The July meeting of the Administrative Regulation Review Subcommittee was held on Tuesday, July 10, 2001, at 10:00 AM, in Room 149 of the Capitol Annex. Representative John Arnold Jr., Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Representative John Arnold Jr., Chair; Senators Marshall Long, Joey Pendleton, and Richard Roeding; Representatives Woody Allen, James Bruce, and Jimmie Lee.
Guests: Paula Pabon, Kentucky Legislative Ethics Commission; Ted Stumbur, Office of Geographic Information; Linda Renschler, Diana Barber, Richard Casey, Kentucky Higher Education Assistance Authority; Rachel Belin, Department of Treasury; Robert B. Barnes, Kentucky Teachers' Retirement System; Richard Dobson, Revenue Cabinet; Richard Schuck, Connie Calvert, Board of Optometric Examiners; B.R. Salyer, Board of Licensure for Professional Engineers and Land Surveryors; J.P. Abell, Tourism Cabinet; Tom Bennett, Ellen Benzing, Scott Porter, Department of Fish and Wildlife Resources; Emily Dennis, Economic Development Cabinet; Parker Moore, Jona Brewer, Diana Andrews, Barbara Foster, Jack Bates, Millie Ellis, John Hornback, Carl Millanti, Heather Weese, Hank List, Natural Resources and Environmental Protection Cabinet; Jack Damron, Brenda Priestley, Department of Corrections; Mary Ellen Wiederwohl, Marilyn Troupe, Education Professional Standards Board; Tony DeName, Mike Haynes, Division of Unemployment Insurance; Rebecca Goodman, Department for Alcoholic Beverage Control; Randy Smith, Kentucky Racing Commission; Dennis J. Langford, Tommy Barnes, Billy S. Perkins, Steven A. Milbu, Rodney Raby, John A. Hudson, Jack M. Rhody, Donald McIntyre, Judith Walden, Suzanne Long, Roger Coomes, Nelson Henderson, Terry M. Slade, Michael "Shane" Peck, Nick Piacsek, Department of Housing, Buildings and Construction; Ellen Hesen, James D. Carreer, Linda Harney, Philip Kremer, Vera Frazer, Johnny Callebs, Elizabeth Harp, Mike Littlefield, John A. Volpe, Dewey F. Crawford, Ann Marks, David Meacham, Robert Calhoun, Sue W. Bell, Beverly Phillips, Cabinet for Health Services; Ginny V. Smith, Cliff Jennings, Cathy Mobley, Karen Doyle, Stephanie Brammer-Barnes, Emily Crowder, Shirley Eldridge, Melony Collins, Cheryl Bentley, Pattie Smith-Glover, Cabinet for Families and Children; Jim See, Joe Darguzas, EnviroPower; Richard Brewer, Victor A. Needham III, Cinergy Corporation; Dwain Kincaid, Kentuckiana Engineering and Thoroughbred Generating Station; J. Ross Mackay, National Geotetic Survey; Carl Breeding, AIK; Al Mattingly, Kentucky Association of Plumbing/Heating and Cooling; Duane Parsons, John M. Fuller, Kroger; Mike Mayes, Kentucky Pharmacists Association; Tom Rechtin, Rechtin HVAC; Chris Killmeier, Walgreens Drug Stores; Gay Dwyer, Jan Gould, Kentucky Retail Federation; John Cooper, KMA; Ronny Pryor, Agribank; Ed Crooks, United Association; Eric Gregory, East Kentucky Power Cooperative; Steve Noland, Western Kentucky Energy Corp.; Ralph Bouvette, Jakob Brannock, Bob Barnett, American Pharmacy Services Corporation.
LRC Staff: Dave Nicholas, Donna Little, Edna Lowery, Karen Smith, Susan Wunderlich, Donna Valencia, Ellen Steinberg, Dan Risch.
The Subcommittee determined that the following administrative regulation, as amended by the promulgating agency and the Subcommittee, did not comply with statutory requirements:
Cabinet for Health Services: Department for Medicaid Services
907 KAR 1:021 & E. Amounts payable for drugs. Ellen Hesen, Interim Commissioner, and Phil Kremer, Division Director for Physical Health, represented the Department. Jan Gould, Senior Vice President, Government Affairs, Kentucky Retail Federation; Mike Mayes, Executive Director, Kentucky Pharmacists Association; Ralph Bouvette, American Pharmacy Services Corp., and Chris Killmeier, Manager, Walgreen Drugs, appeared in opposition to this administrative regulation.
In response to questions by Senator Long, Ms. Hesen stated that in November 2000, the three studies were completed and submitted to the Drug Management Review Board. This administrative regulation represented a compromise. The preceding emergency administrative regulation included three separate components: reducing the pharmacy dispensing fee for retail pharmacists from $4.75 to $4.51; reducing the dispensing fee to long-term care pharmacists from $5.75 to $4.51; and eliminating the unit dosage add-on that was also given to long-term care pharmacists. The emergency administrative regulation was promulgated after the studies required by KRS 205.561 were completed. Since the filing of the emergency administrative regulation, the Department had met with industry representatives from the long-term care industry and pharmacies, retail pharmacists, and legislators, and heard testimony at the ordinary administrative regulation’s public hearing. The Department considered those comments and decided to reinstate the unit dosage add-on based on valid patient safety issues raised and because the elimination of that add-on adversely affected the long-term care pharmacists more than other groups. The Department believed the reduction of the dispensing fees to $4.51 was defensible and believed the average was a measure of central tendency based on the particular type of business and the actual costs to a pharmacist to dispense prescriptions. The Medicaid dispensing rates were fair and far above the average rates, including the amounts paid in the commercial world and through Passport. The Department sent the reports to the members of the Health and Welfare Committee in December because the interim committees were not meeting. The reports were filed in January and a presentation was made to the committee by then Secretary Jimmie Helton and Myers and Stauffer on January 17. That presentation covered the entire study, the report, and the resulting conclusions.
Senator Roeding stated that the dispensing fee had not been raised since 1991. The medical consumer price index had increased approximately twenty percent a year since then. The study, which was required by statute, did not specifically reference long-term care pharmacies, which were the hardest hit by this administrative regulation.
Ms. Hesen stated that the Department had rectified the problems with long-term care pharmacies following the hearings and public input received on this administrative regulation. The Department recognized that long-term care pharmacies took an inequitable hit and that patient safety issues had been raised.
Senator Roeding stated that long-term care pharmacies were required, both by statute and administrative regulation, to give more service to their patients. Because of the extra service requirements, they received extra compensation. A letter was sent to the Department from the executive director of the Kentucky Pharmacists Association that detailed the requirements on long-term care pharmacists. The statute required the fee increase or decrease to reflect the study and because the study does not reference long-term care pharmacies, the fee should not have been decreased.
Mr. Kremer stated that the study’s references to an “institutional pharmacy” included long-term care pharmacies. The report indicated that their studies did not show differences in the costs to retail and institutional pharmacies. Those additional costs referenced by Senator Roeding should be absorbed into the $4.51 dispensing fee.
Senator Roeding stated that at the January meeting, he asked Myers and Stauffer if the study considered the requirements placed on the long-term care pharmacies and they responded that those items were not considered. The Department should follow the example set by other state agencies in working with industry to accomplish objectives. Additionally, the cabinet should examine its use of emergency administrative regulations. The fees should have been adjusted based on the average, as required by statute, which would have resulted in an increase in the dispensing fee’s amount rather than a decrease.
