ALC-JBC Budget Hearings (1:30P-4:00P)

A lot of questions for members so if you would introduce yourself for the record and. If you just want to pick an example would get on the same page will kind of go through it okay Jake plea DFA office of budget which one you all want to do which one. We want to beef council. Less. What else did beef council okay. So the budget manuals are put together through series of of rules and laws that are placed put in place these budget minerals have not changed substantively in years and one big jobs my office does is put all these together so if you have any questions or concerns about how an agency's budget man is presented in the manual a lot of times those questions get asked to the agency. Asin to us to because we're the ones who put these together it's and would we have to do a lot of communication with the agency to make sure it's okay but everything you see in the budget manuals is required under law somewhere usually some rules if I'm going to go to page two of the budget manual. Do you see some information there are appropriation and funding sources that's going to give you where the appropriation lives within our accounting system that's going to give you also where the fund is that Arkansas beef council fund there's gonna be a little bit of an explanation on kind of what the beef council is or what the agency is why they exist what their mission is and then what you're gonna see there is how they're funded okay so right now beef council there funded entirely by special revenues of course we know this special revenues can only be used for a specific purpose I think Senator Teague was helpful enough to point that out this morning. It's federally established you've got an assessment rate of a dollar per head of cattle sold so that tells you where the revenue streams coming from. And then it's a mother details there on kind of what the entity does. That's a big paragraph in the middle. Going down and all of the all of the analysis because going to look very similar a lot of it's going to be kind of boilerplate language going down you're gonna see continuing level appropriation is the FY twenty one authorize which means we're just taking last year's numbers and really carrying forward. Dressing to continue the appropriation that amount of one million sixty seven thousand seventy six dollars and each year the biennium. And in that last paragraph is the executive recommendation provides for the agency request twenty twenties budget manuals what you're gonna see the first thing is what the agencies asking for okay it agency request same thing you're gonna see is what the governor's office with the executive recommendation is based on that agency request and then of course you all come up with recommendations that are the basis for a bill to be drafted. Okay. So then going down to the appropriation summary. We put one of these in place for all the different appropriations this is going to give you the detailed information that you're gonna need for that specific appropriation some agencies have one appropriation like beef council some agency had dozens of appropriations it all just kind of depends on the agency as Kevin will tell you some of the agencies bills earned budgets are pretty straightforward some are very complicated there's a lot of ins and outs to the so if you have any questions or any this doesn't make any sense please grab me and and I'll do my best to explain it to you. Looking at appropriation summer you can see what the appropriation is you've got your funding sources and then on the left there you have something called a commitment item. Commitment item is the term we use in asus which is the state accounting system to delineate different types of expenditures different types of appropriation. So if you pull up the appropriation act for the beef council you'll see specific amounts for these different a commitment items operating expenses and sometimes you'll you'll some of the bureaucrats will refer to these by the number CC that five zero two zero zero zero two. That's the commitment item number for operating expenses so once in awhile you'll catch a bureaucrat up here saying two when they should mean. Operating expenses okay if anybody does that please tell them to use normal English okay because it always tries me little crazy when they used that kind of two oh nine or eleven we can just say if it's operate expenses we need to say it's operating expenses FOR going down you've got conference and travel you get professional fees you got data processing capital outlay in research and development all these are categories of expenses which are defined in the financial management god or DFA somewhere okay so you need make sure that if they're wanting to spend money to go on a trip to learn about how to do their job they're put in that in that concentrate will fees that they don't. Have it up and operating expenses those of you who are on the peer committee sometimes you'll have something called a budget classification transfer or B. C. T.. We do that when we put the budget the wrong line. When we budgeted one of those trips or we budgeted some kind of capital outlay in the wrong commitment item we've got to move from one line the other we have to go to peer and yells approval to do that okay. So there's a commitment items the first call on that nineteen twenty so FY twenty is the one is the most recent for fiscal year of information that we have and that's going to give you your actual expenses so in this case we have fifteen thousand dollars and operating expenses we didn't spend anything at all the other different commitment items and then we spent eight hundred seventeen thousand dollars in research and development okay. Total expenditures by the beef council FOR FY twenty eight hundred thirty two thousand dollars. Going down to the box we can see what kind of revenue they used to spend that eight hundred thirty two thousand dollars okay. The first thing they did is they took a hundred twenty thousand dollars of the fund balance that they had built up in a lot of these small boards and commissions because again they are special revenue they carry a fund balance from one year to the next. So in FY twenty they took a hundred twenty thousand dollars out of their fund balance to maintain operations looks like primarily to fund research and development. In addition they used eight hundred seventy two thousand dollars a special revenue that's there assessment a one dollar per head of cattle. That gives us a total funding of nine