Proposal for Statutory Change to Amend Fee Structure for Kentucky Board of Licensure for Massage Therapy

Kentucky Board of Licensure for Massage Therapy requests a statutory change to update its fee structure, which has not been revised since 2003, leading to insufficient revenue to cover operational costs. The Board aims to generate necessary funds through license fees to sustain its services and agreements with the Department of Professional Licensing. The preferred approach is to allow the Board to set fees through established regulations.

• Kentucky
• Fee Structure
• Licensure
• Massage Therapy
• Statutory Change

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1. Interim Joint Committee on Licensing, Occupations and Administrative Regulations November 20, 2019 Kentucky Board of Licensure for Massage Therapy Dr. Brian Houillion, Chair, Kentucky Board of Licensure for Massage Therapy Isaac VanHoose, Commissioner, Department of Professional Licensing Prepared in partnership with the

2. Request The Kentucky Board of Licensure for Massage Therapy respectfully requests a statutory change to amend its fee structure. The current fee structure has not been amended since the creation of the Board in 2003. Currently, the Board does not generate enough revenue to cover its operational costs and must amend its fee structure to fulfill its statutory duties. Funded solely through restricted funds it generates from license/renewal fees and fines. Lack of funding negatively impacts its Memorandum of Agreement with the Department of Professional Licensing for Administrative Services. This could leave the Department with budgetary issues of its own, up to and including default, potentially impacting other DPL boards. 2 Prepared in partnership with the

3. Department of Professional Licensing Background Funded solely through restricted funds from the boards it serves. Each biennium, licensing boards enter into a Memorandum of Agreement with the Department for administrative services. The cost of these services is determined through a formula based on annual licenses, annual revenue, projected staff time (percentage of a FTE). The Department charges only what is needed to cover its operational costs for the biennium. However, as Department cost increase, so does the amount charged to boards. DPL provides cost savings to boards that cannot afford to hire full time personnel and pay operating expenses as well as boards that do not need a full time employee. Savings are realized through lower licensing fees for licensees. 3 Prepared in partnership with the

4. 2014 2015 2016 2017 2018 2019 Revenues $ 146,972.20 $ 148,524.50 $ 140,111.00 $ 149,122.00 $ 135,654.10 $ 139,149.00 Expenditures $ 170,516.50 $ 182,505.22 $ 188,442.70 $ 170,456.74 $ 163,309.56 $ 152,474.65 The Board s current MOA with the Department is for $127,300 in each year of the biennium (FY 19 and FY 20). The MOA does not include other expenses such as investigative services, legal services, and per diem and travel for board members. While the Board has taken recent emergency measures to cut costs, these expenses still accounted for roughly $25,000 in FY 19. The cost of administrative services provided by the Department is expected to increase roughly 15% due to increases in personnel costs (ARC will increase from 83.43% to 89.37% in next biennium) and the increase in rent resulting from the move to the new office building. $146,395 each year of the upcoming biennium (FY 21 and FY 22). 4 Prepared in partnership with the

5. Preferred Approach The preferred method would be to amend statute to allow for the board to set fees in regulation. Proposed Language: The board shall promulgate administrative regulations establishing a reasonable schedule of fees and charges for the issuance and restoration of licenses and certifications and for the renewal of licenses and certifications issued under this chapter. Currently other Boards operate under a similar statute, including: Cosmetology Respiratory Therapy Chiropractic Examiners Interpreters for the Deaf or Hard of Hearing 5 Prepared in partnership with the

6. Secondary Approach Remove the $50 application fee currently credited to the initial license fee for successful applicants. Increase the limit on initial license fee from $125 to $250 to adequately cover initial processing of applications and first biennium licensing period. Initial fee of $150 to be increased incrementally over time. Increase the limit on biennial renewal fee from $100 to $200 - Increasing the renewal fee will generate the revenue needed to sufficiently fund operations without creating a substantial burden on licensees. Initial fee of $150 to be increased incrementally over time. For perspective, this proposal approximates to an increase of a one (1) hour massage over the two year period - an hourly massage is between $50 and $100. Further, the membership fee for the American Massage Therapy Association is $240 a year or $480 over two years. 6 Prepared in partnership with the

7. Budgetary Impact The secondary proposal is estimated to generate roughly $60,000 of additional revenue and bring the Board s annual revenue to approximately $200,000 for the next four (4) fiscal years. The additional revenue generated through periodic fee increases should be sufficient to cover the Board s costs for the for the next twenty (20) years. Applicants* 2021 150 150 2025 168 168 2029 188 188 2033 211 200 2037 236 200 2041 250 200 Initial Renewal Annual 247 1,085 199,800 223,776 250,629 269,053 275,299 278,750 Current average annual inflation rate is ~12% over four (4) years * Estimate based on average of three (3) previous fiscal years 7 Prepared in partnership with the

8. Border State Comparison Comparison States: IL, IN, MO, OH, TN. VA, WV MEAN Initial $185; Renewal $137 MEDIAN Initial $175; Renewal $150 Missouri additionally charges for a business/establishment license Virginia license is part of the Board of Nursing Ohio license is part of State Medical Board 8 Prepared in partnership with the

9. Questions 9 Prepared in partnership with the