Call to Order and Roll Call
The August meeting of the Administrative Regulation Review Subcommittee was held on Thursday, August 4, 2016, at 11:00 AM, in Room 149 of the Capitol Annex. Senator Ernie Harris, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Ernie Harris, Co-Chair; Representative Mary Lou Marzian, Co-Chair; Senators Julie Raque Adams, Perry B. Clark, and Alice Forgy Kerr; Representatives Linda Belcher and Tommy Turner.
Guests: Kara Daniel, John Schaaf, Legislative Ethics Commission; Kathryn Gabhart, Jenny May, Executive Branch Ethics Commission; Larry Brown, John Marcus Jones, Office of Occupations and Professions; Florence Huffman, Board of Social Work; Allan Allday, Ryan Halloran, Board of Applied Behavior Analysis; Sean Alteri, Division of Air Quality; Amy Barker, Department of Corrections; Michael Kurtsinger, Ann-Tyler Morgan, Fire Commission; Thomas Dockter, Lucretia Johnson, Pam Knight, Dwight Lovan, Charles Lowther, Robert Milligan, Michael Nemes, Brooken Smith, Labor Cabinet; Jamie Eads, Marc Guilfoil, Horse Racing Commission; Elizabeth Caywood, Department for Community Based Services; Bill Londrigan, Ched Jennings, and Tim Wilson.
LRC Staff: Sarah Amburgey, Emily Caudill, Betsy Cupp, Ange Darnell, Emily Harkenrider, Karen Howard, Carrie Klaber, and Donna Little.
The Administrative Regulation Review Subcommittee met on Thursday, August 4, 2016, and submits this report:
Administrative Regulations Reviewed by the Subcommittee:
GENERAL ASSEMBLY: Legislative Ethics Commission: Commission
2 KAR 2:010. Required forms. Kara Daniel, attorney, and John Schaaf, executive director, represented the commission.
2 KAR 2:020. Statement of financial disclosure.
In response to a question by Co-Chair Marzian, Ms. Daniel stated that the financial disclosure form was amended to require disclosure of fiduciary positions held by the filer only, not by the filer’s spouse. This was done for consistency with the authorizing statutes. Mr. Schaaf stated that the authorizing statutes did not require a spouse to disclose fiduciary positions.
A motion was made and seconded to approve the following amendment: to amend the RELATES TO paragraph to add a citation. Without objection, and with agreement of the agency, the amendment was approved.
2 KAR 2:040. Updated registration short forms for employers and legislative agents.
A motion was made and seconded to approve the following amendment: to amend the RELATES TO paragraph to add a citation. Without objection, and with agreement of the agency, the amendment was approved.
2 KAR 2:050. Preliminary inquiries.
In response to a question by Co-Chair Harris, Ms. Daniel stated that this administrative regulation was new and established preliminary inquiry procedures to address complaints of alleged Code of Legislative Ethics violations. The preliminary inquiry procedures were commensurate with the authorizing statute and with the commission’s historical process.
A motion was made and seconded to approve the following amendment: to amend the RELATES TO paragraph to add a citation. Without objection, and with agreement of the agency, the amendment was approved.
2 KAR 2:060. Adjudicatory hearings.
A motion was made and seconded to approve the following amendment: to amend the RELATES TO paragraph to add a citation. Without objection, and with agreement of the agency, the amendment was approved.
2 KAR 2:070. Advisory opinions.
FINANCE AND ADMINISTRATION CABINET: Executive Branch Ethics Commission: Commission
9 KAR 1:040 & E. Registration and expenditure statements; financial transactions and termination forms; and enforcement. Kathryn Gabhart, executive director, and Jenny May, administrative assistant, represented the commission.
A motion was made and seconded to approve the following amendments: (1) to amend the STATUTORY AUTHORITY paragraph to correct a citation; (2) to amend the NECESSITY, FUNCTION, AND CONFORMITY paragraph to clearly state the necessity for and function served by this administrative regulation, as required by KRS 13A.220; (3) to amend Section 4 to establish the types of circumstances that qualified for exoneration or reduction of a fine for late filing of an updated registration statement; and (4) to amend Sections 2 and 4 to comply with the drafting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.
