The5th meeting of the Interim Joint Committee on Licensing and Occupations was held on Friday, October 14, 2005, at 11:00 AM, at the Singletary Center for the Arts in Lexington, Kentucky. Senator Gary Tapp, Chair, called the meeting to order, and the secretary called the roll.
Members:Senator Gary Tapp, Co-Chair; Representative Denver Butler, Co-Chair; Senators Julian M Carroll, Julie Denton, Daniel Mongiardo, Ernesto Scorsone, Dan Seum, and Damon Thayer; Representatives Tom Burch, Ron Crimm, Dennis Horlander, Dennis Keene, Paul H Marcotte, Reginald K Meeks, Charles Miller, Ruth Ann Palumbo, Jon David Reinhardt, and Susan Westrom.
Guests: Todd Leatherman, Assistant Attorney General; John Knight, Licensed Trade Contractors Group; Matt Hammond, Mechanical Contractors Association; and Pat Hancock, Kentucky Association of Plumbing, Heating and Cooling.
LRC Staff: Vida Murray, Ann Seppenfield, Bryce Amburgey and Susan Cunningham.
Senator Tapp informed committee members and the audience that the Legislative Research Commission was accepting donations for the "LRC Hurricane Relief Fund Project." He said that 100 percent of all contributions received would be split equally among the American Red Cross Disaster Relief Fund, the Habitat for Humanity Operation Home Delivery, and the Bush-Clinton Katrina Fund.
Senator Tapp asked for a motion and a second to adopt the minutes from the September 9, 2005 meeting. The minutes were adopted by voice vote.
Senator Tapp introduced Dr. Michael Karpf, Executive Vice-President for Health Affairs for the University of Kentucky, and Rob Rumpke, Executive Director of the Richmond-Madison County Chamber of Commerce, who welcomed the committee members to the University of Kentucky. Dr. Karpf told the committee that the Academic Medical Center, the College of Medicine, and the University of Kentucky Hospital as a clinical enterprise had a variety of programs that otherwise were not available to Kentuckians, including the Markey Cancer Center and solid organ transplantation. He said that the University of Kentucky also provided physicians to rural locations for local health care, only bringing them to Lexington for specialized care.
Rob Rumpke said he was chairman for the Bluegrass Investment Board and a board member of Bluegrass Tomorrow, and welcomed the members on behalf of those organizations as well. He said investing in human capital was very important to the Commonwealth. He said that government and educational institutions should listen to business leaders because they are not training their constituencies with the skills businesses needed.
Representative Burch responded that businesses need to better communicate to the legislature and to educators what their needs are.
Next on the agenda, Todd Leatherman, Executive Director for the Attorney General's Office of Consumer Protection, told the committee that identity theft would be the office's priority legislation in the 2006 session. He said that a task force, with representatives from law enforcement agencies across the state, the federal government, Secret Service, FBI, U.S. Attorney's Office, and Commonwealth Attorneys and County Attorneys from around the state has met twice to address this issue. Mr. Leatherman said that identity theft continues to be one of the fastest growing financial crimes in the United States. He said that the task force is developing a bill to protect Kentuckians from identity theft that will be sponsored by Representative Robin Webb and that will expand the protection afforded in this area. The bill will protect consumers' social security numbers by restricting their collection by businesses, and will provide consumers the ability to freeze their credit reports. He added often credit reports are easily obtained by identity thieves. He said the Office's legislation will also require companies to notify consumers if their identities are stolen and will allow consumers to take court action to validate their identification.
Mr. Leatherman said consumer complaints to the Attorney General's Office include those concerning: Internet auction fraud, where someone had the winning bid in an auction and remits in his or her money but does not receive the item; collection agencies calling looking for a person who was not available at that number; mortgage and finance companies; mail order companies; home remodelers and home builders; and gas price gouging. He said there have been 580 complaints since Hurricane Katrina regarding gas prices. In response, the Office has requested information from approximately 25 retail outlets to determine if there has been gas price gouging. He said that there have not been reports of scam charities operating in Kentucky since the hurricane, although reports of such scams have been reported elsewhere. In closing, he said that there is an ongoing problem of consumers falling victim to foreign lottery scams and counterfeit cashiers check cashing scams.
