Frankfort Inside Out - "Kentucky Chamber of Commerce"

February 20, 2015

After two days of winter weather cancelling session for both chambers this week, the state Senate decided to convene Thursday and Friday while the House took the rest of the week off.

The differing decisions mean the House loses two legislative days while Tuesday and Wednesday’s snow days will be made up by both chambers during the veto period.

Since the Senate did decide to meet, they passed bills out of committee and on the floor.

Senate Appropriations and Revenue Committee passed Senate Bill 94, sponsored by Sen. Joe Bowen, which would limit the state’s spending to 6 percent of the state’s economy.

The Chamber has been a long supporter of this measure which encourages lawmakers to keep Kentucky’s financial house in order and adopt disciplined spending principles.

The Senate A&R Committee also passed SCR 103, which directs the Legislative Research Commission to establish the Kentucky Workforce Oversight Task Force. This task force would study and develop recommendations concerning the benefits, investments and funding of workforce education which is estimated at approximately $900 million a year. Read more on the blog.

Friday, the full Senate passed SB 16 to encourage more students to take computer coding classes as part of their science curriculum.

While many lawmakers did not make it to Frankfort this week due to the winter weather, the Kentucky Chamber sent a letter to all legislators this week urging action on pension reforms during the 2015 session.

Kentucky Chamber President and CEO Dave Adkisson penned the open letter to members of the General Assembly applauding the work that has been done to reform the state’s largest retirement systems, but also making it clear there is much more to be done to ensure the solvency of the pension systems. Read the full letter here.

There are several bills of interest noted below. The Chamber welcomes your feedback or questions on these or any other legislation. To view a full list of bills the Chamber is monitoring this session, click here.

Key Bills

Smoke Free (HB 145/SB 189) – prohibits smoking in public places. HB 145 passed the House last week and awaits action in the Senate. SB 189 has been referred to the Senate Veterans, Military Affairs and Public Protection Committee.
Medical Review Panels (SB 6/HB 398) – creates a system of medical review panels to address the escalating costs directly attributed to Kentucky's uncontrolled medical liability climate, an issue of serious concern for Kentucky employers. SB 6 passed the Senate several weeks ago and awaits action in the House Judiciary Committee.
Cap the Copay (HB 146/SB 31) – mandates that health benefit plans cap the amount of copays on prescription drugs to no more than $100 for a 30-day supply and no more than $200 for a tiered formulary per month.
Addressing the Rising Heroin Epidemic (HB 213/SB 5) – seeks to address the growing heroin epidemic by increasing penalties and improving treatment options.HB 213 passed the House last week and awaits action in the Senate. SB 5 passed the Senate the first week of session and awaits action in the House.

Competitiveness:

Local Option Sales Tax (LIFT) (HB 1) – gives local communities the option to place an additional sales tax of up to one cent on the ballot for voter approval. The measure passed the House last week and now awaits action in the Senate Elections, Constitutional Amendments, and Intergovernmental Affairs Committee.
Public-Private Partnership (P3) (HB 443) – provides an explicit framework for the use of public-private partnerships (P3s) as an alternative method of procurement, construction or financing of capital projects and services by state government.
Stabilization of the Road Fund (SB 29) – increases the AWP floor to the level used to calculate the rate that took effect January 1, 2015, which would stabilize the road fund to ensure much needed revenue for Kentucky’s infrastructure.
Crowdfunding (HB 76) – creates online crowdfunding investment opportunities in Kentucky that will make it easier for people to invest in business ideas that look promising. This legislation would allow people to invest up to $10,000 while helping businesses raise up to $2 million. HB 76 passed the House unanimously last week and awaits action in the Senate.
Workers' Compensation Issues (SB 95/ HB 294) – raises attorneys’ fees for workers’ compensation cases. Both would raise costs to the system without any immediate benefit to employers.
Minimum Wage (HB 2) – incrementally raises the state’s minimum wage to $10.10. HB 2 passed the House last week and awaits action in the Senate.
Telecommunications reform (SB 3/HB 152) – seeks to provide telecom providers the flexibility to invest in new technology. HB 152 passed the House Economic Development Committee last week and awaits action on the House floor. SB 3 passed the Senate State and Local Government Committee last week and awaits action on the Senate floor.
Local government retail operations (SB 130) – sets up clear procedures and a transparent process by which a local government would operate if entering into the retail or wholesale sale of a commercial product or service.
Taxpayer Rights Enhancement Act (HB 361/HB 399) – brings much needed transparency, efficiency and equity to our tax code.
LLET (HB 331) – clarifies costs of goods sold definition in the LLET statute to make it easier for businesses and tax professionals to comply.
Transparency in private attorney contracting (SB 118) – creates transparency, sets reasonable limits on contingency fees, and codifies recent case law requirements to ensure the state remains in control of litigation when hiring contingency fee counsel.
Distillery modernization (HB 198) – permits bourbon distillers to sell their products by the drink to visitors at their distilleries, just as wineries and breweries do today.
Limiting state’s debt (SB 94) – limits General Fund appropriations supported debt to no more than 6% of the budget. The Chamber has supported this concept for many years. SB 94 passed the Senate Appropriations and Revenue Committee yesterday and awaits action on the Senate floor.
Construction material mandate (HB 57) – 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.
Circuit court venues (SB 178) – modifies standards for venue and jurisdiction in actions against the Commonwealth of Kentucky.