hundred ninety three dollars nine hundred and eight three thousand dollars. And that last one that's in in parentheses is one of my favorite lines because that's the one that tells you how much excess appropriation which is to say the authority to spend money without actually having money. Are you shaking your head of. Yes I understand I'm getting there but if it's in parentheses that's money right. So what this is saying is the FY twenty at the end of FY twenty they had a hundred and sixty thousand dollars in the back that's what they're fund balance what's. So I like to look for numbers that are in parentheses that gives us a grand total of eight hundred thirty two thousand five hundred thirty nine dollars which balances against the axles up in nineteen are at a nineteen twenty okay. Next call number is twenty twenty one that's the current fiscal year that gives you the budget that they are currently operating under that was the budget was adopted during the fiscal session. And then going forward you can see the agency's request and the executive recommendation for each of the two years of the of the biennium so twenty two and twenty three. Any questions on the. That makes sense usually takes me a couple hours of getting back into these things every session remember how to read a budget manual. Any questions from the committee members for Mr blade. Thank you date if anyone wants to grab me after this or just sit down and talk about this please let me know thank you. You do a good job thank you. So. So with that we'll move on with Arjun the misc at the summit. House so you're coming to the table. We have an on these miss Kathy. We're going to get all that down there with you. Because we have some audit findings throughout these. Let's do the beef a board and what do the audit findings on the beef board and then we'll take questions and we'll go to the next and. Stay on that format. I. Thank you Mr chairman as Mr chairman said we're going to start with the Arkansas beef council in your big manual that starts on page one they do have audit findings in audit is here to provide details on those findings which are in a separate. tap I believe. Yes my name is David Webb and I'm with Arkansas legislative audit. And there is one funding for the beef council and the. Packet of audit findings is is separate and is on page number six. Of that audit packet so D. F. and A. Collects beef assessments. Of one dollar for every head of cattle sold on behalf of the agency. Detailed monthly reports are provided by the F. and A and that allows for the determination of how much money should be retained by the state of Arkansas and how much should be remitted to the national beef board and to other states. However these detail reports do not always agree with other information that is provided by D. F. and A or the amounts that are open at Lee disbursed to the national board in the other states. We have recommended in the past and we continue to recommend that the agency work with the department of finance and administration to reconcile and explain variances between the detail reports and the summarized data. To ensure that the appropriate amount of revenue is recognized and that the amounts due to other entities are properly recorded and satisfied. Thank you Mr chairman that concludes the funding for this agency. On page six in your agenda. As we do have quite a few questions I'm guessing for audit. Senator Chesterfield you're recognized for a question yes is this a repeat finding says yes a little booklet. Many times have we done this and how many times have they not corrected the problem. In recent memory I'd say that it's been and three of the fat three of the past for audits. And their response was we keep working with D. F. and A to. To try to fix that. Yes someone with D. F. and A what has happened with they're all part of this so that I have a better understanding of why this continues to be on going. Absolutely thank you Mr chair. Looks like the if Nader know who wants to come for probably nobody. A yes I'm afraid I don't have a good answer for you because I don't know the answer to that question but I'll certainly get with our folks immediately and get back with you ma'am I appreciate that very much and thank you for being like with your answer thank you Mr chair thank you. Representative Wooten you're recognized for a question. Thank you Mr chairman. Stay in that. Stand hello four five years this castle can have a problem and not be corrected but DFA oral auditors something done but I do see where you're given the more way out we're ready to hear of cash receipts to the extent possible I would I would recommend you strike out to the extent possible you either get three hundred thousand dollars in UK helpful order you don't get it are you spend three hundred thousand can you can you answer wine what what would be your recommendation from and all that standpoint that you would like to a farm that operated like this. Our recommendation is that. They reconcile between the reports that come from one office of the F. and A and another office of the F. and A. That there be a reconciliation and an understanding as to why these two reports may have different amounts I do not know why they're different but I have but it through the audits we have identified that sometimes this report and that report don't have the same total on it. Mr record we have the outcome but I was just this and to address that represent Wooten and the rest a committee when miss Smith finishes going through their budget we will bring the beef council and to answer any of these questions we have for the actual. The audit findings all our budget. Is that satisfactory they've Mister push your button back all levy in the queue. Do you are. Absent Dodson represent or Senator hammer do you want to wait to the beef council Xander do you want to go now. Senator hammer you're recognized. Thank you Mr chair yes Sir almost almost our office can David regarding what I read in the audit finding we're talking about a thousand ninety four dollars and thirteen hundred and fifteen dollars for this year my mission something hers at the amount of money we're talking about. I believe that's correct in the last three years that you can recall is this a high number or load number compared to what to previous years of man. My recollection is that this is a lower number but I. And I know that there have been times where it has been greater than a thousand dollars. But I can't tell you the number of times okay right now we're talking about an