Present were:

Members: Senator Richard "Dick" Roeding, Co-Chair; Representative Tanya G Pullin, Co-Chair; Senators Joey Pendleton and Gary Tapp; Representatives James E Bruce, Jimmie Lee, and Jon David Reinhardt.

Guests: Diana Barber, Tim Phelps, Kentucky Higher Education Assistance Authority; Hiren Desai, Richard Dobson, Ricky Haven, Jim Livers, Eddie Mattingly, Angela Robinson, Ed Ross, Finance and Administration Cabinet; Jim Grawe, C.W. Wilson, Real Estate Appraisers Board; Jack Damron, James Wagner, Todd Woodward, Department of Corrections; Steve Coffey, Godwin Onodu, Todd Shipp, Doug Sutton, Jerry Wright, Transportation Cabinet; Anne E. Keating, Education Cabinet; Tracy Bertram, Robin Coombs, Glenn Jennings, James Martin, Carla H. Montgomery, Brenda Parker, Gary M. Smith, D.J. Wasson, Environmental and Public Protection Cabinet; James Gallagher, Mark A. Guilfoil, Mark Posnansky, Horse Racing Authority; Frank Dempsey; Ronny Pryor.

LRC Staff: Dave Nicholas, Emily Caudill, Donna Little, Laura Milam, Karen Howard, Sarah Amburgey, Jenifer Harrison, Ellen Steinberg and Emily Harkenrider.

The Administrative Regulation Review Subcommittee met on Tuesday, August 9, 2005, and submits this report:

Administrative Regulations Reviewed by the Subcommittee:

Kentucky Higher Education Assistance Authority: Division of Student and Administrative Services: Commonwealth Merit Scholarship Program

11 KAR 15:090. Kentucky Educational Excellence Scholarship (KEES) Program. Diana Barber, Assistant General Counsel, and Tim Phelps, Student Aid Branch Manager, represented the Division.

In response to a question by Senator Roeding, Mr. Phelps stated that the KEES award could be used in the Kentucky Community and Technical College System.

A motion was made and seconded to approve the following amendments: (1) to amend the RELATES TO and STATUTORY AUTHORITY paragraphs to correct statutory citations; (2) to amend the NECESSITY, FUNCTION, AND CONFORMITY paragraph to clearly state the necessity for, and function served by, this administrative regulation; (3) to amend Sections 1 to 5 and 10 to comply with the drafting and format requirements of KRS Chapter 13A; (4) to amend Section 2 to specify that the reported information shall be submitted electronically or in hard copy; and (5) to amend Section 5 to change the school year to reflect the most recent academic year. Without objection, and with agreement of the agency, the amendments were approved.

Finance and Administration Cabinet: Department of Revenue: Ad Valorem Tax; Administration

103 KAR 7:021. Repeal of 103 KAR 7:040 and 103 KAR 7:050. Eddie Mattingly, Director, Jim Livers, Office of Property Evaluation, and Richard Dobson, Executive Director, represented the Department.

A motion was made and seconded to approve the following amendments: (1) to amend the RELATES TO paragraph to correct a statutory citation; and (2) to amend Section 2 to comply with the drafting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.

Sales and Use Tax: Miscellaneous Retailer Transactions

103 KAR 28:051 & E. Leases and rentals. A motion was made and seconded to approve the following amendments: (1) to amend the RELATES TO and STATUTORY AUTHORITY paragraphs to correct statutory citations; (2) to amend the NECESSITY, FUNCTION, AND CONFORMITY paragraph to clearly state the necessity for and function served by this administrative regulation; (3) to amend Section 5 to replace the term "certificate" with the term "resale exemption"; and (4) to amend Sections 1 to 5 and 7 to 10 to comply with the drafting and format requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.

Accounts

109 KAR 11:021. Repeal of 109 KAR 11:020.

Travel Expense and Reimbursement

200 KAR 2:006. Employees' reimbursement for travel. Ed Ross, State Controller, and Hiren Desai, Attorney, represented the Department.

In response to questions by Representative Lee, Mr. Ross stated that this administrative regulation currently authorized an employee who was attending a conference within forty (40) miles of the employee's work station or home to be reimbursed for the cost of staying overnight if the employee had approval to attend the conference, it was reasonable for the employee to stay overnight, and the agency head approved the reimbursement. For example, an agency head might approve an employee to stay overnight if the employee needed to be on sight early the next morning to set up for the conference. The amendments to this administrative regulation were for clarification purposes only. They did not change the reimbursement requirements and had a minimal fiscal impact.

