The 1st meeting of the Interim Joint Committee on Licensing and Occupations was held on Friday, June 12, 2009, at 10:00 AM, in Room 129 of the Capitol Annex. Senator Gary Tapp, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Gary Tapp, Co-Chair; Representative Dennis Keene, Co-Chair; Senators Tom Buford, Julian M. Carroll, Perry B. Clark, Carroll Gibson, Denise Harper Angel, John Schickel, Dan "Malano" Seum, Kathy W. Stein, and Damon Thayer; Representatives Tom Burch, Larry Clark, Tim Firkins, David Floyd, Dennis Horlander, Joni L. Jenkins, Adam Koenig, Charles Miller, David Osborne, Ruth Ann Palumbo, Carl Rollins II, Arnold Simpson, Ron Weston, and Susan Westrom.
Guests: Tony Dehner, Commissioner, Randy Fawns, Deputy Commissioner, LaTasha Buckner, General Counsel, Alcoholic Beverage Control; Frances Short, Executive Director, Occupations and Professions; Ryan Keith, legal counsel, Cabinet for Public Protection.
LRC Staff: Tom Hewlett, Bryce Amburgey, Michel Sanderson, Carrie Klaber, and Susan Cunningham.
A quorum being present Chairman Gary Tapp called the meeting to order at 10:03 AM. The first order of business was adopting the minutes from the November 14, 2008 meeting. With a motion from Senator Buford, seconded by Representative Firkins, the minutes were adopted by voice vote.
The first item on the agenda was an introduction of Tony Dehner, the new Commissioner for the Department of Alcohol Beverage Control (ABC) to committee members. Mr. Dehner said he has previously served as the director of the Division of Insurance Fraud Investigation and had over 30 years experience in the judicial and criminal justice system. He said these years of investigative and mediation experience are a asset to the Department of Alcohol Beverage Control as it continues to accomplish its statutory purpose of protecting the public welfare and interest, and regulating the alcoholic beverage industry through licensing, education and enforcement. Mr. Dehner said that the department appreciated the support of Senator Tapp for sponsoring Senate Bill 34, and Representative Susan Westrom for sponsoring House Bill 129. He said the passage of HB129 strengthens the enforcement power of ABC to keep alcoholic beverages out of the hands of minors.
Mr. Dehner said that ABC would have a housekeeping measure similar to SB34 in 2010, with three changes that would reduce confusion and bring much needed clarity to their statutes. He said that in 2000, the General Assembly passed legislation that created new licenses outside KRS 243.020 and KRS 243.670. The department proposed to correct these types of licenses created under Chapter 242 and avoid future problems when a new license is created and not placed between KRS 234.020 and KRS 243.670.
A second proposal pertains to changing licensee closing requirements during local option elections located in a dry territory to mirror statutes for wet territories. This change will still require all licensees to close but only in the affected territory of the election rather than in the whole county, and only during the hours the polls are open. Mr. Dehner said the final change would delete duplicative wording and clean up punctuation and syntax so that language will comply with LRC drafting rules and federal requirements.
Senator Gibson asked if the agency was requesting 36 new controllers. Mr. Dehner responded that the changes the ABC was asking for would bring 36 of the ABC statutes into compliance.
Next on the agenda, Frances Short, Executive Director of the Division of Occupations and Profession; and Ryan Keith, general counsel for the Public Protection Cabinet, updated the committee on support provided to professional boards. Ms. Short said the purpose of the division is to provide services on a contractual basis to boards that cannot afford to maintain their own individual staff and offices. She said that in 1974, KRS 224.10-052 was enacted, charging the division with providing administrative services to approximately seven boards; however, all boards maintain their identity and their full authority for making policy decisions in the field they regulate. At the division's inception there were six staff members. At that time the total number of licensees was 5,500 and the division's budget was a combination of general fund dollars and agency receipts from the seven boards. Since that time general fund dollars have been reduced and now the boards are self-funded through their licensure fees. Ms. Short said that currently the Division of Occupations and Professions provides services to 19 boards with a combined total of 20,000 licensees. She stated there are eight Board Administrators to cover these boards. She said in addition to the board administrators there is a director, administrative section supervisor and two fiscal employees. Ms. Short said that currently the division is fully funded by the administrative fees charged to each board for the services it provides. Ms. Short said services provided by the division include implementing and maintaining the system of license issuance, renewal, suspension, revocation, and other administrative action associated with occupational licensing or certifications. She said the division also receives and processes certifications, general correspondence on behalf of the boards; receives and processes complaints; schedules hearings; manages and updates computerized records of all licensees and certificate holders; disseminates meeting notices; coordinates board meetings; maintains continuing education records and assists in preparation of administrative regulations.