Mr. Gould stated that the Kentucky Retail Federation represented community pharmacies and neighborhood drug stores. He recognized there were problems with Medicaid funding and has met with several interested parties (including cabinet officials and legislators) to address the problems from a pharmacist’s perspective. He did not believe the Department complied with KRS 205.561 in promulgating this administrative regulation. First, the Department did not notify the Health and Welfare Committee prior to conducting the study, as required by KRS 205.561(2). The Department sent a letter to legislative members October 24 and made a presentation in December or January, neither of which occurred prior to conducting the study. In a letter dated December 1, 2000, Secretary Helton stated that the Interim Joint Committee on Health and Welfare was notified by letter dated October 24, 2000. Additionally the Department sent letters to pharmacists requesting data as early as September 11, 2000, with a submission deadline of October 2. Thus, the study was designed and data collected before the committee was given an opportunity to comment and recommend changes to the study’s methodology. The study had several flaws that could have been remedied if public input had been received from its inception, as required by statute. Second, KRS 205.561(1) required that the annual report be developed with the advice of the Drug Management Review Board. That board was given copies of the report at its November 15 meeting, after the report was written, rather than during the report’s development. The final version of the report was available for the legislature and public on December 1. Finally, KRS 205.561(4) specified that the dispensing fee was to reflect the average cost of dispensing prescription medication to Medicaid eligible recipients in accordance with the annual report. Average meant the sum of the values divided by the number of the values and was a different number than the weighted median used by the Department. The average was referred to as the unweighted mean in an excerpt from the study. He believed this administrative regulation should be found deficient for those three reasons. His organization fully intended to continue to work with the Cabinet and legislature regarding broader Medicaid issues but believed the requirements of KRS 205.561 were not met.
Mr. Mayes stated that he was the executive director of the Kentucky Pharmacists Association and that his organization was opposed to this administrative regulation’s reduction of the dispensing fee. This administrative regulation was not promulgated in accordance with the statutory requirements of KRS 205.561. Additionally the reduction of the dispensing fees would place a severe hardship on many Kentucky pharmacists and could hamper access to pharmaceutical services by Medicaid recipients. Several people and organizations have testified at the public hearings on this administrative regulation that the study was flawed but the Cabinet did not acknowledge the study’s flaws. Instead, the Cabinet responded that Myers and Stauffer has a history of performing studies and a large practice and that their conclusions were not influenced by the Department. Additionally, the Department has stated that Myers and Stauffer were not able to divulge the data used to determine the cost of dispensing prescriptions to the Medicaid population. The Department’s actions could seriously jeopardize the ability of pharmacists to serve Medicaid recipients who required an extra amount of support services for their prescription drug therapy, including non-formulary preauthorizations and physician office contact. The pharmacy reimbursement had not changed in ten years even with annual inflation increased. This administrative regulation should be found deficient and all interested parties should work together in a spirit of cooperation to solve the Medicaid budget problems. The Governor and Medicaid officials should abide by the Governor’s own statement that the state should not make providers furnish Medicaid services at below their cost and that providers should be treated fairly.
Representative Lee stated that regardless of the Subcommittee’s actions, the dispensing fee would not be changed until the 138 members of the General Assembly addressed the Medicaid budget problems, including the problems regarding the Medicaid pharmacy budget and the dispensing fee. Interested officials, industry representatives and the public will need to work together to determine the best method to provide human services under the Medicaid program with the projected budget shortfalls. While the statutory intent of the General Assembly regarding the study was not followed by the Department, those issues were secondary to the major problems facing Medicaid that would be addressed by the 2002 General Assembly. The solution to Medicaid’s budget problems would adversely affect all providers, including pharmacists. Pharmacists filled the same prescription at different costs, depending on who was the patient. For instance, a pharmacist might fill one prescription for a Passport patient at a reimbursement of $2.60; for an Anthem patient at $2.40; and for a Medicaid patient at $4.51. He hoped that all interested parties would work together in the coming months to be a part of the solution to the state’s Medicaid problems.
The Subcommittee unanimously approved a motion by Senator Roeding, seconded by Senator Pendleton, to find this administrative regulation as amended deficient based on the Department’s failure to comply with the provisions of KRS 205.561.
This administrative regulation was amended as follows: (1) Section 1 was amended to specify that “non-solid dosage form” meant a covered drug item other than an oral tablet, oral capsule, or inhaler; and (2) Sections 3 and 4 were amended to comply with the format requirements of KRS 13A.220(5).
The Subcommittee determined that the following administrative regulations, as amended by the promulgating agency and the Subcommittee, complied with statutory requirements:
General Assembly: Legislative Ethics Commission
2 KAR 2:010. Required forms. Paula Pabon, Legal Counsel, represented the Commission.
This administrative regulation was amended as follows: the RELATES TO paragraph was amended to add a statutory citation.
2 KAR 2:040. Updated registration short forms for employers and legislative agents. This administrative regulation was amended as follows: the RELATES TO paragraph was amended to add a statutory citation.
Governor's Office for Technology: Office of Geographic Information
10 KAR 5:010. The Kentucky Single Zone Coordinate System of 1983. Ted Stumbur represented the Office.
In response to questions by Senator Roeding, Mr. Stumbur stated that, because the current system had both a North and a South zone, it was difficult for the Office to process data across the two different zones using the geographic information technology. This administrative regulation established a voluntary single zone coordinate system that documented the state as one single piece to enable the Office to process the data easier.
This administrative regulation was amended as follows: (1) the RELATES TO paragraph was amended to correct a statutory citation; (2) the NECESSITY, FUNCTION, AND CONFORMITY paragraph was amended to clearly state the necessity for and function served by this administrative regulation, as required by KRS 13A.220(3)(f); and (3) Section 2 was amended to comply with the format requirements of KRS 13A.220(5).
Department Of Treasury: Commonwealth Postsecondary Education Prepaid Tuition Trust Board of Director
20 KAR 2:040. Applying for a prepaid tuition contract. Rachel Belin, Policy Director, represented the Department.
In response to a question by Senator Roeding, Ms. Belin stated that the prepaid tuition program would open for enrollment in October 2001. Information about the program was available on the Internet and a mass marketing campaign, including brochures and other materials, would be distributed over the coming months once the printer finished printing the materials. Additionally, the Department would be conducting a heavy media marketing campaign about the program between now and the enrollment period.
This administrative regulation was amended as follows: (1) the agency name was amended to reflect the correct name of the agency; (2) the NECESSITY, FUNCTION, AND CONFORMITY paragraph and Sections 1 and 2 were amended to comply with the drafting and format requirements of KRS Chapter 13A; and (3) a new Section 3 was created to incorporate by reference the required application form.
Teachers' Retirement System: General Rules
102 KAR 1:220. Final average salary based on average of three (3) highest salaries. Robert Barnes, General Counsel, represented the System.
This administrative regulation was amended as follows: the NECESSITY, FUNCTION, AND CONFORMITY paragraph and Sections 1 and 2 were amended to comply with the drafting and format requirements of KRS Chapter 13A.
Revenue Cabinet; Sales and Use Tax; Miscellaneous Retail Transactions
103 KAR 28:140. Access and other communications services. Richard Dobson, Tax Consultant, Division of Tax Policy, represented the Cabinet.
In response to questions by Senator Roeding, Mr. Dobson stated that the Cabinet currently was collecting this sales and use tax on communications services. Legislation that took effect January 1, 2001, extended the sales tax to interstate communications services. Intrastate communication services have been taxable since 1960. There had been an ongoing discussion with communications service providers regarding access fees based on changes in the communications industry. These charges were taxable and this administrative regulation provided clarification and guidelines to the communications service industry regarding these charges.
This administrative regulation was amended as follows: Section 4(1) was amended to cross-reference KRS 139.100 for clarity.