approach annual appropriation of over a million dollars is that. Correct to the staff we were talking of million sixty seven thousand. Okay ms chairman we just ask that maybe audit would get us what the historical data is as far as to spread I mean the compared to the principles or principles and understand it needs to be user on both sides but given the magnitude of the appropriation against a thousand in the thirteen hundred that's pretty small but could we get the historical spread of last two three years from audit please thank you yes Sir and we would ask for all the to have that force and X.. Few minutes of possible shortly is like quickly the can thank you. Okay miss Smith will let you go through the budget and we'll have beef council committee. Thank you Mr chairman we're on page two the beef council coordinates and implement the program a promotion research and market development to enhance the image of beef and to improve the potential of Arkansas cattle industry as Mr believes that this agency is funded under special revenues from the federally established assessment right of one dollar per head of cattle sold in the state half of that amount collected to go to the National be promotion research board and then the other half remaining for fees is retained by the Arkansas beef council to fund state based programs which complement next in the industry wide effort they only have one appropriation and you'll notice it on page three. The total of actual expenditures was eight hundred thirty two thousand five thirty nine the agency's normal budget is a million sixty seven thousand seventy six dollars they are not asking for any changes in this appropriation and the executive or a recommendation of agrees with that request. Thank you miss Kathy and if we could get the beef council in. C. Tony's on his way to get a. Members before we get started on the beef council if anyone lost a personal item please CS at the chairman's this please. Yes not a hundred dollar bill. So with that Ma'am if you would introduce yourself for a committee. hit the green button please my name is Dennis ban on the administrator of the beef council thank you Representative Dotson. You're recognized for a question. Thank you Mr chair over here right thank you. So just looking at your operating expenses over the last several years It it's not a lot of money I know but it looks like there's about a fifty percent increase in operating expenses. The last fiscal year. And then you're asking for conference travel and professional fees it seems like it's a brand new couple of line items What was the purpose for the increased expenses. Just make the lighted up green and it'll stay on. This is Ben and our budget every year I do not know why it is a separate line item line item rights and has been showing up before but we do budget for travel for a board when they do go on in state meetings and when they have to travel for out of state meetings. Okay. The shirt fifteen thousand this last year but every other year had been under ten thousand piece and accept the preparation line item you have additional line items now. They were zeroed out before. Are you expecting to spend a lot more this year on it than previous years. I guess what do you spend operating expenses normally outside of trick conference reason travel. I think that that was probably built into those operating expenses before and now they're gonna be separated out. I do not know but I can find that out for you okay thank you. The Representative Representative Wooten you're recognized for a question. Thank you Mr chairman are you familiar with the audit report. Yes. Do you have direct supervision over the individuals that are responsible for this or you the sole person over there that works on this and I am the sole person I just took over on September fifth seventh so this just as I am Travis justices replacement yes he is retired. Would you up. Make a commitment to date to this a. Bonnie that you'll tend to get this corrected absolutely I mean a bank a bank draft in August withdrawal in August is not of the positive again until October. And and and and the board not keeping complete list or receipts for license renewals I mean is this you know when you. When you look at the total amount of money we're talking about a million dollars by senator pointed out this is a small amount but it can lead to bigger things and this is been going on over there apparently for forty five years. It. The reconciliation part is the part that we will focus on making sure that all the reports match verses what we get as numbers from D. FNA what we get is numbers for collections actual collections and then what our records mansion so that's one thing that we will work on his or reconciliation and we don't have any licenses or anything. I wonder what you would be yeah we don't do licenses we just base all of our income on every had account is yes okay yes thank you Mr chairman thank you ma'am thank you. Thank you Representative Senator hammer you're recognized thank you here to your far left ma'am. The comment that you just made is the issue on the side of the council as far as being able to reconcile or is it a matter of DFA giving you accurate numbers that you can reconcile against. I think it's. A little bit of a combination but hello couple of the reports that we get from the F. and A don't match and so we're having to figure out where that numbers coming from because there may be penalty and interest from another state submitting their check off dollars to us or vice versa and that could be calculated and how we're calculating that on what we send back to the other states is there could be at this our difference in that and so that's where I'm going to try to work on trying to figure out what it is that's missing in those reports and why they're not both matching. Okay well in realizing your new on job maybe the appropriate agricultural committee could pick that up in a couple months have you come give a report about that because if you're reacting to information get you're getting from DFA but is not coming to you accurately I think that's an issue we need to look at on the other side and not on your side but maybe in a couple months we can look at after you have time to get on the job thank you Mr. Thank you senator. Any further questions for the beef council. A Jack Representative Ladyman. Thank you Mr chair I just I was wondering if maybe you can explain this but how are the other states involved there's money going back and forth to other states can you give us a