Legislative Update: No Budget as Legislature Enters Veto Period

With only one legislative day remaining in the 2016 Session of the General Assembly, here is what you need to know.

  1. Recess Begins – The General Assembly utilized Day 59 of 60 allowed for this regular session on Friday. The House and Senate both adjourned, commencing the Veto Recess, a period of time when legislators return home while the Governor considers vetoing any legislation. Both chambers set their return date from the veto recess for April 12th at 11:00 a.m., when the General Assembly will convene for the final day of the 2016 Regular legislative session.
  2. Budget Unresolved – A stalemate over pension funding via cuts to state universities led House and Senate budget conferees to head into the Veto Recess without an agreement on a new two-year spending plan. The House Democrats feel strongly that state universities should be exempt from the Governor’s proposed cuts of 4.5% in FY16, 9% in FY17, and 9% in FY18. The Senate Republicans and the Governor feel strongly that more money needs to be put into shoring up the state’s underfunded public pension plans, and that those additional funds should come from the cuts to postsecondary education. There is still time for the House and Senate to broker an agreement on the budget before lawmakers adjourn sine die, but currently that seems unlikely
  3. Felony Expungement PassesHouse Bill 40, filed by Louisville Representative Darryl Owens, will allow for the expungement of 61 non-violent class D felonies while requiring a 5-year waiting period and providing protections for employers. The bill received final passage last week and is now on the Governor’s desk. This is a critical workforce issue for GLI that was addressed by the General Assembly last week.
  4. School Leadership Passes – One of the key education issues for Louisville and JCPS for the 2016 Session was giving superintendents more flexibility in selection of principals within school districts. House Bill 184, sponsored by Louisville Delegation Chair Jeff Donohue, received final passage last week and is now on the Governor’s desk. GLI appreciates the passage of this important bill.
  5. Bringing Pharmacy Jobs to KentuckyHouse Bill 527, filed by Rep. Tom Burch and co-sponsored by Rep. Jerry Miller, will allow for mail order pharmacies to operate in the Commonwealth. It received final passage this week and is on the Governor’s desk. GLI played a critical leadership role in promoting this legislation, including testifying in committee. This change in the law will create jobs by allowing one of GLI’s members to create a pharmacy hub in Louisville. We appreciate the bi-partisan leadership demonstrated by Rep. Burch, Rep. Miller, and Sen. Julie Raque Adams.
  6. Distillery Modernization Passes – GLI has consistently supported placing the distilled spirits industry on equal footing with wineries and breweries in the Commonwealth. Senate Bill 11 is an omnibus clean-up of various alcohol-related issues, including allowing Kentucky’s distilleries to sell their products by the drink. The bill received final passage and is now on the Governor’s desk.

GLI has a comprehensive legislative agenda for 2016. Below is an update on some of the bills from the agenda:

Key Bills Moving Forward Last Week

Distillery Modernization – GLI supports placing the distilled spirits industry on equal footing with wineries and breweries in the Commonwealth. Two key bills of interest:

  • House Bill 433House Licensing & Occupations – Focuses specifically on clean-up of distilled spirits issues, was filed with 41 members of the House signing on as co-sponsors.
  • Senate Bill 11Delivered to Governor – Is an omnibus clean-up of various alcohol-related issues, including the distillery issues in HB 433.

Educational Reciprocity

  • Senate Bill 140Delivered to Governor – Filed by Sen. Max Wise, would allow the Council on Postsecondary Education to enter into reciprocity agreements with institutions in other states to provide distance education to Kentucky residents. GLI is supportive of this bill.

Felony Expungement – This is a critical workforce issue for GLI.

  • House Bill 40Delivered to Governor – Filed by Louisville Representative Daryl Owens, would allow for the expungement of some non-violent class D felonies. Requires a 5 year waiting period.
  • Senate Bill 298 Senate Judiciary – Filed by Senate President Robert Stivers, is the Senate’s expungement bill. The bill exempts very specific felonies and requires a 10 year waiting period.

Kentucky Economic Development Partnership

  • House Bill 216Delivered to Governor – Filed by Rep. Mike Denham, would add the chairperson of the Commission on Small Business Advocacy and a representative from the NFIB/Kentucky to the Kentucky Economic Development Partnership. GLI supports this measure.

Pensions
There were several bills of interest that moved last week:

  • Senate Bill 2House Orders of the Day – Sen. Bowen’s bill would make the pension systems more transparent and accountable.
  • House Bill 1Senate Appropriations & Revenue – filed by Speaker Stumbo, would implement a four-year phase in of the legislature paying the full actuarially required contribution (ARC) to KTRS, declares an emergency. HB 1 originally would have bonded $3.3 billion to shore up KTRS but was amended to remove the original language.
  • House Bill 271Signed by Governor – Rep. Jerry Miller’s bill requires benefit information to be disclosed by the retirement systems.
  • Senate Bill 45House Orders of the Day – Sen. McDaniel’s bill requires disclosure of information related to pensions of current and former members of the legislature.
  • House Bill 238Passed Senate, Sent to House for Concurrence – Rep. Yonts’ bill requires the Public Pension Oversight Board to hire their own actuary to do an actuarial audit of the state-administered retirement systems at least every 10 years and review the retirement system’s budget requests every two years.

