Frankfort Inside Out

Legislative Update from the "Kentucky Chamber of Commerce"

The pace quickened last week with the General Assembly more than one-third complete. The Governor introduced his long-awaited tax reform proposal, and both the House and Senate moved forward with their top legislative priorities. Discussions continue on a number of other high-profile pieces of legislation including the budget and potential for expanded gaming. Several additional bills were introduced – many with implications for the business community. 

On Tuesday, Gov. Beshear introduced his “Kentucky Competes” tax reform plan, largely based on selected recommendations from the Governor’s Blue Ribbon Tax Commission. We have posted a summary of the recommendations on kychamberblog.com for members to evaluate the potential impact of the plan. While we are encouraged with the governor’s focus on improving the state’s competitiveness, we need your feedback.

By Thursday, the House took up the Speaker’s top priority of raising the state’s minimum wage. Unlike past changes that mirror the federal minimum wage, HB 1 would ignore our surrounding states’ wage laws and force higher labor costs on Kentucky employers. Additionally, it includes a very subjective “equivalent job” standard, which would lead to many lawsuits against employers. Over the objections of many business groups including the Chamber, the measure passed the House 54-44. 

Also on Thursday, the Senate took up SB 1, a measure to provide a check against executive branch actions. When the General Assembly is not in session, the legislature has no ability to overturn a regulation issued by a state agency. SB 1 would give the legislature the ability to stop a measure they felt was an overreach of authority. It passed along party lines 24-14. 

Below is a list of legislation that is of interest to the business community. For a complete list of bills the Chamber is monitoring, click here.

Legislation of Interest

Medical Review Panels – SB 119 (Denton) establishes medical review panels, a process for evaluating proposed claims against health care providers. This common sense bill will help put an end to the growing number of meritless lawsuits that increase Kentucky’s health care costs. With health care costs remaining a serious concern for all employers, the Chamber has joined with several business and health care groups to launch Care First Kentucky, aimed at addressing the serious threat of meritless lawsuits that take a significant financial toll on medical malpractice liability rates for Kentucky’s health care providers. SB 119 will have a hearing in the Senate Health and Welfare Committee on Wednesday. We urge you to contact your legislator at 1-800-372-7181 and ask them to support SB 119. (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)

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. Call your legislator at 1-800-372-7181 and let them know you support this legislation. (Chamber supports)

Employee Misclassification – SB 81 (Schickel) creates a clear set of guidelines for employers on the definition of an independent contractor. The measure is expected to be heard in committee next week. Please call your Senator at 1-800-372-7181 and urge them to support this legislation. (Chamber supports)

False Claims Act – HB 335 (Stumbo) creates a Kentucky false claims act which gives private citizens strong financial incentive to sue a company that contracts with the statealleging fraud. The Kentucky Chamber agrees the state should recover fraudulent claims. However, creating such lucrative financial incentives to file lawsuits against employers is not the most effective way to pursue claims and could lead to meritless accusations. Moreover, the federal False Claims Act and three Kentucky statutes already enable the state to recover money lost to false claims. (Chamber opposes)

Taxpayer Fairness – HB 345 (Damron) would stop the Department of Revenue’s unfair treatment of taxpayers by equalizing the interest rate between taxpayers’ overpayments and underpayments. (Chamber supports)

Tax Clarification  HB 346 (Damron) simplifies Kentucky tax laws with regard to calculating estimated tax payments for taxpayers whose income fluctuates during the year and attempts to mimic the penalty calculations at the federal level to ease compliance for taxpayers. (Chamber supports) 

Community Development HB 282 (Palumbo) amends current economic development incentives to include mixed-use developments, an important part of urban renewal and revitalization. HB 282 passed the House Economic Development Committee Thursday and now heads to the full House for consideration. (Chamber supports)

University Bonding Authority HB 261 (Damron) would permit universities to issue bonds for capital projects when there is a dedicated funding source from using a combination of cash restricted funds, federal funds, and private funds and would establish conditions under which projects will be authorized. (Chamber supports) 

Smoke Free Workplace HB 173 (Westrom) and SB 117(Denton) prohibits smoking in all indoor public places and workplaces and has received overwhelming support from Chamber members. HB 173 passed out of the House Health and Welfare Committee on Thursday and now awaits a hearing on the House floor. (Chamber supports) 

Telecommunications Modernization SB 99(Hornback) modernizes Kentucky’s outdated telecommunications laws and allows telecommunications companies to invest more in modern high-speed internet and less on outdated landline telephones.  SB 99 passed the Senate and now awaits action in the House. (Chamber supports) 

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. (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. The bill passed the full Senate and awaits a hearing in the House Judiciary Committee. (Chamber supports) 

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) 

Property Owner Liability – SB 78 (Girdler) releases landlords from liability whose tenants own a dog that bites a person on the property. This commonsense measure should be passed without floor amendments attempting to mandate deep pockets for plaintiff lawyers to target. (Chamber supports)

School Finance – HB 154 (Denham) brings financial transparency and security to school districts by requiring school finance officers to make annual reports to the Commissioner of Education. Along with these yearly reviews would be annual training requirements for certain school board members who participate in the district’s financial dealings. This Chamber-supported bill passed the House 58-41 and awaits action in the Senate. (Chamber supports)

Public School Standards SB 89 (Higdon) directs the Kentucky Board of Education to require the Department of Education and all school districts adhere to transparency and privacy standards when outsourcing Web-based tasks to vendors. It permits a school council to supplement the state board-approved academic content standards with higher and more rigorous standards and use them for curricular and instructional purposes. This Chamber-supported billed passed the Senate Education Committee on Thursday and now awaits a hearing on the Senate floor. (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)

School FundingSB 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.

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)

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