summary of what's involved there yes whenever we sell cattle within our state and there for the owner is based in another state say Oklahoma when they sell their cattle within our state we return that check off dollar to that state same thing of an Arkansas former sells his cattle in Missouri Missouri returns that money back to us because that is initially Arkansas's checkoff dollar and so we do that with all the states throughout the country we will return that money to them and vice versa they'll send it back to us okay thank you for that but how does the money does the money come to the if an a and then the you are how how what was the money trail there yes it does go straight to miscellaneous tax they're the collection there the collection point for the money that comes from out of state and the money that's within state from like the lost livestock markets coming in see if an eight miscellaneous taxes the collection point. So then you get a report from the F. and A on how much money is coming in yes all right thank you. Representative would you're recognized for a question thank you Mr chairman on the owner of the collection of that money is that it's a sale board. Yes it sale barns private treaty also drove it also shows the responsibility of the buyer. Two to make the payment or is it the seller's our unit can be either one but usually it's a seller like at this livestock market they pay that the last poultry commission or to to the beef council through DFA correct not to license a compulsory okay is okay thank you Mr chairman. Representative house you're recognized. Thank you Mr chairman ma'am the Arkansas department of corrections is been sending their cattle sometimes down to Texas to sail how are they treated any differently than I and owner. A private owner of in the state so far as the money flowing in that sort of thing. If the eight they're owned by an Arkansas entity the take down they take him down the Texas Texas beef council will send that back to Arkansas. How many ever had a cattle that was that check off dollar will come back to the state of Arkansas and less that cal or those cattle have been owned ten days or less and then they are not subject to have to pay the check off like if you have a cattle dealer and they've owned them for less than ten days state are exempt from paying the check off. But in that case it's. The correctional facilities or the one selling it so they are the owners. And so they would consent of down to Texas and then they'll send that check off dollar back to DFA. Welcome. Thank you Representative. See no further questions of for the beef council we thank you and then we do have some numbers from legislative audit on more recognize Mister we have to come back to the table. Thank you for your Swiffer activity mystery of. Thank you Mr chairman of I was able to the. Obtain numbers for some prior years. for fiscal year. The other thing that was in front of you was for fiscal year nineteen and it's so it. Had an overpayment to the national board of a thousand ninety four and an underpayment to other states thirteen fifteen. In fiscal year eighteen there was an underpayment to the national board of nineteen hundred dollars and an overpayment to other states of a hundred and thirty one dollars. In fiscal year seventeen. We did not have it broken out between the national board and other states it was just a combined figure. Of an underpayment of four thousand nine hundred fifty dollars. And then we did not have similar findings noted. In fiscal year sixteen or fiscal year fifteen. Thank you Mr chairman that's all that I have is the additional information we do have one question Senator sample you're recognized. Motor. My question is for the lady with the beef council can we. We do have another chair so we're good. You're recognized center thank you ma'am I'm over here. Thank. And and by looking at the US. Do you have another job or knows the position. Or you share with the agency had no this is my position all right if you're not familiar with the beef council they are they are managed by Arkansas farm bureau federation okay you do have yes we were I was trying to figure out wanted to the operating expenses were so low and you were doing so much work and so that gives me a better understanding now thank you Mr chair. Thank you senator. The committee with that I'd take a motion for executive wrecked. I have a motion and a second all those in favor say aye. All opposed house have it so with that we'll move on to the catfish promotion board. Is there any audit findings for catfish no Sir okay miss Smith you're recognized catfish promotion board begins on page for your manual no audit findings this agency supports the growth and development the catfish industry and through research promotion market development it's funded again from special revenues one dollar per ton assessment on all catfish feed purchased by commercial Arkansas catfish producers used to fund research and promotion efforts and then the line item for research development which you'll see on the next page represents more than half of the entire budget and it used to fund catfish related research projects the the university of Arkansas and private research companies on page six you'll see their appropriation and of the appropriation FOR this agency is twenty thousand eight hundred ninety three dollars is what they actually spent last year the appropriation is a hundred twenty thousand dollars they have no positions with this appropriation and of this agency they are not requesting any change in that hundred twenty thousand dollars the executive recommendation agrees with the agency requests of no change. Any questions from the committee. I have a motion for executive wrecked. I have a motion and a second all those in favor say aye. All opposed as have it so with that we'll move on to the corn and grain sorghum promotion board. Yes Sir this agency is found on page sixteen in your manual corn and grain sorghum are they promote the growth and development of the corn and grain sorghum industries in the state funded by special revenue their funding comes from for promotion and research comes from I'll have Arkansas farmers have consistently produce more acres of corn and grain sorghum which generates more funds for research and promotion activities which they do the board allocate the money spent. Use me out with the majority going toward research projects from public universities and private companies on research dean consistent with the needs of Arkansas producers the board has