Call to Order and Roll Call
The 3rd meeting of the Interim Joint Committee on Licensing and Occupations was held on Tuesday, August 12, 2014, at 1:30 PM, Kentucky Eagle Inc., 2440 Innovation Drive, Lexington KY 40511. Senator John Schickel, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator John Schickel, Co-Chair; Senators Tom Buford, Julian M. Carroll, Denise Harper Angel, Christian McDaniel, Morgan McGarvey, R.J. Palmer II, and Damon Thayer; Representatives Julie Raque Adams; Tom Burch, Adam Koenig, Charles Miller, Brad Montell, David Osborne, Ruth Ann Palumbo, Sal Santoro, Arnold Simpson, and Susan Westrom.
Guests: Ann Bakhaus, Owner, Kentucky Eagle, Inc.; Representative Steve Riggs, Representative Julie Raque Adams; Pat Dorsey, Kentucky Roofing Contractors Association; Bob Weiss, Home Builders Association of Kentucky; James Kegley, President, Brian Miller, Home Builders of Northern Kentucky; Daniel “DH” Harrison, co-owner, Country Boy Brewing.
LRC Staff: Tom Hewlett, Bryce Amburgey, Jasmine Williams, Michel Sanderson, and Susan Cunningham.
Approval of minutes for the July 11, 2014 meeting
A motion to approve the minutes from the July 11, 2014 meeting was made by Representative Burch and seconded by Representative Palumbo. The motion carried by voice vote.
Ann Bakhaus, owner of Kentucky Eagle distributing company, said her father started the company in 1948 as a 100,000 case operation. The company distributes over five million cases, being the largest Anheuser Busch wholesale distributor in the state. The legislature has been helpful to the industry in Kentucky.
Malt Beverages Awarded as Prizes
Senator Morgan McGarvey said his bill during the 2014 regular session would have created a special malt beverage temporary license for auctions, specifically charitable auctions. Similar legislation will be introduced in the 2015 session. There is already a temporary license for charitable auctions of distilled spirits and wine. The charitable malt beverage license would comply with all the existing regulations. Additionally, the malt beverages would be warm and could not be consumed on the premises. The malt beverages must be awarded to someone over the age of 21. The Department of Alcoholic Beverage Control is in favor of this legislation.
Licensure of Roofing Contractors
Representative Steve Riggs said that during the 2014 legislative session he sponsored a bill concerning licensure of roofing contractors that passed the House but not the Senate. The roofing industry came to the legislature and asked for legislation to protect consumers from “storm chasers,” who come into the state after a catastrophic event to take advantage of the situation. The number of complaints received at the Attorney General’s office and the Better Business Bureau has been increasing, tripling since 2011. There have been lawsuits, tracking down businesses that did the work is difficult because they are often from out-of-state. Many other states license the roofing industry. The Department of Housing, Buildings and Construction could manage a licensing database with existing personnel. There are protocols for plumbing or heating, mandating licensing and insurance. For roofing, which could cost a home owner $7,000 to $10,000, there are no such requirements. The Home Builders Association has asked that new homes be exempt, and this exemption was included the legislation.
In response to a question from Senator Buford, Representative Riggs said that criminal background checks would be done by the department on persons applying for licensure as a roofing contractor.
Senator Buford also commented that the time to apply for a permit to repair a storm-damaged roof should be extended more than the next business day. Additionally, if there is cause for litigation it should be in court of jurisdiction where the violation occurred, rather than Franklin Circuit Court.
Representative Julie Raque Adams commented that this legislation is not a government overreach since the industry itself came to legislators asking for the license.
Bob Weiss, Kentucky Home Builders Association, said his association objected to the permit fee. The fee was just a fee for which they received nothing. It did not provide any inspections. Members feel that if they pay a fee there should be an inspection performed and not a per job permit fee.
Brian Miller, Northern Kentucky Home Builders Association, told the committee that his association was not in favor of the legislation. The association has a built-in network that provides assistance for homeowners after a natural disaster to avoid out-of-town businesses coming in and contracting for work. There is also concern that smaller businesses will have an extra burden if the bill passed.
James Kegley, President of the Northern Kentucky Home Builders Association, said the bill contains burdensome requirements, such as time spent with additional paperwork, continuing education, and extra fees. Also, all counties do not have local inspectors. Enforcement of the existing building code throughout the entire state would be a better effort than creating new categories of licensure.
Kentucky Proud Cider
Daniel “DH” Harrison, co-owner and General Manager of Country Boy Brewing, started the company two and a half years ago. The company has grown from zero employees to 13, and increased production from 500 barrels to 6,500 barrels this year. The company’s two year projection is for 10,000 barrels of product.
Country Boy just opened an operation to sell beer in West Virginia. However, cider sales are not permitted in that state.
Microbrewers in Kentucky are grateful to have the support of the committee for changing the classification of cider from wine to a malt beverage. Cider is the fastest growing segment in the craft beer industry in America. Nationally, cider production has tripled in the last three years. Country Boy Brewing Company has partnered with Evans Orchard, in Scott County, to source apples to begin making Kentucky Proud Cider. A sterilized container is taken to the orchard where the apples are crushed and the juice is transferred directly into the container. At the brewery a minimal amount of ingredients is added to handle bacteria that may still be present. There are no other chemicals added. The cider is fermented using Kentucky yeast.
Kentucky Eagle is the only distributor for County Boy cider. The brewery has seven malt beverage distributors in total including distributors in Indiana, Tennessee and now West Virginia. The cider is sold only at the brewery. There are two varieties, sweet and tart, with sweet cider being the most popular. The company has invested more than $100,000 in cider infrastructure and tanks, and has hired three additional employees since cider was legalized.
In response to a question from Senator Schickel, Mr. Harrison said that the brewery has added four tanks for cider only. Tomorrow the company will begin canning beer that has previously been draft only. A bottling line for cider is planned for 2015 production. The demographic for cider is the 21 to 35 age range.
Senator Schickel said that the next meeting will be Friday, September 12, at 10:00 AM at Keeneland.
There being no further business, the meeting was adjourned at 2:14 PM.