Pharmacy Administration

  • House Bill 527 Delivered to Governor – Filed by Rep. Tom Burch and co-sponsored by Rep. Jerry Miller, would amend Kentucky’s pharmacy law to allow pharmacies to perform administrative activities outside of a licensed pharmacy in the United States, while protecting patients’ interests by keeping activities related to the evaluation and implementation of drug orders, including dispensing activities, inside licensed pharmacies. GLI has been a driving force behind this legislation.

Public-Private Partnerships (P3)

  • House Bill 309Delivered to Governor – Sponsored by Rep. Leslie Combs, it would allow for P3s as a critical tool for the Commonwealth accomplishing economic development projects in cooperation with private industry. GLI supports allowing P3s in Kentucky.
  • Senate Bill 132 – Senate Economic Development – Sponsored by Sen. Max Wise, is the Senate companion bill to HB 309.

Radon Mitigation

  • House Bill 272Delivered to Governor – Filed by Rep. Tommy Thompson, would exempt residential building contractors installing vent pipes from radon mitigation certification requirements, making Kentucky contractors more competitive and efficient. GLI supports this legislation.

School Leadership

  • House Bill 184 Delivered to Governor – Sponsored by Louisville Delegation Chair Jeff Donohue, is one of the key education issues for Louisville and JCPS for the 2016 Session is to give superintendents more flexibility in selection of principals within school districts. GLI is a proponent of this legislation.

Vacant & Abandoned Properties – GLI supports efforts by local governments and developers to return vacant and abandoned properties to productive use and the tax rolls. There are two bills of note:

  • Senate Bill 229Senate State & Local Government – Filed by Sens. Morgan McGarvey, Julie Raque Adams, and Denise Harper Angel, would expand the abilities of land bank authorities to hold, renovate, and lease vacant and abandoned properties if a satisfactory bid is not made at auction.
  • Senate Bill 230Delivered to Governor – Filed by Sens. Morgan McGarvey, Julie Raque Adams, and Dan Seum, would expand local government authority to make spot condemnations and more quickly return vacant, abandoned, and blighted properties to productive use.

Key Bills

Business & Non-Profit Regulation

  • House Bill 367Senate Appropriations & Revenue – Filed by Speaker Pro Tem Jody Richards, would make technical changes to modernize the current laws governing Kentucky’s nonprofit sector and would exempt veteran-owned businesses from paying certain filing fees to the Secretary of State.

Education Standards – Two key bills of interest on education standards:

  • Senate Bill 1House Education – SB 1 is an omnibus education reform proposal that will set up a process for reviewing the state’s education standards and aligning them with the assessment and accountability system.
  • Senate Bill 210 & House Bill 553Senate & House Education – SB 210 & HB 553 would repeal and replace Kentucky’s current academic standards, which would be an inefficient use of dollars and time for our teachers. GLI is opposed to SB 210 & HB 553.

Encourage Computer Science in Schools

  • Senate Bill 107House Education – Would encourage the development of more computer science programs in local schools. GLI supports this legislation.

Expanded Gaming

  • Senate Bill 144Senate Veterans – Sponsored by Sen. Morgan McGarvey and Sen. Julie Raque Adams, this is a constitutional amendment legalizing casino gaming and dedicating 90% of the proceeds to Kentucky’s public employee pensions. GLI took a leadership role in support of this measure.

Franchises

  • Senate Bill 198House Labor & Industry – This legislation filed by Sen. Wil Schroder, would provide that neither a franchisee nor an employee of a franchisee shall be deemed to be an employee of the franchisor for purposes of wage and hour laws, occupational safety laws, unemployment laws, and workers comp laws. GLI supports this bill.

Governor’s School for Entrepreneurship

  • Senate Bill 296House Floor – Filed by Sen. Chris McDaniel, would establish the Governor’s School for Entrepreneurship under the Education & Workforce Cabinet and make a General Fund appropriation.

Historic Preservation Tax Credits

  • House Bill 424House Appropriations & Revenue – Filed by Co-Chairman Rick Rand, would raise the program cap for commercial projects below $3 million in qualified expenditures to $9 million and the per project cap to $900,000; establish a $1 million program cap for residential projects; and create a new incentive for “catalytic commercial projects” above $3 million in qualified expenditures.

Justice Reform

  • House Bill 412 Senate Judiciary – would create a new category of misdemeanor as well as implement additional reforms that would streamline the redemption process for non-violent felons. GLI supports a smarter, more cost-effective approach to criminal justice.

KEES for Dual Credit

  • Senate Bill 127Senate Appropriations & Revenue – This legislation would allow Kentucky students to use their KEES scholarships for dual credit courses while they are still in high school. GLI is supportive of SB 127.

Kentucky Preference in Procurement

  • House Bill 227House State Government – Filed by Rep. Jeff Donohue, would give a preference in state procurement to products made in Kentucky regardless of cost or availability. GLI is concerned this bill could lead to increased costs.

