Public Policy: 2017 General Assembly
For the second time in as many sessions, Republican Gov. Matt Bevin took to the Senate president’s podium to congratulate the legislature for its work. Bevin’s comments echoed the sentiments of Majority Floor Leader Damon Thayer, who preceded the governor in declaring that 2017 was the most productive regular session in modern history. The session was undeniably productive, based on quantity of passed legislation alone. Republicans exercised single-party legislative control for the first time in nearly a century, and released a torrent of bills intended to make the commonwealth more competitive with Southeastern and Midwestern states in job attraction and retention.
The first 28 days of the 30-day session were extremely productive for Bevin, who was successful in passing several dozen bills that were on his agenda. Those bills ranged from government agency reorganizations, to subtle policy initiatives, to sweeping changes such as making Kentucky a right-to-work state and eliminating prevailing wage requirements for publicly funded construction. Bevin and the legislature’s big wins this session included pushing through a tax incentive package for a major Amazon facility in Northern Kentucky (HB 368); curbing drug abuse by outlawing some substances and significantly limiting opioid prescriptions to a three-day supply (HB 333); negotiating a refinance of the KFC Yum! Center in downtown Louisville that was on the verge of default (HB 330); passing additional economic loan pool money for a $1.3 billion aluminum mill investment in Eastern Kentucky (HB 482); killing an effort to separate the County Employee Retirement System from the Kentucky Retirement Systems (SB 226); and personally testifying on behalf of charter schools (HB 520) and right-to-work (HB 1.)
While all of these efforts required legislative buy-in and approval, it is the fulfillment of many of the campaign platforms on which the governor ran in 2015, as well as the agenda of the freshman House GOP class for which Bevin tirelessly campaigned last year.
Despite Republican control across the board, the House, Senate and governor found places to disagree with each other. Those disagreements resulted in the defeat of several significant agenda items the Kentucky business community championed. A year-long effort to produce workers’ compensation reforms (HB 296) died in the final hours without the Senate ever taking the bill up for a hearing or a vote. Legislation to require transparency in attorney general litigation (HB 271) also met a late-night demise in the House.
The newly minted Republican-led General Assembly found occasion to flex some independence of its own. During the veto recess, Bevin vetoed all or parts of four bills – all sponsored by Republicans – similar to what the governor did a year ago in the 2016 session, when the legislature passed a flurry of bills in the last hours of the session, thus foregoing their ability to override any vetoes. This time, House and Senate leadership wasted no time in overriding all four vetoes nearly unanimously.
Among those bills that did not pass were the previously mentioned changes to the workers’ compensation laws (HB 296). Kentucky’s workers’ compensation program is considered a relatively rich benefit for injured workers, particularly due to the length of benefits received. An effort to save the system more than $100 million over the next 10 years was stifled in the Senate after law enforcement agencies expressed serious opposition to limiting partial permanent disability claims to 15 years.
Democrats, while limited in numbers, were able to exploit fissures between the social conservatives and more moderate Republicans to kill a couple of bills this year. However, during the 11 p.m. hour on the last night of the session, Republicans and Democrats came together to unanimously pass a budget amendment drafted to attract a specific but at that point mystery economic development opportunity in Eastern Kentucky, the aluminum mill announced April 26 in Wurtland. In the final hours, the legislature also addressed the heroin and drug epidemic plaguing the state by passing HB 333. The original bill changed the prescribing authority for opioids; the Senate directed a major policy shift when it added “tough on crime” language with increases in the penalties for minor trafficking of heroin and fentanyl.
The Sine Die adjournment March 30 ended legislative activity until Jan. 2, 2018 – or until the governor calls an extraordinary (special) session. Most signals are pointing to an early fall session to address pension and tax reform. A vote on major tax reform will most certainly be tougher than any vote taken during this past regular session. It may require a substantial sales job from the governor before the new Republican majority in the House and the established GOP majority in the Senate commit to a package that likely will create as many new losers as winners in the tax code. ■
Sean M. Cutter is director of government solutions for McBrayer, McGinnis, Leslie & Kirkland.
2017 General Assembly in Review
Here are a few of the 2017 session highlights:
• HB 520: The charter school bill allows publicly funded charters to operate as early as the next school year. It passed with a mayoral provision for Lexington and Louisville, giving the city’s highest executive authority to designate a charter school or schools. School boards will elect for the creation of a local charter, which may be overridden by the state Board of Education. In the final days of session, a late-night vote on HB 471 provided state funding for the charters.
• SB 1: In tandem with the charter school bill, the legislature pushed this comprehensive accountability reform for K-12 education. Performance-based assessment reigns supreme, and review of academic standards will occur next school year.
• SB 4: This bill establishes a pre-trial peer review panel for medical malpractice in an attempt to deter frivolous lawsuits. Complaints can only bypass the panel and accelerate the matter to the court if agreed upon by both parties.
• HB 410: The REAL ID bill allows Kentuckians the option to obtain a travel ID or enhanced driver’s license for interstate travel and admittance onto military bases. Though voluntary, it ensures that Kentuckians who choose not to get the travel ID may simply show multiple forms of identification.
• SB 153: Requires performance-based funding for higher-education institutions. The bill has an emergency clause, making it effective immediately.
• HB 330: Known as the YUM! Center bill, this bill extends the tax increment financing (TIF) program, resulting in increased contributions from the University of Louisville and Louisville Metro.
• HB 1: This right-to-work legislation makes union membership an individual employee choice. This bill was the House’s main priority for the session. Kentucky is now the 27th state to enact right-to-work legislation.
• HB 3: Repeal of the prevailing wage requirement for public works construction projects.
• SB 3: This pension transparency bill requires the disclosure of retirement benefits of current and former members of the General Assembly.
• SB 5: Bans abortions in Kentucky past 20 weeks except in cases that pose serious risk to survival of the mother. It was passed in the early days of the session alongside HB 2, which requires “informed consent,” an ultrasound prior to an abortion, with criminal penalty for violations.
• SB 6: Dubbed the “paycheck protection bill,” it repeals employers’ mandate to withhold union dues from an employee’s salary and sets requirements for labor organizations in collecting and applying dues money for political activities.
• SB 12: Creates a new board of trustees for the University of Louisville and requires Senate confirmation of appointees. SB 207 passed later in the session, expanding that requirement to all public universities.
• HB 100: A win for bourbon and tourism industries alike, this bill allows for the sale of vintage spirits and distilled spirits at fairs, festivals and similar events.
• SB 79: Patients can now enter into contracts with their primary care providers for services. Those in a so-called “direct primary care membership agreement” would not forfeit private insurance or Medicaid.
• HB 112: Known as the “dog bite bill,” it defines the dog owner, not the landlord, as the responsible party in the case of a dog bite on rental property.
• HB 156: This bill establishes the Kentucky Coal Fields Endowment Authority to fund improvement projects in coal severance counties. The bill ensures a $7.5 million installment of coal severance dollars; projects will be awarded based on job creation and economic development potential.
• HB 14: Otherwise known as the “Blue Lives Matter” bill, attacks on first responders will now be considered a hate crime. Previous law defines hate crimes as those committed because of a victim’s race, color, religion, sexual orientation or national origin.