Frankfort Inside Out - March 6, 2015

March 08, 2015

From: Kentucky Chamber of Commerce

Winter weather again interrupted what was supposed to be the final full week of the 2015 session as legislators were forced to make Thursday and Friday snow days due to road conditions and a power outage at the Capitol.

Legislative leaders announced Thursday the session calendar will be updated to make Monday, Tuesday and Wednesday of the week of March 9^th working days.

Before the snow storm hit the state, bringing close to 18 inches of snow to Frankfort, lawmakers worked quickly to get bills passed in the final legislative days before they break for the veto period.

On Monday, legislation to ensure telecommunications reform became the first bill to pass both chambers. House Bill 152, which seeks to provide telecom providers with the flexibility to invest in new technology, passed the Senate Monday with a vote of 30 to 3.

The Kentucky Chamber of Commerce strongly supports this legislation sponsored by Rep. Rick Rand. Telecommunications reform will help make our Commonwealth more attractive to businesses so we can compete for investment dollars and jobs.Read more.

A bill pushed by the Kentucky Chamber and the Kentucky Society of CPAs also became a part of the discussion this week as House Bill 361, the Taxpayer Rights Enhancement Act, was discussed in committee and at a press conference Tuesday.

HB 361, sponsored by Rep. Tommy Thompson, would impose administrative requirements on the department regarding taxpayer protest and refund claims. It would also impose educational and transparency measures. To read more about the legislation and see video of testimony by the groups involved, go to our blog.

However, many of the Kentucky Chamber’s top priorities have been stalled in the legislative process. The Chamber has urged its members and the general public to get involved on these important issues by reaching out to legislators.

Issues like local option sales tax (LIFT), the creation of public-private partnerships (P3) and stabilization of the Road Fund are all crucial to the state’s success and should be passed this year. Other bills that make Kentucky less competitive should be stopped. To read about the issues and get involved, click here.

Several weeks ago the Kentucky Chamber sent a letter to all legislators encouraging them to act this session on the pension crisis looming over Frankfort. With just days left of the General Assembly, several important pension bills are still in play. We encourage you to contact your legislator and let them know that reforms need to be made to the pension system this session and not to kick the can down the road another year.

Another priority of the Kentucky Chamber that has seen little movement is legislation to establish 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 6 passed the Senate earlier in Session and is sitting in the House Judiciary committee, where HB 398 also sits. Please let your Representative know that you support this common sense bill by calling 1-800-372-7181.

There are several bills of interest noted below. The Chamberwelcomes 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

Health Care:

Addressing the Rising Heroin Epidemic (HB 213/SB 5) – seeks to address the growing heroin epidemic by increasing penalties and improving treatment options. Both bills have passed their respective chambers and have had discussion only hearings in opposite chamber committees. Legislators are working toward a compromise to be able to pass a bill by the end of session.
Medical Review Panels (SB 6/HB 398) – 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. SB 6 passed the Senate earlier in Session and is sitting in the House Judiciary committee, where HB 398 also sits. Please let your Representative know that you support this common sense bill by calling 1-800-372-7181.

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 several weeks ago and now awaits action in the Senate State and Local Government Committee. Take action.
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. HB 443 passed the House last week and now awaits a committee hearing in the Senate Economic Development and Tourism Committee. Take action.
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. SB 29 has only had a discussion only hearing in Senate Transportation but there is hope that legislators find a solution to stabilize the road fund before the end of session.Take action.
Telecommunications Reform (SB 3/HB 152) – seeks to provide telecom providers the flexibility to invest in new technology. HB 152 passed the Senate on Monday, making it the first bill of the General Assembly to make it to the Governor’s desk for signature.
Crowdfunding (HB 76) – creates online crowdfunding investment opportunities in Kentucky that will make it easier 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 earlier in session, passed the Senate Banking and Insurance Committee with a committee substitute and now awaits passage on the Senate floor.
Workers' Compensation Issues (HB 206/HB 294) – raises attorneys’ fees for workers’ compensation cases. Both would raise costs to the system without any immediate benefit to employers. HB 294 was withdrawn last week and attached to HB 206, which deals with workers’ compensation for non-paid pastors. Take action.
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. SB 130 passed the Senate State Government Committee earlier this week and awaits action on the Senate floor.
Taxpayer Rights Enhancement Act (HB 361/HB 399) – brings much needed transparency, efficiency and equity to our tax code. A discussion only hearing and press conference was held on Tuesday for the bills, but it does not look like they will receive a vote this year. Sponsor Rep. Tommy Thompson stated that the initiative will receive a hearing during the interim and plans on sponsoring the legislation next year.
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. HB 198 passed the House Licensing and Occupations Committee earlier in session and now awaits passage on the House floor.

