Interim Joint Committee on Licensing and Occupations


Minutes of the<MeetNo1> 3rd Meeting

of the 2011 Interim


<MeetMDY1> August 12, 2011


Call to Order and Roll Call

The<MeetNo2> 3rd meeting of the Interim Joint Committee on Licensing and Occupations was held on<Day> Friday,<MeetMDY2> August 12, 2011, at<MeetTime> 10:00 AM, in<Room> Room 129 of the Capitol Annex. Representative Dennis Keene, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator John Schickel, Co-Chair; Representative Dennis Keene, Co-Chair; Senators Julian M. Carroll, Denise Harper Angel, Jimmy Higdon, Paul Hornback, Dan "Malano" Seum, Kathy W. Stein, Damon Thayer, and Robin L. Webb; Representatives David Floyd, Wade Hurt, Joni L. Jenkins, Adam Koenig, Reginald Meeks, Mike Nemes, David Osborne, Ruth Ann Palumbo, Carl Rollins II, Arnold Simpson, and Susan Westrom.


Guests: Mac Stone, Executive Director, Office of Agriculture Marketing and Promotion and Roger Leasor, Kentucky Wine and Grape Council; Shannon Tivitt, Executive Director, Office of Occupations and Professions, Monica Hall, Iris Triplet-Baker, Jillian Cain Becht, Lisha Stone, former students of proprietary schools.


LRC Staff: Tom Hewlett, Bryce Amburgey, Carrie Klaber, Michel Sanderson, and Susan Cunningham


Approval of minutes

A motion was made by Senator Schickel, seconded by Senator Thayer, to adopt the minutes from the July 8, 2011 meeting. The motion carried by voice vote.


Promotion of the Kentucky Wine Industry

Mac Stone, Executive Director of the Office of Agriculture Marketing and Promotion and Roger Leasor, Kentucky Grape and Wine Council, updated the committee on the wine industry in Kentucky. The industry is thriving because of the General Assembly's support. Two years ago, 100 wines were entered at the Kentucky State Fair. This year 200 wines have been entered in the competition. The growth has been in quality as well as quantity. Eleven Kentucky wineries won medals at a wine competition at the Indiana International Wine Festival, a premier wine festival. Two of the medals were gold. The Kentucky State Parks Department will begin selling some this year's award winning wine at three state parks. The location of the wineries is also expanding from just the central Kentucky region into western and southeastern Kentucky. Forty-two wineries now have tasting rooms. Five wineries have restaurants, 21 host special dinners, and 28 host concerts or entertain with music. Kentucky wine was also present at the World Equestrian Games on the World Stage and several of those wines have been featured at the James Beard House, further endorsing the quality of Kentucky wine.


The general trend in the growth of the industry has steadily increased as the wineries have used the market development and the wholesale cost share reimbursement program. The program has been supported by the legislature through the Grape and Wine Council. Initially the wineries only accessed a portion of the funds due to their limited marketing potential. Now, however, because of the growth in number of wineries, the fund is limited in the amount it can reimburse. There is a cap of $800 that a winery can cost share on a 50/50 basis for marketing. This is still a benefit for the small wineries, but larger wineries are on their own now.


The Agriculture Development Fund had provided money for the viticulture and enology programs at the University of Kentucky. However, budget cuts have taken away some of the money from these programs. The Kentucky Vineyard Society has written a proposal to the Ag Development Board to increase the number of field days and to add a two day educational meeting in January associated with the Fruit and Vegetable Conference. This would include some funding. The University of Kentucky has donated infrastructure and contributed 38 percent of the overhead costs, and should be given credit for helping to maximize fund dollars. Rather than depending on money from grants to keep the marketing and cost share programs growing, wineries are looking for other ways to fund their programs. Self-funding and other cost share mechanisms are being considered. Also, wineries may consider a check-off system similar to soybeans or beef cattle.


Another issue with wineries is the entertainment license. KRS 231.010 defines "a place of entertainment" to mean "a roadhouse, place offering intoxicating or nonintoxicating drinks for sale, tourist camp or place of public entertainment at which people assemble to eat, drink, dance, bathe, or engage in any game or amusement, or any place having therein or thereon any person engaging in the practice of being a medium, clairvoyant, soothsayer, palmist, phrenologist, spiritualist, or like activity, or one who, with or without the use of cards, crystal ball, tea leaves, or any other object or device, engages in the practice of telling the fortune or another; but the last clause shall not be construed to apply to a person pretending to tell fortunes as part of any play, exhibition, fair or amateur show presented or offered by any religious, charitable, or benevolent institution. It shall not mean a private home at which bona fide guest are entertained, drive-in theaters, places of business conducted only as filling stations for motor vehicles or grocery stores, nor transient or temporary entertainment such as circuses, carnivals and county fairs" (Effective: June 17, 1954). The broad scope of the definition may inhibit the business wineries able to conduct. Some wineries are hosting wedding and special events. They want to ensure they are being good neighbors, good stewards, and good business people. They want to benefit the community and the area. The definition from 231.010 also has a clause regarding conduct prohibited on the premises that does not apply to wineries today. Sixty-Eight wineries are making an investment in local infrastructure by hosting events, hiring staff, and buying Kentucky Proud products for events. There is some concern that this definition could have an unintended effect on the ability of the small farm wineries to continue these kinds of activities.


