2017 Interim LEGISLATIVE Volume 30, No. 8 November 2017 * Read online at www.lrc.ky.gov/legislation.htm RECORD Lawmakers briefed on Agency state’s homeland security makes new by Jim Hannah LRC Public Information Kentucky

FRANKFORT – When authorities found out white supremacists and counterprotestors homes planned to gather in Pikeville this past April, the Kentucky Office of Homeland Security its business provided support to the local community to by Rebecca Hanchett head off any violence. LRC Public Information That’s one example Kentucky Office of Homeland Security Executive Director FRANKFORT—One agency based in John Holiday gave of his office’s work while Frankfort is helping thousands of Kentuckians testifying before the Nov. 9 meeting of find housing – all without using a single state the Interim Joint Committee on Veterans, general fund dollar. Military Affairs and Public Protection. He “We don’t receive any general fund said part of the office’s mission is to “connect appropriation,” Kentucky Housing Corporation the dots between local, state and federal (KHC) Executive Director Edwin King told the entities for law enforcement.” Interim Joint Committee on Local Government Holiday added that his office provides during the panel’s Oct. 25 meeting. “With an support to the about 7,700 sworn police abundance of appreciation for the task at hand in officers, 21,000 firefighters, 13,000 EMS the next budget session, I won’t be coming before personnel and 1,600 certified 911 operators Rep. Rob Rothenburger, R-Shelbyville, engag- you to ask for any money.” across Kentucky. es with presenters during the Nov. 9 meeting King and his colleagues at KHC—a quasi- “We are committed to ensuring these of the Interim Joint Committee on Veterans, governmental agency whose income comes frontline responders have everything they Military Affairs and Public Protection. primarily from sales of tax-exempt mortgage need to do their job,” he said. “Here is bonds and fee income from the federal the problem right now: The threats and that data, and as fast as we can, consume it Department of Housing and Urban Development, hazards we face on a daily basis are evolving. and determine if any other threats or hazards or HUD—appeared before the committee to Unfortunately, bureaucracies don’t evolve as exist. It is a never-ending process and it can be talk about one of his agency’s specific missions: fast. Governments have a hard time keeping quite stressful. You would be surprised of the community revitalization, which includes the up with that evolution of threats. And it is Kentucky nexus to many global threats that are rehabilitation and reuse of vacant, blighted and very important for us to face those threats.” happening on a daily basis.” abandoned properties. Holiday said the office was the only With legislators preparing for the Among the KHC revitalization projects civilian agency in Kentucky with access to upcoming session, Holiday outlined the office’s reported to the committee by King and KHC federal classified information systems. various programs and how it functions on a Deputy Executive Directors Lisa Beran and “Our office must consume and analyze limited budget. Jeremy Ratliff were the Scholar House program this data effectively,” he said. “We must take Continued on page 4 Continued on page 4 THE KENTUCKY GENERAL ASSEMBLY 1 Marsy’s Law discussion renewed by Judiciary committee by Rebecca Hanchett LRC Public Information