Landlord Liability

  • Senate Bill 68House Judiciary – Would correct a 2012 KY Supreme Court ruling that made a landlord strictly liable for the actions of a tenant’s dog. GLI will be pushing for its consideration.

Lawn Service Workers Comp Exemption

  • House Bill 56House Floor – Rep. Myron Dossett includes lawn services to the list of exemptions from workers’ compensation on a private home for not more than 20 days.

LIFT – These two bills deal directly with GLI’s top legislative priority:

  • House Bill 374Senate Appropriations & Revenue – The LIFT enabling legislation was filed by Rep. Tommy Thompson.
  • House Bill 2Senate Appropriations & Revenue – Filed by Speaker Stumbo and Minority Leader Hoover, the constitutional amendment would allow for a local option sales tax.

Limited Liability Entity Tax

  • House Bill 292House Appropriations & Revenue – Filed by Rep. Brent Yonts, would expand the definition of “cost of goods sold” under the LLET to include any costs allowed by the Internal Revenue Code. GLI is a proponent of this bill.

Maternity Leave

  • House Bill 627House Labor & Industry – Filed by Rep. James Kay, would require employers with more than 50 employees to provide 6 weeks paid maternity leave for an employee. GLI opposes this legislation because it places an unnecessary mandate on employers.

Medical Review Panels

  • Senate Bill 6Senate Health & Welfare – Sponsored by Sen. Ralph Alvarado, creates a system of medical review panels to address the escalating costs directly attributed to Kentucky’s uncontrolled medical liability climate. GLI supports this legislation.

Prevailing WageGLI supports the repeal of prevailing wage laws and sees these bills as good steps forward:

  • Senate Bill 9House Labor & Industry – Sponsored by Sen. Schroder would exempt public construction projects of $250,000 or more from the state’s prevailing wage laws.
  • Senate Bill 94Senate State & Local Government – Senator McDaniel’s bill would allow local governments to opt out of prevailing wage for public works.

Public Benefit Corporations

  • House Bill 50Senate Judiciary – Sponsored by Rep. Kelly Flood, Rep. Jerry Miller, and Rep. Steve Riggs, would permit public benefit corporations, which is a corporation that allows a company’s board of directors to take “public benefit” into account, in addition to shareholder benefit, when making decisions about the company. GLI has taken a leadership role in making PBCs possible in Kentucky.

Right To WorkGLI supports this legislation as one of our top priorities.

  • Senate Bill 3Senate Economic Development – Filed by Senate President Robert Stivers, is this session’s Right to Work bill.

Road Aid Modernization

  • House Bill 69House Appropriations & Revenue – Reformulates the road fund revenue sharing to a formula of thirds based on population, road mileage, and land area. GLI supports a more equitable share of road funds for urban areas.

Sick Leave

  • HB 617House Labor & Industry – Filed by Rep. Mary Lou Marzian, would require employers to provide earned paid sick leave to employees. GLI opposes this legislation because it places an unnecessary mandate on employers.

Smoke-Free Legislation

  • House Bill 351House Health & Welfare – Filed by Rep. Susan Westrom, would prohibit smoking in indoor public places. GLI is supportive of this legislation.

Tax Reform Proposal

  • House Bill 342House Appropriations & Revenue – Rep. Jim Wayne filed this omnibus tax reform proposal that relies on many of the recommendations from former Governor Beshear’s tax reform task force. The bill creates a burden for many industries by placing a personal property tax on manufacturing equipment, retail inventory, and raw materials, including distilled spirits. Businesses operating in other states could be taxed by Kentucky if they are not taxed by the other state, which could create a competitive disadvantage for Kentucky. GLI is supportive of comprehensive tax reform that is consumption-based and pro-business. Learn more about our tax reform recommendations here.
  • House Bill 247House Appropriations & Revenue – Sponsored by Rep. Watkins, this bill increases the cigarette tax. GLI believes this would be a positive step to raise revenue for the Commonwealth.

Workers Compensation Subrogation

  • House Bill 200House Labor & Industry – Filed by Rep. Bart Rowland, would clean up statutes related to workers compensation insurance subrogation in favor of employers. This would save employers money and make Kentucky more attractive for business.

Workers Compensation Temporary Total Disability – Two bills:

  • Senate Bill 151 & House Bill 311 both await action in House Labor & Industry – would allow payments of temporary total disability benefits to be offset by wages paid to an employee by an employer for light duty or alternative duty work performed during a period of temporary total disability. GLI supports this legislation.

Work Ready Kentucky

  • House Bill 626Senate Appropriations & Revenue – The House Democrat’s Work Ready Kentucky Scholarship Program passed the House Appropriations & Revenue committee this week and it is poised to be voted off the House floor next week. The program would provide free tuition for graduating high school students attending the state’s community and technical colleges. The program is apparently not requiring new dollars, but is being funded out of other funds in the budget.

Workforce Development
Two resolutions have been filed that would establish the Kentucky Workforce Oversight Task Force to study and develop recommendations concerning the benefits, investments, and funding of workforce education.

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