Tobacco Settlement Agreement Fund Oversight Committee




<MeetMDY1> September 2, 2009


The<MeetNo2> 7th meeting of the Tobacco Settlement Agreement Fund Oversight Committee was held on<Day> Wednesday,<MeetMDY2> September 2, 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 David E. Boswell, Joey Pendleton, and Damon Thayer; Representatives Royce W. Adams, James R. Comer Jr., Charlie Hoffman, Tom McKee, and Tommy Turner.

Legislative Guest:    Representative Fred Nesler.

Guests:  Dr. Donald Miller and Milton Pierson, Brown Cancer Center; Nick D’Andrea, University of Louisville; Dr. Robert Means, Markey Cancer Center;  Steve Byars and Drew Graham, University of Kentucky; Mac Stone and Bruce Harper, Kentucky Department of Agriculture; Roger Thomas, Michael Judge, Joel Neaveill, Jennifer Hudnall, and Angela Blank, Governor’s Office of Agricultural Policy; Tim Hughes, Kentucky Agricultural Finance Corporation.


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

Before beginning, the presiding chair, Senator Carroll Gibson, introduced the newest member of the committee, Senator Damon Thayer.


The August 5, 2009 minutes were approved by voice vote and without objection, on a motion made by Senator Boswell, seconded by Senator Pendleton.


The presiding chair invited Dr. Donald M. Miller and Dr. Robert T. Means, both representing the Kentucky Lung Cancer Research Program (KLRC), to address the committee.


Dr. Miller, Director of the Brown Cancer Center at the University of Louisville, began his testimony by indicating the program is collaboration between the two universities. He told the committee state support has been critical for the growth of the Brown Cancer Center and indicated state funds are used to leverage other finances.


The doctor told the committee the funding has been directed toward translation research, extending from the laboratory to the clinic. He then turned to some of the scientific projects funded by the KLRC, starting with a lung cancer “Manhattan Project” involving 5,000 current or former heavy smokers in Kentucky. Other work includes the development of a cervical cancer vaccine, research in a tobacco-based HPV vaccine developed at the Brown Cancer Center, a “suicide DNA sequence” project to develop a method to kill cancer cells. He mentioned the association with Advanced Cancer Therapeutics, which will allow the Brown Cancer Center to develop two-three new drugs per year, and the work being done by Brown and the Owensboro Cancer Research Center in the development of naturally produced pharmaceuticals.


Next, Dr. Means, Professor of Internal Medicine and former Interim Director of the Markey Cancer Center at the University of Kentucky, reported on the work at the center. As it aims for National Cancer Centers (NCI) designation, Markey has recruited Dr. B. Mark Evers as the new Markey executive director. Dr. Evers came from the University of Texas Medical Branch. Five faculty colleagues moved with him, according to Dr. Means.


Continuing, Dr. Means told the committee that KLRC funds, plus funds from the cigarette excise tax, are used to obtain additional NCI funding, which totaled $9 million in FY 2008. Other components of Markey’s program include: research in early detection and lung cancer prevention involving other health facilities, a pulmonary nodule study at UK, and lung cancer sample collection work. According to Dr. Means, the Kentucky Clinical Trial Network continues to expand, with centers in all congressional districts. He also mentioned the investigator-initiated research, another component funded by the KLCR.


The two doctors responded to several questions from committee members.


Dr. Miller explained to Co-chair Sims that the cervical cancer vaccine should be tested in people in 2010. He noted that drug development is complicated. If it works, it will be the first vaccine produced in plants.


Responding to Co-chair Gibson, Dr. Miller said one half of one cent tobacco tax generates about $2.5 million per year for each institution. Dr. Miller later said the tax revenue has been a “huge stimulus for both cancer centers.” Co-chair Gibson encouraged the physicians to continue trying to obtain additional tax funding.

Dr.  Means characterized the NCI funding received as federal money. Dr. Miller added that, typically, the state support received is used to undertake pilot projects that, in turn, generate enough data to merit the federal funding. The KLCR funding also supports infrastructure at the cancer centers, according to Dr. Means.


Dr. Miller responded to Representative Adams that incidents of cancer in the state vary from county to county, but in general the entire state has high smoking rates and a high number of incidents of lung cancer. He noted that youth smoking rates seem to be decreasing in the state.


Senator Boswell said he was proud to represent an area that is contributing to plant-based drug research. He also mentioned the change that was required in state law in the 1990s to allow tobacco tax funds to be used for lung cancer research.


As the testimony ended, Co-chair Gibson lauded the doctors for their work in helping cure cancer.


