Call to Order and Roll Call
The meeting of the Tobacco Settlement Agreement Fund Oversight Committee was held on Wednesday, August 6, 2014, at 10:00 AM, 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, Dennis Parrett, Robin L. Webb, and Whitney Westerfield; Representatives Mike Denham, Terry Mills, Ryan Quarles, and Jonathan Shell.
Guests: Mr. Roger Thomas, Mr. Joel Neaveill, Mr. Bill McCloskey, and Mr. Biff Baker, Governor’s Office of Agricultural Policy; Ms Carrie Banahan, Office of Kentucky Health Benefit and Health Information Exchange; and Ms. Beth Jurek, Office of Policy and Budget, Cabinet for Health and Family Services.
LRC Staff: Lowell Atchley, Kelly Ludwig, and Kelly Blevins.
The July 8, 2014 minutes were approved, without objection by voice vote, upon a motion by Senator Parrett and second by Representative Mills.
Governor's Office of Agricultural Policy
Mr. Roger Thomas, Executive Director, Mr. Joel Neaveill, Chief of Staff, and Mr. Bill McCloskey, Director of Financial Services, Governor's Office of Agricultural Policy, summarized the project funding decisions by the Agricultural Development Board (ABD) during its July meeting.
Mr. Neaveill discussed tobacco settlement funding allocations for the previous months under the County Agricultural Improvement (CAIP), Deceased Farm Animal Disposal Assistance, and Shared-use Equipment programs.
After summarizing some CAIP funding amendments that allowed for additional funding, Mr. Neaveill responded to Co-Chairs Stone and Hornback that money allowed came from newly received 2014 tobacco settlement funds.
Mr. McCloskey and Mr. Neaveill summarized the state and regional projects that received funding approvals. Those were: Beef & Bacon Custom Processing LLC, up to $100,000 in state and $100,000 in multi-county funds to construct a 4,000-square-foot animal processing facility in McLean County; Louisville/Jefferson County Metro Government, $120,000 in state funds for a two-year continuation of the Louisville Farm to Table program; Owensboro Community and Technical College, $7,500 in Daviess County and $4,583 in Hancock County funds to construct a 40-by-80-foot facility to house and handle livestock as a part of a newly established veterinary technician training program; Green River Area Beef Improvement Group Inc., $20,000 in Daviess County funds to provide a youth cost-share program for agricultural production projects.
Mr. Thomas said that the Beef & Bacon facility would be similar to other livestock processing concerns that had received funding in the past. Responding to committee members' questions, Mr. McCloskey said the processor will offer some limited USDA meat inspection.
Representative Stone said it would be ideal if the facility could process and market its products on the site, which is done at some other processing sites in the state. Senator Parrett concurred with Representative Stone and asked if the tobacco funds should be used to process meat for individual customers' own use. Mr. Thomas said that an overriding goal of the program is to increase net farm income. Senator Parrett said the USDA inspection might be part of the criteria for approving tobacco funds for meat processing facilities.
Responding to Senator Gibson, Mr. Thomas listed some other existing meat processing facilities that had sought tobacco settlement funds to improve or upgrade their operations.
Responding to Representative Stone, Mr. Thomas said an earlier feasibility study centering on the possibility of a meat jerky plant in the Somerset area never resulted in the construction of a jerky plant. The study was later offered to other communities. Senator Gibson said that such projects should be undertaken with market certainty, not speculation.
Commenting on the Owensboro Community College veterinarian technician project, Co-Chair Stone said people in that area were excited about the potential for the training program.
Mr. Neaveill described at length the Louisville/Jefferson County Metro Government Farm to Table program. A regionally-focused study would will be undertaken to determine trends in food production and market development. The program has a goal of reducing or eliminating the need for future agriculture development funds.
Co-Chair Hornback commented that it was good the program is moving toward self-sustainability. Responding to Representative Mills, Mr. Thomas said that public perception or acceptance of a project can be meaningful.
Responding to Representative Denham, Mr. Thomas discussed the GOAP outreach that has been undertaken and that is needed still in parts of eastern and northeastern Kentucky. He said that GOAP staff would be available to accompany legislators who wish to meet with constituents regarding the availability of the tobacco settlement funds.
Kentucky Health Care Improvement Authority
Ms. Carrie Banahan, Office of Kentucky Health Benefit and Health Information Exchange, and Ms. Beth Jurek, Office of Policy and Budget, Cabinet for Health and Family Services, provided the annual report on the Kentucky Health Care Improvement Authority (HCIA). HCIA monitors four programs receiving tobacco programs: the former Kentucky Access high-risk health insurance, Kentucky Lung Cancer Research, Tobacco Use Prevention and Cessation, and Kentucky Agency for Substance Abuse Policy programs, all of which report separately to the committee.
Regarding the closeout of the former Kentucky Access program, Ms. Banahan said that, under the federal Affordable Care Act, as of January of this year, insurers could no longer deny health insurance coverage to high risk individuals, thus insurers were given the option of enrolling in the state's Kynect program.
A total of 3,546 members were enrolled in Kentucky Access when it closed in December 2013; 2,584 of those enrolled in the Kynect program. Kentucky Access will continue to pay "run-out claims" for services from six to 12 months after medical treatments. Kentucky Access will likely cease all operations in early in 2015.
Ms. Banahan and Ms. Jurek talked about the individual HCIA programs, program accomplishments, and the role of the HCIA. Ms. Jurek reviewed how tobacco settlement funds were used by various programs. Lingering challenges are the tobacco appropriations decreases that are occurring and the ability to carry the funds forward into the next fiscal year.
Responding to Senator Hornback, Ms. Jurek said there could be about $12 million in tobacco funds left in Kentucky Access accounts. The funds will be available for the General Assembly to appropriate.
Responding to Senator Hornback, Ms. Jurek said she believed the smoking cessation treatment offered by the Prevention and Cessation Program was in the form of nicotine patches.
Responding to Representative Denham, Ms. Jurek said that drug addiction treatment clinics contemplated for communities primarily fall under the jurisdiction of the federal Drug Enforcement Administration. No tobacco funds were used for the clinics.
In a response to Representative Stone, Ms. Banahan said the fewer number of people enrolling in Kynect versus Kentucky Access in late 2013 may have been attributable to people enrolling in Medicare or seeking insurance outside the exchange.
Co-Chair Stone mentioned the recent news reports about serum derived from modified tobacco plants being used on persons infected by the deadly Ebola virus. The tobacco plants were grown at Kentucky Bioprocessing in Owensboro.
Documents distributed during the committee meeting are available with meeting materials in the LRC Library. There being no further business, the meeting was adjourned.