The2nd meeting of the Interim Joint Committee on Licensing and Occupations was held on Friday, October 11, 2002, at 10:00 AM, in Room 129 of the Capitol Annex. Representative Denver Butler, Chair, called the meeting to order, and the secretary called the roll.
Members:Senator Brett Guthrie, Co-Chair; Representative Denver Butler, Co-Chair; Senators Charlie Borders, Marshall Long, Virgil Moore, and Jack Westwood; Representatives Carolyn Belcher, Tom Burch, Larry Clark, Ron Crimm, Jon Draud, Dennis Horlander, Joni Jenkins, Paul Marcotte, Reginald Meeks, Charles Miller, Ruth Ann Palumbo, Jon David Reinhardt, and Jim Stewart.
Guests: Emma Lou Hartlage, Kentucky Board of Embalmers and Funeral Directors; Dr. Joe McCormick, Rick Casey, Kentucky Higher Education Assistance Authority; and Jim Halvatgis Kentucky Department of Veterans Affairs.
LRC Staff: Vida Murray, Jack Jones, Ann Seppenfield, Cynthia Galvin, and Susan Cunningham.
With a motion from Senator Long and a second from Representative Burch the minutes from the September meeting were approved.
Emma Lou Hartlage, executive director, Kentucky Board of Embalmers and Funeral Directors told the committee that Administrative Regulation 201 KAR 15:050 establishes the requirements for apprentices and their supervisors. There being no questions, with a motion from Representative Belcher and a second from Representative Meeks the regulation was approved.
Representative Butler asked Dr. Joe McCormick, executive director, Kentucky Higher Education Assistance Authority (KHEAA), to explain to the committee what action was being taken to implement House Bill 296, passed in the 2002 General Assembly. Dr. McCormick told the committee the new law requires the KHEAA to notify a licensing agency if a borrower is in default of his or her student loan and the agency to notify the borrower that his or her initial or renewal application for license may be denied. The KHEAA has developed a computer program to allow the agencies to check the loan status of applicants on their website and in June of this year, the KHEAA sent a letter to 52 licensing agencies inquiring about their licensing practices, renewal periods and their capability to exchange files electronically. In September the KHEAA sent a Memoranda of Understanding, to all but the two agencies that had already expressed concerns or objections. Dr. McCormick told the committee that at the time of this meeting there were five agencies that had agreed to the memo, two of which say they will self certify. There are 21 agencies who have concerns about the legislation; however, they are willing to work with the KHEAA to resolve them. Dr. McCormick identified some of the concerns the licensing agencies had raised. He said some boards have limited technical staff and did not budget for software to match the KHEAA’s system. The licensing boards also indicated that the KHEAA should pay any costs for hearings requested by applicants who were denied a license because of default.
Dr. McCormick said the Authority will provide electronic data to the agencies, as well as, keep its website updated. The Authority will notify the borrower of a loan in default and provide documentation at any hearing relating to the denial of a license as a result of the default. He said there are 19 states with similar statutes including Illinois, Texas, Alabama, and Tennessee.
Representative Butler asked if there had been any dialogue with any of the 19 states. Dr. McCormick said the Authority had given Kentucky licensing agencies a summary of the information it had obtained from talking to other states to show how other states have complied with similar legislation. Representative Butler also asked if Dr. McCormick would provide the committee with a list of the agencies that had not responded to the letter or refused to comply with the statute. Dr. McCormick said the last page of his handout listed the responses of the boards or agencies. Some have not responded to either the KHEAA’s initial letter in June or the Memoranda of Understanding. Dr. McCormick told the committee that some agencies were concerned about possible litigation once a license was denied since House Bill 296 did not allocate money for that purpose.
Representative Draud asked if the co-chairs of the committee could send a letter to the agencies asking them to respond the letter from the KHEAA.
Dr. McCormick said he would like to clarify to the committee that the KHEAA did not initiate this legislation. He said Representative Colter sponsored the legislation so that the applications of lawyers and doctors who were in default on their loan would be denied until they made arrangements to repay the loan. He pointed out that the KHEAA did not see this Act as a tool to collect funds.
Representative Miller asked how the new law changes the guideline for student loans. Dr. McCormick said the only difference is that under this statute, the licensing board or agency should check with the KHEAA and if the applicant is in default on a student loan that agency is required by law to deny the application. He reiterated that independent boards have reported that they do not have the resources to implement this bill and that they have been advised by their legal counsels that denying licenses on the basis of House Bill 296 may result in lawsuits.