Senator Tapp asked if the complaints received on home builders related to new home construction or remodeling. Mr. Leatherman said that there had been 26 complaints for remodeling jobs, which were actually fewer calls than the Office received last year. He said that there usually is not a contract involved when remodeling and consumers most often complain about the quality of the work performed. Representative Burch asked how the Attorney General's office determines whether businesses are price gouging for gas. Mr. Leatherman said there was a lot of competition; however, if businesses are agreeing to set high prices it is considered collusion. He said the office is looking at state and federal taxes and other costs that make up the price for gasoline.
Senator Tapp also asked if the Office had received complaints about proprietary schools. Mr. Leatherman responded that Decker College was being investigated by both the Attorney General's office and the federal government. Faculty have not been paid and students complained that the quality of instruction was poor.
Next on the agenda was a discussion of House Bill 13, sponsored by Representative Susan Westrom. She told the committee that a similar bill had passed out of the House last session; however, the short session had ended before the bill could be acted on in the Senate. She told committee members that companies in Pakistan were supplying fraudulent certificates, transcripts, and letters of recommendation, placing people who could purchase a degree in competition with people who had worked to earn a degree. She said that most of the fraudulent degrees could be purchased on the Internet. She said that $500 million was spent on fraudulent diplomas in the United States and that at least 1,000,000 Americans have a fraudulent degree. Representative Westrom told the committee that someone had purchased an aerospace engineer diploma for the cost of $199.00 and that teachers in Georgia had been given salary increases after they purchased diplomas for higher degrees. She opined that the Internet has no borders, so the best way to control fraudulent diplomas is at the state level. The Department of Education is working on a site for employers to go to verify a legitimate university.
Senator Denton said the language on page three, line 16 of the bill should be changed since the person presenting the diploma had not made, forged, or altered the document. Senator Carroll added that such a change would make the person who knowingly presenting a false document guilty of fraud.
Next on the agenda under Old Business, representatives from trade unions expressed their appreciation to the committee for the resolution to expedite the hiring of 51 positions for inspectors in the Office of Housing, Buildings and Construction. Erv Klein, President of the Air Conditioners Contracting Association, told the members that the Office of Housing, Buildings and Construction should be working with the HVAC, Plumbing, Electrical, and Housing boards because they have citizen representation and are in touch with the needs of the industry. He also said that when restricted funds are put in the General Fund and then redirected from their designated use it was a hidden tax. Mr. Klein said the trade unions were not asking for lower license fees but for proper use of the fees now collected. Senator Tapp said the inspectors and plan reviewers must be put in place as well as a plan that shortens the time it takes to receive an electrical license. Representative Butler said the state's economy was based on construction and new housing construction should not be held up because a license is not issued in a timely manner.
Senator Tapp told the committee that Chris Lilly, Commissioner for the Department of Public Protection, was going to update the committee on hiring the positions for the Office of Housing, Buildings and Construction. Mr. Lilly told the committee that his department was currently working on 24 registers with an anticipated start date of November 1. He said there would be seven positions added in Building Code Enforcement, three in HVAC, eight in the Division of Plumbing, and six in the State Fire Marshal's Office. He said there will be 19 more hires in April, 2006 because of a six month training time. Mr. Lilly told the committee that in electrical licensing there had been a backlog of applications; however, the processing has been caught up and now with complete information an application can be renewed in two days. He said the Division of Plumbing is issuing licenses with a seven day turn around for applications received in Frankfort, and a three day turn around for applications received in Jefferson County and Northern Kentucky, and in Building Code Enforcement permits are being issued in approximately 15 days. He said the Office had not been technologically updated; however, the Office is testing software that would be used beginning January 2006 that would expedite license applications and renewals.
Senator Tapp reminded members that the meeting in November was moved from its regularly scheduled day due to the Veteran's Day holiday to November 18, 2005, in room 129 of the Capitol Annex at 10:00 AM.
There being no further business the meeting was adjourned by voice vote at 1:00 PM.