Regarding fee transfers, Ms. Short said not all of the boards have fees transferred out of them, but for fiscal year 2008, the fee transfers from various boards totaled $235,000 dollars. For fiscal year 2009, the fee transfers from various boards totaled $1.2 million, and for fiscal year 2010, the fee transfers will total $305,000 dollars. Ms. Short said that some of the consequences experienced include potential financial insolvency. She said there are five boards that will have a negative impact. She said boards with reduced funds are not able to investigate and respond to complaints received. She said a board's primary function is to serve as consumer protection. Ms. Short said there is no way to anticipate the number of complaints a board will receive each year or how involved they will be; and all expenses related to complaints are fully funded by the boards. She said some boards have full time investigators because there is such a large amount of complaints, and when funds are reduced due to fee transfers it creates a hardship on that board to respond to the complaint. She said each year boards seem to experience an increase in the number of complaints. Ms. Short said boards are concerned about the ability to maintain funds in order to have a sufficient budget to respond to complaints. She said some boards, in order to offset the reduction in budgets, are proposing regulations to increase licensure fees.
Ms. Short said the division is working to enhance technology to provide more support. She said the ability for licensees to enroll electronically and submit application information electronically will provide faster turnaround time, and reduce expenses such as postage. She said the division is currently meeting with board chair to gain their input on how the division can provide better services. She said one consistent response has been improve technology, including phone systems. Ms. Short said another method for boards to save money is meet every other month or quarterly in order to accommodate board business. She said the online payment process is being up-dated to include the ability to pay by credit card or debit card and the ability for licensees to print verification of licensure on agency letter head.
Senator Tapp asked how many complaints the boards receive that are not investigated or are let go because of staff shortage. Ms. Short said it would be difficult to determine because every complaint is different. She said that the majority of complaints, generally speaking, eighty-five percent, are investigated as valid complaints. She added that no complaint is passed over due to lack of staff. Representative Clark asked how many boards and commissions there are in the Commonwealth. Ms. Short said that there are a substantial amount; however, she could only speak to the boards serviced by the division. Representative Simpson asked if there was a procedure to ascertain if the boards are continuing to function, asking if rather than adding boards, some boards could be removed. Ms. Short said the mechanism by which boards are assigned to the division is through the General Assembly. She said that one board recently moved to function independently as it felt it had enough money to support itself. Representative Simpson asked what oversight existed in the statutory network to oversee boards that are not assigned to the division for administrative oversight. Ryan Keith, General Counsel for the Public Protection Cabinet responded that the office of Boards and Commissions has oversight on those boards. He said the Division of Occupations and Professions is really an opportunity provided by the Finance Cabinet. For example, there are some boards that are organizationally in the cabinet, the Board of Tax Appeals and the Board of Claims. He said the anomaly of the Division of Occupations and Professions is that all that is in the cabinet organizationally is the staff, a pool of people that is available to boards throughout government who either cannot afford, or simply prefer not to have their own independent staff employed by the board. He said the Board of Nursing and the Board of Medical Licensure are much more substantial and have their own staff. They have more substantial operations than the boards that Occupations and Professions serve. He said the division would be open to boards who feel that using division staff services would be an economic and efficient way to proceed. He said the division would negotiate a contract with any board requesting services.
