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Kentucky Commission on Small Business Advocacy 2010-2011 Annual Report

Table of Contents

Report of the Chairman...........................................................................................1 Introduction to the Commission on Small Business Advocacy.....................2-5 Regulatory Duties and Review….……………………………..........................5-8 Legislative Interests.………………………………………………........................8 Commission Meeting Highlights.....................................................................8-10 Small Business Ombudsman Annual Report ………………………..........10-11 2010-2011 Overview and Conclusion ……………………………………........12

Report of the Chairman

On behalf of the members of the Commission on Small Business Advocacy (the Commission), I am pleased to submit this 6th Annual Report highlighting the Commission’s efforts to support and enhance the Commonwealth’s small business environment. The Commission is proud to have played a significant part in several important small business initiatives during the past year. As our economy begins to show signs of growth, small business will continue to be a vital engine to lead the way to economic recovery. The Commission looks forward to working collaboratively with the Governor, the Cabinet for Economic Development, and others to make sure that Kentucky is recognized as a state that recognizes and values the importance of small business. Much work lies ahead to continue advancing the cause of small business in the state, but I am excited that we are making good progress. I am honored to serve as Chair of the Commission on Small Business Advocacy. The opportunity to represent small business owners in this great Commonwealth is a tremendous privilege. This Annual Report provides an overview of the Commission on Small Business Advocacy’s role, highlights the past year’s activities of the Commission, and addresses several new initiatives. Please let me know if you have any questions or concerns regarding the information in this report. Thank you,

Cathy Zion Chair Commission on Small Business Advocacy


Introduction to the Commission on Small Business Advocacy: The members and staff of the Commission on Small Business Advocacy (the Commission) are pleased to present this report of activities for the 2010-11 fiscal year (July 1, 2010 – June 30, 2011). The Commission on Small Business Advocacy continues to carry out its role as one of the designated advocates for small business in Kentucky. Being attached to the Kentucky Cabinet for Economic Development allows the Commission to access a wealth of related services and expertise to carry out its mission of representing small businesses in the public policy process. The mission statement contained in the bylaws of the Commission on Small Business Advocacy states: “The mission of the Commission is to make the Commonwealth of Kentucky a state that is friendly to small businesses through education, cooperation, and advocacy on behalf of small businesses.” The Commission’s Purpose (from KRS 11.200): • • • • • •

Address matters of small business as it relates to government affairs; Promote a cooperative and constructive relationship between state agencies and the small business community; Coordinate and educate the small business community on federal, state, and local government initiatives of value and importance to the small business community; Create a process by which the small business community is consulted in the development of public policy; Aid the small business community in navigating the regulatory process, when that process becomes cumbersome to the small business community; and Advocate for the small business, as necessary, when regulatory implementation is overly burdensome, costly, and harmful to the success and growth of small businesses in the Commonwealth.

Commission Membership: To carry out its mission, the Commission relies on the expert input of a thirteen member commission appointed by the Governor. Two members are appointed from each of the six Congressional Districts within Kentucky, with one additional “at-large” appointment. The Commission members represent a diverse and unique mix of small business owners and advocates throughout Kentucky. Each member comes to the Commission with an appreciation of small business issues and a commitment to represent the specific needs of this segment of the state’s economy. The overriding goal of this Commission is to be the voice of reason for Kentucky’s small business community during the regulatory and


legislative development process. The ultimate goal is to ensure that issues impacting Kentucky’s small business community are duly considered and researched as to their potential impact on the viability of small businesses in the legislative and/or regulatory processes. The following table depicts the current membership of the Commission on Small Business Advocacy as of June 30, 2011. Note: The order of the table is with respect to Congressional Districts.



Congressional District





First District

Commission Member




First District

Commission Member




Second District

Commission Member


Sandra Thomason

Horse Cave

Second District

Commission Member


John Thomas "Tom"


Third District




Third District

Commission Member Chair Commission/Executive Committee Member



Ft. Mitchell

Fourth District


Suzan H.


Fourth District

Commission Member Secretary Commission /Executive Committee Member




Fifth District

Commission Member


Donna B.