Board of Optometric Examiners
201 KAR 5:010. Application for licensure; endorsement. Richard Schuck, President, represented the Board.
In response to questions by Senator Roeding, Mr. Schuck stated that the application fees for residents and nonresidents were increased by this administrative regulation. The Board’s revenues were down because not as many people maintained Kentucky licensure each year. To keep the Board’s finances able to meet expenses, the Board needed to raise additional money. The Board felt it would be more equitable to charge the same fee amount for both resident and nonresident licensees rather than different amounts for each type of licensee. The Board also deleted the option of licensure by reciprocity in favor of licensure by endorsement because licensure by endorsement was easier for people to obtain in today’s mobile society. The Board publicized the fee increases and was not aware of objections to the new fees from optometrists.
This administrative regulation was amended as follows: (1) the STATUTORY AUTHORITY paragraph was amended to correct statutory citations; and (2) Sections 1 through 3 were amended to comply with the formatting and drafting requirements of KRS Chapter 13A.
201 KAR 5:030. Annual courses of study required. This administrative regulation was amended as follows: (1) the NECESSITY, FUNCTION, AND CONFORMITY paragraph was amended to clearly state the necessity for and function served by this administrative regulation, as required by KRS 13A.220(3)(f); and (2) Section 1 was amended to delete superfluous language, as required by KRS 13A.222(4)(a).
201 KAR 5:040. Unprofessional conduct. This administrative regulation was amended as follows: (1) the RELATES TO and STATUTORY AUTHORITY paragraphs were amended to correct statutory citations; (2) the NECESSITY, FUNCTION, AND CONFORMITY paragraph was amended to clearly state the necessity for and function served by this administrative regulation, as required by KRS 13A.220(3)(f); and (3) Sections 1, 2 and 3 were amended to comply with the drafting and format requirements of KRS Chapter 13A.
Board of Licensure for Professional Engineers and Land Surveyors
201 KAR 18:102 & E. Electronic stamps, seals and signatures. Buck Salyer, General Counsel, represented the Board.
This administrative regulation was amended as follows: (1) the NECESSITY, FUNCTION, AND CONFORMITY paragraph was amended to clearly state the necessity for and function served by this administrative regulation, as required by KRS 13A.220(3)(f); and (2) Sections 1, 5, and 6 were amended to comply with the drafting requirements of KRS Chapter 13A.
Tourism Development Cabinet: Office of the Secretary
300 KAR 2:030. Kentucky Tourism Development Act. Pat Abell represented the Cabinet.
In response to questions by Senator Roeding, Mr. Abell stated that this administrative regulation replaced an existing administrative regulation promulgated by the Economic Development Cabinet because House Bill 87, enacted during the 2001 Regular Session of the General Assembly, transferred the jurisdiction for the program from the Economic Development Cabinet to the Tourism Development Cabinet. The language in this administrative regulation mirrored the language used in the previous administrative regulation.
This administrative regulation was amended as follows: Sections 2, 4, and 5 were amended to comply with the drafting and format requirements of KRS Chapter 13A, including the requirements for incorporation by reference established in KRS 13A.2251.
Department of Fish and Wildlife Resources: Fish
301 KAR 1:012. Boating, swimming and water skiing and other activities on department-owned or controlled lakes. Tom Bennett, Commissioner, and Scott Porter, General Counsel, represented the Department.
In response to a question by Senator Roeding, Mr. Bennett stated that Cedar Creek Lake was a twelve million dollar project being built by the Department in cooperation with the Kentucky Highway Department in Lincoln County on the reconstruction of U.S. 150. The lake had been designed since its inception as a fishing lake. The money used to build the lake came from the sport fish restoration account; thus, the lake was designated as a fishing only lake, with swimming in designated areas.
In response to a question by Chairman Arnold, Mr. Bennett stated that the Department was required to fund the difference between the construction costs for the road to upgrade it to a dam.
This administrative regulation was amended as follows: Section 6 was amended to comply with the drafting requirements of KRS 13A.222(4)(c).
301 KAR 1:019. Cedar Creek Lake. This administrative regulation was amended as follows: Section 6 was amended to comply with the drafting requirements of KRS 13A.222(4)(b).
301 KAR 1:115. Propagation of aquatic organisms. This administrative regulation was amended as follows: (1) the STATUTORY AUTHORITY paragraph was amended to correct statutory citations; (2) the NECESSITY, FUNCTION, AND CONFORMITY paragraph was amended to clearly state the necessity for and function served by this administrative regulation, as required by KRS 13A.220(3)(f); and (3) Section 7 was amended to comply with the drafting requirements of KRS 13A.2251.
301 KAR 1:201. Fishing limits. This administrative regulation was amended as follows: Section 4 was amended to: (1) comply with the drafting and format requirements of KRS Chapter 13A; (2) establish a size limit for largemouth bass at Jericho Lake; and (3) establish a slot limit for bass at Lebanon City Lake.
Game
301 KAR 2:050 & E. Land Between the Lakes hunting requirements. This administrative regulation was amended as follows: the NECESSITY, FUNCTION, AND CONFORMITY paragraph was amended to clearly state the necessity for and function served by this administrative regulation, as required by KRS 13A.220(3)(f).
301 KAR 2:142 & E. Spring wild turkey hunting. This administrative regulation was amended as follows: (1) Sections 4, 5, 6, and 7 were amended to comply with the drafting and format requirements of KRS Chapter 13A; (2) Section 3 was amended to establish a youth only turkey hunt; (3) Section 6 was amended to clarify the ability of a person to assist in a turkey hunt; and (4) Section 7 was amended to clarify the requirements for the second chance drawing.
301 KAR 2:178. Deer hunting on wildlife management areas. This administrative regulation was amended as follows: (1) Sections 1, 3, and 4 were amended to comply with the drafting and format requirements of KRS Chapter 13A; and (2) Section 3 was amended to clarify the requirements for the second chance drawing.
301 KAR 2:251. Hunting and trapping seasons and limits for furbearers and small game. This administrative regulation was amended as follows: Section 11 was amended to correct a typographical error by inserting a missing word.
Hunting and Fishing
301 KAR 3:022 & E. License, tag and permit fees. In response to questions by Representative Allen, Mr. Bennett stated that this administrative regulation did not increase the license, tag and permit fees, but rather allowed customers to purchase the Land Between the Lakes U.S. Forest Service permit on the Department’s permit system. Without the convenience provided by this administrative regulation, customers were required to travel to Golden Pond or contact the U.S. Forest Service directly in order to purchase the permit.
This administrative regulation was amended as follows: Sections 1, 2, and 4 were amended to delete superfluous language as required by KRS 13A.222(4)(a).
301 KAR 3:040. Wildlife disaster contingency measures. This administrative regulation was amended as follows: (1) the STATUTORY AUTHORITY paragraph was amended to correct statutory citations; (2) the NECESSITY, FUNCTION, AND CONFORMITY paragraph was amended to clearly state the necessity for and function served by this administrative regulation, as required by KRS 13A.220(3)(f); and (3) Section 1 was amended to comply with the formatting and drafting requirements of KRS Chapter 13A.
Wildlife
301 KAR 4:010. Districts. This administrative regulation was amended as follows: (1) the STATUTORY AUTHORITY paragraph was amended to correct statutory citations; and (2) the NECESSITY, FUNCTION, AND CONFORMITY paragraph was amended to clearly state the necessity for and function served by this administrative regulation, as required by KRS 13A.220(3)(f).
Economic Development Cabinet: Kentucky Jobs Development Authority
307 KAR 2:021. Repeal of 307 KAR 2:020. Emily Dennis, Attorney, represented the Cabinet.
In response to questions by Senator Roeding, Ms. Dennis stated that the Tourism Development Cabinet now had the jurisdictional authority over the Kentucky Tourism Development Act and they have been directed to establish a Tourism Development Finance Authority, similar to the Kentucky Economic Development Finance Authority. That new body would be the approving body for the tax incentive program. There will not be duplication of services because the duties of the Kentucky Economic Development Finance Authority were transferred to the newly established Tourism Development Finance Authority in the Tourism Development Cabinet. Previously, there was an administrative burden because the secretary of the Tourism Development Cabinet recommended projects for approval by the Kentucky Economic Development Finance Authority and there were paperwork difficulties working between the two cabinets’ roles in the program.