PUBLIC PROTECTION CABINET: Office of Occupations and Professions: Athlete Agents
200 KAR 30:010. Definitions for 200 KAR Chapter 30. Larry Brown, executive director, and John Marcus Jones, assistant attorney general, represented the office.
Mr. Brown stated that his office had thoroughly reviewed all of the statutes, administrative regulations, and forms related to athlete agents. These administrative regulations were being amended to comply with the office’s current statutory authority.
A motion was made and seconded to approve the following amendments: to amend the NECESSITY, FUNCTION, AND CONFORMITY paragraph and Section 1 to comply with the drafting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.
200 KAR 30:020. Complaint review.
A motion was made and seconded to approve the following amendments: (1) to amend the STATUTORY AUTHORITY paragraph to correct citations; (2) to amend the NECESSITY, FUNCTION, AND CONFORMITY paragraph to clearly state the necessity for and function served by this administrative regulation, as required by KRS 13A.220; (3) to amend Sections 2 and 3 to comply with current statutory provisions; and (4) to amend Sections 1 and 4 to comply with the drafting and formatting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.
200 KAR 30:030. Procedure for registration.
A motion was made and seconded to approve the following amendments: (1) to amend the RELATES TO and STATUTORY AUTHORITY paragraphs to correct citations; (2) to amend the NECESSITY, FUNCTION, AND CONFORMITY paragraph to clearly state the necessity for and function served by this administrative regulation, as required by KRS 13A.220; and (3) to add a new Section 2 to establish the requirement for submitting an Application for Renewal of Registration as an Athlete Agent. Without objection, and with agreement of the agency, the amendments were approved.
200 KAR 30:040. Fees.
A motion was made and seconded to approve the following amendment: to delete Section 2, which did not seem authorized by statute. Without objection, and with agreement of the agency, the amendment was approved.
200 KAR 30:051. Repeal of 200 KAR 30:050 and 200 KAR 30:060.
GENERAL GOVERNMENT CABINET: Board of Social Work: Board
201 KAR 23:055. Inactive status of license. Florence Huffman, executive director, represented the board.
Ms. Huffman thanked Subcommittee Staff, especially Donna Little and Carrie Klabor, for assistance with this administrative regulation.
A motion was made and seconded to approve the following amendments: to amend the NECESSITY, FUNCTION, AND CONFORMITY paragraph and Sections 1, 2, and 4 to comply with the drafting and formatting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.
Kentucky Applied Behavior Analysis Licensing Board: Board
201 KAR 43:110. Per Diem. Allan Allday, board member, and Ryan Halloran, assistant attorney general, represented the board.
In response to a question by Co-Chair Harris, Mr. Halloran stated that the fiscal impact submitted for this administrative regulation was erroneous. The board’s total expenses were $129,000, but the impact of this administrative regulation was $8,400.
ENERGY AND ENVIRONMENT CABINET: Department of Environmental Protection: Division of Air Quality: Attainment and Maintenance of the National Ambient Air Quality Standards
401 KAR 51:010. Attainment status designations. Sean Alteri, division director, represented the division.
In response to questions by Co-Chair Harris, Mr. Alteri stated that this administrative regulation established the designation of boundaries relative to the new and revised standards for primary and secondary ambient air quality standards. The only areas that may be out of attainment for the 2015 ozone standard were the Louisville and Northern Kentucky areas, and those areas were very familiar with the control strategies necessary to regain attainment status. Not all areas were in attainment for all pollutants, but air quality in Kentucky continued to improve.
In response to questions by Representative Belcher, Mr. Alteri stated that, if an area was designated nonattainment, an appropriate control strategy would be determined. Failure to comply may result in restrictions on specific pollutant source categories or processes. A key component in regaining attainment status was the permitting process, which included offset reductions from existing facilities. Area growth or new projects may be impacted.