In response to a question by Senator Tapp, Mr. Ross stated that the amendments clarified that if an agency head approved a lodging reimbursement, additional approval by the Finance Cabinet was not required.

In response to a question by Co-Chair Pullin, Mr. Ross stated that the lodging reimbursement policy enabled Lexington hotels to compete equally with Louisville hotels for state conferences.

Representative Lee stated that he could not support this reimbursement policy given the Medicaid budget shortfall.

A motion was made and seconded to approve the following amendments: (1) to amend Section 6 to require that lodging for a conference would be reimbursed only if it was a "necessary expense of official travel"; and (2) to amend various sections to comply with the drafting and format requirements of KRS Chapter 13A. With agreement of the agency, the amendments were approved. Representative Lee raised his objection which was noted by the Chair.

Office of the Secretary: Ad Valorem Tax; Administration

200 KAR 5:080. Sponsorships. A motion was made and seconded to approve the following amendments: (1) to amend Section 2(2) to clarify that evaluation factors used shall insure "best value" as defined in KRS 45A.070(3); and (2) to amend various sections to comply with the drafting and format requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.

Office of the Controller: Office

200 KAR 38:060. Reimbursement to law enforcement officers for certain expenses.

200 KAR 38:070. Internal controls and pre-audit. A motion was made and seconded to approve the following amendments: to amend the NECESSITY, FUNCTION, AND CONFORMITY paragraph and Sections 1 to 4 to comply with the drafting and format requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.

General Government Cabinet: Real Estate Appraisers Board: Board

201 KAR 30:050. Examination, education, and experience requirement. Jim Grawe, Assistant Attorney General, and C.W. Wilson, Chair, represented the Board.

A motion was made and seconded to approve the following amendments: to amend Section 8 to change "certificate holders" to "credential holders." Without objection, and with agreement of the agency, the amendments were approved.

Justice and Public Safety Cabinet: Department of Corrections: Office of the Secretary

501 KAR 6:020. Corrections policies and procedures. James Wagner, Assistant Director, and Jack Damron, Deputy General Counsel, represented the Department.

A motion was made and seconded to approve the following amendments: to amend Section 1 and the material incorporated by reference to: (1) insert material that was inadvertently omitted; (2) clarify provisions; (3) update references and citations; (4) revise provisions relating to the Open Records Act in accordance with KRS 61.872; and (5) comply with the drafting and format requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.

501 KAR 6:240 & E. Home incarceration using an approved monitoring device. A motion was made and seconded to approve the following amendments: to amend the NECESSITY, FUNCTION, AND CONFORMITY paragraph, Section 1, and the material incorporated by reference to: (1) clarify provisions; and (2) comply with the drafting and format requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.

501 KAR 6:999. Corrections Secured Polices and Procedures. This administrative regulation was reviewed and amended, with agreement of the agency, by the Subcommittee in closed session pursuant to KRS 61.810(1)(i) and (k) , KRS 61.815(2), and KRS 197.025(6).

Transportation Cabinet: Department of Vehicle Regulation: Commercial Driver's License

601 KAR 11:010. Fees relating to commercial driver's licenses (CDLs). Todd Shipp, Assistant General Counsel, Steve Coffey, and Doug Sutton, Assistant Director, represented the Department.

In response to a question by Senator Tapp, Mr. Coffey stated that the amendments to this administrative regulation adjusted the CDL fees to reflect the twelve (12) dollar driver's license fee increase from House Bill 267 of the 2005 Regular Session of the General Assembly. The amendments also established a three (3) dollar fee for the criminal history background check required by KRS 281.A300 for the initial application or renewal of a CDL.

In response to questions by Co-Chair Pullin, Mr. Coffey stated that the operator's license fee and the background check fee were the only fees increased by this amended administrative regulation. Additionally, a CDL holder had one tangible (1) license that contained two (2) different driving privileges.

In response to questions by Representative Reinhardt, Mr. Coffey stated that the background check requirement for CDLs was enacted in 2002. For efficiency purposes, the Department had delayed implementing the check until the federal government had established the companion fingerprinting requirements for Hazardous Material drivers.