Education Bills:

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 childcare providers. This Chamber-supported bill passed the House 81-16 and now awaits action in the Senate.
Dual Credits (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 37-0 and now heads to the House for action.
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 and now awaits action in the House.
Charter Schools (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.
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. HB 298 passed both the Senate and House and now heads to the Governor for his signature.
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 37-0 and now awaits action in the House.
Post-Secondary Performance Based Funding (SJR 106) - directs the Kentucky Council on Postsecondary Education to develop a performance-based funding model for the public postsecondary education institutions. The resolution passed the Senate 22-12 and now heads to the House for action.
Low Performing Schools (HB 449) - requires schools that remain classified as persistently low-performing schools for four years to implement an internal innovation option. After failure of implementing existing intervention options, the school shall implement an innovation option that improves student learning and performance by expanding learning experiences for students with new or creative alternatives to existing instructional and administrative practices. HB 449 passed the House 94-0 and now heads to the Senate for action.
Districts of Innovation Assessment Waivers (HB 34) - allows a waiver or modification of the statewide assessment system for schools participating in a district of innovation plan. HB 34 passed the House 95-1 and now awaits action in the Senate.
Student Achievement Gaps (HB 498) – requires a targeted focus school to undergo an audit and implement an internal innovation plan. The focus school must act within 30 days of receiving the report of the audit and the superintendent shall act on the recommendations in the report when creating the innovation plan. HB 498 passed the House Education Committee this week and now awaits action on the floor.
Craft Academy (HB 232) - allows the Craft Academy for Excellence in Science and Mathematics to award a high school diploma. It also allows students enrolled in the academy to earn KEES scholarships. HB232 passed the House and Senate education committee and now awaits action on the Senate floor.
Student Assessment (HB 313) - allows school-based decision making councils to select and use interim or formative assessments for their students. HB313 passed the House Education committee this week and now heads to the floor for action.

Pension Bills:

Independent Actuary Request (HJR 7) – requests the Public Pension Oversight Board to hire an independent actuary. Chamber supported HJR 7 has not received a hearing in the House.
Kentucky Teachers’ Retirement Bonding (HB 4) – allows the KTRS to bond $3.3 billion. HB 4 passed the House on last week and awaits action in the Senate State and Local Government Committee. Many are skeptical of additional bonding, especially since taxpayers have not had the benefit of vetting such a major initiative.
Pension Oversight (HB 47) – adds Legislative, Judicial and KTRS to the Public Pension Oversight Board. HB 47 passed the House earlier in session and awaits passage on the Senate floor. It looks likely this measure will pass this session.
Pension Spiking (HB 116/HB 444/SB 157) – addresses the pension spiking issue that many local governments have been faced with recently. SB 157 passed the Senate State and Local Government Committee earlier this week and awaits hearing on the Senate floor. SB 157 was also attached to HB 108, which is a KRS clean up bill.
Actuarial Analysis (HB 306) – requires funding mechanisms be disclosed and an actuarial study of the system be conducted every five years. Chamber supported HB 306 passed the House floor unanimously on last week and awaits action in the Senate State and Local Government Committee.
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. SB 22 passed the Senate earlier in session and now awaits passage on the House floor. It looks likely SB 22 will pass this session.
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. SB 23 passed the Senate earlier in session and now awaits hearing in House committee.
Unfunded Liability (HB 62) – ensures any entity choosing to withdraw from the Kentucky Retirement System to repay their unfunded liability. HB 62 passed the House earlier in session and now awaits action on the Senate floor.

Energy bills:

Clean Power Plan (HCR 168) - directs the Legislative Research Commission (LRC) to establish a task force to perform a one-time study which assesses the potential impacts of federal environmental regulations on the “affordability” and “reliability” of electricity generation in Kentucky. The “Federal Environmental Regulation Impact Assessment Task Force” is required to submit its findings and recommendations to the LRC by December 4, 2015. HCR 168 passed the House on Tuesday and the Senate Committee on Natural Resources and Energy on Wednesday. The resolution now heads to the Senate for final passage.
Hazardous Waste Management Fund (HB 417) – extends the expiration date hazardous waste management fund assessment fee through 2024. On Wednesday, the measure passed the House by a 97-0 vote and now heads to the Senate.
Nuclear Power (SB 90) – lifts ban on nuclear power plants and requires that nuclear power facilities have a plan for the storage of nuclear waste. On Tuesday, the Senate passed SB 90 by a 30-7 vote.
Natural Resource Severance (HB 194) – lessens the upfront financial impact on counties and cities receiving funds from the Local Government Economic Assistance Fund (LGEAF). Specifically, in the event that a tax refund is issued which reduces the amount of revenue going into the LGEAF.
Surface Coal Mining (HB 543) – gives the governmental responsibility for regulating surface coal mining operations solely to state government (Energy and Environment Cabinet).
Kentucky Oil and Gas Modernization Act (HB 386 / SB 186) – These companion bills are the result of six months of negotiations with the Kentucky Chamber of Commerce, the Kentucky Oil and Gas Association, the Energy & Environment Cabinet, the Department of Natural Resources, the Division of Oil and Gas, the Kentucky Division of Water, the Kentucky Resources Council, the Kentucky Farm Bureau and other industry leaders. HB 386 unanimously passed the full House. SB 186 unanimously passed the full Senate.