FRANKFORT—Kentucky crime victims have weaker rights than Kentucky criminals, say victims’ advocates who hope to balance out Kentucky would those rights with the help of Kentucky’s voters. become at least the One proposed remedy is Marsy’s Law, legislation already passed in a handful of states sixth state to pass that allows a state’s voters to approve specific, limited constitutional protections—dubbed a Marsy’s Law—named “bill of rights”—for crime victims. Sen. Whitney for Californian Marsy Westerfield, R-Hopkinsville, a co-chair of the Interim Joint Committee on Judiciary and Nicholas, who was sponsor of Marsy’s Law bills in past years, said he plans to sponsor similar legislation next year. stalked and killed by an Westerfield told members of the Judiciary ex-boyfriend in 1983. committee at a Nov. 3 meeting that the crime victims’ bill of rights he supports is “largely procedural to ensure that (victims) have a meaningful role in the process, and that’s what balances the rights of victims and defendants. Marsy’s Law sets out to do.” The proposal puts a human face on the rule of Kentucky would become at least the sixth law that considers crime to be against the state, state to pass Marsy’s Law—named for Californian not an individual, she said. Marsy Nicholas, who was stalked and killed by “We have to remember it’s the victim who an ex-boyfriend in 1983—should Westerfield’s has suffered,” she said. Above: Rep. , D-Shively, comments proposal make it through the 2018 General Senate Majority Caucus Chair Dan on Marsy’s Law at the Nov. 3 meeting of the Assembly. Passage of the bill would clear the way Seum, R-Louisville, asked about the process Interim Joint Committee on Judiciary. Below: for the proposed amendment to go on statewide for enforcement should Kentucky amend its Senate Majority Caucus Chairman Dan Seum, ballot next fall, leaving the decision of whether constitution to include a crime victims’ bill of R-Louisville, asks those testifying at the meeting certain victims’ rights should be embedded in rights. Westerfield said the courts could order how a constitutional crime victims’ bill of rights the state constitution up to the voters. different remedies for victims, with redoing a would be enforced in Kentucky. Of all the proposed victims’ rights, defendant’s hearing likely to be the most severe. Westerfield said the one that’s needed most is “They can’t get a new trial,” said Westerfield. the right of victims to have legal standing, which “They can’t trample on the rights of the accused. gives them the ability to fight for their rights in Ordinarily it’s a redo of the hearing at the most.” court. Rep. Joni Jenkins, D-Shively, said she “Right now, even if you were a crime victim supports the proposal but that more needs to be and you could assert that you have a right that done for victims. Many struggle with medical was violated, you don’t have any recourse. You costs and other issues tied to their victimization, can’t show up in front of a circuit court judge she said. and demand to be heard. And that’s not right,” “I talked to a victim of sexual assault last Westerfield said. week and she talked about the financial problems The senator challenged the idea that giving that came with her victimization” including the victims constitutional protections hurts the cost of ambulance transport and extended HIV accused or convicted criminals. Constitutional testing that the victim was required to have, said rights of the accused and convicted “should be Jenkins. “That came out of her pocket and her protected. This doesn’t disrupt any of those. If it insurance.” did, I wouldn’t be for it,” said Westerfield. Marsy’s Law legislation has not yet been Instead of taking anything away, Kentucky filed for consideration during the 2018 Regular Executive Director for Marsy’s Law Ashlea Session. Westerfield said he plans to file his Christiansen told the committee that Marsy’s Law legislation in January.

2 2017 Interim LEGISLATIVE RECORD Lawmakers look at cost of solar energy by Rebecca Hanchett LRC Public Information

FRANKFORT— Solar power means bigger electricity bills for non-solar customers, a group Competitive rates in the called the Consumer Energy Alliance told a panel of state legislators in November. current market is the CEA’s Brydon Ross told the Interim Joint Committee on Natural Resources and Ener- goal of Consumer Energy gy during a Nov. 2 meeting that private cred- Alliance and its its given to solar customers who participate in programs like net metering--which gives retail over 250 members, credit for excess solar energy fed into the elec- trical grid—allows those customers to avoid which include the paying costs that most consumers on the grid pay. Kentucky Chamber of Kentucky has had a net metering program since 2004. Commerce, LG&E/KU The issue, said Ross, is that net metering customers in Kentucky are paid a retail rate that and other is three times the competitive market rate even CEA associate though they don’t pay many of the costs that other electricity customers do. Current solar members energy policies in at least 15 other states have also proven costly, he said. in Kentucky. “Our analysis found that private solar cred- its are shifting costs on to less affluent custom- ers,” said Ross. “Those who can’t afford private solar should not subsidize those receiving pri- vate solar credits.” He was quick, however, to emphasize that his organization supports solar energy. “Advocating for reform in solar does not mean you are anti-solar,” said Ross. “We think the legislature has a real opportunity here to ad- dress an issue before it becomes a real problem.” Rep. , D-Lexington, said that the solar energy movement is just starting to have Interim Joint Committee on Natural Resources an impact in Kentucky. She questioned Ross on and Energy Co-Chair Rep. , R-Prov- how the reforms CEA is proposing would affect idence, comments on solar energy and its im- what she called “transitional costs” as more cus- pact on the electricity grid at the committee’s tomers move toward solar. Nov. 2 meeting. “Incentive programs have been set up to get this whole business up and moving …. But now you’re saying pull back the incentive programs, Natural Resources and Energy Committee. is that what you’re asking for?” Flood said. “We can flood the grid with power when Competitive rates in the current market we don’t need it, but we’re forcing the utility to is the goal of CEA and its over 250 members, buy that first,” he said. “There’s a cost involved in which include the Kentucky Chamber of Com- ratcheting down base load generation.” merce, LG&E/KU and other CEA associate Sen. Jared Carpenter, R-Berea, who also co- members in Kentucky, Ross said. chairs the committee, said lawmakers will con- Rep. Jim Gooch, R-Providence, said solar tinue to look at the issue as they consider cost, is not a constant energy source. Other energy benefit and ultimately the value of certain energy sources “base load” the electricity grid “to be sources. there when the intermittent sources are not “It’s an important issue. It’s about diversifica- providing power,” said Gooch, co-chair of the tion,” he said. THE KENTUCKY GENERAL ASSEMBLY 3 Homeland, from page 1

