Tobacco Settlement Agreement Fund Oversight Committee





<MeetMDY1> October 30, 2013


Call to Order and Roll Call

The<MeetNo2> meeting of the Tobacco Settlement Agreement Fund Oversight Committee was held on<Day> Wednesday,<MeetMDY2> October 30, 2013, at<MeetTime> 9:45 AM (CDT), in Ballroom A and B of the Sloan Convention Center, Bowling Green. Representative Wilson Stone, Co-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, Jimmy Higdon, Dennis Parrett, Robin L. Webb, and Whitney Westerfield; Representatives Tom McKee, and Terry Mills.


Legislative Guests:  Representatives Jim DeCesare and Richard Heath.


Guests: Mr. Roger Thomas and Joel Neaveill, Governor’s Office of Agricultural Policy; Mr. Sam Moore and Mr. Wayne Mattingly, Agricultural Development Board; Ms. Lindie Huffman, Extension Agent, Pendleton County; Mr. Matt Gajdzik, Shelby County Council Member; Ms. Lindsay Phillips, Program Administrator, Mason/Bracken Counties, and Ms. Penny Warwick, Program Administrator, Warren County.


LRC Staff: Lowell Atchley, Kelly Ludwig, and Kelly Blevins.


Minutes of the October 2, 2013 meeting were approved, without objection, by voice vote upon motion by Senator Parrett and second by Senator Hornback.


Governor’s Office of Agricultural Policy

Appearing in a meeting conducted in conjunction with the 2013 Governor’s Office of Agricultural (GOAP) Conference in Bowling Green, Mr. Roger Thomas, GOAP Executive Director, discussed the history of the tobacco settlement legislation in 2000 that led to the establishment of the committee, Agricultural Development Board, and the county agricultural development councils.


Mr. Thomas and Mr. Joel Neaveill, GOAP Chief of Staff, gave a report on the County Agricultural Investment (CAIP) and Shared-use Equipment programs approved for funding during the previous day’s ADB meeting.


Responding to Senator Parrett’s question about only 75 counties having functioning CAIP programs in 2013, Mr. Neaveill explained that some county councils may use their funds in other endeavors or may be letting their limited funds build up for use in subsequent years.


During the discussion, Senator Webb requested a breakdown of counties’ use of the local funds.


Panel Discussion

Next, the committee heard a panel discussion that involved two board members, Mr. Sam Moore and Mr. Wayne Mattingly, who spoke first, and four people representing facets of the agricultural development program at the county level: Ms. Lindie Huffman, Extension Agent, Pendleton County; Mr. Matt Gajdzik, Shelby County Council Member; Ms. Lindsay Phillips, Program Administrator, Mason/Bracken Counties, and Ms. Penny Warwick, Program Administrator, Warren County, whose remarks came later.


Responding to Co-Chair Stone, the board members described their viewpoint in considering funding requests. Mr. Moore said that he looks at the number of people who could be affected. He mentioned an early vision of food processing plants that would involve numerous vegetable producers. Mr. Mattingly observed that the board, in pondering its decisions, relies on the recommendations of county councils. Mr. Moore added that applicants should have “skin in the game,” paraphrasing a former Governor.


Responding to Senator Gibson, Mr. Thomas talked about the future of appropriations for the Agricultural Development Fund. He mentioned the general decline nationwide in smoking rates, which would affect future Master Settlement Agreement (MSA) payments by tobacco companies. Also, the state could be facing an immediate downturn in MSA payments because of an arbitration panel’s ruling that Kentucky and several other states were lax in enforcing certain provisions of the MSA, according to Mr. Thomas, who discussed the ruling at length in the committee’s October 2 meeting.


During the discussion about potential declines in tobacco settlement funding, Senator Webb–alluding to the significance of tobacco production on her region’s economy prior to the tobacco settlement in the late 1990s–remarked that one of her concerns is that the northeast part of the state may be left out. She urged that the board be mindful of the funds that need to be returned to those impacted counties. Mr. Moore responded that the board would welcome project applications from that region and has tried to elicit applications from people in the area. Senator Webb urged creativity to enable applicants to apply for the funds.


The committee heard from the four people involved with facets of the tobacco settlement program at the local level. The presenters talked about trends in their counties, popular programs, judging and funding applicants.


During the discussion, Co-Chair Stone mentioned the progress made in beef cattle production, which he attributed to the tobacco funds.


Representative McKee talked about the tobacco settlement legislation in 2000, House Bill 611, and recalled that those involved had discussed the impact the program would have on county agricultural extension agents. He also cited the importance of the county councils and pointed out that, in most cases, if a project is denied at the board level, it carried a low priority from the local level.


            Responding to Representative McKee, Ms. Huffman talked the effort to develop a farmers’ market in Pendleton County that can serve as a source for fresh produce.


            Co-Chair Hornback asked the panel how much tobacco dependency, or an involvement in current or past tobacco production, is a factor in judging the merit of applications. Ms. Phillips said there are some tobacco dependency questions on the application. According to Senator Hornback, it has been over ten years since the state tobacco settlement program began. Younger people are beginning to farm. Responding to Senator Hornback, who asked if the tobacco dependency criteria would cease to be important, Mr. Mattingly indicated the board looks at the funds in terms of economic development and that tobacco dependency is considered but may not be a driving factor in the awarding of funds.


            Senator Webb pointed out that former farmland, which is now lying fallow, should be revitalized somehow.


            Responding to Senator Parrett, Ms. Huffman described the Shared-Use Equipment Program in Pendleton County. She also talked about the growing awareness of the tobacco settlement program among farm producers in her area.


            Responding to Co-Chair Stone, Mr. Gajdzik described how the county council in Shelby County decides funding applications. All council members are farm producers. There are times, usually when the county is running short of funds, when the council may favor but not grant funding for some applications.


            Representative Stone pointed out that commodity organizations, Farm Bureau, and others do a good job of publicizing the tobacco settlement program.


            Mr. Thomas mentioned the Kentucky Agricultural Finance Corporation, which loans the tobacco settlement funds to farmers and agribusiness concerns. He complimented the work of extension agents. He commented on the corporation’s efforts to grant funds for projects in eastern Kentucky, mentioning in particular a meat processing facility in Wolfe County.


            Mr. Neaveill said that the entire tobacco settlement program involves over a thousand people who volunteer their time in all 120 counties.


Documents distributed during the committee meeting are available with meeting materials in the LRC Library. The meeting adjourned at approximately 11:30 a.m. (CDT).