Fifth District

Commission Member




Sixth District




Sixth District



Perry Park


Commission Member Vice-Chair Commission/Executive Committee Member Commission/Executive Committee

Overview of Commission on Small Business Advocacy Members as of June 30, 2011: Kenneth Clayton of Elkton, Kentucky: Mr. Clayton is the owner of Weathers Drugs, a retail drug store in Elkton, Kentucky. He holds a Doctorate of Pharmacy degree and is a member of the Kentucky Pharmacists Association and the American Pharmacists Association. Mr. Clayton represents the 1st Congressional District, serving a term that expires on August 22, 2013. 3

Joe Rogers of Cadiz, Kentucky: Mr. Rogers is a farmer and has served on other organizational boards including the Pennyrile Electric Board of Directors and the Trigg County Cattlemen’s Association. He represents the 1st Congressional District, serving a term expiring on August 22, 2014. Patrick Clark of Elizabethtown, Kentucky: Mr. Clark owns Clark Jewelers, a retail jewelry store in Elizabethtown. He is a member of the Elizabethtown Tourism Commission and a graduate of the Gemological Institute of America. Mr. Clark represents the 2nd Congressional District, serving a term that expires on August 22, 2013. Sandra Thomason Wilson of Horse Cave, Kentucky: Ms. Thomason Wilson is a graduate of Western Kentucky University and serves as the Executive Director of the Hart County Tourist Commission in Munfordville, Kentucky. She represents the 2nd Congressional District, to serve a term expiring August 22, 2011. John “Tom” Underwood of Louisville, Kentucky: Mr. Underwood is the Kentucky State Director for the National Federation of Independent Business. He received his bachelor’s and master’s degree from the University of Kentucky. He is a member of the American Society of Association Executives. Mr. Underwood represents the 3rd Congressional District, to serve a term expiring August 22, 2014. Cathy Zion of Louisville, Kentucky: Ms. Zion is a graduate of Murray State University and the owner and Publisher of Zion Publications, LLC. She is a member of the KentuckianaWorks/Workforce Investment Board, the SCORE Advisory Board, and the recipient of Greater Louisville Inc’s 2001 Inc.credible Award for Small Businesses. Ms. Zion represents the 3rd Congressional District, to serve a term expiring August 22, 2011. Marvin Wischer of Ft. Mitchell, Kentucky: Mr. Wischer is a Master Electrician and President of KW Mechanical, a mechanical contracting firm serving the construction industry. Marvin is President of the Latonia Business Council and is a board member of the Covington Business Council and the Northern Kentucky Home Builders Association. Mr. Wischer represents the 4th Congressional District, serving a term expiring August 22, 2013. Suzan Ross of Maysville, Kentucky: Ms. Ross is a self-employed certified public accountant and financial advisor. She received her bachelor's degree from the University of Texas at El Paso. She is a member of the Maysville Mason County Area Chamber of Commerce and the American Association of University Women. She is also treasurer for the Downing Performing Arts Academy. Ms. Ross represents the 4th Congressional District, to serve a term expiring August 22, 2012. David Gearheart of Allen, Kentucky: Mr. Gearheart is a graduate of Morehead State University, a former school teacher, and is currently employed as operations manager of a wholesale company. Mr. Gearheart represents the 5th Congressional District, to serve a term expiring August 22, 2011.


Donna Vance of Corbin, Kentucky: Ms. Vance is the owner of the Landmark Inn, Corbin Bingo Parlor, Vanbar Outdoor Advertising and Vance Rentals. She is a member of the Corbin Chamber of Commerce. Ms. Vance represents the 5th Congressional District, to serve a term expiring August 22, 2013. Jason Bailey of Berea, Kentucky: Mr. Bailey is Research and Policy Director for the Mountain Association for Community Economic Development (MACED), a non-profit organization that provides small business lending programs as well as other economic development and public policy initiatives. Mr. Bailey has a Master of Public Administration degree from New York University. He represents the 6th Congressional District, serving a term that expires August 22, 2012. Tyrone Tyra of Lexington, Kentucky: Mr. Tyra is a graduate of LaSalle University. He is the Vice President of Community & Minority Business Development at Commerce Lexington. Mr. Tyra represents the 6th Congressional District, to serve a term expiring August 22, 2010. Joyce Kinder of Perry Park, Kentucky: Ms. Kinder owns and operates Kinder Caviar, Inc., located in Owenton, Kentucky. She is the Vice President of the Kentucky Fishermen’s Association of Independent Fishermen, and Spokesperson for the Western Kentucky Fishermen’s Association. Ms. Kinder is an at-large representative, serving a term expiring August 22, 2012.

