Lawmakers express concerns over proposed increase in food manufacturing feesKAM
Rep. Joe Graviss, D-Versailles, expresses his concern over proposed permit fee increases for food manufacturers that he believes could hurt small businesses and farmers. (Photo: LRC)
UPDATE – Agriculture Commissioner Ryan Quarles released a statement following the meeting of the committee:
“Earlier today, bipartisan members of the Interim Joint Committee on Agriculture raised questions about an extremely high fee increase by the Beshear Administration’s Food Safety Branch on food manufacturers during the middle of the pandemic. I believe I was the first person to bring this issue to the Committee’s attention a month or two ago. According to media reports from the Ohio Valley Resource, the proposed fee increase could have increased fees by 1,000% on some Kentucky food manufactures, many of whom are farm families. As I stated in a letter to the Department on August 14, not only would this fee increase kill small businesses, but it would also increase the cost of food and put it out of reach for our low-income friends and neighbors. I am glad the Department for Public Health is revisiting this matter and I look forward to reviewing the new draft.”
FRANKFORT— Lawmakers spoke out against proposed changes to the permit and fee structure for food establishments and food manufacturing businesses during today’s meeting of the Interim Joint Committee on Agriculture.
“I’m extremely concerned about our small farmers,” Rep. Joe Graviss, D-Versailles, said.
In June, the Kentucky Department for Public Health filed the proposed Kentucky Administrative Regulation changes. The public comment period for the proposal ended Aug. 31.
According to Julie Brooks, regulation coordinator for the Department for Public Health, the department received more than 400 comments on the proposed regulation changes with most of the submissions expressing concern over the increase in fee amounts.
Originally, the new fee structure was based on risk of the food being produced or stored instead of square footage of the facility. Brooks said after reviewing the submitted comments, a fee structure based on risk and income is in the works.
A suggested revision to the original proposal would require food manufacturers whose income is under $100,000 and are at the highest risk level to pay $400 per year. Currently facilities 1,000 square feet and under pay $120 while the larger facilities pay up to $600 per year.
The suggested revisions to the original proposal show some food manufactures, depending on income and risk level, could pay hundreds more in fees in 2021 if the changes are approved.
“I think it goes against the spirit and the intent of (House Bill) 129 to protect our farmers,” Graviss said. “Some of the fees they’re going to experience, the increase is more than their income for the year.”
HB 129, dubbed a “public health transformation” by lawmakers, was an effort to improve Kentucky’s public health system through new funding models and operational changes. The bill passed early on in the 2020 legislative session. The bill had bipartisan support.
Brooks said the bill allows for these fee increases. Some lawmakers, such as committee co-chair Sen. Paul Hornback, R-Shelbyville, and Rep. Nancy Tate, R-Brandenburg, questioned whether the Department for Public Health of was taking advantage of the fee increase perimeters set by HB 129.
Sen. Stephen West, R-Paris, called the proposed fee increase “poorly conceived.” Other lawmakers pointed out the proposal comes at a time when many small businesses are facing financial hardship due to the COVID-19 pandemic.
Rep. Brandon Reed, R-Hodgenville, called the income tiers “unfair.”
“That tier two seems like a wide swath there between $100,000 plus up to $1 million,” Reed said, adding it is not fair for someone making $100,000 to be held to the same standard as someone making $990,000.
Brooks said she also had concerns about the structure of tier two and that she would follow up with staff.
While the majority of the concerns from lawmakers involved food manufacturers, the proposed regulation changes would make food establishments pay 25 percent more.
In closing. Tate shared additional legislation may be required.
“It’s very disappointing that this flexibility in my opinion is being taken advantage of,” Tate said. “So what I suggest and I am very willing to do is to make an amendment to this bill… and I hope I have sponsors and co-sponsors in order to eliminate this type of activity in the future.”