Grapes were passed around to the committee with the explanation that they are a seedless variety called Reliance, grown in Woodford County by Steve Isaacs, a professor at the University of Kentucky's Ag Econ department.


Roger Leasor told the committee that Kentucky finally has a wine industry. The wineries are winning awards not just in Kentucky but in Florida, Indiana, and California. Losing a position at the University of Kentucky due to budget cuts would be like taking a step backward for the wine industry. The path that the successful wineries have set is an invaluable educational tool for wineries that are just now starting.


In response to a question from Representative Keene, Mr. Stone said he would have to check to see how Kentucky was ranked with other states in wine progress. Mr. Leasor said he felt that data collected would reveal that Kentucky's rank is impressive. In response to a question from Senator Carroll about the place of entertainment Mr. Stone said it was his understanding that it would apply to a business in the county, outside city limits, and the county judge has to set the hours of operation.


Proprietary schools in Kentucky

Representative Reginald Meeks said he filed House Bill 125 in the 2011 regular session as a reasoned response to months of input from Kentucky students who felt they had been harmed by proprietary schools. In addition, he had input from the Office of the Attorney General, members of the Board of Kentucky Proprietary Education, representatives of the Office of Occupations and Professions, the Council on Post Secondary Education, the Association of Independent Colleges, and Kentucky public colleges and universities. House Bill 125 corresponded with a national examination of this particular issue. A healthy public dialogue has communicated the merits and the short-comings of various sectors of the post secondary education system. The vast majority of proprietary schools genuinely desire to provide a quality education for students. Schools that use deceptive marketing practices to lure vulnerable students into debt make all proprietary schools look bad. If these things are occurring, they need to be addressed. Representative Fred Nesler has also been involved in this effort since the beginning.


Representative Meeks pointed out that Crit Luallen, Auditor of Public Accounts, testified at the June, 2011 meeting of the Interim Joint Committee on Licensing and Occupations. She stated that the Board of Proprietary Education has not been adequately monitoring the proprietary schools that it oversees. There have been deficiencies cited in the Office of Occupations and Professions administrative support of the board. House Bill 125 attempted to address these concerns.


Changes in transparency, accountability, grievance procedures and student protection requirements for proprietary schools should not be arbitrary or unilateral. Public colleges and universities and non-profit institutions could also improve in these areas. The student protection fund, managed by the Board of Proprietary Education, is inadequate, but there are concerns about public and non-profit schools served by the CPE having sufficient protections for their students as well.


The final version of House Bill 125 would have allowed the Board of Proprietary Education and the CPE to explore reasonable financial protections, rather than mandating specific fees. Proprietary schools are more likely to go out of business than public or non-profit schools. There should be a common solution to ensure that students get the quality education that they pay for, regardless of the type of school the student chooses to attend.


House Bill 125 was amended to allow use of the integrated post secondary data system, also known as IPEDS, to avoid duplication and redundancy in reporting requirements. Also, changes were made to give proprietary schools a voice in the deliberations by CPE that impact their operations. The accreditation section of the bill was modified to allow national accreditation to be accepted in lieu of regional accreditation in schools that are in good standing.


Work should continue across all post-secondary institutions in Kentucky to ensure that course credit earned in one institution is of equivalent quality across institutions and will be successfully transferred. Previous testimony said financial aid does not go to the school but to the student; however, when financial aid for students is paid for by tax payer dollars, schools have an obligation not only to the students but to the tax payers of the Commonwealth.


Shannon Tivitt, Executive Director of Occupations and Profession, said the office handles the administration functions for 23 of the state's 43 regulatory boards. These boards are independent state authorities that set policy for various occupations throughout the state. The office, on behalf of the boards, license over 20,000 individuals and or businesses. The state Board for Proprietary Education is unique in that it is the only board that handles businesses versus an individual license. Many of the recommendations that were made by the Auditor of Public Accounts have been addressed, some were about the Office of Occupations and Professions operations and some were for the board's policies and daily business.


In response to a question from Representative Westrom, Ms. Tivitt said the board, by statute, has 11 members. A new chair was selected in January. Three members of the board represent technical schools, and three members represent privately owned institutions. Currently the governor's office is reviewing applications for new and renewing members.