In response to questions by Senator Tapp, Mr. Coffee stated that the Department began performing the background checks on July 1 of this year. However, the checks were not comprehensive. KRS 281A.300 limited the check to state and federal wanted or "hot file" records.

In response to a question by Co-Chair Pullin, Mr. Coffey stated that the background check was performed once, either at the time of application for new licenses or at the initial renewal for existing CDLs.

In response to a question by Representative Lee, Mr. Coffee stated that the Kentucky State Police performed the background check. If it indicated an outstanding warrant, they notified the appropriate law enforcement agency.

In response to questions by Representative Reinhardt, Mr. Coffee stated that because KRS 281A.300 authorized a one-time background check, the Department could not conduct subsequent checks. However, the Department would be notified if a CDL holder received a DUI or moving violation in Kentucky or a license suspension from another state. The Department set the background check fee based on the State Police's cost to perform the check.

A motion was made and seconded to approve the following amendments: (1) to amend Sections 1, 2, and 3 to reorganize the instruction permit and licensure fees for CDLs in accordance with KRS 281A.150; (2) to amend Section 7(2) to delete the increased fee for additional endorsements requiring skills testing; (3) to amend Section 8 to delete the criminal records check requirement for additional endorsements and to delete the notice requirement regarding outstanding warrants because those requirements exceeded the scope of KRS 281.300; and (4) to amend the RELATES TO and NECESSITY, FUNCTION, AND CONFORMITY paragraphs and Sections 4, 5, and 8 to comply with the drafting and format requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.

Education Cabinet: Kentucky Board of Education: Department of Education: Pupil Transportation

702 KAR 5:080. Bus drivers' qualifications, responsibilities, and training. Anne Keating, Assistant General Counsel, represented the Department.

A motion was made and seconded to approve the following amendments: (1) to amend Sections 1 and 29 to correct the names and edition dates of two items incorporated by reference; and (2) to amend Sections 1, 4, 7, 14, 18, and 29 to comply with the drafting and format requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.

Environmental and Public Protection Cabinet: Department of Labor: Office of Workers' Claims: Department of Workers' Claims

803 KAR 25:010. Procedure for adjustments of claims. Carla Montgomery, General Counsel, represented the Department.

A motion was made and seconded to approve the following amendments: (1) to amend the RELATES TO paragraph to correct statutory citations; (2) to amend the NECESSITY, FUNCTION, AND CONFORMITY paragraph to clearly state the necessity for, and function served by, this administrative regulation; and (3) to amend Sections 1, 3, 4, 5, 6, 7, 12, 13, 20, 21, and 27 to comply with the drafting and format requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.

803 KAR 25:021. Individual self-insurers. In response to questions by Representative Bruce, Ms. Montgomery stated that transferring the regulatory oversight of workers' compensations self-insured groups to the Office of Insurance was appropriate because they were similar to commercial insurance carriers. To ensure the financial security of new individual self-insurers, this amended administrative regulation increased the amount of assets they must have over liabilities from $3,000,000 to $10,000,000 and established a maximum retention level of $1,000,000 for specific excess insurance. Additionally, for employers who were formerly self-insured, the amendments required the Executive Director to set an amount of surety that met or exceeded certain minimum amounts.

A motion was made and seconded to approve the following amendments: to amend Sections 1, 3, 4, and 5 to comply with the drafting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.

803 KAR 25:028. Repeal of 803 KAR 25:026.

803 KAR 25:030. Special fund and employer; joint liability. A motion was made and seconded to approve the following amendments: (1) to amend the RELATES TO paragraph to correct statutory citations; (2) to amend the NECESSITY, FUNCTION, AND CONFORMITY paragraph to clearly state the necessity for, and function served by, this administrative regulation; (3) to amend Section 1 to comply with the drafting and format requirements of KRS Chapter 13A; and (4) to create a new Section 2 to incorporate by reference the required form. Without objection, and with agreement of the agency, the amendments were approved.

803 KAR 25:170. Filing of claims information with the Office of Workers' Claims. A motion was made and seconded to approve the following amendments: to amend Sections 1, 2, 3, and 5 to comply with the drafting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.

Environmental and Public Protection Cabinet: Department of Public Protection: Office of Insurance: Insurance Contract

806 KAR 14:007 & E. Rate and form filing for health insurers. Glenn Jennings, Executive Director, represented the Department.