This administrative regulation was amended as follows: the RELATES TO, STATUTORY AUTHORITY, and NECESSITY, FUNCTION, AND CONFORMITY paragraphs were amended to update statutory citations.
Natural Resources And Environmental Protection Cabinet: Department for Environmental Protection: Division for Air Quality: Attainment and Maintenance of the National Ambient Air Quality Standards
Hank List, Deputy Secretary, John Hornback, Director, Division for Air Quality, and Bob Logan, Commissioner, Department of Environmental Protection, represented the Cabinet. Joe Darguzas and Jim See, EnviroPower Corporation, and Dwain Kincaid, Kentuckiana Engineering and Thoroughbred Generating Station, appeared before the Subcommittee in opposition to these administrative regulations. Van Needham, Manager, Regional Governmental Affairs, Cinergy Corporation; Dick Brewer, Manager, Environmental Affairs, Cinergy Corporation, and Chairman, Utilities Information Exchange; Eric Gregory, Public Affairs Manager, East Kentucky Power Corporation; Guy Zerramelli, ADP Environmental Affairs Manager; and George Semens, Vice President, Government Affairs, LG&E and Kentucky Utilities, appeared before the Subcommittee in support of these administrative regulations.
Secretary List stated that the federal government established a federal implementation plan in 1997, with which Kentucky was required to comply. Currently, Kentucky was in the process of establishing the state implementation plan acceptable to the federal Environmental Protection Agency.
Mr. Hornback stated that the Division for Air Quality had been working to adopt or incorporate federal requirements for reducing oxides of nitrogen emissions for several years. The federal regulations had been reviewed and upheld by various courts, including the United States Supreme Court, and one minor issue remained regarding the total level of emissions allowed for each state. Thus, it was possible that the emissions level allowed Kentucky might change at some future date. These administrative regulations adopted the federal requirements to reduce oxide and nitrogen emissions from utilities, industrial boilers and cement kilns. The Cabinet was issued a notice on December 18, 2000, from the federal government that its air pollution control program was not adequate to protect air quality in Kentucky and surrounding states and that the Environmental Protection Agency (EPA) had determined Kentucky was not in conformity with the required time schedules for implementing the federal requirements. The EPA had agreed to defer formal action, including formal adoption of the federal rules without adjustment for Kentucky’s needs, if Kentucky proceeded with its state implementation. The EPA had identified nitrogen oxide emissions into the ozone as a primary target for emission reductions in Kentucky. These administrative regulations established requirements relating to the ceilings on emissions, allocation procedures for credits, existing and new sources, early reduction credits and benefits, and trading programs. There were nineteen eastern states involved in this program and those states were permitted to trade emission credits in a free market trade. If these administrative regulations were not implemented, the federal government would implement the federal program in Kentucky pursuant to the notice received in December 2000.
In response to questions by Representative Lee, Mr. Hornback stated that these administrative regulations were basically the same as the federal regulations, except that some changes had been made to accommodate changes requested by environmental groups, industries, utilities, the Chamber of Commerce and others. These administrative regulations mirrored, and were no more stringent than, the federal regulations.
Secretary List stated that the EPA was allowing Kentucky to customize its regulatory scheme to meet the state’s needs; thus, these administrative regulations included some differences from the federal regulations that would be imposed on Kentucky if a federal implementation plan was required.
In response to questions by Senator Roeding, Secretary List stated that the automobile emissions program was separate from these administrative regulations, which addressed stationary sources of pollution. The stationary sources were easier to identify, regulate and control than mobile sources. These administrative regulations would reduce the NOx emissions in Kentucky to .15, as required by the federal government. If the stationary sources complied with the requirements and reduced their emissions to the required levels, that might reduce the need for future expansion of the vehicle emissions programs in Louisville and Northern Kentucky to other areas of the state. The enactment of these administrative regulations would delay further more stringent action by the EPA on automobile emission standards.
Mr. Hornback stated that the EPA has required Kentucky to maintain compliance with the automobile emission standards in Louisville and Northern Kentucky and has stated that the reduction of NOx emissions from industrial boilers and power plants would help address the future need for other air quality issues.
In response to questions by Senator Pendleton, Mr. Hornback stated that the Cabinet was late in implementing these administrative regulations and had been notified by the EPA of its deficiencies. Kentucky needed to make allocations for the first three-year period regarding emission credits in order for utilities and industries to make plans and establish controls necessary to be in compliance by May 2004. It was important that these administrative regulations be implemented now in order to give businesses and the Cabinet the opportunity to work out remaining issues prior to the compliance deadline. If these administrative regulations were not timely implemented, facilities that added controls during 2001 would not be eligible for early reduction credits because the federal government still needed to approve Kentucky’s implementation plan. The credits were good for a three-year allocation period. After the three-year period, the Cabinet would redistribute the credits to include new facilities and maintain a smaller percentage set aside for new sources in subsequent years.
Secretary List stated that companies wanted to earn early reduction credits and were already spending money to comply with the federal and state NOx emissions requirements. It was important that the regulatory scheme be in place so companies would have adequate time to prepare for compliance to earn the credits available to them.
In response to questions by Chairman Arnold, Mr. Hornback stated that the system was designed as a free market system to allow industries to develop the most economical reductions and to access the free market. Federal ceilings had been established for each state and for each sector, including the utilities sector, the industrial boiler sector, cement kilns, and others. Kentucky would allocate the credits it received to reduce its emissions but because nineteen states were involved in the program, it was important that all nineteen states reduce their emissions. A state trading program would most likely be established with the other eighteen states to permit Kentucky businesses, for instance, to trade with Indiana businesses for excess credits.
Secretary List stated that it was hard to determine if emissions from Kentucky went into other states or if other states’ emissions came into Kentucky as the direction of the winds changed daily. If Kentucky identified an emitter from another state that was causing problems in Kentucky, Kentucky would ask for correction by the offending state and the EPA.
In response to questions by Representative Allen, Mr. Hornback stated that the nineteen states were required to have an integrated process for dealing with emissions since each state’s emissions affected the other states. Kentucky did not have the regulatory authority to tell Nashville or Cincinnati what to do to clean up their emissions problems; rather Kentucky could go through an EPA petition process and request the federal government to make those requests. The state could determine to some degree if emissions came from mobile or stationary sources based on the direction of the winds at various elevation levels and the state’s knowledge of current emission levels from various stationary sources in different locations of Kentucky.
Secretary List stated that this program applied to the states located east of the Mississippi River. The EPA would monitor compliance more closely during the period of May to September since those are the problem days in most instances.
In response to a question by Senator Roeding, Mr. Hornback stated that monitors were located in Boone County, Campbell County, other places in Kentucky, and that several monitors were in Cincinnati.
In response to a question by Senator Long, Secretary List stated that Kentucky was behind schedule in implementing these administrative regulations. The EPA was closely watching Kentucky to ensure that Kentucky was making a good faith effort to put the state implementation plan in place. The Cabinet believed that these administrative regulations had been amended to respond to comments made throughout the public hearing process and were ready to be implemented in Kentucky.
In response to questions by Senator Pendleton, Mr. Hornback stated that the federal government had placed limits on emissions under the NOx SIP call, which was approximately 36,000 tons for utilities. Those limits would be allocated on a pro rata basis by the Cabinet to new and existing sources, which also had the option of purchasing credits off the market. The system would be a free market so that industries could buy credits more efficiently based on market needs. Because these administrative regulations had not been implemented, the Cabinet had not allocated new credits to new industries. An amount of credits would be allocated to new sources but utilities could choose to market their credits rather than use the credits for their own systems.