Kentucky’s Office of Homeland Security need for homeland security on the local level and includes a Fusion Center that monitors terrorism, said the state will roll out a hometown security cyber threats and organized crime. The center advisory program early next year. also handles social media analysis, critical “It is my opinion the local community infrastructure and geospatial analysis, which should always take the lead,” Holiday said. “Our Holiday outlined as the next step in providing analysts are going to have certain parts of the the most useful data to local communities. entire state that they’re going to manage. They’re “But, we do want to stress that any future going to create those liaisons and have real-time reduction in funding will directly affect the d at a .” capabilities of our office to mitigate these Sen. Whitney Westerfield, R-Hopkinsville, ever-increasing and ever-evolving threats.” he said. “With threats growing and evolving and suggested the office use data from Kentucky’s resources diminishing, we have to get creative.” criminal court system to spot trends. The deputy executive director of the office, Holiday said that might come in the future. Mike Sunseri, said that in 2004 the office had a He added that the people on the ground in Rep. , D-Brandenburg, comments local communities would update the state’s during the Nov. 9 meeting, which was held at the $44 million budget. That dropped to a little less Kentucky Transportation Cabinet headquarters than $4 million this year. geographical mapping system in real time to in Frankfort. In response to a question by Rep. Jeff Greer, allow for timely analysis of trends and security D-Brandenburg, Holiday also spoke about the issues across Kentucky. Housing, from page 1

(which provides affordable housing for single development) leveraged a total economic impact parents who are full-time students until they of $655,000 for Owsley County. So, again, it finish their higher education), the 14-site creates those necessary and needed affordable Recovery Kentucky residential substance abuse Among the KHC housing units for the residents, but also then program, and three projects in Somerset, revitalization projects brings the economic impact to the particular Springfield and Owsley County in which KHC jurisdiction,” she said. partnered with state agencies and local cities and reported to the In reference to Scholar House—which has counties to replace or renovate blighted property, locations in most every region of the state— King said. committee were Local Government Committee Vice Chair Rep. In Somerset, six dilapidated single-family the Scholar House Rob Rothenburger, R-Shelbyville, asked King homes were demolished and rebuilt using federal and his colleagues the maximum length of stay community block grant funds and HOME program, Recovery for residents. investment partnership funds with KHC’s help, “As long as they’re meeting their said Beran. Priority for the homes was given to Kentucky program and requirements, they can stay until they’ve finished low-income, elderly and disabled persons, she projects in Somerset, their education,” said King. reported to the committee. Rothenburger commented on the success of “The total economic impact of not only Springfield and affordable housing programs in his county, where finishing those structures but strengthening the KHC partnered with a local developer to build community in terms of that economic power was Owsley County. affordable senior citizen housing. It only took $719,000,” Beran said. three weeks for the first phase of 42 completed In downtown Springfield, KHC partnered units to be claimed by seniors, he said. with the Department of Local Government “I want to tell you how successful that to create seven one- and two-bedroom rental County where Beran said various funding program is and how much our seniors in apartments for senior citizens by rehabilitating an sources were used to build 21 houses in the Maple Kentucky appreciate that because now, they don’t historic building into the Robertson Apartments, Lick and Milltown subdivisions. The average have to make a choice of whether they’re going said Beran. The total economic impact of that income for each of the households, Beran said, to pay rent, utilities, or medicine payments each project totals over $1.4 million, she said. was $14,879. month,” Rothenburger said. “They can move in, Similar local success was achieved in Owsley “Looking at the overall impact… (the and they can relax and enjoy life.”