Monica Hall, a single mother, has been a Licensed Practical Nurse for seven years. She decided to return to school for a Registered Nurse degree. Most schools have long waiting lists for their RN programs. The Kentucky Board of Nursing magazine had an advertisement for a program with no waiting list. She followed up with the school that placed the advertisement. During a meeting with an academic advisor she was told that her income would increase, that the nursing instructors were helpful, flexible, and interested in helping her achieve her goals. It was only later that she learned that the nursing program was in academic probation with the Kentucky Board of Nursing because its students were not meeting the required pass rate. During the third quarter, lecture time was less than the syllabus stated and classes were substandard. The instructor appeared to be uninterested in teaching. When asked a question the instructor simply told the students to look for the answer in their text book. The list of fees Ms. Hall was given when she enrolled did not match the charges for her classes. When she asked about these charges, the financial aid officer was reluctant to investigate or explain the differences. Financial aid remaining in her account was never refunded to her. After receiving complaints, the Dean of Nursing advised students that if they did not like the program they should leave. In 2006 the Kentucky Board of Nursing voted to close the Registered Nurse program, but in 2010 voted instead to put the program on probation for one year. While trying to further her education and increase job opportunities, the end result has been heavy debt and no degree.


Iris Triplet-Baker, former student of a proprietary school, said she returned to school in 2008 as a non-traditional student with a goal of going to law school. She enrolled in a school in close proximity to her home. Once enrolled, she was informed that many credits from the school would not transfer to another college. In interviewing at law schools she was told that a degree from the school she attended would not be recognized. Professionals in the community told her that they do not hire graduates from that school. When she voiced her concerned to the school she was told that she could leave. She was advised to call the Board of Proprietary Education but this resulted in a dead end. She has since created a group called "Linked Up," to be the voice for students in for-profit colleges.


In response to a question from Representative Keene, Ms. Baker said it had been 17 years since she graduated from high school and she was told that programs at the school she attended were approved by the American Bar Association. In response to a question from Representative Jenkins, Monica Hall said she was unaware at the time of enrollment that she was entering a proprietary school, adding that she did apply to a public school that had received 600 applications implying that there would be a long delay in being accepted into the program. In response to a question from Representative Simpson, Ms. Baker said she enrolled in a para-legal program. In response to a question from Representative Westrom, Ms. Hall said her understanding was that the Kentucky Board of Nursing was trying to act in their oversight capacity; however, the school's legal team would step in to stop their action. In response to a question from Representative Koenig, Representative Meeks said the Board of Proprietary Education is committed to making the changes recommended by the Auditor's office as well as working on issues that will be changed legislatively.


Jillian Kain Becht, former proprietary school student, thanked the committee for inviting her to testify at the meeting. She told members that she successfully completed a professional medical coding program, received a diploma in medical coding, and passed the certification exam to become a certified professional coder through the American Academy of Professional Coders. Prior to attending a proprietary school, she attended a public university for less than a year. She then entered the work force, which led to a job at a health care services business. This job involved assisting registered nurses in obtaining treatment authorizations from insurance companies. This is where she learned the fundamentals of insurance and billing, using procedure and diagnosis codes to receive authorization for patient care. She soon realized that she was interested in more than an administrative position. However, because she was a single mother with a full-time job she did not know which school would best fit with her schedule. She wanted to attend an accredited school that would fit her budget and make her a more valuable employee. Traditional colleges did not offer a flexible schedule for part-time students with a full-time job. Also, they did not offer accelerated classes, and while some did offer on-line classes, this lacks the advantage of a classroom environment. A proprietary college seemed the best fit for her. The school she selected was an accredited college with a medical coding program and a high success rate for its alumni. Instructors at the school were vital to her education. She believes her education was invaluable to her career advancement, providing her with the tools to improve her future with an opportunity to grow.


Alisha Stone, Senior para-legal at Frost Brown Todd in Lexington, became a para-legal after earning an associate degree from a proprietary school in 1998. She researched various colleges in the area to see how classes would fit into her schedule, as well as the possibility of grants, financing, and the length of time required to finish a program. On her initial visit to the school she would eventually graduate from, she took entrance exams, and filled out the necessary paper work to begin as a student the next quarter. The financial aid department was helpful in applying for student loans for fees not covered by grants. She was a non-traditional student in classes with students just out of high school, and others who were coming back for second and third careers and who were older than she was. Her instructors were knowledgeable and prepared her well for entrance into this new field. The college coordinated an internship that became a full-time job for a short time. The fact that she did not have experience was not a deterrent for hiring her as the firm was impressed by her education and the reputation of her school. Her alma mater also gives back to its alumni and the para-legal profession as a whole.


Representative Keene told committee members that the next meeting will be September 9, 2011, at 10:00 AM in the Annex.


There being no further business to come before committee, the meeting was adjourned at 11:08 AM