The Commission’s Regulatory Duties: The Commission’s Duties: • • • • •

Coordinate and promote awareness of the Federal Small Business Regulatory Enforcement Fairness Act of 1996, and its subsequent amendments within the small business community of the Commonwealth; Develop a process by which the small business community is made aware of state legislation and administrative regulations affecting it, both prior to its enactment and during its implementation; Advocate for the small business sectors when state legislation and administrative regulations are overly burdensome, costly, or harmful to the success and growth of the sector; and Collect information and research those public policies and government practices which are helpful or detrimental to the success and growth of the small business community; and Review administrative regulations that may impact small business.

Filing Administrative Regulations: “If small business may be impacted by an administrative regulation, the administrative body shall e-mail a copy of the administrative regulation as filed, and all attachments required by KRS 13A.230(1), to the chief executive officer of the Commission on Small Business Advocacy within one (1) working day after the date of the administrative 5

regulation is filed with the Commission. The e-mail shall include a request from the administrative body that the Commission on Small Business Advocacy review the administrative regulation in accordance with KRS 11.202(1)(e) and submit its report or comments in accordance with the deadline established in subsection (1)(c) of this section. A copy of the report shall be filed with the regulations compiler.” The Commission’s Regulatory Duties: In acting as an advocate for small business, the Commission may submit a written report to the promulgating administrative body to be considered as comments received during the public comment period required by KRS 13A.270(1)(c). The report may specify the Commission’s findings regarding the administrative regulation, including an identification and estimate of the number of small businesses subject to the administrative regulation, the projected reporting, recordkeeping, and other administrative costs required for compliance with the administrative regulation, and any suggestions the Commission has for reducing the regulatory burden on small businesses through the use of tiering or exemptions, in accordance with KRS A.210. A copy of the report shall be filed with the regulations compiler of LRC.

Regulatory Review: A significant portion of the Commission’s statutory obligation is to review state regulations, assess their impact on small business, and advocate on behalf of the small business sectors when regulations are overly burdensome or harmful to the small business sector in Kentucky. During the 2010-2011 fiscal year, the Commission on Small Business Advocacy received 174 promulgated regulations and/or amendments from the various state cabinets that were determined to have a potential impact on small businesses. These regulations pertained to such areas as Occupational Safety and Health, environmental issues, permit fees, tax issues, etc. When significant new regulations or changes to existing regulations are proposed, the Commission reviews them for any potential adverse impact to the small business community. Items related to compliance issues, licensing, fines, reporting requirements and other documentation catch the attention of the Commission staff. Any one of these items, individually or in combination, can create significant problems for a small business owner if not reasonably implemented. The chart on page 7 is a compilation of the promulgated regulations received by the Commission on Small Business Advocacy during the 2010-2011 fiscal year.


The Commission reviews all proposed regulations in a timely manner and takes followup action as needed. Listed below is an overview of the regulatory review process established by the Commission on Small Business Advocacy.

Kentucky Commission on Small Business Advocacy Legislative/ Regulatory Review Process


Introduction of Bill / Regulation Legal Review By CED Staff Executive Director



Commission Action

Executive Committee




Phone Calls

Letters Associations Legislators Chairman Bill Sponsors LRC Cabinets


Low Neutral

Provide Testimony

Throughout 2010-2011, the Commission reviewed newly promulgated regulations while being mindful of the economic downturn and the impact additional regulatory requirements could have on the small businesses community. The Commission on Small Business Advocacy will continue watching out for the interest of small business as it relates to the regulatory process, and will diligently voice concern and opposition when the implementation of new regulations weighs negatively upon the profitability of this sector of the economy.

