Call to Order and Roll Call
The 2nd meeting of the Interim Joint Committee on Licensing and Occupations was held on Friday, July 10, 2015, at 10:00 AM, in Room 129 of the Capitol Annex. Representative Dennis Keene, 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 Joe Bowen, Julian M. Carroll, Denise Harper Angel, Jimmy Higdon, Paul Hornback, Ray S. Jones II, Christian McDaniel, Dan "Malano" Seum, and Damon Thayer; Representatives Tom Burch, Denver Butler, Larry Clark, Jeffery Donohue, Dennis Horlander, Joni L. Jenkins, Adam Koenig, Reginald Meeks, Charles Miller, Brad Montell, Darryl T. Owens, Ruth Ann Palumbo, Sal Santoro, Arnold Simpson, Diane St. Onge, and Susan Westrom.
Guests: Fred Higdon, Commissioner, Matt Neal, FDA State Tobacco Coordinator, Steve Humphress, General Counsel, Department of Alcoholic Beverage Control; Steve Kelly, Deputy Commissioner, Department of Agriculture; Hoppy Henton, Council for Burley Tobacco; Orlando Chambers, Tobacco Research and Development Center, University of Kentucky; Gary Feck, Commissioner, Jack Coleman, Deputy Commissioner, Department of Housing, Buildings and Construction; Michael Donta, Deputy Commissioner of Workplace Standards and Supervisor of Apprenticeship, Kentucky Labor Cabinet; Brian Miller, Executive Vice President, Home Builders Association of Northern Kentucky; Mike Quinn, CEO, Quinn Electric; Mark Kramer, CEO, Townsley Electric.
LRC Staff: Bryce Amburgey, Jasmine Williams, Michel Sanderson, and Susan Cunningham.
Approval of minutes for June 18, 2015 meeting
A motion to approve the minutes of the June 18, 2015, meeting was made by Representative Burch and seconded by Representative Keene. The motion carried by voice vote.
Presentation on Electronic Cigarettes
Matt Neal, State Program Coordinator for the FDA tobacco contract, told the committee that according to the 2014 Kentucky Incentives for Prevention survey (KIP) a high percentage of e-cigarette users in Kentucky are sixth through eighth graders. Senate Bill 109 (2014 RS) defined noncombustible products such as vapor products or alternative nicotine products as tobacco products intended for human consumption. Under the new legislation, retailers are prohibited from selling these products to anyone under 18 years of age. The Department of Alcoholic Beverage Control has investigators who conduct regular, monthly tobacco inspections of any business that sells tobacco products. The FDA does not regulate e-cigarettes.
Representative Keene recognized Representative Larry Clark, who asked members to note information in their folders regarding e-cigarettes. He said that the University of Louisville has been awarded a grant for research on this topic. Additionally, he noted that he had filed a bill in the 2015 Regular Session to regulate e-cigarettes like other tobacco products. Fees from regulations could return approximately $7 million.
In response to a question from Representative Burch, Mr. Neal was unsure about the level of nicotine in the vapor used in the e-cigarettes. Commissioner Higdon said the agency is charged with enforcing current law that limits access to minors. The vapor has nicotine that is addictive, and there are health risks in using the product.
Senator Higdon commented that ABC compliance buys are effective in raising awareness to retailers who might otherwise sell to minors.
In response to a question from Senator Hornback, Mr. Higdon said it is harder to identify smaller venues. Mr. Humphress said that anonymous tips help the ABC identify these venues for inspections. Any products found are seized and destroyed. Mr. Neal said the FDA is working on administrative regulations relating to e-cigarettes.
In response to a question from Senator Seum, Mr. Humphress said that it is illegal for a retailer to sell e-cigarettes to a minor under the age of 18.
Steve Kelly, Deputy Commissioner for the Department of Agriculture, said the department is inspecting retailers for signage to acknowledge no sales of tobacco products to minors. Of concern is the fact that tobacco for this product is not produced locally, and as smokers switch to liquid nicotine, there will be less need for locally grown burley tobacco.
Hampton “Hoppy” Henton was present, representing the Council for Burley Tobacco, a grower-only organization representing growers of burley tobacco in a multi-state area. He said that he is also a citizen representative on the FDA committee that is writing regulations for e-cigarettes. Smoking products are referred to as combustible, and chewing tobacco is non-combustible. The FDA’s analysis is that nicotine is highly addictive, although health hazards are not fully defined. The hazard of nicotine is greatly magnified when tobacco is burned.
Addiction and health risks in some cases are not the same thing. Advocates of the e-cigarette focus on people already addicted to tobacco or already smoking who are using e-cigarettes as a way to reduce or stop smoking. This eliminates burning tobacco and replaces it with vapor, moving from high-risk smoking. In cases where there are restrictions on tobacco use, such as work and restaurants, people who are addicted are able to use vapor until in their own environment where they can smoke. This is known as dual use. The health community is divided on this concept.
