The 3rd meeting of the Interim Joint Committee on Agriculture and Natural Resources was held on Wednesday, September 8, 2004, at 12:30 PM, in the Club Lounge at the Kentucky Horse Park. Representative James Gooch, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Ernie Harris, Co-Chair; Representatives James Gooch, Co-Chair, and Roger Thomas, Co-Chair; Senators Vernie McGaha, Virgil Moore, Joey Pendleton, Damon Thayer, and Elizabeth Tori; Representatives Royce Adams, Adrian Arnold, Scott Brinkman, Hubert Collins, James Comer, Tim Couch, Mike Denham, Keith Hall, Charlie Hoffman, Thomas McKee, Charles E. Meade, Brad Montell, Fred Nesler, Don Pasley, Rick Rand, Brandon Smith, Jim Stewart, Tommy Turner, Ken Upchurch, Susan Westrom, and Brent Yonts.
Guests: Deputy Secretary Mark York and Joy Morgan, Environment and Public Protection Cabinet; Claria Horn-Shadwick, Becky Daft, and Gus Koch, Kentucky Equine Education Project, and Jeff Harper, Kentucky Farm Bureau.
LRC Staff: Tanya Monsanto, Biff Baker, Lowell Atchley, Hank Marks, Rhonda Carter, and Kelly Blevins.
Rep. Gooch thanked everyone for attending the meeting and introduced Rep. Hoffman. Rep. Hoffman thanked the members of the Kentucky Equine Education Program for their attendance and representation in the audience. Rep. Hoffman then introduced Mr. John Nicholson, Director of the Kentucky Horse Park. Mr. Nicholson thanked the committee members for holding the committee meeting at the Kentucky Horse Park. He described activities at the Kentucky Horse Park, like the Rolex 3-day event, that support the equine industry in Kentucky.
Sen. Thayer thanked Mr. Nicholson for making facilities at the park available to the committee. He commented that this committee meeting is necessary to focus more attention on the number one agricultural industry in Kentucky: horses.
Rep. Gooch asked for a motion to approve the minutes from the August 26, 2004 meeting. There was a motion and a second. The minutes were approved by voice vote. Then Sen. McGaha gave a report of the Rural Issues Subcommittee. He described the impact of Bovine Spongiform Encepalopathy (BSE's) and how it will change the disposal of animals in Kentucky. There was a motion and a second. The report was approved by voice vote. Then Rep. Westrom gave a report of the Horse Farming Subcommittee. Rep. Westrom stated that the subcommittee took a tour of the Kentucky Horse Park. There was a motion and a second. The Horse Farming Subcommittee was approved by voice vote. Then, Sen. Harris gave a report of the Natural Resources Subcommittee. He described the work of the Transmissible Spongiform Encepalopathy (TSE) Task Force. TSE's are a threat to livestock, wildlife, and public health because there is no cure. There was a motion and a second. The Natural Resources Subcommittee report was approved by voice vote.
Sen. Moore spoke and he described the interest in riders from other states who wish to participate in horse-related events in Kentucky. He said that Kentucky's equine industry is known throughout the United States.
Then Rep. Gooch asked representatives from the Environmental and Public Protection Cabinet (EPPC) to come to the table and discuss Executive Reorganization Order 2004-731. Deputy Secretary Mark York and Joy Morgan from EPPC discussed the reorganization.
Rep. Yonts asked why the Labor Department was separated from the Review Board and Mine Safety Commission. Mr. York stated the change was to elevate those entities to the Secretary's Office.
Rep. Yonts asked whether the separation creates inefficiencies. Mr. York said no it does not. It separates the appeals process. For example, the Mine Safety Review Commission has statutory responsibilities to hold meetings and a different appeals process.
Rep. Yonts asked where the Mine Safety Review Commission was formerly located. Mr. York stated that it was under the Public Protection Cabinet.
Rep. Thomas asked before reorganization, how many positions were in the three cabinets being combined by the reorganization order and how many there are today under the single cabinet.
Joy Morgan responded there are 3,200 positions available. That is the same number that existed when the three cabinets were separate. Today, there are approximately 2,800 positions filled. The cabinet is filling critical vacancies right now. The cabinet is also scaling back where certain positions have been abolished.
