The legislature returns Monday for day 28 of the 30-day session. We’ll keep members updated on the status of legislation that may impact your business. Following the conclusion of the session, we will release our annual Results for Business report detailing what passed, what didn’t and what it means to your bottom line.

Earlier this week, Gov. Beshear signed HB 463 in a bill signing ceremony with legislative leaders of both chambers. This Chamber-supported legislation addresses the high costs of the state’s corrections system, which was identified by the Chamber’s Leaky Bucket report. HB 463 has the potential to save our state over $422 million in the next decade without taking a soft approach to crime. This bill makes public safety a priority by continuing to hold offenders accountable, but chooses alternative methods to incarceration such as better drug treatment programs.

Several other Chamber-supported bills have passed both legislative bodies and head to the Governor’s desk for his signature:

	Principal Selection – SB 12 (Winters) gives superintendents more authority in the hiring of school principals. Since superintendents are held accountable for the success or failure of each school, it is only logical and in the best interests of students, for superintendents to have a say in the leadership of those schools.
	Jurisdictional limits – Kentucky currently has some of the lowest jurisdictional limits in the country. SB 108 (Higdon) raises the jurisdictional limits for the small claims division of District Court from $1,500 to $2,500 and District Court from $4,000 to $5,000. This bill enable businesses to recover small claims in small claims court rather than having to pursue litigation in District Court thus saving court costs for small businesses and the court system itself.
	Health plan wellness programs – SB 114 (Denton) authorizes health benefit plans to offer incentives to members who participate in a voluntary wellness program.
	One stop business center – SB 8 (Givens) calls for the Kentucky Secretary of State to establish a “one stop” electronic business portal to streamline information sharing among businesses and governmental agencies in the state.
	Health insurance – HB 255 (Simpson) allows state tax exclusions for health insurance premiums, most notably for adult children under the age of 27, that are deductible pursuant to the federal health care law. This bill serves to alleviate an administrative burden for employers by bringing Kentucky's tax code in line with the federal tax code under the new health care law.
	Racing & wagering – SB 24 (Thayer) directs the governor to execute an interstate compact on participation in live pari-mutuel horse racing and pari-mutuel wagering activities.

There are several bills we continue to oppose and encourage you to contact your legislators in opposition. Call 1-800-372-7181 and express your concerns on the following bills:

	Election of PSC officials – SB 151 (Jones) proposes a change in the make-up of Kentucky’s Public Service Commission by increasing the number of commissioners from three to seven and making them elected positions instead of appointed. This model has been used in 13 other states and brought instability in the utility markets by politicizing the process of reviewing rate cases brought before the commission.  The House Tourism and Labor Committee stripped the bill of its original provisons on Monday and passed the bill as a study during the interim.  The measure narrowly passed the House 48-46 on Tuesday and awaits final action in the Senate.
	Costly health care mandates – SB 75 which will raise the cost of providing health care for small businesses by mandating higher payments to chiropractors without improving services, took a few interesting turns this week. The House Banking and Insurance Committee passed a committee substitute (link) to the bill that now awaits consideration by the full House. Meanwhile, the Senate rolled SB 75 into HB 199, which passed the full Senate on Thursday night. We are encouraging the House not to concur with these changes to HB 199. While the Chamber feels chiropractors offer valuable services to our communities, price increases should not be obtained through a legislative mandate.
	False claims – In response to the federal Deficit Reduction Act (DRA) of 2005, a number of states have filed various forms of false claims acts in order to increase the amount of money recovered from Medicaid fraud. Right now, the federal False Claims Act enables Kentucky to recover state money lost to false Medicaid claims. But to receive a 10% increase in Medicaid recoveries, the DRA requires states to enact false claims acts with “qui tam” provisions. These provisions enable whistleblowers to file lawsuits in the name of the state alleging Medicaid fraud, claim a bounty (15-25%) from any proceeds recovered for the state and recover attorney’s fees and expenses from the defendant. The Chamber agrees the state should recover fraudulent claims. However, creating such lucrative financial incentives to file lawsuits against employers is not the best way to recover claims. Two false claims acts have been filed in the General Assembly and both contain qui tam provisions. While SB 11 (Jensen) and HB 4 (Stumbo) ) passed their respective chamber and await consideration by the other chamber. HB 4 is similar to SB 11 but includes all state funds and is not limited to Medicaid, which would expand the scope of employer liability even more.
	Lawsuit lending – HB 412 (Bell) seeks to regulate the litigation financing industry, which involves advancing money at a high interest rate to plaintiffs engaged in pending litigation in return for a share of any future recovery. In a letter to lawmakers, the Chamber expressed its concern that this bill does little to protect consumers, but rather encourages more litigation. It passed the House but has yet to receive a hearing in the Senate.

 

Update on other legislation of interest:

	Wastewater certification program – SB 120 (Smith) will allow Kentucky Energy and Environment Cabinet to pursue a regulation change over the course of the upcoming months that will create a certification program for laboratories that test for water quality issues and standards. The Kentucky Chamber's Energy and Environment Council has reviewed the certification concept and is supportive of the measure because it can potentially take the liability of accidental falsified information from the laboratory or incorrect lab results off employers who are required to test their wastewater. The bill was amended this week to include a biomass initiative and passed the House floor on Wednesday. The measure awaits concurrence by the Senate.
	Response to low-performing schools – HB 476 (Jenkins) would weaken the process used to turn around low performing schools. Current law allows for appropriate action to turn around consistently low-performing schools, prioritizing student needs and learning. HB 476 places the desires of the adults in the schools above the needs of the students by weakening the process for removing ineffective teachers and principals from the schools identified as low-performing. Click here to view Dave Adkisson's letter to the editor on the issue and the memo delivered to the members of the House Education Committee. This bill failed in the House Education committee this week.
	Nuclear power ban – SB 34 (Leeper) would lift Kentucky’s nuclear power moratorium in the state. The measure stalled in the House Tourism Development and Energy Committee.
	Tax reform – Unlike past efforts to “reform” the tax code to raise revenue, SB 1 will create a tax code commission to recommend a completely new tax code to the legislature for an up-or-down vote. Their charge will be to make our code more conducive for business. As currently written, the voting council members would consist of five economists, two CPAs, a PVA and a tax attorney. Business groups, including the Kentucky Chamber, will be consulted for input. Read more about the Kentucky Chamber’s support of this measure here. This legislation stalled in the House Appropriations and Revenue Committee.
	State employee pensions – SB 2 (Thayer) establishes a 401K-type of retirement system for all new state employees, legislators and judges beginning July 1, 2012. While the 2008 reforms were a good starting point, much more needs to be done to address Kentucky's $28 billion unfunded pension liability. This proposal would not change the benefits for current employees or retirees, but would set up a defined contribution system for future state employees.  SB 2 stalled in the House State Government Committee.
	Early graduation – SB 69 (Winters) would allow students, who meet specific academic criteria, to graduate high school early and attend a public two-year or four-year postsecondary institution. This initiative stalled in the House Education Committee.
	School Dropout – HB 225 (Greer) phases in raising the mandatory school attendance age to 18. Currently, the mandatory school attendance age is 16. HB 225 stalled in the Senate Education Committee.
	Rx-only cold medicine – SB 45 (Jensen) will increase health care costs for employees and increase employee absenteeism by requiring a doctor’s prescription for medication with pseudoephedrine. The Kentucky Chamber offered a number of other solutions to legislators that could be more effective in combating the state’s meth abuse problems. Learn more about this issue and contact your legislators at www.stopmethnotmeds.com. The measure awaits action on the Senate floor.