Secretary List stated that the Cabinet believed Kentucky would comply with the federal mandate but would not know that for sure until these administrative regulations were implemented and the regulated entities began reducing their emissions. The Cabinet would work to ensure that Kentucky complied with the federal requirements and would report back to the Subcommittee on its progress. A company’s ability to sell or trade credits depended on the company’s ability to over-control emissions and create value. The utilities were not able to just simply sell their credits without taking steps themselves to comply with the requirements.
Mr. Hornback stated that the federal government had drafted regulations for Kentucky, which did not provide early credit to existing sources that controlled their emissions already. Those existing sources were already spending money to install controls and achieve the required reductions and should not be faced with the possibility of losing the early reduction credits because these administrative regulations were not implemented. Additionally under the federal requirements, new sources would not be rolled into the existing source pool as quickly as the state plan would permit them.
In response to a question by Representative Bruce, Mr. Hornback stated that the number of monitors in Kentucky and Tennessee differed, as well as the number in Eastern and Western Kentucky. The number and location of monitors were based on population densities and large population centers. Kentucky’s program was designed in accordance with the federal expectations for identifying the exposure to Kentucky’s large metropolitan areas, regional population centers, and rural areas.
In response to questions by Representative Lee, Mr. Hornback stated that under the federal trading program requirements, a business could purchase credits from the federal trading program from the emission credits registered by each state for the program. New facilities would be required to obtain credits from either the state allocation process or the federal trading program but this requirement only affected large boilers with 250 million Btu an hour.
Mr. Darguzas stated that while the independent power community believed the Cabinet had done a good job in most areas, the Cabinet still needed to more adequately address the manner in which new independent power producers were treated by these administrative regulations. While existing utilities did agree with the requirements of these administrative regulations, the new utilities did not agree with the NOx trading program. These administrative regulations did not establish the NOx trading program, which was a disadvantage to new utilities because the existing utilities have not shown a willingness to allow new industries to purchase NOx allowances and credits. The existing utilities would be required to put on controls to reduce pollution. If the state auctioned off the allowances directly, the state would have over one hundred million dollars of revenue from the sale of the allowances. A study conducted by an independent consulting engineer suggested that the rate increase would be one to two mills, or one to two tenths of a cent per kilowatt hour, if the utilities imposed on themselves the maximum control possible.
Mr. Kincaid stated that he agreed with Mr. Darguzas’ comments. These administrative regulations did not go far enough regarding new source set asides, which currently were set at just five percent. Based on the Governor’s Task Force on Energy and the President’s emphasis on developing new power generation in the United States, the new source set asides would limit new industry’s ability to bring on-line new utilities especially in Kentucky.
In response to questions by Representative Lee, Mr. Darguzas stated that new industry representatives had submitted written and oral testimony to the Cabinet on numerous occasions and had met with air quality individuals several times. While he believed the Cabinet was responsive and listened to their concerns in many areas, the Cabinet had not been accommodating in regards to how the independent power producers would be treated in their efforts to bring lower cost electrical supplies to Kentucky. The Cabinet had not given the new industry representatives an explanation why the requested changes would not be made.
In response to questions by Chairman Arnold, Mr. Darguzas stated that the basic problem was that there were not enough credits to meet the needs of both existing and new utilities. The federal government did not allocate enough credits to Kentucky and the surrounding states to meet the states’ needs. New generators would be required to have very low emission levels, around .07 pounds per million Btu. Existing utilities would have a higher level.
In response to questions by Senator Roeding, Mr. Darguzas stated that the plants proposed by his company, EnviroPower, and Mr. Kincaid’s company would have a baseload of 8,760 hours a year of operation as a Kentucky coal-fired power plant. The companies would bring to their communities several hundred long-term permanent employees and between 600 and 1,000 employees during construction. They believed their companies were an economic development activity for their regions of Kentucky, but the NOx issue posed a problem for them. The electricity generated by his plants will be sold both inside and outside Kentucky. For instance, all the electricity generated at its Hazard location would be used within a sixty to one hundred mile radius of the facility. Because of a shortage of generation in that region, their power will stabilize the electric grid and provide a low cost source of power to that region. Those plants would create forty megawatts of new electricity through the elimination of line losses in that region. Thus, his plants will provide both an economic and electrical benefit to that region. The Governor’s moratorium did not affect the projects for which his company had already received permits and his projects would go forward if the other issues were resolved.
In response to a question by Chairman Arnold, Mr. Darguzas and Mr. Kincaid stated that their plants would only burn Kentucky coal.
In response to questions by Representative Allen, Mr. Darguzas stated that his company’s business plans were to sell electricity only to utilities for those utilities to then redistribute to individual consumers. This region of the United States was growing at such a rate that, if something was not done by 2005 to address the future needs of this area, this region would face the same kind of power shortages experienced recently in California and about to hit New York. He did not know how his company’s power sales program would play out but he knew that his generating plants would be located in areas to benefit Kentucky’s citizens.
Mr. Needham stated that Cinergy Corporation supported these administrative regulations.
Mr. Brewer stated that he was the Chairman of the Utilities Information Exchange, which was an association of the environmental experts of each of the existing utilities in Kentucky and had worked with the Division for Air Quality over the last year regarding these administrative regulations. His organization had reached a consensus among its members and with the Cabinet on several issues but was now in the process of waiting for these administrative regulations to become effective. Their utilities were making capital investments but did not know yet if those investments would be justified with the state implementation plan. If these administrative regulations were not implemented, the federal requirements would be imposed on Kentucky and would not provide credit to the industry for the current capital investments. These administrative regulations established a cap and trade program modeled after the similar program for sulfur dioxide emissions, which did not have a new source set aside. The market would handle the controls based on supply and demand and the cost effectiveness of reducing emissions at specified plants. Existing utilities recognized the need for allowances for new sources and believed the market would address their needs. The existing coal-fired utilities have a current emission rate of .45 pounds Btu of NOx or higher and will be required to have a rate of .15 or lower. The EPA’s model rules recommended a five percent set aside for new sources to be allocated over a five year period. Kentucky adopted the five percent set aside but reduced the allocation period to three years. After operating under the new source set aside for three years, a new source would then be in the same pool as existing utilities for their pro rata shares of the credits. Kentucky needed to move forward with its state implementation plan to enable utilities to earn their early reduction credits and to join with the nineteen state trading program.
Mr. Gregory stated that these administrative regulations needed to be put in place so that industries could plan their compliance efforts. If the NOx allowances were increased for new sources, the individual companies would be faced with capital construction costs around 679 million dollars, which would eventually get passed on to consumers.
In response to a question by Chairman Arnold, Mr. Semens stated that Kentucky utilities would spend about 106 million dollars to establish NOx controls to provide the five percent set aside. The controls would cost about two million dollars to operate. As the set aside amount was increased, the equipment cost also increased. Those costs would be passed on to customers because everybody paid the costs of clean air, including the costs of NOx and sulfur dioxide reductions. The existing utilities favored the establishment of a marketplace to trade existing credits. The rates for existing utilities were set by the Kentucky Public Service Commission and would not increase unless the PSC approved an increase. However, a new utility could increase its prices based on market demands without the protections afforded consumers by the PSC.
Secretary List stated that the discussion had turned from these administrative regulations to policy decisions that should be established by the General Assembly. The legislature should determine if the set asides should be greater than five percent.