Rep. Yonts asked if there were critical vacancies in mine safety. He asked for a list of critical vacancies and where those vacancies are located. Ms. Morgan said she would provide the information on critical vacancies to the committee and that there are critical vacancies for mine inspectors.
Rep. Montell stated that the committee was frustrated when informed that many positions were in management but that service positions were left unfilled. Deputy Secretary York stated that the cabinet has filled service positions leaving management positions unfilled. There is a focus on service delivery positions first, then the cabinet will fill managerial positions. The cabinet is realizing savings under Ms. Morgan's office.
Rep. Montell said that he knew the cabinet was challenged by the need to improve service delivery and cut costs. Then there was a motion by Sen. Harris, seconded by Sen. Thayer to approve Executive Reorganization Order 2004-731. It was approved by voice vote.
Then, Ms. Claria Horn-Shadwick, Executive Director of the Kentucky Equine Education Project (KEEP) spoke. She discussed Kentucky's multi-breed horse industry describing the number of horses in Kentucky and the types of horses in Kentucky. Ms. Shadwick described the popular misconceptions about the equine industry in Kentucky and how those misconceptions have prevented the industry from maintaining a competitive edge in comparison with states like New York and Pennsylvania. Horse farming is a $4 billion dollar contribution to Kentucky's economy through wages, earnings, taxes, and support of related industries. Horse farming plays a vital role in Kentucky tourism, and it is a part of Kentucky heritage. Ms. Shadwick then discussed some of the incentive programs in other states that have caused many horse farmers to leave Kentucky. Kentucky is the only state with taxes on stud fees and other states do not tax feed and supplies. Currently KEEP does not have a legislative mission. The mission is educational, but the board will be looking at developing a legislative agenda.
Sen. Harris thanked Ms. Shadwick for her comments and then asked if New York purses were $40 million and how that figure compared to Kentucky's incentive programs. Ms. Shadwick stated that Kentucky has a Thoroughbred Development Fund which has an $8 to $9 million dollar purse.
Sen. Harris asked if there were fewer mares today. Ms. Shadwick said that to qualify for New Jersey's purse, the horse must be raised in New Jersey. For that reason horses sired in Kentucky will leave the state.
Sen. Harris asked if some states require the horse be born in that state. In other words the horse will be conceived in Kentucky but born elsewhere. He also asked if the reduction in the standard bred horse was due to artificial insemination (AI). Ms. Shadwick said that AI played a role but that it primarily had to do with incentives in other states.
Rep. Gooch noted that $40 million was the state subsidy of purses, incentives and awards in New York. Ms. Shadwick said yes.
Rep. Denham thanked KEEP for their presentation. He said that he has been in the horse farming business for years and that there is a problem of disincentives in the industry. Horse farmers leave the state to purchase feed and supplies. He encouraged the committee to seek solutions to the problem of disincentives.
Sen. Pendleton thanked KEEP for their presentation and their efforts to rebuild the industry. Rep. McKee stated that we need better information about incentives in other states. Rep. Westrom stated that the horse industry in Kentucky could quickly decline if something is not done to remove disincentives. One of the more difficult tasks is re-educating the public about the equine industry. Then Rep. Westrom asked about the impact of mare reproductive loss syndrome (MRLS). Ms. Shadwick stated that there were fewer foals and that impacted revenues and sales.
Rep. Brinkman said that he was concerned about the industry. States that have funded large purses and incentives have also expanded gaming. He stated he is unsure if Kentucky can match those states without it. Ms. Shadwick stated that expanded gaming would have a dramatic impact. KEEP does not have a legislative agenda. When the KEEP board meets, it will determine the industry's position on expanded gaming.
Rep. Brinkman stated that Kentucky's ability to generate significant new net revenue is limited. Rep. Gooch thanked Ms. Shadwick for her presentation and the audience for attending the meeting. Rep. Moore raised the importance of supporting a slaughterhouse in Kentucky. He said Kentucky is loosing the window of opportunity to support a slaughter plant.
There was a motion to adjourn. It was seconded. The committee adjourned and then toured Pennbrook and Springwood horse farms.