Rep. Crimm asked if the loan application contained a statement telling the borrower that if he or she defaults on his or her student loan that he or she could be denied a license to practice. Dr. McCormick said there was no such statement because the loans were regulated by federal law. He said such a statement could be added to the promissory notes for the eight loans that are state scholarship loans.
Senator Moore said denying a license for default was counter productive since the applicant probably needed the license to practice to have income to repay the loan. Dr. McCormick said the only requirement in House Bill 296 was that the applicant contact the KHEAA to make satisfactory arrangement to repay the loan. Once this is done the licensing agency can issue the license.
Representative Clark said that there should be a statement on the loan application to make the applicant aware of consequences of default. He asked Dr. McCormick to have the KHEAA’s attorney send the committee chairmen a letter regarding the position the KHEAA has on this statute. Dr. McCormick said that legally he can not put a statement in the body of the application; however, he can add information to the loan packet and brochures.
Senator Long said if agencies were not in agreement with the statute they should have been at this meeting to discuss self certification. Dr. McCormick said he agreed that the students should be fully aware of the responsibilities of repaying the loan; however, he did not feel that it was the responsibility of the KHEAA to take all of the action required to revoke or deny a license.
Representative Draud asked Dr. McCormick what action the KHEAA had taken to make the agencies who had not responded to the June letter respond. Dr. McCormick said after the June 6, letter was sent, a draft Memoranda of Understanding was sent to each agency on September 16 and page six his handout was the result. He said that this was the first time that the KHEAA was required to have direct contact with agencies.
Representative Clark asked Dr. McCormick to send the committee members a letter telling them how he planned to advise applicants of their obligation to repay their loan or risk having their license revoked or denied. Dr. McCormick said he would.
Representative Butler said if necessary the chairman would call all the boards before the committee to explain their action or lack thereof.
Jim Halvatgis, Deputy Commissioner for the Department of Veterans’ Affairs, came before the committee to talk about the Kentucky veterans’ program trust fund. This fund was set up for veterans who received a bonus but wanted to donate their bonuses. In 1992, the fund was granted a tax refund check off so that veterans receiving a refund they could “check off” an amount to put into the trust fund. In 2000, veterans’ license plates were approved by the legislature. Part of the initial purchase price of the license plate would go to the trust fund; however, when renewing the plate, a donation is voluntary. A ten-member board of directors, established by statute, distributes the funds.
Mr. Halvatgis said there is a transportation program for veterans who do not have transportation to VA centers for medical checkups and treatment. Two vans were recently purchased for use in Western Kentucky and in the last six months 100,000 miles has been recorded on both vans. The trust fund also gives money to the Disabled American Veterans (DAV) who operate the Colorado Trust Fund. The Kentucky veterans’ trust fund board makes a request to the Colorado Trust Fund for vans when needed and the DAV is able to purchase vans at an economical price. The trust fund recently applied for a Federal VA grant to purchase a van that is equipped to go out in the community to check in homeless shelters for veterans or to set up in a shopping mall to provide service for veterans and help them file claims for benefits.
Mr. Halvatgis said the trust fund recently bought land in Hopkinsville for a veterans’ cemetery. Some funds were taken out of the trust fund for an exhibition in Hanoi of photographs taken “in country” during the Viet Nam conflict. Fort Campbell received money from the fund for a project at its museum and for an eternal flame memorial to the 101st Air Borne.
Mr. Halvatgis said the Department of Veterans’ Affairs wants legislation to give one tenth of one percent of the gross gaming revenue of veterans organizations that have bingo and scratch offs. He said all the leaders of the veterans organizations along with the joint executive council of veterans’ organizations were asked if there would be support for the bill. Everyone supported the bill; however, he indicated that the bill had been amended to require that moneys be collected by the Department of Charitable Gaming and remitted to the Department of Veterans’ Affairs. He noted that there is less paperwork for the organization by submitting the moneys to the Department of Charitable Gaming directly, who in turn will send the money to the trust fund.
Representative Burch asked how much money the veterans expected to get from this legislation. Mr. Halvatgis said approximately $93,000 which would buy about eight vans. He said that the money would come only from the receipts of veterans’ organizations and not from church or school organizations.
Representative Butler asked for comments on the legislation from Commissioner Ray Franklin from the Charitable Gaming Commission. Mr. Franklin indicated that his department had no problem with the legislation.
Representative Butler said there would be a request for a meeting on November 15 because of the elections.
There being no other business with a motion from Representative Burch and a second from Representative Belcher the meeting was adjourned.