What You Need To Know, March 5, 2018 – Regular Session (2018)


What You Need To Know, March 5, 2018 – Regular Session (2018)

Budget and Revenue Bills Pass the House

Last week the House revealed their changes to HB 200, the Executive Branch biennial budget. As you know, Governor Bevin introduced his budget proposal in mid-January and the House worked the better part of a month and a half hearing from state agencies and stakeholders. Last Wednesday evening the House Appropriations and Revenue Committee presented their changes. The bill passed committee and was voted on by the full body on the House floor on Thursday. HB 200 passed by a vote of 76-15. The bill restores a number of programs that were cut in the Governor’s proposal especially those that affected education interests, including education transportation funding. It increases the SEEK per-pupil funding to its highest level ever, restores health coverage for retired teachers and funding for Family Resource and Youth Services Centers. HB 200 also reinstates the 6.25% cuts to public universities and fully funds the public pension systems. How did the House restore funding to these programs?

Alongside HB 200, the House passed increases to several revenue streams as part of HB 366. In what was somewhat of a surprise, the changes to HB 366 included a 50 cent increase to the state cigarette tax as well as establishing a 25 cent per dose tax on opioids to be paid by distributors and mail order pharmacies. HB 366 also includes changes to remove a $10 personal income tax deduction. In all, modifications contained within HB 366 raise roughly $250 million in new revenue. House A&R Chairman Steven Rudy told members of his committee during consideration of both the budget bill and revenue bill that he fully intends to address comprehensive tax reform during this session. Today is the 42nd day of this 60-day session, making his statement regarding comprehensive tax reform this session somewhat surprising.

KAM was disappointed to see that the House budget does not include funds for the $100 million workforce investment bond pool as incorporated by the Governor in HB 200. Both the budget and revenue bills are now in the Senate, and we will continue to advocate for inclusion of this significant program in the budget.

Pension Reform Update

Last week was also busy in the Senate, as the Senate State and Local Government Committee presented the long-awaited public pension reform bill in committee. The committee did not take a vote and introduced several changes to SB 1. While the document does not officially contain amendments that the Senate recommends, you can view their proposed amendment HERE. The changes are favorable to teachers and state employees.

Along with SB 1, the Senate also passed SB 66, which allows local governments a phase-in period for fully funding their pension contributions.

KAM Priority Bills Continue to Move

SB 82, sponsored by Senator Mike Wilson, is legislation to preempt localities from regulating auxiliary containers, like plastic bags, cups, and to-go containers. Over 200 cities across the country have passed fees, taxes, or city-specific manufacturing requirements, creating a patchwork of regulation that harms companies who manufacture these products, retailers who sell them, and consumers who buy them. There should be uniform regulation at the state level, which SB 82 establishes. SB 82 will be heard tomorrow in the Senate Economic Development, Labor, and Tourism Committee. Please contact your State Senator and ask that they vote YES on SB 82.

SB 160, legislation sponsored by Senator Rick Girdler, modernizes the statute which prohibits “grossly excessive” price increases by sellers of goods and services during a state of emergency declared by the Governor. KAM supports SB 160, and we encourage you to reach out to your State Senator and ask that they vote YES on SB 160. The bill passed the Senate committee last week by unanimous vote.

HB 2, sponsored by Rep. Adam Koenig, is comprehensive reform to the state’s workers’ compensation laws. The bill has passed the House and now awaits action in the Senate.

HB 227, sponsored by Rep. Jim Gooch, is the net metering legislation that will address inequities in how renewable energy users receive credit for excess energy that they produce. Currently, all other users subsidize users of renewable energy, like those with solar panels. KAM supports HB 227 and asks that you contact your State Representative and ask that they vote YES on this important bill.

HB 252, sponsored by Rep. Jim DeCesare, is legislation to reform the state’s unemployment insurance system and better align benefits with surrounding states. The bill could be heard for a vote on the House floor this week. KAM supports these efforts. Please contact your State Representative and ask that they vote YES on HB 252.

HB 324, sponsored by Rep. Diane St. Onge, HB 324 is legislation that will protect critical infrastructure in the state, like chemical plants, from the unregulated use of drones around these significant infrastructure assets. The bill passed the House last week by a vote of 80-1 and now moves to the Senate for action.

HB 370, legislation sponsored by Rep. Robby Mills, seeks to update the state’s brownfields statute to make the program more accessible and easier for property cleanup. This bill is a product of compromise between KAM, the administration, and environmental interests. It passed the House Natural Resources and Energy Committee last week. Please contact your State Representative and ask that they vote YES on HB 370.

New Bills of Interest

HB 535, sponsored by Rep. Kim Moser, allows KEES scholarship funds to be used for qualified workforce training programs. Qualified workforce training program refers to a program that is one of Kentucky’s top five high-demand work sectors as determined by the Kentucky Workforce Investment Board. HB 535 was sent to the House Education Committee for consideration.

HB 609, sponsored by Rep. Sal Santoro, is the product of the House Working Group on Transportation recommendations, based on their work during the interim. It has been referred to the House Appropriations and Revenue committee, although a hearing is not scheduled at this time. HB 609 does the following:

  • Increases the motor fuels tax by 10 cents by increasing the variable rate by 6.5 cents and the supplemental user fee by 3.5 cents.
  • Adds an index to the supplemental user fee using the National Highway Construction Cost Index.
  • Sets registration fees for hybrids, hybrid-electrics, and non-hybrid electric vehicles.
  • Increases various fees.
  • Establishes a multi-modal fund, with no appropriation attached.

HB 609 does not address diversions from the Road Fund. The bill will increase total road funds by $392,118,578 in FY 19 and $443,749,950 in FY 20.

HB 611, sponsored by Rep. Kim Moser, allows comprehensive public universities to offer programs of a vocational-technical-occupational nature below the associate degree level in the top five high-demand sectors with the approval of the Council on Postsecondary Education. HB 611 has been referred to the House Education Committee for consideration.

Keeping You Informed

As in past years, we will continue to communicate with you weekly with bill tracking lists on the KAM Homepage (Bill Tracking), summaries of legislative actions and dynamics, and specific bills of interest. We will also, of course, contact you immediately as issues of particular interest or concern arise.

We have resumed our KAM Conversation Conference Calls on Thursdays, and invite KAM Members to call and take part in this dialog every Thursday during the 2018 Legislative Session. The information for the call is:

  • Call-in Number:        877-746-4263
  • Participant Code:     0219774#

Calendar & Key Dates

The General Assembly has completed 41 legislative days of this 60-day session. With the final third before us, we expect the pace to quicken and for the days to get longer as legislators complete their work for the 2018 Regular Session. You can access the session calendar HERE and the committee meeting schedule HERE. Please keep in mind that this calendar can change if the legislature decides to shift days. We will let you know if that happens; however, they must adjourn by April 15, according to the Constitution. Below are specific dates of interest:

  • March 27-28 – Concurrence Days
  • March 29-April 9 – Veto Recess
  • April 13 – Sine Die

Meet the KAM Governmental Affairs Team here.

Don’t know who your elected representatives are? Click here to reach the Action Center of the Kentucky Prosperity Project to find this and other important information to help you make your opinion heard on matters affecting you and your business! You can also purchase a Kentucky General Assembly Blue Book from KAM, or purchase the companion KAM Blue Book App for Apple and Android products from their respective app stores.

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