In response to a question by Chairman Arnold, Mr. Logan stated that the Cabinet has tried to deal with the concerns raised by new industries based upon the permit requirements and regulations currently in existence. The set aside issue was a matter of policy and the Cabinet had tried to accommodate all entities equitably based upon the statutory requirements.
In response to questions by Chairman Arnold, Secretary List stated that the Governor had established a moratorium on new permits to give the state the opportunity to determine what policy decisions should be made during the 2002 Regular Session of the General Assembly regarding Kentucky’s electric grid. The Cabinet had complied with the requirements of KRS Chapter 13A regarding the notices of intent and public hearings and had worked with utilities and interested parties in developing these administrative regulations. Now, the Cabinet wanted these administrative regulations approved by the Subcommittee so that the state program could be implemented sooner than later.
The Subcommittee unanimously approved a motion by Senator Long, seconded by Senator Roeding, to approve 401 KAR 51:001, 401 KAR 51:160, 401 KAR 51:180, and 401 KAR 51:195, each as amended, and the remainder of these administrative regulations without amendment.
401 KAR 51:001. Definitions for 401 KAR Chapter 51. This administrative regulation was amended as follows: Section 1 was amended to: (1) make the definition of “commence commercial operation” consistent with this term in the federal NOx SIP Call; and (2) comply with the drafting and format requirements of KRS Chapter 13A.
401 KAR 51:160. NOx requirements for large utility and industrial boilers. This administrative regulation was amended as follows: (1) Section 2 was amended to require units that accept permit limits to keep NOx emissions below 25 tons during the control period and to allow these units to secure NOx credits from the open market in a sufficient amount to cover the permitted limits; (2) Section 7 was amended to change the required date for submission of the annual compliance certification from January 30 to November 30; and (2) Sections 2, 4, 5, and 7 were amended to comply with the drafting and format requirements of KRS Chapter 13A.
401 KAR 51:180. NOx credits for early reduction and emergency. This administrative regulation was amended as follows: (1) Section 3 was amended to: (a) require distribution of the early reduction credits over a three-year period rather than all at once on a first-come-first-serve basis; and (b) establish requirements for the utility pool; and (2) Sections 2, 3, 4, 5, 6, and 7 were amended to: (a) clarify requirements; and (b) comply with the drafting and format requirements of KRS Chapter 13A.
401 KAR 51:195. NOx opt-in provisions. The federal mandate analysis comparison was amended to cross-reference the state compliance standards established in KRS Chapter 224.
Justice Cabinet: Office of the Secretary
501 KAR 6:020. Corrections policies and procedures. Jack Damron represented the Cabinet.
In response to a question by Senator Roeding, Mr. Damron stated that CPP 15.2 was specifically designed to handle contact between inmates. A statute in KRS Chapter 510, which related to sexual offenses, covered conduct between inmates and employees. CPP 27-27-01 was amended to comply with statutory requirements enacted during the 2001 Regular Session of the General Assembly.
This administrative regulation was amended as follows: (1) the RELATES TO paragraph was amended to correct statutory citations; (2) Section 1 was amended to correct the edition date of the material incorporated by reference; (3) CPP 15.2 was amended to clarify the defined terms; and (4) CPP 27-27-01 was amended to comply with the requirements of HB 281.
Education Professional Standards Board
704 KAR 20:690. Kentucky Teacher Internship Program. Mary Ellen Wiederwohl, Staff Member, and Marilyn Troupe, Staff Member, represented the Board.
This administrative regulation was amended as follows: (1) Section 7(3) was amended to increase the amount of the stipend for teacher internship mentors from $1,000 to $1,400 in accordance with the 2000-2002 Budget Memorandum; (2) Section 8 was amended to delete language that repeated or summarized KRS Chapter 13B, as required by KRS 13A.120(2)(e) and (f); and (3) Section 10 was amended to: (a) comply with the drafting requirements of KRS 13A.2251; and (b) change the edition date of the material incorporated by reference.
704 KAR 20:696. Standards for accreditation of educator preparation units and approval of programs. In response to questions by Senator Roeding, Ms. Wiederwohl stated that alternative route programs allowed a person to concurrently serve as a teacher or administrator while the person pursued the remainder of the preparation, internship, and assessment requirements. This administrative regulation was promulgated to comply with Senate Bill 77, enacted during the 2000 Regular Session of the General Assembly.
This administrative regulation was amended as follows: (1) the RELATES TO, STATUTORY AUTHORITY, and NECESSITY, FUNCTION, AND CONFORMITY paragraphs were amended to correct statutory citations; and (2) Sections 2, 3, 5, 8, 14, 15, 16, 18, 22, 23, 24, and 25 were amended to comply with the drafting and format requirements of KRS Chapter 13A.
Department for Alcoholic Beverage Control: Licensing
804 KAR 4:360 & E. Restaurant drink licenses for fifth and sixth class cities. Rebecca Goodman, General Counsel, represented the Department.
In response to a question by Chairman Arnold, Ms. Goodman stated that a city’s classification was determined based on population, but she did not know the exact requirements for each classification.
This administrative regulation was amended as follows: (1) the RELATES TO paragraph was amended to correct statutory citations; (2) the NECESSITY, FUNCTION, AND CONFORMITY paragraph was amended to clearly state the necessity for and function served by this administrative regulation, as required by KRS 13A.220(3)(f); and (3) Section 1 was amended to comply with the formatting and drafting requirements of KRS Chapter 13A.
Department of Housing, Buildings and Construction: Kentucky Building Code
815 KAR 7:120. Kentucky Building Code/2002. Judith Walden, General Counsel, Dennis Langford, Commissioner, and Nick Piacsek, Assistant Director, Administrative Services, represented the Department.
This administrative regulation was amended as follows: Section 4(1) was amended to specify the effective date of this administrative regulation, to comply with KRS 13A.330.
Boilers and Pressure Vessels
815 KAR 15:027. Certificates and fees for boiler and pressure vessel inspection. This administrative regulation was amended as follows: Section 2(5)(d) was amended to delete provisions that conflicted with KRS 236.990(2), 236.990(1), and 236.550(2).
Cabinet For Health Services: Department for Public Health: Maternal and Child Health
902 KAR 4:035. The cost reimbursement system for metabolic food and formula for the uninsured. Robert Calhoun, Maternal and Child Health Branch, Sue Bell, Health Start in Childcare Program, and Elizabeth Harp, Program Administrator, Newborn Screening Program, represented the Cabinet.
In response to a question by Representative Bruce, Ms. Bell stated that this administrative regulation was not part of the Stars for KIDS NOW program.
This administrative regulation was amended as follows: (1) the TITLE was amended for clarity and brevity; (2) the RELATES TO and STATUTORY AUTHORITY paragraphs were amended to correct and add statutory citations; (3) the NECESSITY, FUNCTION, AND CONFORMITY paragraph was amended to clearly state the necessity for and function served by this administrative regulation, as ; (4) Section 1 was amended to correct and clarify definitions; (5) Section 2 was amended to: (a) clarify meaning; and (b) complete statutory citations; (6) Section 3 was amended to fully name a necessary form; and (7) Section 4 was amended to comply with the incorporation requirements of KRS 13A.2251.
Radiation Operators Certification
902 KAR 105:020. General requirements. John Volpe, Manager, Radiation, Health and Toxic Agents Branch, and Dewey Crawford, Supervisor, Radiation Control Branch, represented the Cabinet.
In response to questions by Chairman Arnold, Mr. Volpe stated that this administrative regulation affected the actual operators of radiation-producing machines, regardless of its location. The operators might be located in a hospital, an industrial setting, or another place. There were two different types of operators: a general operator and a limited operator. A general operator was certified to work in hospitals using contrast-type media and different procedures that create more of a radiation-risk. A limited operator completed a course in radiation protection offered by the Cabinet.
