Local Mandate Fiscal Impact Estimate

Kentucky Legislative Research Commission

2014 Regular Session

Part I: Measure Information

Bill Request #: / 155
Bill #: / HB 38 GA
Bill Subject/Title: / AN ACT relating to electrical inspections.
Sponsor: / Representative Larry Clark
Unit of Government: / x / City / x / County / x / Urban-County
x / Charter County / x / Consolidated Local / x / Unified Local Government
Office(s) Impacted: / Local legislative bodies, chief executive officers of cities and counties, electrical code enforcement units
Requirement: / x / Mandatory / x / Optional
Effect on
Powers & Duties: / x / Modifies Existing / x / Adds New / x / Eliminates Existing

Part II: Purpose and Mechanics

HB 38 GA promotes statewide standardization of and compliance with requirements related to the establishment, administration and oversight of electrical inspection and permitting programs necessary for the safety of life and property.

Under current law, local governing entity compliance with state electrical inspection requirements includes elements such as the adoption of an ordinance or resolution expressing intent and creating an electrical inspection program, establishment by ordinance of a fee structure related to inspection cost, and the employment or contracting with or for electrical inspection services performed by a state-certified electrical inspector within in a designated jurisdiction.

HB 38 GA is attempting to legislate recommendations that came out of a HB 215 task force created by the 2012 Regular Session of the General Assembly. The task force was created to “study the effect of possible changes to laws on electrical inspection and licensure on Kentucky’s electricians and electrical inspectors.” The task force discussed the current status of local government electrical inspection programs. The task force considered subjects such as standardized electrical inspection protocols and forms, statewide uniform interpretations of the National Electrical Code for electricians and contractors who work in multiple jurisdictions, and provision of state assistance to local programs as a means of encouraging county compliance. The HB 215 task force report indicated variances in local compliance with Kentucky law and this bill is an attempt to curtail compliance violations.

The state Department of Housing, Buildings and Construction (DHBC) has plan review, inspection and enforcement responsibility over the National Electrical Code as adopted and incorporated into the Kentucky Building Code (815 KAR 7:120) and Kentucky Residential Code (815 KAR 7:125). Specific state laws governing electrical inspection programs and the state and local participants are found in KRS Chapter 227 and KRS Chapter 227A. Under the measure, some statutes are repealed and re-enacted as new Sections under KRS Chapter 227A. Various Sections of KRS Chapter 227 are amended. The bill amends KRS 227A.010, KRS 227A.030, KRS 227A.050, KRS 227A.130, KRS 198B.060, KRS 211.350, and KRS 227.205. It repeals KRS 132.815, KRS 227.450, and KRS 227.500. Note that the measure creates an Electrical Division within DHBC.

Part III: Fiscal Explanation, Bill Provisions, and Estimated Cost

The fiscal impact of HB 38 GA on local governments is an indeterminable increase or loss of revenue accompanied by an increase or decrease in expenditures.

Local governments not in compliance with KRS Chapter 227A, as revised, must not perform electrical inspection functions. However, provision is made under the measure for local government entities with and without existing electrical permitting and inspection programs to meet requirements, to request authorization from the state Electrical Advisory Committee, and upon recommendation, from the DHBC to carry out these programs. Provision is made for the DHBC to appoint and assign electrical inspectors to each county. Provision is also made for local government entities to employ, contract for, or contract with a certified electrical inspector. Provision is made for adoption of a fee schedule to cover the cost of inspections with the collecting entity keeping the fee. Any local government with a schedule of fees related to electrical permitting and inspection that was enacted by ordinance as of January 1, 2014 may continue to assess fees in accordance with its enacted fee schedule. Depending on the fees, if any that have already been established by local governments, revenues may or may not change. Local governments may also fix penalties for violations and establish fines for violations.

A description of effects of the measure on local revenues and expenditures follows.

