Call to Order and Roll Call
The meeting of the Tobacco Settlement Agreement Fund Oversight Committee was held on Wednesday, October 7, 2015, at 10:00 AM, in Room 129 of the Capitol Annex. Representative Wilson Stone, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator C.B. Embry Jr., Co-Chair; Representative Wilson Stone, Co-Chair; Senators Carroll Gibson and Robin L. Webb; Representatives Mike Denham, Tom McKee, Terry Mills, Ryan Quarles, and Jonathan Shell.
Guests: Mr. Roger Thomas, Mr. Joel Neaveill, Mr. Bill McCloskey, Ms. Angela Blank, and Dr. Luther Hughes, Governor’s Office of Agricultural Policy; Ms. Kimberly Richardson and Ms. Johnna McHugh, Division of Conservation; and Ms. Sandy Gruzesky, Division of Natural Resources.
LRC Staff: Lowell Atchley, Kelly Ludwig, and Kelly Blevins.
The September 2, 2015 minutes were approved, without objection, by voice vote, upon a motion by Senator Embry 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 (GOAP), testified about project funding decisions made by the Agricultural Development Board (ABD) during its September meeting.
GOAP officials summarized funding allocations for the previous month under the County Agricultural Improvement (CAIP), Deceased Farm Animal Disposal Assistance, and On-Farm Energy programs.
Before beginning, Mr. Thomas brought to the attention of members, GOAP’s annual report for the 2015 fiscal year.
Mr. Neaveill reviewed the $1.64 million in CAIP approvals from the September meeting, and the single shared-use approval for Monroe County. Responding to Co-Chair Stone, Mr. Neaveill indicated that some counties trade in their old farm equipment at times for newer implements. The representative pointed out that the shared use program, whereby counties hold pieces of farm equipment and rent to farmers, is an example of another area where the agricultural development funds are beneficial.
The on-farm energy allocations totaling $180,197 were committed to 21 farm operations. According to Mr. McCloskey, the cost-share program provides an incentive for farmers--many of them dairy and poultry operations--to invest in technology that will save energy over a period of years.
Responding to Senator Gibson, Mr. Thomas described a conversation he had with the State Veterinarian regarding preparedness to deal with the avian flu that has struck poultry flocks throughout the Midwest. While the senator had mentioned egg producers, Mr. McCloskey indicated there are more broiler producers in Kentucky than egg producers.
GOAP officials reviewed two projects approved for funding during the previous Agricultural Development Board meeting: The Boys and Girls Club of Franklin-Simpson, $2,650 for a gardening project, and Woodford County High School, $5,000 for shop equipment and tools the high school’s agriculture department. Representative Stone noted the importance of the Franklin-Simpson Boys and Girls Club in creating learning opportunities for young people.
Representative Denham thanked the GOAP representatives for the Kentucky Agricultural Finance Corporation loan that formed part of the financial commitment for a new welding institute in Fleming County.
Responding to Senator Gibson, Mr. Thomas reviewed the status of Master Settlement Agreement funding coming to the state as a result of a settlement between the state and tobacco companies in June 2014. At that time, Kentucky received $57.2 million more than budgeted for fiscal years 2015 and 2016. During the past legislative session, the General Assembly passed House Bill 510 that amended the previous budget and restored tobacco settlement funding to agencies that were facing shortfalls. According to Mr. Thomas, the legislation appropriated an additional $5 million to the Kentucky Agricultural Finance Corporation for agriculture-related loans and budgeted $6 million for the Division of Conservation’s soil erosion and water quality cost share program.
Approximately $7 million of remaining tobacco settlement funds have not been spent and are to be held in reserve as per the budget bill. Mr. Thomas indicated the state is anticipating $16 million in additional unbudgeted funds by virtue of the 2016 Master Settlement Agreement (MSA) payment. He expressed a hope that the formula for allocating the MSA funds in the state will continue to be observed.
Division of Conservation
Ms. Kimberly Richardson, Director of the Division of Conservation, reviewed the soil erosion and water quality cost share program which receives tobacco settlement budgetary appropriations.
Ms. Richardson reviewed the history of the program, its purpose, and implementation. She highlighted the funding, pointing out the program received $11 million in FY 2015-2016. The speaker discussed program implementation in 2015 and 2016, starting with technical review of applications at the conservation district level and culminating with the potential implementation of practices by farmers starting in February 2016.
Ms. Richardson reported on two programs, the Green River Conservation Reserve Enhancement Program, which began in 2001 and consists of 100,000 acres in the Green River area of the state, and the Regional Conservation Partnership Program, a newer program involving several commodity groups, agencies, and universities that will focus on nutrient management for livestock producers. She described three projects that benefit, in part, from the federal Nonpoint Source Management Program (the 319 program).
Ms. Richardson said that best management practices are routinely evaluated and updated, as is the application process for landowners seeking soil erosion and land stewardship cost share funds.
In answer to Senator Webb, Ms. Richardson described how her agency works with the Natural Resource Conservation Service in dealing with nutrient management issues involving livestock. She discussed the aspect of not punishing farmers but instead working to institute good land stewardship practices. The Agriculture Water Quality Authority has input in the process as well.
According to Ms. Richardson, in response to Representative McKee, some counties have their own cost share erosion and land stewardship programs. Responding to Co-Chair Stone, she explained that, apart from tobacco settlement funds, some conservation districts receive local tax revenues and are then able to undertake local programs.
Documents distributed during the meeting are available with meeting materials in the LRC Library. There being no further business, the meeting was adjourned.