This administrative regulation was amended as follows: the STATUTORY AUTHORITY and NECESSITY, FUNCTION, AND CONFORMITY paragraphs and Sections 1 through 6 were amended to comply with the drafting and format requirements of KRS Chapter 13A.
Department for Medicaid Services
907 KAR 1:160 & E. Home and community based waiver services. Ellen Hesen, Interim Commissioner, Phil Kremer, Division Director for Physical Health, Ann Marks, Deputy Secretary and Acting Director, KenPac Division, and David Meacham, KenPac Division.
This administrative regulation was amended as follows: (1) Section 1 was amended to: (a) delete definitions of “medically oriented service” and “non-medically oriented service”, as requested by the agency; and (b) revise the definition of “social worker” to mean a person with a bachelor’s degree in social work, sociology, or a related field, as requested by the agency; (2) Section 2 was amended to require that an out of state provider meet the same requirements as an in state provider, as requested by the agency; (3) Section 3 was amended to specify that records regarding services provided to a minor shall be kept for the specified time period or for three years after the recipient reaches the age of majority, whichever is longest, as requested by the agency; (4) Section 4 was amended to clarify that an HCB waiver service shall be provided to a recipient who meets the level of care requirements and who would, without waiver services, be admitted by a physician’s order to a nursing facility, as requested by the agency; (5) Section 5 was amended to clarify the requirements for attendant care and ADHC services, as requested by the agency; and (6) Sections 1, 3, 4, and 5 were amended to comply with the drafting and format requirements of KRS Chapter 13A.
Department for Mental Health and Mental Retardation Services: Institutional Care
908 KAR 3:050 & E. Per diem rate pursuant to the "Patient Liability Act of 1978". Mike Littlefield, Administrative Regulations Coordinator, and Linda Harney, Director, Mental Health and Mental Retardation Services, represented the Department.
In response to questions by Senator Roeding, Mr. Littlefield stated that this administrative regulation was promulgated to replace an emergency administrative regulation. While the ordinary administrative regulation was going through the process, the Department received newer, more recent audited cost reports that indicated a different cost level for several of the facilities. Thus, the Department proposed an amendment to this administrative regulation to include the more updated cost information.
This administrative regulation was amended as follows: Section 1(1) was amended to increase the per diem rates for nine of the listed facilities to reflect the actual costs of providing services as reflected in the most recent audited facility costs reports, as requested by the agency.
Cabinet For Families And Children: Department for Community Based Services: Day Care
922 KAR 2:110. Child care facility provider requirements. Cliff Jennings and Stephanie Brammer-Barnes represented the Cabinet.
This administrative regulation was amended as follows: (1) the RELATES TO paragraph was amended to correct statutory citations; (2) the NECESSITY, FUNCTION, AND CONFORMITY paragraph and Sections 1 through 4 were amended: (a) for clarity; and (b) to comply with the drafting requirements of KRS Chapter 13A; and (3) Section 1(7), (8), (9)(d), and (10) were deleted because they repeated statutory language, in violation of KRS 13A.120(2)(e) and (f).
922 KAR 2:120. Child care facility health and safety standards. This administrative regulation was amended as follows: (1) the RELATES TO paragraph was amended to correct statutory citations; and (2) the NECESSITY, FUNCTION, AND CONFORMITY paragraph and Sections 1 through 5 were amended: (a) for clarity; and (b) to comply with the drafting requirements of KRS Chapter 13A.
922 KAR 2:170. Stars for KIDS NOW Program for Type I licensed child care centers. In response to questions by Representative Bruce, Ms. Talley stated that the Governor’s Office for Early Childhood Development and the Cabinet worked very closely with the provider population to develop the quality rating standards. However, the budget bill allocated a specific amount of money for this program. Because the Cabinet did not know how many participants there would be in the program, the Cabinet was being fiscally responsible by setting a lower reimbursement rate. If fewer centers participate, the Cabinet would have the ability to increase the reimbursement in the future. The Cabinet and Governor’s Office sent letters to providers on July 1 that explained the process and the budgetary concerns and requirements. The program was implemented statewide July 1 and the ninety pilot programs were now in a position to receive their money for achieving the quality rating. Her office would meet with providers across the state and explain the process to them in person.
Representative Lee stated that all day care operators, regardless of the size of the day care, should be able to participate in the program and he encouraged the Cabinet to talk with operators from all sized-facilities to gain feedback regarding the program. The success of the program depended on the effectiveness of the coordinators in addressing the concerns of day care operators.
In response to questions by Chairman Arnold, Ms. Talley stated that it cost more to provide care for children under two than for children over two. Thus the amount of reimbursement varied depending on the age of the children and the number of subsidy children being served. The money would be provided up front, rather than as a cost reimbursement, so that day care centers could maintain the quality achieved at their centers.
Chairman Arnold stated that more money needed to be allocated to this program in the next budget.
In response to a question by Senator Roeding, Ms. Talley stated that the national data indicated that most child care across the United States was poor to mediocre. The first five years of a child’s life were critically important for building the brain’s infrastructure in a quality environment. House Bill 706, enacted during the 2000 Regular Session of the General Assembly, established supports for day care centers to improve their quality without increasing the day care costs to parents. Participation in the program was voluntary.
This administrative regulation was amended as follows: (1) the STATUTORY AUTHORITY and NECESSITY, FUNCTION, AND CONFORMITY paragraphs were amended to correct statutory citations; (2) Section 1 was amended to add the definition for the Stars for KIDS NOW Program; and (3) Sections 1 through 12 were amended: (a) for clarity; (b) to provide statutory citations; (c) to complete regulatory references; and (d) to comply with the drafting requirements of KRS Chapter 13A.
The Subcommittee determined that the following administrative regulations complied with statutory authority:
Kentucky Higher Education Assistance Authority: Kentucky Loan Program
11 KAR 3:100. Administrative wage garnishment. Richard Casey, General Counsel, and Linda Renschler, Student Aid Branch Manager, represented the Authority.
KHEAA Grant Programs
11 KAR 5:036. Leveraging Educational Assistance Partnership Program and Special Leveraging Educational Assistance Partnership Program eligibility. In response to questions by Senator Roeding, Ms. Renschler stated that seventy-two Kentucky postsecondary institutions participated in the College Access Program (CAP) grant which included the federal funds under this administrative regulation. Students received information about the availability of these funds.
Mr. Casey stated that specialty postsecondary institutions, such as cosmetology schools, did not participate in the CAP grant program and were not affected by this administrative regulation.
11 KAR 5:121. Repeal of 11 KAR 5:120.
11 KAR 5:140. KTG Award determination procedure. In response to a question by Senator Roeding, Mr. Casey stated that this administrative regulation applied to the twenty-two postsecondary institutions that participated in the Kentucky Tuition Grant (KTG) program. The KTG program was established by statute specifically for private, degree-granting institutions.
11 KAR 5:145. CAP Grant Award determination procedure.
11 KAR 5:170. Refund and repayment policy.
Teacher Scholarship Loan Program
11 KAR 8:030. Teacher scholarships.
11 KAR 8:040. Deferment of teacher scholarship repayment.
Osteopath Scholarship Program
11 KAR 14:040. Osteopathic Medicine Scholarship Program overawards and refunds.
Commonwealth Merit Scholarship Program
11 KAR 15:060. Kentucky Educational Excellence Scholarship overpayment and refund and repayment procedure.
Board of Optometric Examiners
201 KAR 5:050. Office locations. Richard Schuck, President, represented the Board.
201 KAR 5:061. Repeal of 201 KAR 5:060.
201 KAR 5:090. Annual renewal fees. In response to questions by Representative Allen, Mr. Schuck stated that the annual renewal fees remained the same since 1997 and had not been changed.