Pension Bills:

Independent Actuary Request (HJR 7) – requests the Public Pension Oversight Board to hire an independent actuary.
Kentucky Teachers’ Retirement Bonding (HB 4) – allows the KTRS to bond $3.3 billion.
Pension Oversight (HB 47) – adds Legislative, Judicial and KTRS to the Public Pension Oversight Board.
Transparency (HB 49) – makes provisions regarding the costs of placement agents and administrative costs and would have transparency requirements for investment fees on the systems website.
Pension Spiking (HB 116/HB 444/SB 157) – addresses the pension spiking issue that many local governments have been faced with recently.
Actuarial Analysis (HB 306) – requires funding mechanisms be disclosed and an actuarial study of the system be conducted every five years.
Pension Transparency (SB 22) –strengthens transparency to require the Judicial Retirement Plan, the Legislators' Retirement Plan, the Kentucky Retirement Systems and the Kentucky Teachers' Retirement System to establish in administrative regulation a placement agent disclosure policy and require the policy to disclose to the boards of trustees of the plans and systems the name of the placement agent, the dollar value of the investment and the fees or payments made to placement agent for each investment in which a placement agent was used.
Legislators Retirement Plan (SB 23) – allows legislators contributing to the Legislators' Retirement Plan prior to January 1, 2014, to make a one-time election to have their benefits from the system based solely on their legislative salary and any salary earned in another state-administered retirement system prior to January 1, 2014.
Unfunded Liability (HB 62) – ensures any entity choosing to withdraw from the Kentucky Retirement System to repay their unfunded liability.
Pension Transparency (SB 20) – provides disclosure and transparency for legislators in the retirement system.

Education:

Childcare Rating System (HB 234) – directs the Early Childhood Advisory Council to clarify participating agencies and establish a schedule for implementing a quality-based rating system for licensed childhood providers. This Chamber-supported bill has passed the House Education Committee and awaits action on the floor.
Prevailing Wage (SB 9) – excludes all educational buildings and facilities from meeting the requirements of the existing prevailing wage law. This Chamber supported bill passed the Senate 24-12 but was defeated in the House Labor and Industry Committee.
Dual Credits (HB 265/SB 110) – permits high school seniors in the 2015/2016 school year and high school juniors and seniors in the 2016/2017 school year to use their KEES awards to pay for dual credit courses. SB 110 passed the Senate Education Committee and now awaits action on the floor.
School and Student Performance (SB 132) - allows a superintendent to select the principal in a school identified as an initial intervention school. SB 132 passed the Senate 28-6 and now awaits action in the House.
Computer Science Programs in Public Schools (SB 16) - calls for the Kentucky Department of Education to make students in computer coding courses eligible for science credits. It also includes professional development for teachers beyond the core to include computer sciences. SB 16 passed the Senate Friday.
Area Development Districts (SB 104) – prohibits an area development district from acting as both a fiscal agent and service provider relative to the provisions of the WIA and WIOA.
Charter Schools (HB 174/SB 8) – establishes a public charter school pilot project to create new, innovative and more flexible ways of educating all children in the public school system. SB 8 passed the Senate 23-11 and now awaits action in the house.
Area Development Districts (HB 426) – requires the Department for Local Government to prepare a manual of requirements for area development districts. It also clarifies and delineates the workforce investment board’s authority and what it can do. HB 426 also requires the Auditor of Public Accounts to audit the district every four years and prohibits an ADD from serving as both a fiscal agent and service provider relative to the provisions of the WIA and WIOA.
Postsecondary Education Capital Projects (HB 298) – authorizes bonds from the General Fund in fiscal year 2015-2016 for construction of a research building at the University of Kentucky.
Kentucky Workforce Oversight Task Force (SCR 103) – directs the Legislative Research Commission to establish the Kentucky Workforce Oversight Task Force to study and develop recommendations concerning the benefits, investments, and funding of workforce education. The task force must submit a report to the Legislative Research Commission by December 11, 2015. The resolution passed the Senate A&R Committee and now awaits action on the floor.

Energy:

Hazardous Waste Management Fund (SB 80) – extends the expiration date of the hazardous waste management fund assessment fee through 2024.
Nuclear Power (HB 84) – lifts Kentucky’s ban on nuclear power plants by allowing the construction of nuclear power facilities on sites previously used for the manufacture of nuclear products.
Pipeline Safety (HB 272) – seeks to establish a pipeline safety fund by imposing a levy on oil and gas pipelines running through Kentucky.
Utility Franchise Fees (HB 325) – grants cities the ability to restrict utilities from recovering franchise fees by adding a surcharge to the ratepayer’s bill.
Kentucky Oil and Gas Modernization Act (HB 386 / SB 186) – provides regulatory certainty for the development of Kentucky’s deep shale resources. The legislation begins the effort to reclaim abandoned storage tanks and sets forth water quality testing requirements.
Net Metering (SB196) – allows customers who rent or lease renewable electric generating facilities to be eligible for participation. SB 196 also increases the allowable size of eligible electric generation from 30 kilowatts to 1,000 kilowatts.