Call to Order and Roll Call
The 6th meeting of the Interim Joint Committee on Licensing and Occupations was held on Monday, November 28, 2016, at 10:00 AM, Turfway Park, Florence, KY. 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, Denise Harper Angel, Ray S. Jones II, Christian McDaniel, and Damon Thayer; Representatives Larry Clark, Jeffery Donohue, Daniel Elliott, Dennis Horlander, Adam Koenig, Jerry T. Miller, David Osborne, and Diane St. Onge.
Guests: Chip Bach, General Manager, Turfway Park; Frank Kling, Chairman, Mark Simendinger, Board Member, Kentucky Racing Commission; Adam Watson, Daniel, “DH” Harrison, Kentucky Guild of Brewers; Tina Volz, PT, Ed Dobrzykowski, PT, Louis Kelly, General Counsel, Kentucky Board of Physical Therapy; Steve Stevens, CEO, Kentucky Association of Realtors; Robert M. Weiss, Executive Vice President, Home Builders Association of Kentucky; William T. Reynolds, O.D., President, Fred M. Mayes, O.D., Treasurer, Nicole Biddle, Counsel, Kentucky Board of Optometric Examiners.
LRC Staff: Tom Hewlett, Bryce Amburgey, Jasmine Williams, Michel Sanderson, and Susan Cunningham.
Approval of minutes from October 14, 2016 meeting.
Due to the lack of a quorum, approval of the October minutes was passed over.
Welcome to Turfway Park
Chip Bach, General Manager of Turfway Park, said that it was an honor to host the meeting at Turfway Park.
Mark Simendinger, board member, Kentucky Horse Racing Commission, said over the last 15 years the number of races in the United States has dropped dramatically. The number of foals in Kentucky has dropped, and there are fewer races. Purses per race have remained solid; however, due to the additional money from historical horse racing. States who do not have historical horse racing, or other revenue sources to supplement purses, are struggling because there is no additional money in their purse program.
In response to a question from Representative Clark, Mr. Bach said Turfway has no objection to having historical horse racing. However, the owner, Jack Entertainment, is waiting on pending litigation before having historical horse racing at Turfway Park.
In response to a question from Representative Keene, Mr. Simendinger said Ohio has purse challenges and a larger number of racing day. Racinos are now helping bring in larger purses.
Frank Kling, Chairman of the Kentucky Horse Racing Commission, said that money collected from the Kentucky excise tax on pari-mutuel wagering came from live racing, simulcast racing, Advanced Deposit Wagering (ADW) and Historical Horse Racing (HHR). The money from live racing, simulcast and HHR is divided between the Thoroughbred Development Fund, Standardbred Development Fund, Quarter Horse and Other Breeds Development fund, Backside Improvement Fund, Equine Industry Program, Equine Drug Research, Higher Education Fund. It is estimated that in fiscal year 2017 excise taxes on pari-mutuel wagering will increase due to HHR.
In response to a question from Senator McDaniel, Mr. Simendinger said ADW is an online account, such as TwinSpires.com, that allows you be wager on a race from any location. Tax from these accounts is based on the amount wagered. The percentage of excise tax that goes into the general fund from a live wager is broken down in a different calculation than an ADW online account. The tax rate is lower for the ADW online account.
Senator Thayer added that the revenue bill three years ago enacted a 1.5 percent flat tax on all wagers in the state from other areas. However, ADWs only pay half a point. Therefore, when wagering at a track, 1.5 percent is taken from your wager, but if you wager from the app on your phone only .5 percent is taken out of the bet. Standardbred races are exempt from the pari-mutuel tax.
Kentucky Guild of Brewers
Adam Watson, President, Kentucky Guild of Brewers, said Senate Bill 11 raised the production cap for a microbrewery from 25,000 barrels per year to 50,000 barrels. This allows the microbrewers to keep their retail privileges. Microbrewers can now sell their own malt beverages by the package and by the drink to consumers at fairs, festivals and other similar events located in wet territory. The Guild has partnered with the Kentucky Tourism Cabinet to help promote Kentucky craft beer as well as the Department of Agriculture to feature Kentucky Proud products and the “Drink Kentucky” app. The guild has an agreement with local farmers who pick up spent grain to use in animal feed.
Daniel Harrison, Secretary, Kentucky Guild of Brewers, said that microbrewers are participating in events across the state such as the Festival of the Horse in Georgetown, the Cynthiana Art Walk, and the Shaker Village Music Festival as well as events such as Ironman Louisville. Additionally, microbrewers hold their own special release events. These events draw patrons worldwide.
In the past five years, craft brewing in Kentucky has seen a 600 percent growth rate. In 2016 11 new breweries opened. Currently, there have been 46 ABC microbrewery licenses issued. Sixteen of these breweries are planning expansion. In 2016, brewers increased their workforce by 25 percent. Kentucky’s craft brewers export to 38 states and 12 countries with a total economic impact of $495 million. Projected sales for 2017 are for at least 40,000 more barrels with beer sales up 40 percent.
Adam Watson said that that craft breweries are paying excise tax, wholesale tax and sales tax on their products, which in 2016 generated over $6,557,744. Guild members also participate in and contribute to local charities and organizations, with West Sixth donating over $120,000 to local and national charities this year.
Representative Keene commented that the industry is being viewed as an economic development catalyst.
