Occupational Licensing Review Subcommittee (ALC)

June 16, 2022

 

Cavenaugh [00:01:12] Please take your seat. I see a quorum so we’re going to call the meeting to order. Thanks, everyone, for coming. What we’re going to be up for review today is going to be from the cosmetology in the Arkansas Department of Health. If you’ll come down to the table, please, and introduce yourself for the record, and you’ll be able to start your presentation. 

 

Thompson [00:01:46] Charles Thompson, attorney, Arkansas Department of Health. 

 

Gilmore [00:01:50] Matt Gilmore, Department of Health. 

 

Cavenaugh [00:01:51] Thank y’all, gentlemen, for coming. You’re recognized to make your presentation to us. 

 

Thompson [00:01:56] Thank you, Madam Chair. This is a– I’ve come before y’all during sessions and during committees many times. And this is the only time I’ve been the only thing on the agenda. So this is, this is– a lot of this is new. What you have before you is our response to, for the, for the committee’s review occupational licensing as it relates to cosmetology and its component licenses. Cosmetology has been regulated in Arkansas for many, many, many, many years. I believe starting in the 60’s, I think, is the first statute regarding– it might even be sooner than that. It might have been in the 50’s. It came under the Arkansas Department of Health around 2010. And as you’ll note in our responses and the responses to the questions that, that at the time it came under the Arkansas Department of Health, the Independent Cosmetology Licensing Board was insolvent. They had passed– they had raised their fees at that time just before they came on with us to fix that situation. You’ll notice in your materials that, you know, we have in the financials, we have a fund balance that was a result of those fee increases. And when we realized after a couple of years that that was an– that the continuing fund balance increase was an anomaly reduced fees. That didn’t quite take care of the situation, so we reduced fees again. And now we have gotten to the point where we are, where we are about even. We are looking at other ways to a fee– I mean, spend down plan on that reserve, including fee waiver for at least one cycle, maybe more, as well as ongoing educational programs. As you all may know, we, under Act 900 of this last legislative session, cosmetics and permanent cosmetics and body art came up under the cosmetology section for the purposes of oversight, specifically to have a board because they didn’t have a board before that oversaw them. So they’d be now members of the Cosmetology Technical Advisory Committee. So as part of our review of, of our programs, we have not instituted quite yet at the spend down program because we don’t know where we’re going to sit financially quite yet, because it hasn’t even been a full fiscal year since we received the other programs. We have individuals– our inspectors are, are cross-trained to deal with both programs or find efficiencies where we where we can. We in fact have an online registration system that’s about to go on, that’s about to start real soon that everybody’s really excited about and that everybody really likes. So, so, anyway, needless to say, we are still looking at, still looking at our spend down plan for that reserve. We have approximately 50,000 licensees in the cosmetological arts. That includes– the licensees include practitioners, students, because they get a student permit when they start a school. And that the, the lesser included– what we call– what I call the lesser included licenses, the aestheticians and the manicurists. They don’t receive as much education. They get a limited scope license essentially, but it all falls under cosmetology. I think that’s about all I have as a background. I’d be happy– I’d be happy to take any questions from committee members about the, about our report or about anything else regarding cosmetology. 

 

Cavenaugh [00:05:27] Okay. I have a question. How much do you have in your fund balance? Because I couldn’t find that. 

 

Thompson [00:05:33] I believe it’s approximately $5 million. 

 

Cavenaugh [00:05:35] $5 million. And you were talking about that they had been insolvent before. Why were they insolvent? What was their issue? 

 

Thompson [00:05:45] Madam Chair, I don’t have– I was not with the department at the time, so I don’t have– I’d be happy to get the background history on that. I do know that they were a stand alone board not under the Department of Health. They had their own staff. They were all completely autonomous. So I don’t know the ins and outs of why they were insolvent at that time. I do know that they did raise their fees just prior to them coming over to ADH. 

 

Cavenaugh [00:06:06] Okay. One thing, and I’m sure other members received this also, we received an email letting us know that some of the states that touch us and surround us, we have the highest except for Missouri– the fees for cosmetology. Is that, with a fund balance of $5 million, is there an opportunity that we might be able to reduce those fees and get them back to the, to the people and still keep it solvent? 

 

Thompson [00:06:35] That, that is part of our spend down analysis. Yes, Madam Chair, the– we have reduced fees twice since they came under ADH. So it really is– it’s been real– it’s been a– trying to project things out, you know, takes, takes a year, couple of years. So that is part of this. That is part of the analysis and the spend down. We most recent– our most recent rule revision, we came through and we did reduce fees. And we still continue to look at that as well as a fee waiver, fee waivers for everyone for a cycle. That is part of the analysis. 

 

Cavenaugh [00:07:06] Okay. And just– yes. 

 

Gilmore [00:07:08] This is Matt Gilmore. A couple of the bills that passed this last session. There is one that would require a fee waiver for low income individuals. So that’s going to be a hit to the balance as well. So. But we are watching that closely. 

 

Cavenaugh [00:07:20] And just how much of your actual revenue comes from fees, and how much comes from fines? 

 

Thompson [00:07:28] I don’t have the– I believe, I believe the, the fines are significantly less. I don’t have that. I don’t have those numbers with me. I was not– 

 

Cavenaugh [00:07:37] If you just get them to staff. 

 

Thompson [00:07:38] I’d be happy to. I’d be happy to. 

 

Cavenaugh [00:07:40] Appreciate that. Senator Ingram, we’re ready for your question. 

 

Sen Ingram [00:07:45] Did I understand you? Now you’ve cut fees enough that it’s balancing basically what you’re expending is what your income is now? You’ve cut it to that point? 

 

Thompson [00:07:56] That is correct, Senator. 

 

Sen Ingram [00:07:57] Thank you. 

 

Cavenaugh [00:07:59] Do I have any other questions? Seeing none, I appreciate ya’ll coming. If you could just get that information to the staff and we’ll put it out to the rest of the committee. 

 

Thompson [00:08:12] Absolutely, madam Chair. Thank you, members. 

 

Cavenaugh [00:08:13] Thank you all. With that, if we have no other business, I’m going to let you know that the next meeting is not going to be in July. We’re not going to meet in July. It will be August the 18th. And just as a reminder, coming up in September, we’re going to start looking at recommendations that we want to look at for a final report that’ll be due, I think, December. So be thinking about everything that we’ve discussed and where you might want to make some changes. And with that, we’re adjourned.