Mr. Henton spoke regarding the taxing of e-cigarettes at the nicotine delivery level as compared to the tax on a pack of cigarettes. As consumption drops, manufacturers raise their prices, maintaining their profit level. If the tax structure were attached to the retail level, this would keep a revenue stream without raising cigarette taxes.
Orlando Chambers, Kentucky Tobacco Development and Research Center at the University of Kentucky, said there is a laboratory to analyze tobacco samples. Analysis of e-cigarettes and e-liquid finds that the amount of nicotine in the products is correct to the labeling. However, other minor alkaloids have been found, leading analysts to question if the nicotine is synthetic or from tobacco. Most of the products come from China and India, but not much is from the United States. Last year, only 200 acres of tobacco was grown specifically for applications related to e-cigarettes.
The market is growing with anticipated sales of $3.5 billion in 2015, with predictions that e-cigarettes with overtake conventional cigarettes within the next 15 years. Barrels of nicotine, as well as bottles and flavors, are sold on the internet. The value of the product in an e-cigarette is declining. Based on estimates, approximately 3.5 million one milliliter e-cigarettes could be made from the nicotine that could be produced in an acre of tobacco. Growers are paid less for tobacco grown for this use.
In response to a question from Senator Higdon, Mr. Kelly said the department inspections involve checking for signage regarding sales to minors. ABC is the enforcement agency regarding tobacco sales to minors.
In response to a question from Senator Hornback, Mr. Henton said the FDA is working on e-cigarette regulations that should be finalized this fall. Dr. Chambers said nicotine could be produced from sources other than tobacco.
Senator Hornback said that he is against taxes just to raise money. The reason to raise taxes on combustibles was to cut consumption. He advised using caution on taxing a product for that purpose.
Northern Kentucky Home Builders
Brian Miller, Executive Vice President, Home Builders Association of Northern Kentucky, said the Enzweiler Apprentice Training Program began in 1967 and is the longest continually operated, privately owned trade school in the nation. It began as a four year program in carpentry, and in 1978 a four year program in electric was established. There is also a two year program for HVAC. The curriculum is recognized by the U.S. Department of Labor. The program is 26 weeks long, providing 126 hours of training. The school calendar goes from April to September, two nights per week from 6:00 PM until 9:00 PM. Tuition is approximately $1,500 per year. There is a 98 percent job placement rate and a 76 percent job retention rate after three years. In 2013, the HBA of NK conducted a survey of the work force needs in the construction industry in northern Kentucky. That survey showed that by 2025 there will be a need for approximately five thousand new skilled trade workers.
This year the state ceased to accept the certificates of graduation from the Enzweiler program as a recognized education provider for HVAC and electric. The school had received no notice that the program did not meet requirements for state licensure. During the past month the school has met with the Department of Labor and the Department of Housing, Buildings and Construction to reestablish acceptance of the school’s programs as a certified provider for these respective trades.
Through this process we have also discovered the ratio of apprentice to journeyman for residential contractors should be adjusted. The current state ratio is geared toward the needs of large public projects. Our contractors work in a residential setting rather than at large public jobs.
Senator Schickel commented that the Enzweiler school has always received high praise from contractors for the training provided to its students. He noted that the committee will assist the school in any way possible. Representative Keene agreed the school is on the right track to solving the problem.
Mark Kramer, CEO, Townsley Electric, said he has been teaching in the electrical field for over 30 years. Prior to 2003, employees worked for the owner of a company. The owner retained a Master’s License, which also served as a contractor’s license. In 2003, statewide licensing began and created a mandate that there be at least one licensed electrician on every project. Housing, Buildings and Construction regulations allow that a test for an electrician’s license may be taken two years prior to the regular date if the applicant is attending an approved program. However, Department of Labor regulations state that there must be three journeymen to every apprentice. Townsley Electric performs small commercial work, with a typical job consisting of two journeyman and four apprentices. This is normal for the entire trade throughout Kentucky.
The Department of Housing, Buildings and Construction does not regulate training programs. The Department of Labor’s regulations state that there must be three journeyman for every apprentice. Mr. Kramer stated that having a licensed person on every project was not a problem. However, the industry is not structured to place the journeyman to apprentice ratio for small projects. Mr. Miller said the Department of Labor has offered an annual waiver process, but it is not business friendly.
In response to a question from Senator McDaniel, Mr. Miller replied there are on-the-job training hours in addition to a certificate of completion by a recognized educational provider. The projects in residential construction are different than a large prevailing wage job.
In response to a question from Senator Bowen, Mr. Kramer responded that the Department of Labor’s regulation pertains to collective bargaining and prevailing wage projects, which are projects that do not include residential contractors.
There being no further business to come before the committee, with a motion and second, the meeting was adjourned at 11:07 AM.