Interim Joint Committee on Education


Subcommittee on Postsecondary Education


Minutes of the<MeetNo1> 1st Meeting

of the 2013 Interim


<MeetMDY1> September 9, 2013


Call to Order and Roll Call

The<MeetNo2> first meeting of the Subcommittee on Postsecondary Education of the Interim Joint Committee on Education was held <Day> Monday,<MeetMDY2> September 9, 2013, at<MeetTime> 10:00 AM, in<Room> Room 131 of the Capitol Annex. Representative Reginald Meeks, Co-Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Alice Forgy Kerr, Co-Chair; Representative Reginald Meeks, Co-Chair; Senator Katie Stine; Representatives Leslie Combs, C.B. Embry Jr., Kelly Flood, Richard Heath, Donna Mayfield, Jody Richards, Tom Riner, Rita Smart, and David Watkins.


Guests: Erin Klarer, Kentucky Higher Education Assistance Authority and Kentucky Higher Education Student Loan Corporation.


LRC Staff: Ben Boggs, Kenneth Warlick, and Daniel Clark.


The Impact of University Research on Economic Development in Kentucky

Robert L. King, President, Kentucky Council on Postsecondary Education (CPE), said research tends to get overlooked regularly at postsecondary institutions because of the focus on college readiness and student success. The research components of postsecondary institutions are just as important as college readiness and student success and have a significant role in the long-term economic future of Kentucky.


Mr. King said in order for Kentucky to compete in a global economy, postsecondary education must focus on the public good, knowledge creation, knowledge transfer, and building partnerships. Mr. King stated that the Improvement Act of 1997 (House Bill 1) was so important to re-thinking and re-structuring higher education in Kentucky. House Bill 1 (1997) set three specific objectives. One objective was for the University of Kentucky (UK) to become a major comprehensive research institution ranked nationally in the top 20. Another objective was for the University of Louisville (UofL) to become a nationally recognized metropolitan research university. The last objective was for regional universities to each have at least one nationally recognized program of distinction or one nationally recognized applied research program, and to work cooperatively with other postsecondary institutions to assure access to quality degrees.


Mr. King said the strategic agenda for Kentucky postsecondary and adult education, Stronger by Degrees, has five focus areas: college readiness, student success, research, economic and community development, and efficiency and innovation. Some of the strategies that help underline the five focus areas are to encourage UK and UofL to play a central role in the creation of new knowledge and recognize universities and faculty members for the advancement of knowledge and enlightenment. Also, the strategies underline support for collaborative research efforts that leverage university expertise, and lead to research investments and commercialization in high-growth or emerging areas that are aligned with business and industry growth. Additional support is used to develop and implement a strategic communications plan that highlights campus-based research and development initiatives, the impact of this work on Kentucky’s economic and community competitiveness, and to secure additional funding for research matching programs and explore new funding approaches to maximize research that fosters an innovative, creative, and entrepreneurial culture within the postsecondary education community.


Mr. King said CPE is encouraging students to pursue degrees and credentials in science, technology, engineering, math, and health (STEM+H) fields. There is a growing STEM+H capacity in Kentucky, and CPE has developed a STEM+H taskforce that helped develop a state-wide P-20 strategic action plan to accelerate Kentucky’s performance within the STEM+H disciplines. Mr. King said between the years 2009-2012 all postsecondary institutions in the state had nearly 20,000 STEM+H degrees that were conferred.


Mr. King spoke about the Endowment Match Program which matches state dollars with private gifts to encourage higher education research activities. The Endowment Match Program encourages private giving because donors can double their contributions by having them matched dollar for dollar by the state. Both state and private funds are endowed, which provides a perpetual source of research funding. In total, there has been $820 million contributed into the endowment fund from state and private money and the endowment values today are worth over $1.06 billion. Also, externally funded research has grown by over $246.2 million and endowed positions grew by 451 positions. Mr. King stated that CPE will be asking for a new round of endowment match funding from the General Assembly this upcoming session.


Representative Jody Richards commented positively on the Endowment Match Program and commended Mr. King on his foresight and his recommendation for more money towards the Endowment Match Program.