Kentucky Board of Physical Therapy
Louis Kelly, General Counsel, Kentucky Board of Physical Therapy, said that the board will have legislation for the upcoming session to enact Kentucky’s participation in a national, interstate compact for physical therapy. It is believed that this would reduce the burden on licensing the profession. The physical therapy compact is like other compacts Kentucky has. For example, a Kentucky driver’s license is recognized when driving in other states. However, an attorney with a license in Kentucky can only use that license in Kentucky. To practice in Ohio, the attorney must have a license through the Ohio bar association. Currently, Kentucky physical therapy law is similar to a law license. To practice physical therapy in Ohio, the therapist must obtain an Ohio physical therapy license. A compact would change that.
Under a proposed compact drafted by the Federation of State Boards of Physical Therapy, in consultation with the Council for State Governments and member institutions, those states who have passed enabling legislation will enable a licensee in good standing in their state to go to another member state to practice physical therapy without getting a license in that state. Those physical therapists who wish to practice in another state pay a fee to participate in multi-state licensing under the compact.
The compact will go into effect once ten states have enacted the legislation. Currently four states, including two bordering states, Missouri and Tennessee have adopted the compact. The Federation predicts that 12 to 17 states will introduce legislation this year.
Senator Buford said that the compact made perfect sense.
In response to a question from Representative St. Onge, Mr. Kelly said the physical therapist would only maintain continuing education in their home state. Ms. Volz added that in order to participate in the compact the member state has to have continuing education in their law.
Tina Volz, Chair, Kentucky Board of Physical Therapy, said that the board is very much in favor of the legislation. The requirement of reporting to a national disciplinary data base is important. Also, the compact will improve access to therapists.
Ed Dobrzykowski, physical therapist as Saint Elizabeth Hospital, said that the hospital had difficulty in hiring physical therapists. The demand for physical therapists is well known. Telehealth is a new area that has advantages to having a compact. The American Physical Therapy Association supports the compact.
Senator Schickel cautioned that the members of the General Assembly are concerned about states’ rights and data gathering. There have been problems in the past with compacts and he asked that the board members consult with Senator Givens regarding the legislation.
Kentucky Association of Realtors
Steve Stevens, CEO, Kentucky Association of Realtors, said the Kentucky Association of Realtors represents over 10,000 realtors in Kentucky. There are 21 local boards across the state of Kentucky. A strong housing market is the cornerstone of a growing economy. Home owners and investors in commercial real estate bring a positive impact to neighborhoods and communities. Home ownership in Kentucky outpaces the nation by five percentage points.
Home values are rising and interest rates are staying low; however, inventory is at an all-time low in Kentucky. When this occurs, home prices rise at a faster rate than incomes. Income levels have risen by about two percent while home prices have been growing at a rate of five to six percent per year. The average number of days a house is on the market is less than 120 days.
For every two houses sold one job is created and each purchase generates about $60,000 to the economy. This includes appraisers, auctioneers, attorneys, insurance companies, surveyors, mortgage lenders and home inspectors.
The real estate industry needs tax reform, and encourages supporting first-time home buyers through tax credits. Legal reform is needed to protect landlord interests in tenant issues regarding owner’s investments and personal responsibility. The majority of real estate companies in Kentucky are small businesses. It is well known that over- regulation of small businesses results in higher costs to consumers and slows economic growth.
The real estate industry knows that Kentucky is facing a substance abuse problem and would like to commit their support to the legislature in helping stop the heroin crisis.
Bob Weiss, Executive Vice President of the Home Builders Association of Kentucky, said home building is up by 15 percent compared to last year. There are 30 occupations that go to work when a home is built. This adds to the tax base, income generated and creates jobs.
Workers left the industry during the housing bust in 2008, and have not returned now that home building is back on the rise. Two members of the Homebuilders Association, northern Kentucky and Lexington have their own schools to train workers in HVAC, plumbing, electrical and carpentry. These schools offer night classes so that students can work in their trade during the day and take relevant courses in the evening. The placement rate is 99.5 percent.
Senator Schickel took issue with a comment that the legislature has done a good job regarding the heroin crisis. He said the problem is getting worse.
Senator Buford commented that dealing with drug addiction was a difficult situation. He added that there is a problem with finding labor to build new houses. He also commented that in the past the Senate has worked on the issue of liability when an apartment owner rents to a dog owner.
Senator Thayer noted heroin has permeated life in Kentucky. He said that he supports any bill to toughen penalties regarding heroin dealers.
Kentucky Board of Optometric Examiners
Dr. Bill Reynolds said that the Board of Optometric Examiners would like to change the Optometry Act regarding license renewal fees. Currently the fee is capped at $200. The change requested would place the renewal fee in administrative regulations that would be promulgated by the board. This is consistent with other health care providers and does not require a statutory change when fees are amended. The board has not requested an increase in fees in 20 years. Costs to the board such as rent have increased, and the general assembly has swept the account during this time period. The increase in fees is supported by the Kentucky Optometric Association that represents over eighty percent of the practicing optometrists in the state. The board has sent a notice to all licensed O.D.s in the state asking for response. All responses have been supportive of a fee increase.
In response to a question from Representative Horlander Dr. Reynolds said the board verifies credentials. Complaints are investigated by the board. If there is a law suit against an optometrist the board investigates that complaint.
Senator Schickel noted that he has met with this group several times and advised them that to be successful the membership must have buy-in.
Representative Jerry Miller said that all the testimony heard today ties in the Governor’s Red Tape Reduction Act.
In response to a question from Senator Buford, Dr. Reynolds said the board’s account had not been swept since 2012 because there was nothing to sweep.
Representative Osborne said that he has been meeting with the board regarding sponsoring this legislation and commended the board for reaching out to their membership.
In response to a question from Senator Jones, Dr. Reynolds said that when the students start to graduate there will be more work for the board.
There being no further business, the meeting was adjourned at 11:35 AM.