Tobacco Settlement Agreement Fund Oversight Committee




<MeetMDY1> September 7, 2011


Call to Order and Roll Call

The<MeetNo2> meeting of the Tobacco Settlement Agreement Fund Oversight Committee was held on<Day> Wednesday,<MeetMDY2> September 7, 2011, at<MeetTime> 10:00 AM, in<Room> Room 129 of the Capitol Annex. Senator Paul Hornback, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Paul Hornback, Co-Chair; Representative Wilson Stone, Co-Chair; Senators Carroll Gibson, David Givens, Vernie McGaha, and Joey Pendleton; Representatives Royce W. Adams, James R. Comer Jr., Tom McKee, Fred Nesler, and Tommy Turner.


Guests: Joel Neaveill, Angela Blank, Jennifer Hudnall, and Christi Marksbury, Governorís Office of Agriculture Policy; Debby Milton and Lane Gould, Kentucky Infrastructure Authority.


LRC Staff: Lowell Atchley, Stefan Kasacavage, and Kelly Blevins.


The August 3, 2011, minutes were approved, without objection, by voice vote, upon motion by Senator Vernie McGaha and second by Senator Joey Pendleton.


Prior to receiving the monthly report from the Governorís Office of Agricultural Policy, committee members discussed the plight of the dairy industry in Kentucky and the need for economic incentives or legislation that would be beneficial for the dairy industry.


Governorís Office of Agricultural Policy

Mr. Joel Neaveill, Chief of Staff, Governorís Office of Agricultural Policy (GOAP) presented that agencyís report of project funding decisions made by the Agricultural Development Board (ADB) in its previous meeting in the absence of Mr. Roger Thomas, Executive Director.


Mr. Neaveill reviewed funding under the County Agricultural Improvement and Deceased Farm Animal Disposal Assistance programs from the previous month.


ADB-approved projects presented for review included: Gallrein Farms Inc., Shelby County, which received $150,000 in agricultural development funds to expand a retail and greenhouse operation; Nelson County Fiscal Court, $30,000 to help buy a truck that will be used in the countyís dead livestock removal program; Owen County 4-H Club Council, $20,000 to sponsor a youth livestock cost-share program; and Wolfe County Fiscal Court, $350,000 in agricultural development funds to help develop a United States Department of Agriculture-certified meat processing facility and retail distributorship. Mr. Neaveill detailed reasons the board denied funding for two projects, Franklin-Simpson Industrial Authority, which sought $15,000 in agricultural development funds to create an entrepreneurial resource center, and Destiny Health Trends Network, which requested $150,000 to help develop an agriculture-related television series.


Co-chair Hornback indicated the Gallrein project would benefit the community, particularly farmers who supply farm products to the company.


Responding to Co-chair Stone, Mr. Neaveill said he would mention a suggestion to the board that stronger financial security be required for cost reimbursement grant recipients, should they fail to refund pro-rated grant amounts. Gallrein received a cost reimbursement grant. Co-chair Hornback said he recalled the Department of Labor took a lien on property involved in forgivable loan situations.


The Wolfe County project prompted several questions and comments. Responding at various times to Co-chair Hornback, Senator Pendleton, Senator Givens, Representative McKee, and Senator McGaha, Mr. Neaveill commented on the environmental permitting timetable, the status of acquisition of additional funding, how the meat processing will be approached, sources for the livestock that will be processed at the plant, the regional impact of the project, the development of the business plan, market surveys, and multicounty involvement in the project.


One of the projects denied funding, Destiny Health Trends Network, prompted additional discussion as well. Mr. Neaveill responded to questions and comments from Co-chair Hornback, Senators Givens and Pendleton, and Representatives
Adams, McKee, and Stone, about the need for the agriculture industry to explain itself to the public via the media, the status of a GOAP plan to develop a public relations, marketing, and communications plan on agriculture and the caution that should be exercised in the development of the plan, the involvement of the private sector in funding development of an agriculture public relations plan, and assistance from other state agencies.


Prompted by questions from Senator Givens, the committee discussed with Mr. Neaveill the status of the planned Kentucky Agriculture Heritage Center. According to the discussion, the board of directors for the proposed center is looking for a new site for the museum, with word that an intended donation of 50 acres for the museum in Mercer County will not materialize. Mr. Neaveill indicated that a $10 million bond issuance, to be repaid with future tobacco settlement funds, is still in place. Members talked about the potential location for the museum, with Senator Pendleton suggesting that a site near Frankfort would be ideal because the state capital also is the locale for several historic buildings and sites.


Kentucky Infrastructure Authority

††††††††††† The committee received a report Ms. Debby Milton, a Financial Analyst with the Kentucky Infrastructure Authority, who updated the panel on that agencyís use of tobacco settlement funds for rural water and wastewater projects.


††††††††††† In her remarks to the committee, Ms. Milton discussed KIA loan programs, grant amounts, how tobacco settlement funds are used, and examples of unique projects in the state. Ms. Milton also discussed future funding needs in light of project rankings undertaken in regions of the state.


††††††††††† Senators Pendleton, Givens and Hornback, and Representatives Stone and McKee commented on the work that KIA is doing to expedite planning and funding for the rural water and wastewater projects. The legislators talked about the importance of the tobacco settlement funds in the utility extensions.


††††††††††† Documents distributed during the committee meeting are available with meeting materials in the LRC Library. The meeting adjourned at approximately noon.