A motion was made and seconded to approve the following amendments: to amend Sections 2, 4, 5, 8, 9, and 10 to comply with the drafting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.
JUSTICE AND PUBLIC SAFETY CABINET: Department of Corrections: Office of the Secretary
501 KAR 6:110. Roederer Correctional Complex. Amy Barker, assistant general counsel, represented the department.
In response to a question by Co-Chair Harris, Ms. Barker stated that this policy revision was the annual policy update for the Roederer Correctional Complex.
A motion was made and seconded to approve the following amendments: to amend Section 1 to revise policies RCC 09-29-01, 09-31-01, 13-13-01, 16-01-02, 16-03-01, 17-01-02, and 26-01-01: (1) for clarity and consistency; (2) to update citations; and (3) to make minor technical corrections. Without objection, and with agreement of the agency, the amendments were approved.
501 KAR 6:160. Correctional Industries.
COMMUNITY AND TECHNICAL COLLEGE SYSTEM: Fire Commission: Commission on Fire Protection Personnel Standards and Education
739 KAR 2:140. Volunteer fire department reporting requirements. Michael Kurtsinger, division director, and Anne – Tyler Morgan, attorney, represented the commission.
A motion was made and seconded to approve the following amendments: (1) to amend the RELATES TO; STATUTORY AUTHORITY; and NECESSITY, FUNCTION, AND CONFORMITY paragraphs to correct citations; (2) to amend the NECESSITY, FUNCTION, AND CONFORMITY paragraph and Sections 1, 2, and 4 to comply with the drafting and formatting requirements of KRS Chapter 13A; and (3) to amend Section 4 to reference the July 15, 2016 compliance deadline established in KRS 95A.055(7), in order to clarify that the requirements were not transitional, but a permanent regulatory device. Without objection, and with agreement of the agency, the amendments were approved.
LABOR CABINET: Department of Workers’ Claims: Department
803 KAR 25:010. Procedure for adjustments of claims. Dwight Lovan, commissioner; Michael Nemes, deputy secretary; and Brooken Smith, chief of staff, represented the department. Bill Londrigan, president, AFL – CIO, and Ched Jennings, attorney for injured workers, appeared in opposition to 803 KAR 25:010. Tim Wilson, attorney, appeared in support of 803 KAR 25:010.
Mr. Lovan stated that this administrative regulation established procedures in accordance with KRS Chapter 342 for processing workers’ compensation claims related to litigation. The department was responsible for balancing the rights of injured workers with the rights of employers. This administrative regulation established provisions for the use of an online, electronic Litigation Management System (LMS). LMS would save both the department and stakeholders money because LMS would reduce paper, copying, and postage costs. Claims would be processed more quickly. To effectively use LMS, training was taking place at various locations across Kentucky. The department made accommodations for electronic signatures and created a new method for determining when a document was received. Forms were revised for compatibility with LMS.
Mr. Jennings stated that he had represented injured workers for the last forty (40) years. Changing workers’ claims processing to an electronic format was important; however, efficiency and accuracy were still crucial. LMS had not been adequately tested outside of the cabinet. Injured workers should be able to use LMS without an attorney; however, the system was extremely difficult for nonattorneys to use. There were access concerns regarding worker injury attorneys, especially in rural areas of Kentucky. Of particular concern was the complexity of the forms required for LMS. A nonattorney would have great difficulty completing LMS forms.
Mr. Jennings requested three (3) amendments to this administrative regulation. He requested that, during interlocutory relief determinations, once a judge was assigned to a case, that judge should not be subject to change during the adjudication process. This would reduce delays and discourage judge shopping. The second amendment Mr. Jennings requested pertained to safety violations. If it was determined that an employer committed a safety violation, the injured worker would be compensated thirty (30) percent more. If it was determined that the employee committed a safety violation, the injured worker’s compensation would be reduced by fifteen (15) percent. Both the injured worker and the employer were required to identify the specific safety violation that resulted in the injury. It was very difficult for an injured worker to determine the specific safety violation; therefore, that requirement for specificity should be deleted. The third amendment would reduce the maximum number of days for processing a compensation payment. Because LMS should expedite the claims process, the maximum number of days for issuing a payment should be fourteen (14) days. A penalty was not established in this administrative regulation if the payment did not meet the deadline.
