tommy Turner.


Guests:  Roger Thomas, Executive Director of the Governor’s Office of Agricultural Policy; and GOAP staff members Todd Harp, Joel Neaveill, Michael Judge, and Sandra Gardner; Tom Keene, University of Kentucky Agronomy Specialist.


LRC Staff:  Biff Baker, Stefan Kasacavage, and Susan Spoonamore, Committee Assistant. 


Biff Baker conducted the election of Senate and House Co-chairs.


Representative Charlie Hoffman nominated Representative Dottie Sims for House Co-chair; seconded by Representative Tom McKee. Representative Tommy Turner moved that nominations cease and that Representative Sims be elected by acclamation; seconded by Representative Royce Adams. Upon voice vote, and without objection, Representative Dottie Sims was elected as House Co-chair.


Senator Charlie Borders nominated Senator Carroll Gibson for Senate Co-chair, seconded by Senator Joey Pendleton. Senator Pendleton moved that nominations cease and that Senator Gibson be elected by acclamation; seconded by Senator Charlie Borders. Upon voice vote, and without objection, Senator Carroll Gibson was elected as Senate Co-chair.


The January 8, 2009 minutes were approved, by voice vote and without objection, on a motion made by Representative Sims and seconded by Representative Adams.

The committee first heard from Todd Harp, Senior Project Analyst, Governor’s Office of Agricultural Policy (GOAP), who summarized the revisions contained in the 2009 Agricultural Development Board (ADB) policy document.  He stated that the revisions included consolidating model programs into one program now called the “County Agriculture Investment Program” (CAIP). He went on to explain the 11 provisions under the CAIP.


Mr. Harp noted that, unlike before, each investment area would be available in every county. As he summarized the policy revisions, Mr. Harp noted one change – the lack of “tobacco dependency” will not render a producer ineligible for program participation.


Responding to Representative McKee, Mr. Harp indicated that county councils will be able to strengthen the new policies, or make them more restrictive, with the exception of the tobacco dependency policy. According to Mr. Harp, a uniform scoring system to be used by county councils in judging applications would award points to those who had past or current involvement in tobacco production.


Mr. Harp also pointed out other provisions: an annual cost-share limit will be implemented in 2009; the ADB may require significant contributions of county Agricultural Development Fund moneys for projects; collaboration projects involving multiple counties and pooling of funds will be given greater consideration; and the ADB, the Auditor of Public Accounts and other relevant state agencies may review all project records.


Referring to the tobacco dependency requirement, Senator Borders indicated the intent of the Agricultural Development Fund was to help farmers in the state who had once produced tobacco. The senator expressed a hope that they would not begin seeing more non-tobacco dependent applications receiving the funds.


Roger Thomas, GOAP Executive Director, stated that the provision specifically would provide broader access, particularly to young farmers. He mentioned the points given to tobacco farmers on the scoring sheet.


During on-going discussion, Co-chair Gibson asked how moneys would be divided between counties that collaborate on projects, such as regional farmers’ markets. Mr. Harp mentioned a regional farmers’ market project funded last year. That project received funds from its home county and surrounding counties, based on producer representation. According to Mr. Harp, the board would review regional projects from the standpoint of the extent that counties participate. According to Mr. Thomas, the board also looks at the level of local participation as an adjunct to county council participation.



Representative McKee stated that all the revisions are good, but asked that the agency, during some upcoming regional workshops, stress to the councils how important they are and that their list of priorities will be considered as usual.


Mr. Rogers discussed the addition of a new investment option – On-farm Energy Efficiency and Production Investment Area.  He said the goals of this program would be to increase producer awareness in improving energy efficiency; to offer financial incentives to encourage farmers to adopt new technologies; and to assist with the costs of hiring technical expertise in applying for grant programs.


Mr. Michael Judge, Director of Operations, briefed the committee on a new Deceased Farm Animal Disposal Assistance Program, which was developed in consultation with the Kentucky Division of Conservation. He said the program would serve as an interim measure to facilitate the coordination of environmentally sound and cost effective disposal of dead livestock. The county Agricultural Development Councils will have the opportunity to commit a portion of their local funds to an approved program within their country. 


Representative Adams asked if officials in Washington were willing to delay the implementation of the Food and Drug Administration regulation affecting the use of livestock materials in all animal feed. Mr. Thomas indicated that the implementation of regulation would be effective on June 26, and there is no way to stop it. According to Representative Adams, the final implementation of the federal regulation will make the new state program even more important.


As discussion continued, Co-chair Sims asked if the county councils received information regarding the policy revisions. Mr. Thomas stated that the councils did receive information, and the information also could be found on GOAP website.


 Joel Neaveill, GOAP Chief of Staff, discussed the funding decisions by GOAP for January 2009, while Mr. Judge summarized the February 2009 project reports. 


At one point, Co-chair Gibson asked if there was a notable decline in dairy operations. Mr. Thomas stated that there was a decline.


Responding to Co-chair Sims, the GOAP officials explained the new state project application review process, which has the board reviewing state project applications during one monthly meeting, then considering the applications during the next month’s meeting. CAIP applications will be reviewed at every monthly ADB meeting.


In looking at a chart showing projects funding through the years, Representative Adams asked what happens to those applicants who do not meet their obligations under forgivable loan arrangements. Mr. Thomas responded that those who do not achieve their forgiveness obligations must repay the remaining portion of the loan. According to Mr. Neaveill, the board has generally moved away from forgivable loans, partly because they are difficult to track and it is difficult to make the loan procedure uniform.


Sen. Gibson stated that due to the shortness of the hour, that Mr. Tom Keene with the University of Kentucky agreed to delay this presentation until the next meeting of the committee. 


Documents distributed during the committee meeting are available with meeting materials in the LRC Library. The meeting adjourned at approximately 11:45 a.m.