changed researchers to come up with charge researchers to come up with innovative ideas for research thanks to our funded by special revenue aids one cent per bushel assessment at the first point of sale or when the corner grain sorghum enters the USDA long program and is applicables to all corn and grain sorghum produced in Arkansas for market. They have one appropriation which is on page seventeen R. their actual expenses reported eight hundred seventy six thousand one thirty eight their total appropriation authorized is two million dollars with the majority of that over one point nine million in research development the agency is asking for no changes in this appropriation they're asking for it to continue at this level and executive recommendation is that as well. Okay. A we have somebody present from the corner in. Sorghum grain sorghum board. So my question is if you look at your actual twenty nineteen and then your budget is twenty five thousand fifteen thousand dollars difference there is there a reason we keep that big a difference. In addition so for the record mark Lambert I'm the administrator of the corn and grain sorghum promotion board there's really I guess the the biggest difference is some of the operating expenses say if if they go to travel at the travel out of state conferences the reason for that is we only spent fifty seven hundred dollars just last year and that was usually the big travel months is June and March so would we put that under travel and conference expenses instead of operating yes I mean we can transfer at the operating expenses I mean we don't have the ability to go into asus and and do this so we take guidance from the F. and A of of where where these things need to be. Senator sample do you have a question. Yes I I'm. Just for the record. This is someone from farm bureau actually is doing that. Okay and so you. Farm bureau does most all of the the Promotion boards is that correct yes Sir okay and I agree that it should have been on competition travel. Thank. By Representative Beck. Thank you Mr chair at the just a question analysis on the catfish. They also previous but you have access funds is that correct seven hundred and eighty seven thousand yes Sir so the appropriation hasn't changed so what will happen to that money the US seven hundred eighty seven thousand and I guess the fund balances of as of last year was five hundred forty thousand dollars the reason why are appropriations is so high is because I mean we don't we don't know what's actually out in the field we could have corn in the bins from two thousand twelve come in to the first point of sale and we could actually collect to two million dollars from those bushels of corn and that's the reason why this is so hot so the reason for for our appropriation be and be in the way it is is if the money's there we want to be able to the board wants to be able to spend it and say if research projects or we started talking with the US poultry egg and poultry people in the university Arkansas center FOR poultry excellence and we started in cooperation with them teaching people in Morocco how to how to take in United States corn primarily from the mid south and helping them grow chickens faster and in bigger on a on a I guess a more efficient level. So that's that's the reason why on our preparations is is so are because we don't there's a factor that we don't know. But is it is another question. So is it typical that you have that large of fund carried over the board is being carrying carrying of a carry over just because the projects they're not they're the research projects are not there this last year I think they funded somewhere around seven hundred thousand dollars in research projects and that was everything that was brought to the board they challenge university Arkansas to bring in more projects come up with new innovative ideas the largest project I think they spent about two hundred fifteen thousand dollars on irrigation so that's that's that's the reason why the boards carrying so much and because these projects around three year increments there's a lot of projects where they roll off that three years we pick up new projects and after that first year you don't want to cut that project and it still had two years left because research takes time and that's the reason why the board carries open carries over that carries over that amount so they can actually carry for those projects that are in the first or second year so they can. Aaron to completion. Thank you. Senator Rapert you're recognized for a question. Yes Mister chairman I I actually just wanted it it made me perk up there you said that some of this funding and I'm over here to your right I'm in the back so to your left apology. I see very very dimly through this class you're talking about you mentioned something about Morocco. In a program would you please explain it to me just a little bit yes Sir so the United States grain U. S. grains council if you look there website up its grains dot org what they do is they they travel all over the world they have funds that is in the travel all over the world they try to teach these producers that are in low income countries such as Morocco West Africa India China Japan wherever it may be they try to teach them how to grow animals or animal agriculture livestock efficiently so they can actually feed their people instead of feeding the livestock rocks dirt things like that so they teach him saying you know you can. One pound of corn in it and it will put on three quarters of a pound of on a check and rather than you feeding one pound of rocks and it put on absolutely nothing so in the nutrient uptake there in the livestock industry in the in the grains council is the ones that do that so we help our markets in the export market we make the the simply make the crop disappear which which helps out or markets in which helps out Arkansas producer since seventy five roughly seventy seventy five percent of our corn is exported. To. Of. That's all for now thank. Senator hammer you're recognized for a question thank you Mr chair the excess funds can only be used for research is that a correct statement yes Sir all right and so no matter how much you build up in research carry Ford it can't be diverted down to the operating expenses or any other matter it all has to be retained for research research or promotion in the corner or grain sorghum industry okay and then on a side note when something happens like up and I with this year where their corn crop got pretty decimated how does that