Mr. Londrigan stated that the AFL – CIO concurred with the comments made by Mr. Jennings. AFL – CIO’s main concern was transparency and the difficulty of using LMS for the claims process.
In response to questions by Co-Chair Marzian, Mr. Jennings stated that over the last decade workers’ claims premiums were reduced by approximately fifty (50) percent. Another rate reduction was expected soon. Some premiums had been refunded. The workers’ claims fund was not related to the general fund or tax dollars. Employers have financially benefitted to the detriment of injured workers. Mr. Londrigan stated that he hand delivered a comment letter to the department on April 29 and did not receive a response. Mr. Jennings stated that the Statement of Consideration did not address Mr. Londrigan’s comment letter.
Co-Chair Marzian stated that 1990s’ reforms to workers’ compensation laws made it difficult for injured workers to receive compensation and to find injury attorneys to represent them. The legislation capped workers’ injury claims attorneys’ fees. This administrative regulation seemed to require a lot of forms. The fourteen (14) day deadline seemed reasonable. It seemed prudent during interlocutory adjudication to maintain the same judge, who would already be familiar with the facts of the case. Co-Chair Marzian stated that it was her hope that the department would consider the three (3) amendments suggested by Mr. Jennings and Mr. Londrigan.
Mr. Wilson stated that the forms were simpler with LMS than the previous forms. Nonattorneys could complete the forms. The deadline for claims payments was sufficient. Only three (3) people attended the public hearing, and there were only ten (10) written comments. Workers’ claims was a delicately balanced system.
In response to questions by Representative Belcher, Mr. Jennings stated that a claim could still be filed outside of the LMS system, but the claim would then be on a two (2) tier system, which may create problems. Most injury clients used a smartphone, rather than corresponding by email. Mr. Wilson stated that the department had claims specialists, who could assist injured workers with understanding LMS forms. Injured workers filing without an attorney were required to be held to the same standards as attorneys. Statistically, self-representing injured worker cases resulted in poor outcomes. The department attempted to facilitate injured workers without attorneys in the past, but that system failed. Many injury attorneys did not require payment until compensation was awarded. Mr. Jennings stated that a claims specialist was prohibited from completing forms for the claimant and had restrictions regarding how much assistance could be offered. Mr. Londrigan stated that the lack of attorneys available to assist these injured workers was underestimated, especially in rural areas.
Representative Belcher stated that she had concerns regarding injured workers without access to attorneys or computers. These injured citizens were already under stress, and the claims system should be made easier for self-representing injured workers. Mr. Nemes stated that the department was considering legislation to make the process easier for self-representing injured workers. Senator Kerr stated that she was, with Representative Chris Harris, co-chairing a task force that included workers’ compensation stakeholders. The task force was meeting August 19, 2016, at 10 a.m. in Room 131 of the Capitol Annex and would consider many of the issues relevant to this administrative regulation.
In response to a question by Senator Kerr, Mr. Lovan stated that LMS was tested extensively. Because of firewalls, not everyone was able to test LMS before it went live. Information required on LMS forms was not substantively different than that required on the previous forms, but the format had changed. The interlocutory process was developed specifically to provide appropriate relief as quickly as possible. It was not practical to require a single judge to adjudicate the entire process because these types of judges traveled throughout the state. From a scheduling standpoint, requiring a single judge may significantly increase the amount of time for the injured worker to receive interlocutory relief. The process was designed to discourage judge shopping. Regarding the concern about the requirement that an employee establish the specific safety violation, case law established the need for the proof of specificity. Pertaining to the maximum deadline for issuing a compensation payment, the authorizing statutes were silent regarding this matter. The initial deadline proposal was for thirty (30) days; however, public comments on the deadline were received and in response to those comments the deadline was revised to twenty-one (21) days. Parties could agree to arrange the issuance of a payment earlier. Mr. Lovan stated that he personally accepted Mr. Londrigan’s comment letter. Mr. Lovan thought that the comments from the letter had been addressed in the Statement of Consideration, but if they were not, it was inadvertent. Mr. Nemes stated that the interlocutory process established in this administrative regulation gave the department the flexibility to change judges during adjudication if necessary to expedite the process to provide faster relief to an injured worker.