In response to Senator Katie Stine’s questions regarding state funds remaining to be matched and how other universities besides UK and UofL have been successful in obtaining Endowment funds, Mr. King said the state funds reside in an account that is part of CPE’s budget. Mr. King said some of the Endowment Match Program resources would be made available to the comprehensive universities and those funds have been distributed.


In response to Representative Reginald Meeks’ question regarding documenting the federal decrease and the impact of sequestration on the availability of dollars for matching funds, Mr. King said he cannot document it yet but the available resources for research funding across the country are under the restraints of sequestration.


In response to Representative Reginald Meeks’ question regarding STEM+H degrees being specific to certain types of jobs, Mr. King said that there is interest in elevating associate degree level nursing degrees to bachelor degrees because of the increasing needs of people in the health care fields. Also, there are an increasing number of certificates in manufacturing and engineering technology.


James Tracy, Vice President for Research University of Kentucky, said he oversees the research programs at UK. He said UK is a land-grant research university that was authorized by the Morrill Act of 1862. All land-grant universities have a single mission with three parts. Those three parts are education, research, and public service. Dr. Tracy said research is an economic engine and UK in 2012 had $360 million in total R&D expenditures. That is equivalent to a direct annual payroll of $240 million and about $14 million in state income tax revenue.


Dr. Tracy explained basic research at UK and stated there is a $1.4 billion instrument located at Oak Ridge National Laboratory called the Spoliation Neutron Source that occupies eighty acres of land. This instrument is used to understand the fundamental forces that hold matter together. Also, UK’s Department of Biology and Spinal Cord and Brain Injury Research Center studies tissue regeneration in salamanders. UK is studying the genetic mechanisms by which the salamanders are able to regenerate tissue. By having these studies on salamanders, the long term effect on understanding how tissue regenerates could provide new treatments in spinal cord and brain injuries in humans.


Dr. Tracy explained applied research at UK and stated UK has had two major applied research projects. One of the applied research projects is the production of a concrete called Tekcrete Fast that was developed at UK’s Center for Applied Energy Research. Tekcrete Fast is now being sold worldwide and UK is starting to see the economic benefits from it. The other applied research project is the House Boat to Energy Efficient Residences (HBEER) Project. This project is led by the UK College of Design with engineering support from the Center for Applied Energy Research. HBEER responds to the economic downturns on the houseboat manufacturing industry and provides Kentucky’s residence with energy efficient housing. One of the HBEER homes can heat or cool for $1.65 a day, which is an 80 percent reduction in heating and cooling costs in a typical mobile home.


Dr. Tracy explained translational research at UK and said UK is looking at new treatments for pediatric heart disease. UK is using magnetic resonance imaging to improve life for pediatric patients. UK is using this technology to find defects in heart function that is common on pediatric patients and then apply it in the clinic.


Dr. Tracy explained the importance in strategic investments in research and said the Kentucky legislature provided $120 million for construction of three floors at UK’s BioPharm building in 2005-2006. UK added $14.5 million of institutional funds to acquire land and to shell-in additional research floors. The building was opened in 2010 and pharmacy students began pursuing their studies there.


In response to Representative Tom Riner’s question regarding strategic investments, Dr. Tracy said UK is always happy to receive financial support from industry and has a number of partnerships with companies around the country.


In response to Representative Rita Smart’s question regarding the cost of the HBEER homes, Dr. Tracy said the first prototype that was built cost nearly $100,000 and the second one almost $80,000. The goal is to get the cost nearly to $50,000.


William Pierce, Jr., Executive Vice President for Research and Innovation, University of Louisville, said UofL’s mission is to be a premier nationally recognized metropolitan research university. Dr. Pierce said 70 percent of funding for UofL’s research comes from the federal government with 17 percent coming from the state, 7 percent industry and 6 percent non profit. UofL is focusing on increasing funding from other sources besides the federal government. Also, UofL is developing consortias with a variety of different groups across the nation.


Dr. Pierce said UofL is proud to be a part of the Coulter Translational Research Program, which is a bioengineering program. The program combines the talents of UofL’s physicians and engineers to develop new devices, techniques, and procedures that are useful in medical practice. UofL recently commissioned a study on return on investment. Dr. Pierce stated the study is not just for research but it is also for state investment in UofL. The initial numbers from this study indicate that there is approximately three dollars generated in the state economy for every dollar the state invests in UofL.


