Call to Order and Roll Call
The 5th meeting of the Interim Joint Committee on Transportation was held on<Day> Tuesday, November 13, 2012, at 10:00 AM, in Room 154 of the Capitol Annex. Representative Hubert Collins, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Ernie Harris, Co-Chair; Representative Hubert Collins, Co-Chair; Senators David Givens, Jimmy Higdon, Ray S. Jones II, Bob Leeper, R.J. Palmer II, John Schickel, Brandon Smith, and Johnny Ray Turner; Representatives Linda Belcher, Leslie Combs, Tim Couch, Will Coursey, David Floyd, Keith Hall, Melvin B. Henley, Jimmie Lee, Terry Mills, Rick G. Nelson, Tanya Pullin, Marie Rader, Steve Riggs, John Short, Arnold Simpson, Fitz Steele, Jim Stewart III, and Addia Wuchner.
Guests: From the Kentucky Transportation Cabinet: Tom Zawacki, Commissioner, Department of Vehicle Regulation; Heather Stout, Director, Division of Motor Vehicle Licensing; Alice Wilson, Executive Director, Office of Audits; Randy Royer, Division Director, Office of Audits; Kim Jenkins, Audit Manager, Office of Audits; Vickie Bourne, Executive Director, Office of Transportation Delivery; Lisa Lee, Office of Transportation Delivery; Kim Jenkins, Legislative Liason; Matt Osborne, Legislative Liason; Jerry Burns, Attorney; David Allgood, Center for Accessible Living.
LRC Staff: John Snyder, Brandon White, Dana Fugazzi, and Jennifer Beeler.
Approval of Minutes
Representative Hall moved to approve the minutes from the October 2, 2012 meeting. The motion was seconded by Representative Steele and adopted by voice vote.
Chairman Collins recognized the departing members of the committee: Representative Linda Belcher, Representative Melvin Henley, Representative Lonnie Napier, and Representative Alicia Webb-Edgington.
Parking Placards for the Disabled
Tom Zawacki, Commissioner, Department of Vehicle Regulation explained how Kentucky is trying to find ways to change the current system of parking placards for the disabled so that there is less abuse in the system.
Heather Stout, Director Division of Motor Vehicle Licensing, explained that the cabinet receives numerous complaints about people misusing the placard and is striving to a solution. In 2008, when a $6 fee was charged for a permanent placard, there were approximately 26,000 placards issued. During the 2008 Regular Session, legislation passed to remove the fee to obtain a placard; succeeding years have seen a large increase in the number of placards issued, reaching approximately 230,000 in 2012. Temporary placards have also increased, but not as dramatically. In 2008, there were approximately 6,000 issued and, as of October 2012, there have been approximately 8,800 issued.
Ms. Stout explained that one of the issues the cabinet has noticed is that there are no requirements for a physician’s signature for placard renewals. Placards have a two year expiration, but an individual is allowed to renew a placard twice before having to acquire a physician’s signature, thus the individual has a total of 6 years to hold the placard. The expiration on the placard is handwritten, which causes concern because it can be easily altered. Local law enforcement officials are primarily concerned with the data that is received from the placard system inquiry. Often, when law enforcement officials query a placard, the officers will receive a message that states the placard is not found. When a query is run on a specific placard, the officer should receive a name, address, social security number, placard number, and expiration date or status of the placard. It is the responsibility of the county clerk’s office to input this information.
One possibility to improve the placards is to modify the design to a hole punch expiration date, which would alleviate the chance of someone altering the expiration date. Another option is a sticker decal on the placard with the month and year expiration.
In response to Representative Collins, Ms. Stout stated that the most cost effective option to modify the placards would be to change to the hole punch expiration option, but that could also bring additional problems with waste of placards at the end of the year.
In response to Representative Collins, Ms. Stout explained modifying the design of the placards to the decal option would require a change to the system for the ability to print the decal, and that there would be an additional cost of 25 cents to print each decal.
In response to Senator Harris, Ms. Stout stated that a legislative change was needed to require a physician’s signature to renew a placard after two years. It would depend on the physician whether to give an individual a placard for the next two years.
In response to Senator Harris, Ms. Stout stated that, with the implementation of the new KAVIS system, entering information for a placard will be simpler. She explained that instead of having to type in the information that the clerk would just scan the application into the system.
In response to Representative Collins, Ms. Stout explained that a temporary placard requires physician approval which allows for three months’ use of the placard and can be renewed only once with an additional physician’s signature. She stated that the permanent placard requires either a physician’s signature or observance from the clerk that the person is disabled.
In response to Representative Riggs, Ms. Stout stated that with the hold punch placard the year would be permanently printed on the placard, so the reason for the waste would be the need to print a certain amount of placards, and if those placards are not used by the end of that year, any remaining placards would be discarded and wasted.
In response to Representative Riggs, Ms. Stout explained that in 2008 legislation was passed to remove the fee required to obtain a placard. She added that the material cost to print the placards to do a decal and the placard would be 50 cents per placard.
David Allgood, Center for Accessible Living, said he is one of many who has been able to drive a disability accessible vehicle. As a person with a permanent placard, his concern is the double abuse and what the need is for individuals to be issued two placards.
Tom Zawacki, Commissioner, Department of Vehicle Regulation explained that an individual may have the option of receiving two placards if they show need that there are two different vehicles that require a placard.