affect anything that you do and would that have any bearing on the financial numbers as to how they might change for next year yes Sir so it was just what I was going back and saying we don't know what's out there so something happened I think we grew seven hundred thousand acres of corn this year and just for easy math two hundred bushels an acre that's fourteen million forty million bushels of corn SO one percent of that is one point four million I thank in that right somewhere around there hundred forty million bushels of corn and we're gonna take in one point four million bushels just Risi math so something like that happens. We're gonna look at we lose two hundred thousand acres of corn just because a wind storm or something came through we lose of what is it forty million bushels of corn said our numbers are in the lower about four hundred thousand dollars so that's our financial impact what whatever is not sold on a port of first point of sale we cannot collect on in typically the corn board collects about ninety percent of what's out what's on the field and that's as due to people either magnet in Dearborn back in and so on it it and dear corn on a cash basis were somebody just holding it in their bands until they find a better price okay which counts for the fluctuation in the numbers and yes Sir thank you. Representative Tosh you're recognized for a question. Right here in front of you thank you Mr chair I'm just curious. The one cent per bushel assessment at the point of entry of A to point of sale I guess I should say is that the in house decision that says that amount is that regulated by the state or the federal government. Tell me who decides that in and have a it's Regulated who can decide whether to increased or not it is it is regulated by state law it is under the promotion agreement I don't I can't cite Arkansas code to you but it is the dollar per bushel I think it's been in place since the nineties increases I think you'd have to go and have almost an increase that we would have to come come to you all where there would have to be a bill or and and have that increased but uh it as of right now I mean you can see it it is sufficiently takes care mark Martin the corn and grain sorghum promotion in the state the grain sorghum it is a. That's a different story but there's not a lot of money in the grain sorghum side it is regulated there's actually to check off one check off from the state and then the national program I think it was may loss through USDA under a mess in the early two thousands in which it is a percentage based funding in which we apply for and bring it back to the state as a pass by. Thank you. Senator Chesterfield you're recognized for a question I'm of the executive branch. Proper motion the second. Second all those in favor say aye. All those eyes have it thank you Sir. With that we'll move on to the rice research promotion board. Yes Mister chairman and we're gonna move over in our book to page one ninety eight this is the Arkansas rice research and promotion board this agency has no audit findings on page one ninety nine you'll see the department appropriation sermon summary this agency actually has to appropriations no positions. on page two hundred two oh one is the first appropriation this is the rice research and promotion to improve the profitability of growing rice in Arkansas by continuing it conducting a program of research extension and market development. It's funded for a special revenues which are collected from assessments on all rice produced in Arkansas all the assessment currently consists of a dollar thirty five per bushel of rice grown in Arkansas all paid by the producer and assessment of that same amount of dollars thirty five per bushel paid by the first point of sale buyer the funds raised by the producer assessment our reserve for the research program and the buyer funds reserve for promotion and market development activities. The first appropriation again is the rice research and promotion you'll see their actual expenses was a little over five point three million dollars the actual budget is a little over six point eight million they're not asking for any change in this there are no positions tied to this appropriation or this agency and the executive recommendation they're not asking for any changes the executive agrees with that on this appropriation their second appropriation on page two oh two and two oh three is the terror of rate quoted cash in this receiving funds from to tear up right quota programs is part of to trade agreements between the United States and the European Union in Colombia these funds are designated to be used only for rice research efforts on this one you'll see on page two of three that the angel agencies actual expenses for research and development were a little over twelve million dollars their budgeted fifteen million dollars they're not asking for any change and the executive agrees in that so all total they have to appropriations and no changes it's a little over twenty one point nine million dollars each year. Thank you miss Kathy. do we have someone here from the Rice research promotion board. If you would introduce yourself for the record. Hi my name is brandy Carol and the administrator of the rice research and promotion board yes ma'am can you explain the tariff rate quota cast where it looks like we spent five million more than we took in. Un. Yes there was I'm quite a large balance that had carried over from year to year in that account the board did finally reach a point in their project development where they did make the decision to spend quite a lot of that but the the Columbia a to your Q. program is where most of that has come from is started in two thousand twelve. And I'm. Those collections had built up you know since that time in the board had not spent. The board had not spent much of what have been collected in that amount of time. Thank you Representative Jett do you have a question. Yes thank you Mr chairman this dollar thirty five Senate bills let's not correct is it. It's It's one point three five cents per bushel from the first purchaser. And and the the purchaser funds go to promotion of market development in that it's one point three five cents per bushel from the producer and that is dedicated to research billion dollar thirty five bushel that that would be in yes is a print the punctuation would be wrong there I thank you thank you Mr. You represent Senator hammer you're recognized thank you Mr chair and taken on to What's Representative just asked