Dr. Pierce stated that because of the Endowment Match Program, UofL has accomplished significant life-changing research. Dr. Roberto Bolli along with colleagues in Boston, developed a cellular treatment that appears to reverse damage from heart attacks and shows promise in treatment of many cardiovascular diseases. The treatment uses a patient’s own cardiac cells to rejuvenate the heart. Also, at the James Graham Brown Cancer Center, physicians and caregivers continue to seek new and better ways to provide treatment to patients. Researchers use tobacco plants to deliver a vaccine to prevent cervical cancer and researchers also utilize unused computer time at schools throughout Kentucky to search for potential drugs designed to fight cancer.


Dr. Susan Harkema, Rehabilitation Research Director, and Professor, Department of Neurological Surgery, University of Louisville, said she is very fortunate to be in Kentucky and that she would not be here if not for the Endowment Match Program and the Kentucky Spinal Cord Injury Research Trust. It has been a critical funding support for research at UofL and has helped UofL be known nationally and internationally as the state that is doing incredible neurotrauma research.


Representative Tom Riner thanked Dr. Pierce for his presentation and stated that he is thoroughly impressed with the research and work that goes on at the James Graham Brown Cancer Center.


In response to Representative Reginald Meeks’ questions regarding state grants being utilized so research departments can keep staff in place, Dr. Harkema said the original idea of creating the endowment is fantastic because it is sustainable over time. Also, with research, universities are constantly building and funding needs to continue on with the specific needs of the university. Dr. Tracy agreed with Dr. Harkema and stated that for over 50 years university research funding has depended on the federal government. He stated that there needs to be a way to create stable funding for the universities that are not as susceptible to grant money.


Representative Jody Richards commented positively on the presentation and stated that Western Kentucky University has a research facility that with new research programs that all started with the Endowment Match Program.


Kris Kimel, President, Kentucky Science and Technology Corporation (KSTC), said statewide and nationally there are mass transformations in the economy. Kentucky’s economy now and in the future will not be structured by a few industries or companies. Kentucky needs to be structured and supported by thousands of entrepreneurial companies that are driven by people who grew up in Kentucky, moved to Kentucky, or are being retained in Kentucky.


Mr. Kimel said KSTC is a private independent company. The company was created in 1987 in response to the change in economy and to create something in Kentucky that was there to help and work with the state, private sectors, and universities to help forward a kind of new innovation in the economy. KSTC works very closely with CPE, Economic Development Cabinet, Department of Education, and many more companies in the Kentucky. Mr. Kimmel said ultimately, Kentucky has to have more companies that generate more products and more jobs at a higher volume to be successful.


Mr. Kimel said KSTC just recently started a Governor’s School for Entrepreneurs. In this program, students from across the commonwealth learn the process of creative thinking, entrepreneurship, and how to start companies and new products. KSTC was expecting around 50 applications for the program yet received over 100 applications.


Sean O’Leary, Manager, Kentucky Enterprise Fund, said KSTC is reliant upon UK and UofL because many of the innovations KSTC funds emerge from of those universities and 75 percent of the companies KSTC funds have a partnership with UK and UofL. KSTC has invested $23 million in a total of 89 companies over the past 10 years and that has created over $270 million in private investment going into those same companies.


Mr. Kimel stated that in 2011, according to The Coughlin Report, Kentucky was rated as the fifth highest in the nation in increased entrepreneurial activity. Also, according to Fast Company magazine, Kentucky is now 21st in innovation among all states, fifth in entrepreneurial growth, and second in the country in percent growth for startup per one million residences.


In response to Representative Reginald Meeks’ questions regarding companies staying in Kentucky, Mr. Kimel said in many cases, most companies do stay in Kentucky. Mr. O’Leary said most companies stay where they are first established.


In response to Representative Jody Richards’ question regarding Kentucky’s entrepreneurial growth statistics, Mr. Kimel said he did not have the statistics with him, but he would forward the statistics to Chairman Meeks for the committee to review.


In response to Representative Rita Smart’s question regarding documentation of statistics for individual counties, Mr. Kimel said he would deliver the documentation to Chairman Meeks.


With no further business before the committee, the meeting adjourned at 12:15 p.m.