Representative Simpson asked if boards that are assigned administratively have a mechanism to accept complaints relative to the operation of the board rather than of the licensees. He asked how to preclude arbitrary and capricious conduct by the board, or in that instance is the only recourse a court of law if the board is operating in an arbitrary and capricious manner. Ms. Short said if the complaint is against the actual board itself as opposed to a violation of law, it is her understanding that under statute the board members are protected and she had not encountered a circumstance where there was a complaint brought directly against a board member or the board itself.
Representative Rollins asked if there was a website where there is more information available regarding particular accounts for each boards, such as what the boards have in reserve and what their normal operating costs are. Ms. Short said the division could provide more detailed information. Senator Tapp asked Ms. Short to follow up with staff regarding Representative Rollins request.
Representative Koenig commented that there are over 400 boards and commissions, saying that he is interested in streamlining or combining some of the boards that overlap each other. Representative Westrom asked, if there was a licensing complaint filed against a professional counselor, was the complaint handled by the division. Ms. Short said the function of the Division of Occupations and Professions is strictly administrative. She said that each board had their own board counsel provided through the Attorney General's Office.
Representative Floyd asked if there were other functions the division performed besides providing administrative support for the boards named in statute. He also asked if the division put complaints in writing to be delivered to those boards. Ms. Short replied that all decisions regarding complaints were made by the specific boards; however, the division does get calls for explanations regarding the complaint process. Ryan Keith added that the statute specifically identifies more than 20 boards the division is authorized to work for, if those boards choose to hire the division. He added that there is general language that states that any other similar occupational or licensing board may also choose to use the division staff. Representative Floyd, in response to Mr. Keith, said the statute says that "the boards and commissions are relieved of the power and duty to provide the services for themselves." Representative Floyd asked if that was a directive, or if they may do that regardless. Mr. Keith replied that the division provides administrative services if they choose to hire the division through a contractual relationship for the purposes of receiving mail, processing licensing, and others duties office staff would perform. Senator Tapp clarified that there is an annual contract that the division charges the board or commission for and asked if the fee charged was based upon the number of licensees. Ms. Short it was a combination of the number of licensees and the amount of time that would be spent working for the board in addition to an administrative fee.
Senator Carroll said in the 70's there were over 5,000 board appointments made adding that board appointments are a major function of the Governor's Office, which has within it an Office of Boards and Commissions. He said the General Assembly did need to take a better look at reining in some of the boards to save overhead cost. He said there is a statutory procedure for individuals who have had a license revoked with a process that goes through the court system. Senator Carroll said there is an enormous case load in Frankfort for handling appeals and felt that an intermediate body in state government that would avoid appeals reaching circuit court could save state government the expense of hiring lawyers. He added that the General Assembly should look at oversight in terms of adequately hearing complaints and adequately providing for a response for these complaints. Senator Carroll asked if there were any discretionary funds that the division could use if a board did not have money to investigate complaints. Ms. Short said generally the division will ask for an emergency allocation for that board and the board repays the allocation as the license fees replenish their budget.
Representative Simpson said boards have attorneys but asked about licensees who cannot afford one. He said those individuals need to have a safety net. Representative Simpson asked if the boards that the division oversees have a uniform policy on payments or are there variations and who makes decisions on board compensation. Ms. Short said compensation is established in regulation and determined by the boards. She said the average per diem is $100 per day. Some smaller boards that meet quarterly or less pay $50 per diem. Representative Simpson asked if there were other remunerations for the boards the division oversees. Ms. Short said other than the per diem costs there would be mileage related to attending board meetings as well as attending conferences related to their field. Senator Tapp said that the fees are set by administrative regulations; however, after the boards are set up they raise fees and the General Assembly sweeps those fees.
Senator Tapp told the committee that if there were any topics members were interested in hearing he and Chairman Keene would review them for future meetings. Representative Simpson asked if it would be appropriate to ask if Program Review would consider having staff do an analysis of all existing boards and bring that report to the committee for consideration. Chairman Keene told the committee that Representative Simpson had been named "Lawyer of the Year" by his fellow attorneys in Kentucky.
There being no further business to come before the committee the meeting was adjourned at 10:47 AM.