about the. Come dollar wise how much actually went toward promotion and dollar wise how much actually went toward research animal here too far left okay hi it's So from that the actual check all funds which are the you know the original appropriation of around six million dollars those funds are required by by laws that the that you guys have passed a to be split it it's pretty much half and half because the first the the producer has to pay half the assessment and then the first purchaser has to pay half of the assessment and so all of the the purchaser assessments go to Promotion of market development so it it's approximately half okay then based on that there's a comment in our section that says over the recent years the rice field in Arkansas's remain static or slightly increased. Our under are there enough dollars that are appropriated to the research side that. We're given at all we got or is our need to increase the dollars to the research side to get off that stagnant or slightly increased comment. I mean I do believe that the appropriation is It is adequate to cover that at this point are you asking if we need to increase the the check off or yes one asking is is the appropriation is being used for research being used effectively if it's remain static fortunately showing slight increase. Well I mean I think that the yield the bill can figure year to year as you know as as our production I do think that the trend line yield is is up and has been for a long time I think that comment it's not just yield it's the number of bushels because you know last year we only got one point one million acres planted. And so that wasn't necessarily yield that was. Production but not yield per acre so I think that statement might be a little bit. Incomplete okay alright thank you Mr. Senator Stubblefield you're recognized. Thank you Mr chairman right. We're bringing. Brady was cash balances carried over was that the almost fund with a here in the state of Arkansas. They are held by the rice foundation. Where where is the they are headquartered in Virginia they are the entity that administers those tear free quota programs on a national level and they manage that account FOR the Arkansas board now all the fans are always reported in asus and so they're accounted for you know in the Arkansas accounting system as well is there a foundation fund. Those are those are those carried over money center foundation's one. Date no Sir there mostly in cities and city. And the total amount is a much. currently in the cash fund it's a. Approximately ten million dollars ishe okay. All right. Thank you may first thank you Mr. Thank you senator Johnson. Thank you Mr chairman A is Caroline over here. Okay. Of. The research funds for those expended. almost exclusively with the university of Arkansas division of agriculture okay occasionally we we do have projects that go through Arkansas state and the USC a ACT research service a lot of times those are still in partnership with the division through the you if I. Thank you you may have seen the articles of paper that doctor Cochran is warning to sell some land to and he's. Hi my term not his poor math thing their situation all this and I'm just wanted to see this does go into that program that he's hoping to expand with the sale of that that land that some legislators have expressed a reservation on how the whole transaction was handled so that this does go into that rice research that's conducted at that center is that correct. At pine tree the I'm another's yes yes absolutely okay. Really all I mean all of their row crop stations would have some of their plot yes okay and answer my question thank you ma'am thank you Mr chair. Representative Jett. Thank you Mr chairman there you correctly you said I'm over here ma'am. Okay very quick quick disorders press me ten million dollars Ishq sent around someplace there is approximately ten million dollars in that are invested in CD's from the terror freight quote of funds that the board has access has access to it's a through a I'm a free trade agreement one with the European Union and then one with Columbia. And for Columbia example when we signed a free trade agreement when the not stay signed in two thousand twelve of the terror of thunder ice into Columbia it was eighty percent and so through the free trade agreement they allowed a certain number of tons of rice into Columbia of. Basically to duty free and so the the Colombian rice industry in the United States or its industry got together to basically auction off of those quote is. And so add a Cup a company that wanted to export rice from the United States and in the Columbia can rent to those quotas to import the rice into Columbia duty free and so those those quarter rents have al you and so we have captured that value the money has to be spent on research half the money goes to the Columbia industry for research on behalf of it goes to the United States and then it's divided among the rice producing states by A based on your production which means we get around Arkansas gets around forty five percent of what comes to the United States and so that's what we were they asked about you know that balance you know that money had built up pretty quickly and the board wanted to spend some time and determine how they could invest that to build something you know really lasting for the industry the program does it's a twenty year program and after twenty years all rights will go into Columbia duty free and so and the value of those quoted rants will go down over time because the terror of has already started to decline and the number of bushels that go in duty free has started increase and so the value of those Of the quota rants will eventually be you know become nothing in the twenty years you know the program will be gone and so the board did want to you know they saved a lot of that money additionally but until they could come up with a really good. A plan to invest that money wisely are you were locked rooms like thrust federation they want to raise a check off are you here any of that is that news to you. Not entirely no Sir I do know that there has been have been discussions about raising the check office if you raise a check of the house of how does that reconcile with the ten million dollars is already put back I'm or what what are you going to be well I mean I think that I think that you know the main reason First of all the terror for a quota funds cannot be used on promotion or market development and so a lot of the things that we do Right now all you know