Call to Order and Roll Call
The 6th meeting of the Interim Joint Committee on Licensing and Occupations was held on Wednesday, November 2, 2011, at 10:00 AM, in Room 131 of the Capitol Annex. Senator John Schickel, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator John Schickel, Co-Chair; Representative Dennis Keene, Co-Chair; Senators Tom Buford, Julian M. Carroll, Denise Harper Angel, Jimmy Higdon, Dan "Malano" Seum, Kathy W. Stein, and Damon Thayer; Representatives Tom Burch, Larry Clark, David Floyd, Dennis Horlander, Wade Hurt, Joni L. Jenkins, Adam Koenig, Reginald Meeks, Charles Miller, Michael J. Nemes, David Osborne, Darryl T. Owens, Carl Rollins II, Sal Santoro, Arnold Simpson, and Susan Westrom.
Guests: Representative Ron Crimm, and Colonel Steve Bullard, Kentucky Air National Guard; Dan Fay, Commonwealth Hotels and Jim MacFarlane, Kentucky Restaurant Association, Northern Kentucky Chapter.
LRC Staff: Tom Hewlett, Bryce Amburgey, Carrie Klaber, Michel Sanderson, and Susan Cunningham.
Approval of minutes
A motion was made by Representative Keene, seconded by Senator Buford and the minutes from the October 14, 2011 meeting were approved by voice vote.
BR 120, AN ACT relating to qualifications for military service
Representative Ron Crimm, sponsor of BR 120, told committee members that the bill was not aimed at harming the tattoo industry. Rather, the military has requirements restricting tattoos on the neck, the forearm or the bottom of the leg from the knee down. Also, tattoos considered sexual in nature, or containing graphic or offensive content are not permitted. Individuals considering a military career need to be aware of these requirements. The bill requires each tattoo facility to conspicuously display, in a prominent place easily seen by patrons, a printed sign that: (a) is at least eleven inches by fourteen inches in size, with letters at least one inch high; (b) is supplied by the Cabinet for Health and Family Services; and (c) warns that any tattoo on the neck, forearm, or lower leg shall automatically disqualify the wearer from military service in the United States Armed Forces.
Colonel Steve Bullard, Kentucky Air National Guard, told committee members that each branch of service has some leeway in determining where tattoos are permitted or not permitted. Basically the head area is generally prohibited. The Army does allow some tattoos on the back of the neck. It is a judgment call for the recruiter in most cases. Language in the bill might be changed to say a tattoo may disqualify recruits and provide prospective soldiers with criteria for the branch to which they are applying.
In response to a question from Representative Clark, Representative Crimm said he learned of this issue from his son, who is a Master Sergeant in the Air Force, and is in charge of recruiting and retention in Kentucky. His son had a highly qualified recruit but because of a tattoo on the recruit's neck the recruit was prohibited from enlistment. In response to a question from Representative Burch, Colonel Bullard said if there should ever be a draft put in place, tattoos on the forehead or certain other places would be disqualifiers, unless rules were changed for the draft. Colonel Bullard added that he did not anticipate tattoo rules changing. Representative Crimm noted that the Navy had the strictest criteria, stating that certain content, obscenity, sexual explicity, and tattoos in the mouth are causes for disqualification.
BR 175, AN ACT relating to the sale of alcoholic beverages at restaurants
Senator Schickel, sponsor of BR 175, told committee members the restaurant industry's ability to purchase a liquor license was dependent on a restaurant's ratio of food sales to alcohol sales. The bill changes KRS 241.10, from "fifty percent of gross receipts," to, "fifty percent of food and beverage receipts." The restaurant and bar business has changed over the years and this bill is an attempt to update an out-dated law. The statute specifically states that fifty percent of gross receipts must be from food to qualify as a restaurant and obtain a liquor license. Some auditors are using sales from tee shirt and novelties to figure gross receipts for a business. BR 175 would clarify this to say that fifty percent of food and beverage receipts must come from the sale of food. This would exclude sales of non-food items from the calculation.
Dan Fay, of Commonwealth Hotels, Inc., said that Senator Schickel did a good job of describing the need to clarify the intent of the statute. Businesses have evolved into not only selling food but other items. Businesses like the Hard Rock Café and Jimmy Buffet's Margaritaville and Disney restaurants are tourist attractions as well as legitimate restaurants. However, a large portion of their sales is merchandise. Under the current interpretation of the statutes they could be in violation of the law. Also, private clubs who count dues as part of their revenue could be impacted. The accounting firms that work for the restaurant industry have standard charts of accounts they use to report revenue and expenses. These charts set food and beverage revenue apart from total revenue. The restaurant and hotel associations would like to change the statute to define fifty percent of food and beverage revenue to qualify for a liquor license instead of using total revenue.
Representative Keene commented that Senator Schickel has a legitimate concern and he was supportive of the legislation.
In response to a question from Representative Clark, Mr. Fay there will be an effect on insurance rates for businesses and that the Department of Alcoholic Beverage Control did not have any concerns at this time. In response to a question from Senator Seum, Mr. Lay said coffee, tea, and soft drinks are considered food items. In response to a question from Representative Koenig, Mr. Lay said the industry has a uniform system for reporting sales; however, some businesses interpret the statutes differently.
Senator Higdon commented that the statutes are written to help restaurants sell alcohol. The problem comes when someone who wants to establish a bar tries to sell food to qualify for a restaurant liquor license. Mr. Lay commented that auditors check for other purchases as well as food and beverage sales.
There being no further business to come before the committee the meeting was adjourned at 10:23 AM.