The Commission’s Legislative Duties: During the 2011 Regular Legislation Session, the Commission tracked numerous pieces of legislation with a potential small business impact. Of particular interest was Senate Bill 8, an act relating to creation of a one-stop electronic portal to conduct business in the Commonwealth. Senate Bill 8 passed the House and Senate unanimously and was signed into law by the Governor. It requires state government to create a centralized and easily accessible electronic business portal to serve as the primary entry point for business interaction with state government. This includes numerous business obligations such as registering a business name and legal structure, obtaining business permits and licenses, taxes, unemployment insurance, etc. In addition, the legislation seeks to reduce the amount of duplicate information collected from businesses by different government agencies. The goal is to make it easier for entrepreneurs to start, operate, and grow their businesses in Kentucky. Senate Bill 8 requires the Commission to prepare an annual report (beginning December 1, 2012) on the effectiveness of the one-stop business portal and make recommendations for improvement.

Commission Meeting Highlights: The bylaws for the Commission on Small Business Advocacy require that the Commission hold quarterly meetings. Between July 1, 2010, and June 30, 2011, the Commission on Small Business Advocacy held four quarterly meetings of the Executive Committee and the full Commission. One special called Executive Committee meeting was also held. The following are brief highlights of each Commission meeting. 7/23/2010 – Special Called Executive Committee Meeting: The Executive Committee met to formulate the guidelines of a small business license plate design competition scheduled to be announced in August. Partners for Entrepreneurial Advancement in Kentucky (PEAK) was endorsed as the non-profit organization to receive proceeds from the sale of small business license plates. Design competition rules were established, including the process for selecting a winning design by December 2010. It was determined that license plate designs would be accepted from Kentucky small businesses having 50 or fewer employees.


08/25/10 – Executive and Commission Meeting: Governor Steve Beshear and Cabinet for Economic Development Secretary Larry Hayes joined Commission members at this meeting. Discussions were held on the importance of small business to the state, as well as current and upcoming small business initiatives. Commission members also heard an update on health care insurance, an extremely important issue for many small businesses. 12/3/10 – Executive and Commission Meeting: The Commission met in Lexington as a result of an earlier decision to hold meetings at locations around the state to allow greater accessibility for small business owners and entrepreneurs who may want to attend. The Commission recognized the service of two former members (Loretta Daniel and Vivian Llambi) and welcomed five new members (Kenneth Clayton, Marvin Wischer, Patrick Clark, Joe Rogers, and Jason Bailey) to their first meeting. Governor Beshear appointed these members via Executive Order 2010-802 on September 22, 2010. The Governor also reappointed Donna Vance, Tyrone Tyra, and Tom Underwood to the Commission. In addition, Cathy Zion was appointed Commission Chair and Tyrone Tyra was appointed Vice-Chair. Commission members chose a winning small business license plate design (see below). The winning design was submitted by Gerald Printing, a small printing business with locations in Bowling Green and Russellville. It was noted that 900 license plate applications, along with a $25 deposit and approval from the Kentucky Transportation Cabinet, were required before the plate could be produced. The Commission discussed strategies to publicize the winning license plate design. Discussion was held on other small business initiatives including the Kentucky Small Business Investment Credit (KSBIC) program (scheduled to begin accepting applications in January 2011), the new state minority/women-owned business certification program and the federal State Small Business Credit Initiative (SSBCI). Winning Small Business License Plate Design