Tourism Development Cabinet: Department of Fish and Wildlife Resources: Fish
301 KAR 1:015. Boats and motor restrictions. Tom Bennett, Commissioner, and Scott Porter, General Counsel, represented the Department.
Licensing
301 KAR 5:030. Purchasing licenses and obtaining replacement licenses. In response to questions by Representative Allen, Mr. Bennett stated that this administrative regulation increased from $3.00 to $4.00 the administrative costs for a person who wanted their license replaced because their original license was lost. The person was required to provide documentation that a license had originally been purchased. The state MARS system required the Department to enter a specific cost code for each time a license was issued or replaced.
Natural Resources And Environmental Protection Cabinet: Department for Environmental Protection: Division for Air Quality: Attainment and Maintenance of the National Ambient Air Quality Standards
401 KAR 51:170. NOx requirements for cement kilns.
401 KAR 51:190. Banking and trading NOx allowances.
401 KAR 51:200. Regional NOx emission requirements.
Mobile Source Related Emission
401 KAR 65:001. Definitions for 401 KAR Chapter 65. John Hornback and Bob Logan represented the Cabinet.
401 KAR 65:010. Vehicle emission control programs.
Justice Cabinet: Jail Standards for Counties Housing Class D Felons
501 KAR 13:021. Repeal of 501 KAR 13:020. Jack Damron represented the Cabinet.
Workforce Development Cabinet: Department for Employment Services: Unemployment Insurance
787 KAR 1:281. Repeal of 787 KAR 1:280. Tony DeName, Director, Division of Unemployment Insurance, and Michael Haynes, Internal Security Officer, represented the Cabinet.
787 KAR 1:300. Successorship.
Department for Housing, Buildings and Construction: Elevator Safety
815 KAR 4:025. Permit fees for new and altered elevators. Judith Walden, General Counsel, Dennis Langford, Commissioner, and Nick Piacsek, Assistant Director, Administrative Services, represented the Department.
Kentucky Building Code
815 KAR 7:080. Licensing of fire protection sprinkler contractors.
815 KAR 7:106. Repeal of 815 KAR 7:105.
HVAC Licensing Requirements
815 KAR 8:010. Master heating, ventilation, and air conditioning (HVAC) contractor licensing requirements.
815 KAR 8:020. Journeyman heating, ventilation, and air conditioning (HVAC) mechanic licensing requirements.
Boilers and Pressure Vessels
815 KAR 15:080. Fees for licensing new boiler and pressure vessel contractors.
Plumbing
815 KAR 20:030. License application; qualifications for examination, examination requirements, expiration, renewal, revival or reinstatement of licenses.
815 KAR 20:050. Installation permits. In response to questions by Senator Roeding, Ms. Walden stated that the inspection fee for a replacement hot water heater had been increased by this administrative regulation to $35. The Plumbing Code Committee, which was comprised of industry representatives, recommended the increase of the fees to support the program and believed the costs were appropriate to cover the inspector’s costs of conducting the inspection. The Department made a commitment to the board to decrease the fees in the future if there was a problem with the increased fee amount.
Mr. Langford stated that there were sixty-eight Board members throughout all regions of Kentucky who worked closely with the Department to develop the increased fees.
Hazardous Materials
815 KAR 30:060. Certification of underground petroleum storage tank contractors.
Electrical Inspectors
815 KAR 35:015. Certification of electrical inspectors.
815 KAR 35:030. Kentucky certification of electrical contractors.
Cabinet For Health Services: Department for Public Health: Maternal and Child Health
902 KAR 4:130. Health Start in Childcare Program. Robert Calhoun, Maternal and Child Health Branch, Sue Bell, Health Start in Childcare Program, and Elizabeth Harp, Program Administrator, Newborn Screening Program, represented the Cabinet.
Department for Medicaid Services: Services
907 KAR 1:145E. Supports for community living services for an individual with mental retardation or a developmental disability. Ellen Hesen, Interim Commissioner, Phil Kremer, Division Director for Physical Health, Ann Marks, Deputy Secretary and Acting Director, KenPac Division, and David Meacham, KenPac Division.
Senator Roeding stated that he wanted to be recorded as voting against this emergency administrative regulation, 907 KAR 1:320E, 907 KAR 3:030E, and 907 KAR 3:160E.
907 KAR 1:320E. Kentucky Patient Access and Care System (KenPAC).
Payment and Services
907 KAR 3:030E. Coverage and payments for IMPACT Plus services.
907 KAR 3:160E. Specialized children's services clinic. In response to questions by Senator Roeding, Mr. Kremer stated that the Department limited the ability of registered nurses to conduct certain examinations based on concerns for proper training and knowledge of equipment usage and that the inspections be conducted appropriately.
Ms. Hesen stated that the limits applied to the special child sexual abuse medical examinations and not to the entire Medicaid population. The Department worked with the Office of Domestic Violence in promulgating this administrative regulation.
Senator Roeding stated that the Department should consider expanding the list of service providers to include registered nurses as a cost-saving measure. Additionally he stated that the Cabinet should reduce the number of emergency administrative regulations it promulgated because the public was not able to provide input before the emergency administrative regulation took effect.
Ms. Hesen stated that the Department did not defer the emergency administrative regulations so that the Department representatives would be available to discuss both the emergency and ordinary administrative regulations promulgated by the Department with the Subcommittee.
Cabinet For Families And Children: Department for Community Based Services: Child Welfare
922 KAR 1:181. Repeal of 922 KAR 1:180. Cliff Jennings and Stephanie Brammer-Barnes represented the Cabinet.
The Subcommittee and the promulgating administrative agencies agreed to defer consideration of the following administrative regulations to the next meeting of the Subcommittee:
Governor's Office: Office of Agricultural Policy: Kentucky Aquaculture Production System Grant Program
10 KAR 4:020E. Disbursement of monies from the Kentucky Aquaculture Production System (KAPS) Grant Program for the construction of commercial aquaculture ponds.
Governor's Office For Technology: Early Childhood Development Authority
10 KAR 6:010E. Duties of the Early Childhood Development Authority.
Board of Optometric Examiners
201 KAR 5:037. Advertising. Mr. Schuck stated that the Board wanted to defer the Subcommittee’s consideration of this administrative regulation. Without objection, this administrative regulation was deferred.
Board of Speech-Language Pathology and Audiology
201 KAR 17:027. Supervision requirements for a speech-language pathology assistant.
201 KAR 17:030. License fees and requirements for inactive status.
201 KAR 17:090. Continuing education requirements.
Board of Licensure and Certification for Dietitians and Nutritionists
201 KAR 33:015. Application; approved programs.
201 KAR 33:050. Complaint procedure.
201 KAR 33:060. Supervision requirements.
Justice Cabinet: Kentucky Parole Board
501 KAR 1:030. Determining parole eligibility.
501 KAR 1:040. Conducting parole revocation hearings.
Education, Arts, And Humanities Cabinet: Kentucky Board of Education: Department of Education: Office of Learning Programs Development: Office of Instruction
704 KAR 3:500E. Professional Development Leadership and Mentor Fund.
Department of Insurance: Health Insurance Contracts
806 KAR 17:150E. Health benefit plan rate filing requirements.
806 KAR 17:310E. Prompt payment of claims reporting requirements.
806 KAR 17:320E. Kentucky Access requirements.
806 KAR 17:330E. Kentucky Access health benefit plans.
806 KAR 17:350E. Guaranteed Acceptance Program (GAP) reporting requirements.
Cabinet For Families And Children: Department for Community Based Services: Adult Services
922 KAR 5:110. Adult guardianship services.
The Subcommittee adjourned at 2 p.m. until August 7, 2001, at 10 a.m. in Room 131 of the Capitol Annex.