they don't cost the same as they did when the rate was set in nineteen ninety five and the right really hasn't changed much since nineteen eighty five And and so would you know part of that argument would be to help you know increase our promotion of market development fines also the tear for a quote if funds do in you know by twenty and I'm a little more than ten years we will not get any more from that program All you know the board is also made some commitments If they if they have been able to subsidize the current research program with the to your queue funds to a degree but again that you know the ability to do that over time will diminish and so eventually it might be. You know it might be necessary to increase the check off. Thank you Mr. Thank you senator Chesterfield you're recognized yes I move executive who's proper motion of second. Second in discussion on the motion. Seeing none all those in favor say aye. All opposed eyes have it motion passes for move on to the soybean promotion board and I do believe they have audit findings so we want to go to all that first. They're on page two oh four is where they start in your budget manual and they do have audit findings. Thank you Mr chairman I'm still David with from legislative audit and there are two compliance findings four two thousand and nineteen for the Arkansas soybean promotion board. In the first finding we mentioned that NONEXEMPT discretionary grants in excess of ten thousand dollars which were dispersed by the board during fiscal year nineteen were not presented to the Legislative Council or to the joint budget committee for review and approval prior to being awarded as required by Arkansas law. The second finding pointed out that the agency did not obtain certain disclosure forms for grants in excess of twenty five thousand dollars as required. Thank you Mr chairman that concludes the findings for this agency. Senator Chesterfield you're recognized. Yes I was. Service center so miss Kathy if you would you go through the The agency's. What. David where they repeat findings The findings in two thousand and nineteen were repeat findings but. They had been identified originally in two thousand and eighteen. But there had not been sufficient time for the agency to implement changes. Because the transactions in fiscal year nineteen occurred so early in the year and so that's why they. were repeated again in fiscal year nineteen or fiscal year twenty twenty audit is currently under way and I ask the auditor who's on that engagement if we had any problems for fiscal year twenty and he said that they had corrected that in the current fiscal year thank you. Senator hammer you have a question for all that yes I do thank you Sir who who were the contractors grantees that. They made arrangements with. The four NONEXEMPT discretionary grants. Were for the mid south sweeping board four hundred and fifty two thousand the American soybean association for forty five thousand. Arkansas farm bureau fit foundation for twenty thousand and the for state fair association for eighteen thousand five hundred. In the repeat finding were all for those clued in the repeat finding. Probably so I can't I don't have the I don't have the vendors for two thousand and eighteen. But I'd. But it's very very likely that vendors that were used in two thousand and nineteen had also been used in two thousand and eighteen and you know what to contract for four was a promotion items or do you know. I don't know specifically right now okay I'll get with you later thank you thank you Mr. Thank you senator. So with that we'll move on to miss Smith to go through the budget thank you Mr. Beginning on page two oh for for the Arkansas soybean promotion board this agency works to support the growth and development of the soybean industry in Arkansas they have one appropriation it's primarily used to fund a program of research the university of Arkansas agricultural experiment station although smaller portion is also used for administration and FOR other programs designed to hand enhance the Arkansas soybean industry it is funded through special revenue collected from assessment of one half of one percent of the NET market value of soybean selves in Arkansas on page two oh six you'll see the appropriation the actual expenses were a little over a five point six million the appropriation budget and authorized level is eight point three million they are not asking for any change there are no positions associated with this agency and the executive recommendation also agrees with the agency request of no change on this appropriation. Any questions from the committee. No question so exiting executive correct all right we have motion executive Rick. Second. All those in favor. All those against all right we have adopted. All right the wheat production board. Yes ma'am our next one begins on page two oh seven in your manual this is the Arkansas wheat promotion promoting the growth and development of wheat industry in the state this one also is funded from special revenues that are collected on one cent per bushel assessment on all week grown in Arkansas their funds are primarily used to maintain a program of research the university of Arkansas agricultural experiment station and the cooperative extension services and they also support domestic and export promotion programs the memberships and national wheat promotion organizations they also note that a small portion is used for other programs designed to enhance the Arkansas wheat industry on page two oh nine is the appropriation for them there are no positions of their total expenses will over forty three thousand dollars they're authorized level is four hundred and forty four thousand four ninety four the agency is requesting no changes this is no positions with this agency as well and the executive recommendation agrees with that recommendation of four forty four. Four ninety four. Thank you any questions from the committee. Seeing none do have a motion for executive branch now I'd have motion second all those in favor say aye all those against the motion passes. In person thanks to all right of ladies and gentleman personnel needs the Tuesday October the twentieth at eight o'clock in the morning and if you have this handout on your desk if you are on personnel your name will be there and the chairs will be senator eads. And of. The. Representative eaves and senator E.. So there you go. All right of it does anyone want me to call out the names. With me tomorrow and. To meet tomorrow at nine meeting adjourned.