2011 REGULAR & SPECIAL SESSIONS

LEGISLATIVE REPORT

MARCH 31, 2011

The blur that was the first week of "Part I" of the organizational session set the tone for what would be the fastest pace for a short session in recent memory. Traditionally, this week in January is much quieter, culminating in the elections of each chamber's leadership posts who then return home before the substantive "Part II" begins the first week of February. But with a full plate of bills filed, heard and voted out of the Senate that first "quiet" week, legislation was off and running until the last gavel on March 9th in the Senate. 165 Senate bills, 488 House bills and almost 500 resolutions between the two chambers kept your legislative committee very busy.

Final Action

In the final week, the House and Senate focus was on House Bill 305, an attempt to plug the $166 million hole in the state's current year Medicaid budget. The House's proposal would shift FY 2012 money to the current year's budget, and fill in the remaining 2012 deficit with projected savings. The Senate substitute would instead enact cuts across state government of 0.525% the first year, excluding education and its funding formula known as SEEK. The second year of that biennium would cut 2.26% across state government, including a 1.56 % cut for education. After several meetings and phone calls, the House recessed on Tuesday, March 8, planning to work over the veto period to come to a compromise with Senate leadership and leave one legislative day to allow for override of any potential vetoes by Governor Beshear.

Special Session

Instead of saving one final day, the Senate convened unilaterally the next day, Wednesday, March 9, using the last day of the 30-day session. With no compromise and no House chamber in session, all remaining bills were left to languish. That afternoon, Governor Beshear issued a call for a Special Session that began Monday, March 14^th. Two items were listed on the call: House Bill 305's Medicaid budget bill (HB 1), and "the graduation bill" which would raise the drop-out age from its current 16 to 18 years old. Both contained an emergency clause, which would make any legislation effective upon the governor's signature.

House Democrats worked with the minority Republicans on a compromise (view here) which passed 94-4 on March 21^st. The Governor had issued notice to providers advising them of a 35% cut in provider payments as of April 1st. That prompted a week of testimony in the House from medical providers, who said it would cause layoffs and possibly shutter some rural hospitals. The Senate A& R committee held its own hearings with Health and Human Services Cabinet Secretary Janie Miller spending hours testifying on the administration's plans to make up the deficit through managed care contracts "and other efficiencies".

That Senate committee and the full Senate voted out a Senate Committee Substitute the same day (view here). It reinstituted across-the-board cuts, lowered to 0.355% for the remainder of FY 2011, and 1.74% for FY12. The bill also cut postsecondary education, limited the amount of debt restructuring the Governor could enforce, cut SEEK funding in FY 2012, and set a deadline of January, 2, 2012 when an independent accounting firm would issue a report on the total savings achieved by the Medicaid program. If less than 82% of the projected savings was not achieved, the education cuts would go into effect on January 30, 2012. It also repealed state employee furloughs upon the Act's effective date. The Senate adjourned for the day, ready to come back April 6^th and if necessary, attempt to override any gubernatorial vetoes. It was all but a given that the bill was headed for Conference Committee, never a surprise when budget bills are debated.

Instead, the surprise came in the form of concurrence by the House, followed by the motion to sine die. On an 86-2 vote, they concurred, with assurances in the form of a letter from Governor Beshear that same afternoon, promising to line-item veto the bill to essentially restore it to original HB 1 language. On Friday, March 25^th, the Governor issued his veto message (view here) after the House went home, leaving the Senate to return, unilaterally, as scheduled on April 6^th. According to the Constitution, both chambers must agree on when to end a session, so this session will continue until both chambers sine die or the Governor calls them back into session.

Team Effort

We want to thank all of you for your calls, visits, emails and texts to legislators this session. As a direct result, some affirmative county bills became law, and some detrimental legislation was stopped. Those "little green slips" piled up when we asked you to call. Your calls and emails were the talk of the capitol after we alerted you to a potential negative floor amendment on Senate Bill 135, and that amendment was not called because of your efforts.

Please thank the members of your KACo Legislative Committee. Those members, led by Committee Chairman and KACo President Chris Harris, met weekly to review and debate every bill with a potential impact on county government. Those of us at the annex worked together every week to promote county issues. We want to extend our thanks to every affiliate executive director and association lobbyist who worked in concert with you throughout the session to convey your message. It was a team effort and could not have been as successful otherwise. The staff at KACo continues to work with the affiliates to promote a unified county government agenda, and this session was no exception.

Bills of County Interest

The lists of bills below highlights some of the legislation filed this session affecting county government. You can access the complete listing of every bill your KACo Legislative Committee tracked, KACo's position on each bill, and the status of the bill at the time of this writing here. The Senate has yet to adjourn sine die and until that date, the special session has not officially concluded.

I. HOUSE BILLS THAT PASSED:

HB 26 (Belcher): This pilot project will allow any of the following entities located in the counties of Bullitt, Hardin, Jefferson, Meade, or Oldham, to participate in a regional wastewater commission:

(a) A city that owns a wastewater system;

(b) An urban-county government that owns a wastewater system;

(c) A sanitation district created pursuant to KRS Chapters 67 and 220;

(d) A metropolitan sewer district or a joint sewer agency established under KRS Chapter 76;

(e) A water district that owns a wastewater system established under KRS Chapter 74; and

(f) An agency of the federal, state, or local government owning a wastewater system subject to regulation by the Kentucky Division of Water.