Next, Co-chair Gibson asked Mr. Roger Thomas, executive director of the Governor’s Office of Agricultural Policy (GOAP) to submit his monthly report to the committee. Accompanying him were Mr. Mike Judge, Director of Operations, and Mr. Joel Neaveill, Chief of Staff.


One state-funded project, Crystal Bridge Fish Farm LLC, prompted questions from Co-chair Gibson, Representative Comer, Representative Adams, Senator Pendleton, and comments from a legislative guest, Representative Fred Nesler.

The GOAP officials explained the rationale for the $95,800 grant/loan approved by the ADB. They said the project will allow producers in the Oldham County area to obtain tilapia fingerlings from a local source, rather than from out of state.


During testimony in response to legislators’ questions, Mr. Thomas said the board discussed the project twice, and some members expressed hesitancy. They said certain benchmarks that the applicant must meet were set after assessing how many tilapia local producers would purchase. A total of 14 producers wrote letters of support for the project, according to testimony.


Terms in the contract are standard, they told Representative Comer. They indicated the ADB and the Kentucky Agricultural Finance Corporation would have a lien on the company’s equipment.


Representative Nesler explained why the aquaculture industry has struggled in Kentucky and expressed his optimism the project would be successful.


In continuing discussion, the committee witnesses said tilapia can be found in groceries and restaurants in the state. As discussion ended, Senator Pendleton mentioned an effort in Christian County to attract a fish processing company.


Later, Senator Gibson asked about county participation in the Crystal Bridge project. GOAP staff responded initially that Oldham County had contributed funds. (GOAP staff corrected the record after the meeting to indicate the county would have $2,500 available, but had not contributed funds thus far.)


Eastern Kentucky University’s receipt of $220,000 in state and county funds for the evaluation of feedstock forages for livestock consumption and biofuel production prompted some discussion. Senator Boswell asked about coordination with other energy-related entities. Mr. Judge said the university has been in contact with the University of Kentucky and a forage and grasslands organization. The senator said he wanted to highlight the need to coordinate efforts so as to not duplicate the work at other institutions.


Mr. Thomas noted that the ADB funding was part of a $4.4 million project between EKU and General Atomics. Mr. Thomas noted some of the research at EKU will involve looking at algae as an energy source. Mr. Judge also mentioned research and field trials being undertaken in the state involving switchgrass. In turn, Senator Boswell discussed the energy work being done at the Center for Applied Energy Research at UK. He mentioned a recent symposium on algae.


Next, the GOAP staff members responded to Co-chair Sims’ questions about the Kentucky Center for Agriculture and Rural Development (KCARD) project to implement a 12-month program for the development of agribusiness entrepreneurs. Mr. Judge explained the project, which received $59,000 in funding, was an outgrowth of several groups expressing a need to help agribusiness entrepreneurs get started. KCARD would act as a catalyst in passing on business ideas.


Co-chair Sims questioned the idea of giving KCARD funds to study the issue for a year. But, according to Mr. Judge, KCARD would help link entrepreneurs with resource people in areas like developing a business plan or product labeling. The GOAP representatives clarified that the project would be statewide and not confined to KCARD’s home county, Hardin. They told the co-chair that KCARD offers assistance throughout the state in assisting agribusiness ventures.


            As the meeting continued, Representative McKee lauded the board for approving $75,000 in state and Harrison County funds for a farmer’s market shelter in Harrison County. The project will benefit that county, Representative McKee said.


            Responding to Co-chair Gibson, Mr. Judge said the farmer’s market funding varies from locale to locale, depending on the type project. Mr. Thomas said the board reserves the right to request a feasibility study for projects totaling over $100,000.


Co-chair Gibson said he would like to see farmers’ markets established on university campuses. Mr. Thomas responded they would welcome those type applications.


Next, they explained how the board came to the decision to approve $862,634 for the Kentucky Beef Network to implement several production and marketing programs for cattle producers and to provide educational programs to enhance profitability. They said the Beef Network would be asking for additional funds at a later date for an education component of the project.


During a discussion of denied projects, Co-chair Gibson asked if county councils ever approve projects, knowing that the board will deny them. The action is “rare,” but happens, Mr. Thomas said.


The denial of another project prompted a question from Senator Boswell. The applicant, Daviess County Soil Conservation District, had sought $10,000 in county funds to administer a youth conservation effort, part of which would have involved a Christmas tree planting project. GOAP staff had recommended no funding because of a lack of producer impact. Senator Boswell asked if there would there be a producer connection with the tree planting. Mr. Neaveill said there was no indication that the trees would be grown in Kentucky.


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