Frankfort Inside Out

The 2014 session of the Kentucky General Assembly has neared the half-way point, with 28 of the 60 days behind them. Approximately 700 bills and resolutions have been filed for consideration. This past week, several Chamber-supported measures advanced and other legislation of concern to business was introduced.

Last week, the Senate made important progress by advancing SB 119, legislation to enact a common sense review process of medical claims to weed out frivolous lawsuits. With health care costs remaining a serious concern for all employers, the Chamber has joined with several business and health care groups to launch the Care First Kentucky coalition. Several members of the group, including Chamber President & CEO Dave Adkisson and Health and Wellness Council Chairman Dr. Andy Henderson, testified before the Senate Health & Welfare Committee in support of the bill. SB 119 passed the Senate Health and Welfare Committee on Wednesday, but was returned to committee Friday for further consideration. We urge you to contact your legislator at 1-800-372-7181 and ask them to support SB 119.

The Chamber along with the governor and a bipartisan group of legislators and advocates rallied at the Capitol to push for a statewide smoke-free law to help address Kentucky’s poor health rankings. President and CEO Dave Adkisson spoke at the eventalongside Medal of Honor Recipient Dakota Meyer on Wednesday. HB 173 has passed out of the House Health and Welfare Committee and now awaits a hearing on the House floor. We urge you to contact your House & Senate members at 1-800-372-7181 and ask them to support a smoke-free law.

Two other very important measures advanced in the Senate last week. Legislation to address the workers’ compensation special fund and a bill to clarify the definition of independent contractors cleared committee and await action on the Senate floor. SB 63(McDaniel) saves employers costs on their workers’ compensation assessments by encouraging one-time settlements on claims before 1996. SB 81 (Schickel) creates a clear set of guidelines for employers on the definition of an independent contractor.

At the request of the Chamber, HB 369 was introduced to lower the statute of limitations for written contracts from 15 years to 10 years. Currently, at 15 years, Kentucky has the highest statute of limitations for written contracts in the nation, the next lowest being 10 years. The bill awaits a hearing in the House Judiciary Committee.

This week, the Chamber will announce our Public Private Partnership legislation. A coalition of more than a dozen chambers of commerce from across Kentucky, as well as other business organizations, will present the benefits of adopting P3s in Kentucky and the economic opportunity this will mean for the Commonwealth. Stay tuned for more information on how you can be supportive of this effort.

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

Legislation of Interest

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)

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 state alleging 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 and the state receiving less money recovered for each claim. Moreover, the federal False Claims Act and three Kentucky statutes already enable the state to recover money lost to false claims. HB 335 awaits a hearing in the House Judiciary Committee. (Chamber opposes)

Public School Standards – SB 89 (Higdon) directs the Kentucky Board of Education to require the Department of Education and all school districts to 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. SB 89 passed the Senate 37-0 and now awaits action in the House. (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. HB 261 passed the House and now awaits action in the Senate. (Chamber supports) 

Early Childhood  HB 323 (Graham) directs the Early Childhood Advisory Council to develop a quality-based rating system for licensed childcare and certified family childcare homes. HB 323 passed the House and awaits action in the Senate. (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 has long supported expanded gaming 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. Although legislators have expressed that support is lacking, public efforts continue to encourage action. (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 Kentucky and has bipartisan support. The bill passed the full Senate and awaits a hearing in the House Judiciary Committee. (Chamber supports)

Health Benefit Plans – HB 362 (Stone) prohibits health benefit plans from limiting out-of-network providers and covered services to those performed within the Commonwealth of Kentucky. This appears to be an attempt to address limited health plans offered on or off the state’s health care exchange. Mandating expanded networks could remove the cost savings negotiated for these lower cost plans. The Chamber is concerned with any provisions that raise costs of health plans, particularly as employers struggle to comply with the ACA.

Medicaid Managed Care – HB 361 (Stumbo) permits someone enrolled in a Medicaid managed care organization (MCO) to appeal an action by an MCO relating to care received. It will require an action by an MCO to state the reason for the action with specifics and also that the MCO shall pay for services rendered while an appeal was pending if a hearing officer reverses a decision to deny, reduce or terminate health care services.

Tax Exemption for Data Centers – HB 308 (DeCesare) exempts qualified data centers from paying certain state and local taxes.This would create a tax incentive to encourage the establishment of data centers, a fast growing industry which states are working to recruit. (Chamber supports)

Greenhouse Gas Emissions – HB 388 (Gooch) establishes Kentucky-based standards for greenhouse gas emissions by electric utilities. This measure pushes back on U.S. EPA’s ruling to regulate greenhouse gas emissions which will drive up Kentucky’s electricity prices. (Chamber supports)

Public Pension Audits – HB 389 (Yonts) requires all of Kentucky’s public employee pension systems to undergo an independent audit every five years. (Chamber supports)

Small Business Tax Credit – HB 301 (Palumbo) simplifies and streamlines the Small Business Tax Credit Program administered by the Kentucky Economic Development Finance Authority. HB 301 has cleared the House committee and awaits action on the House floor. (Chamber supports)

Pension Spiking – SB 142 (McDaniel) will help state and local governments reduce their unfunded liability by addressing pension “spiking.” Spiking occurs when a public sector employee increases their creditable compensation more than 10% in a fiscal year during the 5 years prior to retirement. When a “spike” occurs, the last employer is required to pay the actuarial rate of the resulting increased retirement benefit, which includes the employee’s and employer’s cost. (Chamber supports)

Workers’ Compensation – Two bills filed will increase the costs of workers’ compensation for Kentucky employers. SB 136 (Buford) makes extensive changes to the workers’ compensation system by increasing benefits and doubling attorney’s fees. SB 137 (Carroll) would also double attorney’s fees specify the time frame for benefits paid. Both would raise costs to the system without any immediate benefit to employers. (Chamber opposes)


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