Call to Order and Roll Call
The 2nd meeting of the Tobacco Settlement Agreement Fund Oversight Committee was held on Monday, March 10, 2014, at 2:00 PM, in Room 129 of the Capitol Annex. Senator Paul Hornback, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Paul Hornback, Co-Chair; Representative Wilson Stone, Co-Chair; Senators Carroll Gibson, Jimmy Higdon, and Dennis Parrett; Representatives Tom McKee, Terry Mills, and Ryan Quarles.
Guests: Roger Thomas, Joel Neaveill, and Biff Baker.
LRC Staff: Lowell Atchley, Hope Bow, and Kelly Blevins.
The January 8, 2014 minutes were approved, without objection by voice vote, upon a motion by Senator Gibson and seconded by Representative McKee.
Governor’s Office of Agricultural Policy
Mr. Roger Thomas, Executive Director, and Mr. Joel Neaveill, Chief of Staff, Governor’s Office of Agricultural Policy (GOAP), testified about project funding decisions made by the Agricultural Development Board (ADB) during its January and February meetings.
Mr. Neaveill summarized funding allocations from the February ADB meeting under the County Agricultural Improvement (CAIP), Deceased Farm Animal Removal Program, and Shared-use Equipment programs. Following the overall review, some of the services offered and equipment acquired under programs Deceased Farm Animal Disposal and Shared-use Equipment programs were explained.
Representative McKee commented that he was encouraged with
the Deceased Farm Animal Disposal programs that are able to operate a free
service to producers.
Senator Parrett echoed Representative McKee’s remarks and expressed the success
in Hardin County. Senator Gibson encouraged GOAP officials to work more closely
with the Transportation Cabinet to save resources in this area.
Mr. Neaveill provided details on the statewide and regional projects, which included: Metcalfe County 4-H Council, Incorporated, approved for $2,750 in Metcalfe County funds for its 4-H Country Ham project where youth will learn about the history, process, and science of curing hams, as well as food safety and meat production. Menifee County 4-H was approved for $1,400 in Menifee County funds for a ham curing facility to store youth ham projects.
The committee next received a status report on the Master Settlement Agreement (MSA) litigation pending in Franklin Circuit Court. The status report dealt with the ramifications of an arbitration panel's ruling last fall that Kentucky and other states in 2003 failed to diligently enforce escrow provisions involving tobacco companies not participating in the MSA. The adverse ruling could mean a future MSA payment reduction of an estimated $45-$50 million.
Mr. Thomas explained the Office of the Attorney General has filed two motions – one calling on the court to set aside the ruling and another to set aside an earlier settlement agreement involving tobacco companies and several states. The court had previously heard arguments on the motions.
Mr. Thomas explained it may take some time for the Franklin Circuit Court to issue rulings. Because the arbitration ruling could affect the 2014 MSA payment, the Franklin Circuit Court has been asked to stay its decision this year. It was mentioned in the meeting that Kentucky usually receives its MSA payment around April 15.
Responding to Co-Chair Hornback, Mr. Thomas indicated that legal work on the case is essentially being done by outside council.
In a response to Senator Gibson, Mr. Thomas said the original MSA, agreed to in 1998, contains the guidelines on how enforcement was to work. According to his testimony, it is unclear what "diligent enforcement" means.
Mr. Thomas told Senator Hornback that in 2003, not all the legislation ultimately needed for MSA enforcement had been passed.
Documents distributed during the committee meeting are available with meeting materials in the LRC Library. There being no further business, the meeting was adjourned.