HB 34 (Rader): This bill allows coroners and deputy coroners to equip a public or private vehicle with red and blue lights and a siren, with local legislative body approval, to respond to the scene of an emergency involving a fatality.

HB 41 (Hall): Relating to lights on emergency vehicles, permits publicly owned jail vehicles used for emergency purposes to use blue lights but not sirens with fiscal court approval; permits elected jailer or chief administrator of a jail without a jailer to use blue lights on one personal vehicle.

HB 167 (Damron): Relating to insurance premium tax, this bill adopts provisions of an interstate compact as outlined in federal legislation, allowing the state and local governments to retain a portion of the amount collected on multistate surplus lines of insurance. While this is a relatively small portion of overall collections, any reductions are ill-timed and need to be challenged.

HB 433 (McKee): This bill creates a 5-member waste tire working group in the Energy & Environmental Cabinet. The group will serve in an advisory capacity as well as develop a "core fee" concept for waste tires and look for ways to assist local governments seeking grants for waste tire disposal. It also caps the Cabinet's use of the waste tire fund for administrative purposes at 25%. The group currently does not include an elected county official, but Rep. McKee has committed to sponsor a bill in 2012 to add at least one fiscal court member.

HB 463 (Tilley): This bill was the end result of the 7-member Penal Code and Controlled Substances Task Force, co-chaired by Rep. John Tilley and Senator Tom Jensen and included LaRue County Judge/Executive Tommy Turner. The members began their work with the Pew Center on the States last summer to consider updating Kentucky's criminal code with the goal of maintaining public safety and reducing recidivism rates. You can view the complete text of the bill here. A summary of each section is available here.

II. HOUSE BILLS THAT DID NOT PASS

HB 57 (Crimm): This bill has been filed ever since the 2006 session when local governments relinquished their authority to the state to negotiate a franchise fee with telecommunications companies when, in the 2005 session, the state pledged to "hold harmless" the amount local governments collected the prior year. Since that time we have been shorted approximately 15% per year. The state needs to be held accountable to their pledge.

HB 64 (Yonts): This legislation would have required the Department of Corrections to develop the cost of incarceration and supervision information. It would have required acknowledgement of consulting that information prior to acceptance of a felony plea bargain; and would have required the incarceration cost information be included in the sentencing phase of a trial.

HB 68 (Yonts): This bill would have made membership on a governing body of certain districts, local ethics bodies, and planning units, incompatible offices with other such positions within a county. This would put a strain on counties large and small who currently struggle to recruit qualified residents willing to serve on these boards and commissions.

HB 98 (Yonts): Currently the court fees fiscal courts added on to Circuit and District Court filing fees can be used "for the purpose of paying expenses for courthouses, bonds related to them, and administration expenses of" Circuit (KRS 23A.220) or District (KRS 24A.185) Court. This bill would have restricted expenditure of these fees to Court of Justice-related facilities only.

HB 137 (Fischer): Relating to the compensating rate calculation for local property taxes, this bill would have recalculated the formula for determining the annual compensating rate. More study should be completed to address the broader issue of local taxation.

HB 150 (Simpson): This three-pronged bill would have revised the charter county government statutes; it would have amended county ordinance statutes to reflect city ordinance law that requires only one publication, saving tax dollars; and finally it would have stopped the penalty for two entities (i.e. two fire districts) who merge, forcing them to join the state health insurance pool, which could be more costly to those entities.

HB 258 (Couch): This elections bill would have increased the per-precinct allotment from the state from the current $255 up to $1,500, raised election officer pay from $60 up to $100 per election day, as well as other payments for election officers. Several years ago the average per-precinct cost was approximately $1,400.

HB 487 (Santoro/Clark): Relating to electrical inspectors, currently about half of Kentucky's counties either employ or contract with an electrical inspector. Those counties are "closed" counties. "Open" counties neither employ or contract with an inspector and, by statutory default, pass the inspections on to the Department of Housing, Buildings and Construction inspectors. Currently there are seven to cover the entire state, leaving many inspections to possibly unscrupulous private contractors who may excessively charge for their services.

III. SENATE BILLS THAT DID NOT PASS

SB 78 (Buford): Relating to the sale of delinquent property tax bills, this legislation originally would have placed more administrative burden on county attorneys and clerks and staff, as well as further restricted the amount of expenses third-party purchasers can recoup on the property owner, possibly reducing the number of purchasing companies. In 2009, legislation was passed that placed limits on third-party purchasers, further protected rights of consumers and increased the amount of taxes collected for all entities including school districts. Counties were able to defeat this measure in the many manifestations it took on during the session. We are likely to see this legislation attempted again in 2012.

SB 134 (Schickel): This bill would have required Circuit Clerks to first direct all process to the sheriff, and then to other named officers. This would reduce the amount of fees diverted from the sheriff's office.