In response to a question by Co-Chair Harris, Mr. Lovan declined to agree to the three (3) amendments requested by Mr. Jennings and Mr. Londrigan.
Co-Chair Harris stated that this was not a partisan issue. This was a complex issue with many variables.
Senator Clark stated that this was not a partisan issue, but an issue of a new system. A new system often had flaws that would be corrected. Once the flaws in this system were addressed and training was completed, Senator Clark expected this to be a good system.
A motion was made and seconded to approve the following amendments: (1) to amend the RELATES TO paragraph to correct citations; (2) to amend Sections 5, 7, 10, and 30 to incorporate by reference required forms; (3) to amend Section 12 to authorize the use of telephonic or video hearings if the parties agree or demonstrate good cause; and (4) to amend Sections 1, 3, 4, 7, 8, 10, 12, 14, 19, 20, 25, and 30 to comply with the drafting and formatting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.
803 KAR 25:014. Repeal of 803 KAR 25:009.
Mr. Lovan stated that 803 KAR 25:009 was being repealed because the Supreme Court found the portion of the statute that authorized 803 KAR 25:009 unconstitutional.
803 KAR 25:089. Workers' compensation medical fee schedule for physicians.
PUBLIC PROTECTION CABINET: Horse Racing Commission: Thoroughbred Racing
810 KAR 1:009. Jockeys and apprentices. Marc Guilfoil, executive director, and Jamie Eads, director, Division of Incentives and Development, represented the commission.
Quarter Horse, Paint Horse, Appaloosa and Arabian Racing
811 KAR 2:190. Kentucky Quarter Horse, Paint Horse, Appaloosa, and Arabian Development Fund.
CABINET FOR HEALTH AND FAMILY SERVICES: Department for Community Based Services: Division of Family Support: Energy Assistance Program/Weatherization
921 KAR 4:119. Repeal of 921 KAR 4:118. Elizabeth Caywood, policy analyst, represented the department.
Division of Protection and Permanency: Adult Services
922 KAR 5:081. Repeal of 922 KAR 5:080.
The following administrative regulations were deferred to the September 13, 2016, meeting of the Subcommittee:
HIGHER EDUCATION ASSISTANCE AUTHORITY: Division of Student and Administrative Services: Kentucky Educational Excellence Scholarship Program
11 KAR 15:090. Kentucky Educational Excellence Scholarship (KEES) program.
GENERAL GOVERNMENT CABINET: Board of Licensure for Marriage and Family Therapists: Board
201 KAR 32:030. Fees.
Board of Licensed Diabetes Educators: Board
201 KAR 45:110. Supervision and work experience.
TRANSPORTATION CABINET: Division of Driver Licensing: Administration
601 KAR 2:030 & E. Ignition interlock.
EDUCATION AND WORKFORCE DEVELOPMENT CABINET: Board of Education: Department of Education: Learning Results Services
703 KAR 4:041. Repeal of 703 KAR 4:040.
Office of Instruction
704 KAR 3:342. Repeal of 704 KAR 3:340.
LABOR CABINET: Department of Workplace Standards: Division of Occupational Safety and Health Compliance: Division of Occupational Safety and Health Education and Training: Occupational Safety and Health
803 KAR 2:412. Fall protection.
PUBLIC PROTECTION CABINET: Department of Financial Institutions: Division of Non-Depository Institutions: Mortgage Loan Companies and Mortgage Loan Brokers
808 KAR 12:021. Licensing and registration.
808 KAR 12:055. Uniform standards for mortgage loan processor applicant employee background checks.
The Subcommittee adjourned at 12:25 p.m. until September 13, 2016, at 1 p.m.