Call to Order and Roll Call
The 4th meeting of the Interim Joint Committee on Economic Development and Tourism was held on Thursday, October 15, 2015, at 11:00 AM, at Jim Beam American Stillhouse, Clermont, KY. This was a joint meeting with the Interim Joint Committee on Labor and Industry. Senator Alice Forgy Kerr, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Alice Forgy Kerr, Co-Chair; Representative John Short, Co-Chair; Senators Perry B. Clark, Carroll Gibson, Ernie Harris, Jimmy Higdon, Reginald Thomas, and Mike Wilson; Representatives Lynn Bechler, George Brown Jr., Larry Clark, Hubert Collins, Leslie Combs, Tim Couch, Mike Denham, Jeffery Donohue, Myron Dossett, Richard Heath, Dennis Horlander, Cluster Howard, James Kay, Kim King, Martha Jane King, Brian Linder, Tom McKee, Terry Mills, David Osborne, Ruth Ann Palumbo, Dean Schamore, Arnold Simpson, Fitz Steele, Wilson Stone, Russell Webber, and Jill York.
Guests: Melanie Roberts, Judge Executive, Bullitt County; Jerry Summers, Director of Community Relations, Beam Suntory; Kristen Meadors, Director of Governmental and Regulatory Affairs, Kentucky Distillers Association; Representative Marzian; Randy Strobo, Attorney, Downey Strobo PLLC; Johnny Miller, Founder, Earthwell Energy Management Inc.; Chris Woolery, Program Coordinator, How$martKY; Josh Bills, Project Coordinator, Energy Efficient Enterprises; Eric Dixon, Coordinator, Appalachian Citizens Law Center; Senator Seum, Majority Caucus Chair and Senator Reginald Thomas.
LRC Staff: John Buckner, Lou DiBiase, and Ashlee McDonald.
Minutes
A motion by Representative Clark, seconded by Representative York, to approve the minutes of the September 17, 2015 meeting carried by voice vote.
Kentucky’ Signature Industry Update
Jerry Summers, Director of Community Relations, Beam Suntory, gave an overview of Beam Suntory. Beam Suntory is the world’s third largest distilled spirits company, and Jim Beam is the number one selling Kentucky bourbon in the world. Beam Suntory has 329 companies worldwide, over 37,000 employees, and over $20 billion in sales, of which 36 percent are generated by alcohol sales. Jim Beam bourbon accounts for sales of over 7 million cases to 130 countries.
Tourism plays a vital role in Jim Beam’s brand development. The Jim Beam American Still House, Claremont, Kentucky, opened in September 2012 with a $20 million investment. The facility alone hosts over 135,000 visitors annually, and for many visitors is the starting point of the Kentucky Bourbon Trail. A companion facility – the Jim Beam Urban Still House – was opened in Louisville on October 1, 2015. Located on 4th Street Live, it represents a $5.2 million investment, and will capitalize on the 4 million annual visitors to Louisville’s 4th Street Live area.
Mr. Summer emphasized the importance of the Highway 245 tourism corridor, which is the official trailhead of the Kentucky Bourbon Trail. It sees over 200,000 visitors annually, and is the location for the Bernheim Forest, the Four Roses distillery, the Forrest Edge Winery, and the R.J. Corman Dinner Train.
Mr. Summers explained that fair alcohol beverage control regulations that help facilitate tourism development, maintaining state advertising funds for travel and tourism promotion, and the continued support of Highway 245 redesign are the industry’s legislative priorities.
Kristen Meadors, Director of Governmental and Regulatory Affairs, Kentucky Distillers Association, explained several way that Kentucky Distillers can remain competitive. An economic impact study shows that bourbon is now a $3 billion dollar industry. The work force has doubled in the last two years, the number of distilleries has tripled and it has produced a $1.3 billion dollar capital investment. KDA created the Kentucky Bourbon Trail in 1999 to highlight the bourbon industry. In 2012, KDA launched the Kentucky Bourbon Trail Craft Tour to showcase Kentucky’s micro distilleries, becoming the first state in the country to have such a tour. Ms. Meadors stated that although Kentucky is well known for its bourbon, there are many challenges facing distilleries. Legislators can help improve the tourism aspect of Kentucky bourbon by allowing distillers to sell by the drink, expand bottle limits for visitors, increase sample sizes, authorize local option precinct elections for distilleries and permit the sale of antique spirits at retail. Ms. Meadors emphasized to the committee that these are simple changes that require no additional funding. The tourism modernization will generate more than $2 million in annual revenue according to University of Louisville’s Urban Studies Institute.
Senator Seum, Majority Caucus Chair, Kentucky Senate, welcomed the committee to his district and expressed his support for repealing the 6 percent sales tax that was implemented for alcohol sales.
Responding to a question from Representative Clark, Ms. Meadors stated that the Kentucky Distillers Association has prioritized its requests for legislative help. The KDA has also looked at other states for examples on improving the bourbon industry.
In response to Representative Webber, Ms. Meadors stated that on average, customers spend about $1,000 in merchandise, product, and rental car fees, among others, in completion of the Kentucky Bourbon Trail.
In response to Representative McKee regarding agriculture and its relation to Kentucky Bourbon, Ms. Meadors explained that in the KDA Economic Impact Study, due to funds from the Kentucky Agriculture Development fund, Kentucky distilleries are using 40 percent of grains from Kentucky.
In response to Representative DuPlessis, Mr. Summers explained that if the ABC regulations are made equal for the bourbon industry, the bourbon industry revenue will continue to rise.
In response to Representative Kay, Ms. Meadors explained that along with the Kentucky Bourbon Trail and Kentucky Bourbon Trail Craft Tour, the distilleries also offer activities such as the Great Bourbon Chase in hopes of attracting a younger generation.
2015 House Bill 229 – An act relating to economic development
House bill 229 creates new sections of KRS Chapters 278 to require retail electric suppliers to use increasing amounts of renewable energy; require retail electric suppliers to take energy-efficiency measures and implement energy-efficiency programs that increase energy savings over a period of time; provide for alternative compliance plans for public utilities who fail to meet renewable energy or efficiency requirements; define renewable energy; specify reporting requirements to the Public Service Commission regarding progress in diversifying energy sources and energy savings; require the Public Service Commission to develop tariff guidelines for purchase of renewable power.
Randy Strobo, Johnny Miller, Chris Woolery, Josh Bills, and Eric Dixon provided their examples and testimonials of the success while using or installing energy efficient devices. Each presenter expressed support for rural electric companies to offer energy efficient options.
Senator Reginald Thomas expressed his support for House Bill 229 and implementing energy efficient options across Kentucky.
There being no further business to come before the committee, the meeting was adjourned at 12:45 p.m.