2010 Extraordinary Session Ends

Posted: Tuesday, June 01, 2010
Blog: Legislative Update

During the 2010 "special session" last week your AGC of Kentucky Government Affairs Team was successful in lobbying for nearly $500 million in new bonding for among other items state funded construction projects including Category 5 schools along with an acceleration of the Job Creation Tax credit.

Funding for the state's schools most in need of replacement (Category 5) was solved after considerable discussion and negotiations thus clearing the way for passage of the state budget. Under the final plan, the state will match funding for local school districts that levy a "second nickel," or 5 cents per $100 in property value.

The accelerated tax credit will enable small business employers to use 2009 as the base year of employment for applying for tax credits for the 2010 Tax year.  Eligible AGC of Kentucky members with 50 or fewer employees can receive the tax credit of up to $25,000 for hiring one new employee in 2010 along with a capital investment of at least $5,000.

The Tax credit acceleration along with passage of House Bill 5, Unemployment Insurance legislation saving Kentucky employers nearly $700 million were the top legislative priorities of the AGC of Kentucky and our allies in the KY Small Business Caucus during the "special session".

A very special thank you to Senate Appropriations & Revenue Committee Chair Bob Leeper, I-Paducah who met with a delegation of Small Business Caucus members including a representative from AGC of Kentucky and agreed to sponsor an amendment to the budget bill. Rep. Tanya Pullin D-South Shore efforts in the House were also instrumental in our success. Thanks also to all the legislators who voted for HB-5, sponsored by House Speaker Pro Tempore Larry Clark, D-Okolona. 

The two-year, $17.1 billion spending plan House Bill 1 reached the governor's desk following final legislative passage at the conclusion of day five of the "special session", staving off a threatened government shutdown on July 1.


The plan includes no new taxes and includes new general fund bonding of $437 million.

Also headed to the governor is House Bill 2, the revenue package needed to pay for the two-year budget. Among the provisions added to by the Senate were tax incentives aimed at benefiting rural and low-income communities through business investment and philanthropy.

Another amendment to HB 2 directs coal severance money into a scholarship program aimed at drawing pharmacy students into coal counties. The program is similar to those aimed at bringing badly needed doctors into the rural Kentucky, with each year of service offsetting a year of school loans. Students who decide not to fulfill their end of the contract would be required to pay back the loans. Students from coal counties would be given preference for the scholarships.

The session continued into the Memorial Day weekend with legislators meeting on Saturday May 30th to finalize the state "road plan". Soon after the final passage of the road plan, a press release was issued touting among other projects the inclusion of $62.5 million for Kentucky’s share of a new bridge across the Ohio River between Milton, Ky., and Madison, Ind.

The new bridge was one of dozens of projects in the $4.45 billion road project legislation which the General Assembly ultimately passed during the 6 day "special session".

The Transportation Cabinet’s operations budget of about $5 billion and the two-year road plan were the last two major pieces of legislation still in play that the legislature hoped to approve on Saturday.


Following it's passage the House and Senate adjourned "sine die" at approximately 11 pm Saturday evening and sent the legislation on to the Governor for his signature.

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Special Session

Posted: Thursday, June 25, 2009
Blog: Legislative Update

Legislative Special Session - No Racinos but small business gets a break, finally!

Richard Vincent & John Brazel, AGC of Kentucky

 

As Senate leaders had warned, the Beshear-proposed and House-passed racetrack slots bill was defeated in the upper chamber this week, failing to get out of the Senate A&R committee, but the other three items on the governor's call were agreed upon and passed in good order as the 2009 special session wrapped up work in eight legislative days.

 

Passed: An economic incentive-package probably best known for seeking to lure a major NASCAR event to Northern Kentucky, along with an AGC of Kentucky and Small Business Caucus supported tax credit for small businesses who hire one additional employee and invest $5,000 in equipment or technology. The $25,000 tax credit is targeted at existing small businesses in Kentucky and has been on our legislative agenda for the three previous sessions but failed to pass in the 2009, 2008 & 2007 regular sessions.

 

We greatly appreciate the efforts of Rep. Tanya Pullin (D-South Shore) and Sen. Gary Tapp (R-Shelbyville) whose leadership and perseverance on this important issue has led to its final successful passage.

 

Also passing was the so-called 'Bridges Bill' to create a finance-and-control authority for massive transportation megaprojects like the $4.1 billion Ohio River twin-bridges project in Louisville, and a rebalanced state budget to fix what Gov. Steve Beshear and some predictors called a near-$1 billion shortfall in the coming fiscal year.

 

The economic-incentive measures lawmakers agreed to include $75 million to boost existing incentives that encourage the expansion of businesses already operating in Kentucky. Plus, in addition to tax credits to help Kentucky Speedway in Gallatin County land a NASCAR Sprint Cup race, it also includes tax incentives to attract the Breeders' Cup horse racing championships to Louisville, and creates a tax credit for small businesses (see above) and for film and TV productions shooting in the Commonwealth. It also exempts active-duty military from state income taxes.

 

The initial reason Beshear called the special session for June 15 was to revise the state budget. His proposal called for using $741 million in federal stimulus funds to fill most of the projected shortfall. He also proposed across-the-board spending cuts for most state agencies — but sparing education — of 2.6 percent. Those steps lawmakers approved.

 

But in the agreement reached between House and Senate negotiators late Tuesday, the governor's proposal to suspend three paid holidays for state workers making less than $50,000 a year and five holidays for those making $50,000 or more was deleted from the final bill.

 

Overall, observers hailed the session as highly productive, given quick and relatively painless agreement on three major issues. But the biggest newsmaker in the room — video lottery terminals, or video slots — came up short when it landed in the Senate.

 

The governor had added VLTs to the session call to help save the state's troubled Thoroughbred industry, by drawing more patrons to tracks and injecting new money into race purses. The hope was to keep racetracks open, and horses and horsemen in the state.

 

The VLT idea has been bubbling under the legislative surface for a decade or more, but no full chamber has ever actually voted on it — until the House voted 52-45 last week to approve the measure. But House leaders added a sweetener this year: a sudden proposal to tie most slots revenues to debt service on bonds for more than $1 billion in school-building construction, both at state colleges and in school districts statewide where crumbling elementary and secondary buildings need replacement.

 

However, Senate leaders felt relying on slot-machine revenue was bad public policy, and had their own proposal to help the horse industry without expanded gambling: Taxing state lottery sales and adding a surcharge for simulcasting signals from Kentucky horse racing tracks.

 

In the end, neither chamber could agree to the other's proposal and the session concluded yesterday sine die.

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