FRANKFORT — The Kentucky House on Thursday gave final passage to separate bills aimed at reforming the private, for-profit college industry and the state pension system.
The House voted unanimously to agree with Senate changes to House Bill 308, which would establish a new state agency with greater independence to regulate for-profit colleges.
Currently, the Kentucky State Board for Proprietary Education oversees the schools. But industry representatives hold a majority of its seats, and it has been criticized for failing to protect students' interests.
The federal government and the states, including Kentucky, have been scrutinizing for-profit colleges' advertising, student loan default rates and the quality of their teaching.
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The House also voted unanimously Thursday to accept Senate changes to House Bill 300, which would enact new ethics restrictions on the public pension systems for state workers, schoolteachers, judges and legislators.
Among other things, SB 300 would impose retroactive term limits for members of the pension agencies' boards, some of whom have served for many years. It also would require placement agents — outside operators paid to promote investment products to the pension agencies — to register with the state as lobbyists.
Some states have banned placement agents outright, citing the agents' role in pay-to-play scandals elsewhere, but Kentucky lawmakers said they did not think that was necessary.
The U.S. Securities and Exchange Commission is conducting an inquiry into the use of placement agents at the Kentucky Retirement Systems, which covers state and local government workers. State auditors last year found nearly $11.6 million in fees paid or committed to placement agents from 2007 to 2010 in KRS investment deals.
The bills now go to Gov. Steve Beshear for his signature or veto.