Mr. Allgood explained that there is a huge need to change the way placards are issued and enforced because there is a lot of abuse. Individuals who truly need those placards need to be able to park in the assigned parking spaces.
In response to Representative Floyd, Ms. Stout explained that the idea of putting a driver’s license number on a parking placard was thought of in the past, but what deterred the decision was in the case of children or those who do not have driver’s licenses. She added that the cabinet is willing to look into tying a personal identification card or another form of identification to the placard.
Cabinet’s Auditing Procedures for the International Fuel Tax Agreement (IFTA) Fuel Tax Reporting
Alice Wilson, Executive Director, Office of Audits, stated that the International Fuel Tax Agreement (IFTA) is an agreement among the 48 contiguous states and 10 Canadian provinces to distribute motor carrier fuel taxes based on the miles driven in each jurisdiction. The agreement simplifies fuel reporting used by interstate motor carriers. Each driver pays a usage tax at the pump when purchasing diesel fuel. The tax is a fuel usage tax when a driver is driving through certain states. Taxes collected through IFTA are motor fuel taxes that are imposed by each jurisdiction on the consumption of motor fuel in qualified motor vehicles. To qualify for IFTA, a motor vehicle must be used in interstate operations, have a gross vehicle or registered gross vehicle weight exceeding 26,000 pounds, or have three or more axles regardless of weight.
In response to Representative Collins, Ms. Wilson explained that each state that is a member of the IFTA agreement must audit three percent of the carriers each year. There is also a peer review process that includes a team of workers to go to each state and look at the auditing procedures to verify the state is meeting its three percent auditing quota.
Ms. Wilson explained that some of the benefits to the licensee include one license and one set of decals for each qualified motor vehicle to operate through all member jurisdictions. This allows for the licensee to file only one tax return each quarter with the base jurisdiction. There is only one tax payment or refund and one audit by the base jurisdiction. There are also benefits to each jurisdiction, and there are fewer taxpayers, lower administrative costs, increased audit coverage, and increased enforcement.
The Kentucky Transportation Cabinet, Division of Motor Carriers, oversees licensing of IFTA carriers, processes tax returns, and conducts various training sessions throughout the year so the carriers understand what is required by being a part of the IFTA agreement. Annually, upon renewal, the licensee must sign a form stating he or she has read and understood all recordkeeping requirements to go along with an IFTA decal.
Ms. Wilson testified about the auditing procedure, how the cabinet chooses which licensees to audit, the process by which the audit is performed, and how at the conclusion of the audit the license will either receive a bill or a refund. A licensee is required to maintain a beginning and ending odometer reading by vehicle for each quarter, a trip sheet, driver’s logs, lease agreements for vehicles leased, quarterly distance recaps for each IFTA vehicle, and fuel receipts for bulk purchases and retail purchases.
There are two different ways a licensee can handle bulk fuel, either by paying taxes directly to the supplier, or paying no tax when purchased but paying under a separate return filed with the jurisdiction where the fuel was purchased and stored.
Ms. Wilson explained that, if a licensee has a bulk tank at the time of audit, the cabinet will enter the bulk purchases and bulk withdrawals into separate excel spreadsheets and compare the totals on a quarterly basis for each fuel type.
In response to Senator Schickel, Ms. Wilson stated that there have been no additional policies or procedures added in the last year. She explained that there have been representatives from the cabinet that have been out conducting seminars to inform licensees of their responsibilities, and that could be the cause of recent confusion.
In response to Representative Collins’ question regarding motor carrier registration, Kim Jenkins, Audit Manager, Office of Audits, explained that typically a licensee is required to travel to the Transportation Cabinet when an apportion plate is being received.
In response to Senator Higdon, Rick Taylor, Deputy Commissioner, Department of Vehicle Regulation stated that all renewals fees for interstate motor carriers are based off the previous year’s mileage for each jurisdiction.
Chairman Collins turned over the meeting to Chairman Harris.
Human Service Transportation
Vickie Bourne, Executive Director, Office of Transportation Delivery gave a status on the number of providers in each county, as well as a breakdown of which brokers served as providers. Ms. Bourne also informed the committee of the 1915(b) waiver the cabinet has received from Centers for Medicare and Medicaid Services (CMS) to allow brokers to serve as providers.
Jerry Burns, an attorney representing Ron and Brenda Babcock, owners of Ron and Brenda’s Transportation Service, explained that his clients started out with just one van and now have certificates in five counties providing transportation services for disabled person’s vehicles. His clients applied for authority to provide Medicaid-only transportation services in Pulaski County, as well as an application for 20 disabled people’s vehicles in the same county. Those applications were protested by the regional human service transportation broker, which also acts as a provider. His clients wish to change the law so that a broker who is also a provider cannot protest competition. He raised questions regarding the fairness of for-profit companies having to compete against government-subsidized not-for-profit agencies.
In response to Senator Givens, Lisa Lee, Deputy Commissioner, Department of Medicaid Services, explained that Kentucky has operated under the 1915(b) waiver for quite some time. Once the Deficit Reduction Act of 2005 passed giving states flexibility in their Medicaid programs, Kentucky’s Medicaid program chose to make several changes. CMS urged the department to move towards using the state plan over the 1915(b) waiver to alleviate some of the administrative burdens associated with the waiver. In 2009, federal law restricted the ability of brokers to serve as anything other than a provider of last resort. The Kentucky Medicaid program then pursued a 1915(b) waiver to ensure an adequate number of providers.
With no further business before the Committee, the meeting adjourned at noon.