Frankfort Inside Out

The halls of the capitol annex were buzzing with activity as legislators convened for the second week of the 2014 Kentucky General Assembly. With over 300 bills already filed, committees gathered to hear some of the legislators’ top priorities, with few even passing the full House or Senate. But the real activity of this year’s legislative session will come in the form of the state budget.

After Gov. Beshear outlines his budget proposal in his State of the Budget address, legislators will begin the real challenge of prioritizing state spending in a difficult budget.

Though most of the legislative action will heat up after the filing deadline for new legislative candidates, discussion began on a few noteworthy bills this week. The discussion of casino gaming began as an informational hearing on HB 67 (Clark) in the Licensing and Occupations Committee. Also, HB 173 (Westrom), prohibiting smoking in all indoor public places and workplaces, was featured on KET’s Kentucky Tonight on Monday, with the Chamber’s Ashli Watts making the business case for the legislation. Finally, the Senate passed SB 5 (Stine) with overwhelming support on Thursday. SB 5 creates more treatment beds for drug addicts and lengthens prison sentences for drug traffickers. This bill is particularly aimed at the growing heroin epidemic in Kentucky.

Additional legislation of interest is listed below, but please feel free to contact us with questions or concerns about how these bills and others could impact your business. As the session continues, this list will continue to grow, so please check our website and watch your inbox for each week’s Frankfort Inside Out.

Legislation of Interest

Employee Misclassification – SB 81 (Schickel) creates a clear set of guidelines for employers on the definition of an independent contractor. (Chamber supports)

Charter Schools
HB 85 (Montell) authorizes charter schools in Kentucky. Charter schools are independent schools designed to provide tuition-free public education choices to parents and students. Charters liberate teachers and administrators from red tape and allow more innovation in the classroom. In exchange for this flexibility, charter schools require high accountability, knowing they can be closed if they fail to live up to their charter. (Chamber supports)

Cost of Goods Sold
– HB 136 (Yonts) clearly defines the cost of goods sold under Kentucky’s Limited Liability Entity Tax (LLET) which is paid by many small businesses in Kentucky. (Chamber supports)

Workers' Compensation Special Fund – SB 63 (McDaniel) saves employers costs on their workers’ compensation assessments by encouraging one-time settlements on claims before 1996.  It would also prohibit the siphoning of funds out of the special fund to fund the day-to-day operations of the Labor Cabinet. (Chamber supports)

School Funding SB 13 (Schickel) requires that no mandate be placed on public schools without program funding to carry out the mandate. Legislation would include a fiscal note adequate for compliance with the mandate, and no school district would be required to comply with mandated enactments of the General Assembly that do not provide adequate funding.

Election of Public Service Commissioners – SB 35 (Jones) would expand Kentucky’s Public Service Commission from three appointed commissioners to seven elected commissioners. The Kentucky Chamber opposes politicizing Kentucky’s PSC which would lead to higher utility rates across the state. (Chamber opposes)

Public Construction Cost Driver – HB 96 (Donohue) unnecessarily increases costs on public construction projects by requiring construction materials, such as iron and steel, to be produced in the United States, regardless of cost or availability. (Chamber opposes)

Renewable Energy Mandate – HB 195 (Marzian) requires the use of renewable energy portfolio standards in Kentucky, thus increasing electricity costs unnecessarily in the state. (Chamber opposes)

Alcohol Modernization – SB 83 (Schickel) continues an effort to modernize Kentucky’s  alcohol laws by allowing the expanded sales and production of malt beverages and ciders. The measure also clearly defines the definition of a micro distillery to help start-up companies. (Chamber supports)

School Standards HB 215 (Kerr) prohibits the Kentucky Board of Education and the Kentucky Department of Education from implementing the English and Math standards, also known as Common Core standards, and the Next Generation Science Standards. It prohibits state officials from ceding control of content standards and assessments and prohibits withholding state funds from school districts who adopt different academic standards. (Chamber opposes)

School Finance HB 154 (Denham) requires financial reports to be made by school finance officers and the Commissioner of Education. Annual reviews will be required of school district financial reports. Annual training requirements will also be specified for school finance officers. This legislation provides much needed transparency and holds our education system accountable. (Chamber supports)

Raising the Minimum Wage
HB 1 (Stumbo) raises the state minimum wage from $7.25 to $10.10 per hour by July 1, 2016, raising the cost of labor in Kentucky far above Kentucky's competitor states. The Chamber supports current state law that automatically indexes the state minimum wage to the federal minimum wage, rather than one that puts Kentucky employers at a competitive disadvantage. (Chamber opposes)

Casino Gaming HB 67 (Clark) and SB 33 (Seum) amend the Kentucky Constitution to allow the General Assembly to submit to Kentucky voters to permit casino gaming. The Chamber encourages the General Assembly to authorize gaming options to provide a much-needed boost to the state as well as to recoup the hundreds of millions of dollars being spent annually in casinos in neighboring states. Gov. Beshear noted in his State of the Commonwealth that revenues from expanded gaming could restore some of the governmental cuts Kentucky has made over the past six years. (Chamber supports)

Wage and Hour Litigation HB 148 (Marzian) creates a new subjective measure, deemed 'equivalent jobs." An employer not paying the same wages to two people holding potentially different jobs of "equivalency" would be guilty of discrimination and open to lawsuits. Wage discrimination is already illegal. The Chamber opposes arbitrary legal standards that encourage litigation. (Chamber opposes)

Smoke-free Kentucky HB 173 (Westrom) prohibits smoking in all indoor public places and workplaces and has received overwhelming support from Chamber members. Manager of Public Affairs Ashli Watts appeared on KET’s Kentucky Tonight Mondaynight discussing the Chamber’s position. (Chamber supports)

Combatting Heroin Abuse SB 5 (Stine) creates more treatment beds for drug addicts and lengthens prison sentences for drug traffickers. This bill is particularly aimed at the growing heroin epidemic in northern Kentucky and has bipartisan support. It passed the Senate 36-0 on Thursday. (Chamber supports)

Angel Investor Tax Credit – HB 37 (Simpson) creates an angel investor tax credit allowing for more private dollars to be used to help small businesses establish and expand in Kentucky. (Chamber supports)


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