Section 4: Creates A NEW SECTION OF KRS CHAPTER 227A

Local governing entities or combination of entities with existing electrical permitting and inspection Program as of January 1, 2015 may request authorization or new authorization to carry out local jurisdiction electrical permitting and inspection programs which must be in compliance with requirements under Section 4 of the measure. The state Electrical Advisory Committee must first approve the request before DHBC authorizes the program to continue. Entities are allowed to continue to include other electrical work within its permitting and inspection program, in the absence of a state requirement, if the work was included in the entity’s inspection program prior to January 1, 2015.

Other local governing entities or combination of entities would be able to request authorization to carry out local jurisdiction electrical permitting and inspection programs which must be in compliance with requirements under Section 19 of the measure. Again, the state Electrical Advisory Committee must first approve the request before DHBC authorizes the program which must meet department requirements.

Local governing entities must not impose additional electrical inspection or permit requirements or establish any local jurisdiction inspection and permitting programs unless that entity had its electrical inspection or permit programs or requirements in place before January 1, 2015 or is granted DHBC permission. Also, these local governing entities must not alter or remove any program or requirement on or after January 1, 2015 without permission of DHBC.

Fees collected by the authorized local government unit and related to the permit must stay with the local government.

Section 7: Amends KRS 227.470

A city passing a resolution expressing intent not to enter into an agreement with the county fiscal court and failing to establish an authorized electrical inspection program, would be subject to having a DHBC-employed and certified electrical inspector assert jurisdiction and inspect projects for a fee within the city. This fee would go to the collecting entity.

Section 8: Amends KRS 227.480

Administrative regulations describing the circumstances where inspections deemed necessary for the safety of life and property are to be promulgated by DHBC and the authorized local government entities must incorporate these through adoption or amendments to an existing ordinance. This activity could require additional staff time and resources. Note that local governing entities are not required to appoint the electrical inspector but retain authority to fix their compensation.

Section 9: Amends KRS 227.487

Standardized electrical inspection reporting forms focus on cited electrical installation violations and are to be completed and retained by electrical inspectors in a DHBC approved format. The inspector only has to give a copy of any cited electrical installation violations, instead of a copy of the total report, to the owner of the electrical installation or the owner’s authorized agent when fees are paid. Local inspection reports are to be made available to DHBC upon request instead of automatically sending a second copy to that agency. Under current law, inspectors give a copy of the total inspection report to the owner or representative when fees are paid. This should reduce some staff time, paperwork and mailing expenses for those existing local inspection programs.

The formula for the maximum inspection fees is modified to provide for a “maximum allowable permitting and inspection fee” to be charged in implement and administer electrical programs and which is to be promulgated by the HBC department by administrative regulation. Local governing entities enacting a schedule of fees for this service as of January 1, 2014, are allowed to continue to assess the fee according to its enacted fee schedule after the effective date of the ACT. Otherwise, the fees for electrical inspections by the department are promulgated by administrative regulation.

Electrical inspectors must furnish a $5,000 surety bond to DHBC when contracting for or with

local governing entities and when authorized, to administer, carry out, and enforce DHBC administrative regulations. Inspectors employed by the local governing entities are not so required.

Section 18: Amends KRS 227A.130

New penalties in the form of fines, ranging from $25 to $250 per offense, are authorized for local governments for the violation of any ordinance or resolution passed under the provisions of KRS Chapter 227A, relating to electricians and electrical contractors. Any money collected from this fine would be retained by the local governments.

Additional fines ranging from $1,000 to $2,000 for violations of KRS Chapter 227A, related administrative regulations, or any provision of the state’s adopted electrical code are authorized. Penalties are for each offense. Each day the violation continues constitutes a separate offense. Violations of KRS 227A.020 are excluded. Any money collected from these fines would be retained by the local government or the state, depending on the type of violation.

Section 22: Repeals KRS 227.500

This repeals imprisonment as a penalty for certain violations related to electrical work. If persons are no longer jailed for particular violations, local jail expenditures would decrease. The department has no documentation of this penalty ever being used, and there is limited potential for decreased local jail expenditures if this penalty was ever used.

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Data Source(s): / Department of Housing, Buildings and Construction, Public Protection Cabinet; 2012 RS HB 215 Task force Electrical Inspection/Licensure Final Report (2012)
Preparer: / Dianna McClure / Reviewer: / MCY / Date: / 3/5/14

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