A motion was made and seconded to approve the following amendments: (1) to amend various sections to comply with the drafting and format requirements of KRS Chapter 13A and make technical corrections; and (2) to amend material incorporated by reference to make technical corrections. Without objection, and with agreement of the agency, the amendments were approved.

Health Insurance Contracts

806 KAR 17:500 & E. Basic health benefit plan requirements. In response to a question by Co-Chair Pullin, Mr. Jennings stated that this administrative regulation implemented House Bill 278 from the 2005 Regular Session of the General Assembly.

In response to questions by Senator Tapp, Mr. Jennings stated that because the market place insurers were still in the process of developing basic health benefit plans, they had not started marketing them yet. However, the Department expected insurance premiums to decrease once the plans were available.

In response to questions by Co-Chair Pullin, Mr. Jennings stated that the new plans should be available before the end of the year.

Senator Tapp stated that the Subcommittee would appreciate being updated on the progress of the basic plans and their effect on the market. Co-Chair Pullin agreed and stated that the Subcommittee formally requested such an update from the Department. Mr. Jennings agreed to keep the Subcommittee informed by letter.

A motion was made and seconded to approve the following amendments: to amend various sections to comply with the drafting and formatting requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.

Workers' Compensation Self-Insured Groups

806 KAR 52:010 & E. Forms for application, security deposits and financial statements. In response to questions by Co-Chair Roeding, Mr. Jennings stated that there were seven (7) workers' compensation self-insured groups in Kentucky. This package of administrative regulations strengthened the Department's ability to monitor their financial viability.

A motion was made and seconded to approve the following amendments: to amend the STATUTORY AUTHORITY and the NECESSITY, FUNCTION, AND CONFORMITY paragraphs to comply with the drafting and format requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.

806 KAR 52:020 & E. Aggregate excess insurance. A motion was made and seconded to approve the following amendments: to amend the STATUTORY AUTHORITY and the NECESSITY, FUNCTION, AND CONFORMITY paragraphs to comply with the drafting and format requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.

806 KAR 52:030 & E. Workers' compensation self-insured group rate, rule and form filings. A motion was made and seconded to approve the following amendments: to amend various sections to comply with the drafting and format requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.

Department of Public Protection: Horse Racing Authority: Harness Racing

811 KAR 1:215 & E. Kentucky Standardbred Development Fund. Mark Guilfoil, Jim Gallagher, Executive Director, and Mark Posnansky, Attorney, represented the Department.

A motion was made and seconded to approve the following amendments: (1) to amend the RELATES TO and STATUTORY AUTHORITY paragraphs to correct statutory citations; (2) to amend Section 20 to clarify that final decisions regarding distribution of Kentucky Standardbred Development Fund revenue were made solely by the Kentucky Horse Racing Authority; and (3) to amend Sections 1 to 7, 16, 20, 21, 27, 32, and 33 to comply with the drafting and format requirements of KRS Chapter 13A. Without objection, and with agreement of the agency, the amendments were approved.

The Subcommittee and the promulgating agencies agreed to defer consideration of the following administrative regulations to the next meeting of the Subcommittee:

Council On Postsecondary Education: Public Educational Institution

13 KAR 2:045. Determination of residency status for admission and tuition assessment purposes.

Environmental and Public Protection Cabinet: Department for Natural Resources: General Provisions

405 KAR 7:001. Definitions for 405 KAR Chapter 7.

Permits

405 KAR 8:001. Definitions for 405 KAR Chapter 8.

Bond and Insurance Requirements

405 KAR 10:001. Definitions for 405 KAR Chapter 10.

Inspection and Enforcement

405 KAR 12:001. Definitions for 405 KAR Chapter 12.

Performance Standards for Surface Mining Activities

405 KAR 16:001. Definitions for 405 KAR Chapter 16.

Performance Standards for Underground Mining Activities

405 KAR 18:001. Definitions for 405 KAR Chapter 18.

Special Performance Standards

405 KAR 20:001. Definitions for 405 KAR Chapter 20.

Areas Unsuitable for Mining

405 KAR 24:001. Definitions for 405 KAR Chapter 24.

Cabinet for Health and Family Services: Office of Inspector General: Health Services and Facilities

902 KAR 20:330 & E. Psychiatric residential treatment facilities.

The subcommittee adjourned at 10:55 a.m., until Tuesday, September 13, 2005.