1/20/11 - Executive and Commission Meeting: Commission members heard a presentation from Yvette Smith, Executive Director, Office of EEO and Contract Compliance in the Finance & Administration Cabinet, regarding the new Commonwealth of Kentucky Minority Business Enterprise/Women Business Enterprise (MBE/WBE) Certification Program. Information was also provided on the small business license plate registration process, including the PEAK registration website at Discussion was held on small business legislation being considered in the 2011 legislative session. The 2010 small business ombudsmen statistics were discussed, and it was determined that a meeting with the ombudsmen was needed to better understand the information being reported. Commission members reviewed progress on their strategic plan adopted in 2009 and decided to incorporate a strategic planning session into the next Commission meeting. The planning session will help chart the Commission’s direction for the next 12-24 months. Many of the Commission members attended a small business license plate press conference with Governor Beshear following the conclusion of the Commission meeting. 4/29/11 - Executive and Commission Meeting: Discussion was held with small business ombudsmen from various state agencies. It was decided that further review is needed to potentially change the reporting categories and/or processes. A discussion was held on Senate Bill 8, which will create a business one-stop portal and streamline business interaction with the state. Information on the state’s application for federal funding through the State Small Business Credit Initiative was presented. The rest of the meeting involved a strategic planning session facilitated by Darryl Smith and Debbie Gray. A draft strategic plan document resulted from the discussion and identified three primary focus areas for the Commission: Marketing (promote the importance of small business); Public Policy (develop a public policy agenda for small business); and Partner Development (work to identify and collaborate with key small business partners).

Small Business Ombudsman Annual Report: In 2006, the General Assembly established a Small Business Ombudsman Program. KRS 11.175 requires each Cabinet to designate a Small Business Ombudsman who shall be responsible for providing regulatory process information and responding to regulatory inquiries from small businesses. Each Ombudsman provides an annual report to the Commission, due no later than December 1 of each year, summarizing the number and nature of inquiries the Ombudsman has received from small businesses during the previous 12 months. The Commission on Small Business Advocacy compiles the information provided by the various ombudsmen to be included in the Commission’s annual report. After previous efforts to obtain more accurate reporting compliance, the Commission saw a significant increase in the number of inquiries reported in 2010. As discussed above, evaluation of what these numbers mean, and what action the Commission should take going forward, is ongoing. The charts on page 11 summarize the number and nature of the inquiries received from each ombudsman and their corresponding cabinet.


Chart 1

Chart 1 above details the inquiry type. Chart 2 below corresponds to the cabinet from which the reporting was received.





1 12 807

1810 101000



324 407



Public Safety

Public Education

State Procurement

Econ. Dev. Programs

Occupational Safety

Code Enforcement


Environmental Issues

Cabinet CHFS Economic Development Education Energy and Environment Finance Justice Labor Personnel Public Protection Tourism, Arts & Heritage Transportation General Totals

Tax Issues

Chart 2: 2010 Small Business Ombudsman Inquiries by Cabinet

51 6 28 457 414

433 5649



281 1



7496 103636




733 3830



2010 – 2011 Overview The past year saw some significant successes for small business in Kentucky. The Commission was pleased to play a role in three primary small business initiatives during the past year: Implementation of the Kentucky Small Business Investment Credit Program Creation of the new Commonwealth of Kentucky Minority Business Enterprise/Women’s Business Enterprise Certification Program Development of a specialty small business license plate to recognize the importance of small businesses to Kentucky’s economy The Commission participated with Governor Steve Beshear and others in three press conferences to highlight each of the initiatives listed above. The Commission was pleased to get back to a full contingent of thirteen members in 2010. The addition of five new members re-energized the entire Commission. The Commission is involved in several current initiatives of importance to small business. During 2011, Commission members have provided comment and input on the implementation of Senate Bill 8, the Kentucky Business One-Stop Portal. This project has the potential to greatly streamline the process of how businesses interact with state government. The Commission is also greatly interested in the implementation of the State Small Business Credit Initiative (SSBCI). The lack of funding, particularly from traditional sources such as banks, has severely hampered small business growth and development during the past couple of years. The SSBCI program seeks to address this critical need. The Commission believes this program will be a significant tool to help small businesses and will support the program’s rollout in the near future.

Conclusion: This is an exciting, yet challenging time for small business. The Commission desires to play an important role in making sure the voice of small business is heard. It is easy to look back and say much has been accomplished, yet much remains to be done. The Commission will continue to work diligently to ensure effective implementation of Senate Bill 8, SSBCI, and other programs that are important to small business growth in Kentucky.


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