4 2017 Interim LEGISLATIVE RECORD 2018 Regular Session Calendar

THE KENTUCKY GENERAL ASSEMBLY 5 General 2017 Assembly Senate

Julie Raque Adams (36) Jimmy Higdon (14) John Schickel (11) 213 S Lyndon Lane 344 N Spalding 2147 Natches Trace Louisville, KY 40222 Lebanon, KY 40033 Union, KY 41091 (LRC) 502-564-8100 (LRC) 502-564-8100 (LRC) 502-564-8100 (LRC) 502-564-8100 (Home) 270-692-6945 Wil Schroder (24) Ralph Alvarado (28) Paul Hornback (20) 25 Observatory Pointe Dr. 3250 McClure Road 6102 Cropper Rd Wilder, KY 41076 Winchester, KY 40391 Shelbyville, KY 40065 (LRC) 502-564-8100 (LRC) 502-564-8100 (LRC) 502-564-8100 Dan “Malano” Seum (38) Joe Bowen (8) Stan Humphries (1) 1107 Holly Ave 2031 Fieldcrest Dr 763 Sinking Fork Rd Fairdale, KY 40118 Owensboro, KY 42301 Cadiz, KY 42211 (LRC) 502-564-8100 (LRC) 502-564-8100 (LRC) 502-564-8100 (Home) 502-749-2859 (Home) 270-685-1859 (Home) 270-522-0195 Brandon Smith (30) Tom Buford (22) Ray S. Jones II (31) 124 Craig Street 409 W Maple St PO Drawer 3850 Hazard, KY 41702 Nicholasville, KY 40356 Pikeville, KY 41502 (LRC) 502-564-8100 (LRC) 502-564-8100 (LRC) 502-564-8100 (Home) 606-436-4526 (LRC FAX) 502-564-2466 (Work) 606-432-5777 (Home FAX) 606-436-4526 (Home) 859-885-0606 (Work FAX) 606-432-5154 Robert Stivers II (25) (Home FAX) 859-885-0606 Alice Forgy Kerr (12) 207 Main St Jared Carpenter (34) 3274 Gondola Dr Manchester, KY 40962 PO Box 100 Lexington, KY 40513 (LRC) 502-564-8100 Berea, KY 40403 (LRC) 502-564-8100 (Home) 606-598-8575 (LRC) 502-564-8100 (Home) 859-223-3274 (Work) 606-598-2322 Danny Carroll (2) Christian McDaniel (23) (Work FAX) 606-598-2357 220 Cimarron Way PO Box 15231 Damon Thayer (17) Paducah, KY 42001 Latonia, KY 41015 105 Spyglass Dr (LRC) 502-564-8100 (LRC) 502-564-8100 Georgetown, KY 40324 (Home) 270-703-8025 Morgan McGarvey (19) (LRC) 502-564-8100 Julian M. Carroll (7) 2250 Winston Ave Reginald Thomas (13) 702 Capitol Ave Louisville, KY 40205 702 Capitol Ave Annex Room 254 (LRC) 502-564-8100 Annex Room 255 Frankfort, KY 40601 (Home) 502-589-2780 Frankfort, KY 40601 (LRC) 502-564-8100 (LRC) 502-564-8100 Perry B. Clark (37) Stephen Meredith (5) (LRC FAX) 502-564-0777 5716 New Cut Rd 702 Capitol Avenue Johnny Ray Turner (29) Louisville, KY 40214 Annex Room 229 849 Crestwood Dr (LRC) 502-564-8100 Frankfort, KY 40601 Prestonsburg, KY 41653 (Home) 502-366-1247 (LRC) 502-564-8100 (LRC) 502-564-8100 C.B. Embry Jr. (6) (Home) 270-287-9849 (Home) 606-889-6568 PO Box 1215 (Work) 270-230-3301 Robin L. Webb (18) Morgantown, KY 42261 Gerald A. Neal (33) 404 W Main St (LRC) 502-564-8100 462 S 4th St Grayson, KY 41143 (Home) 270-526-6237 Meidinger Twr, Ste. 1250 (LRC) 502-564-8100 Louisville, KY 40202 (Home) 606-474-5380 Rick Girdler (15) (LRC) 502-564-8100 Stephen West (27) 702 Capitol Ave (Home) 502-776-1222 202 Vimont Ln Annex Room 209 (Work) 502-584-8500 Paris, KY 40361 Frankfort, KY 40601 (Work FAX) 502-584-1119 (LRC) 502-564-8100 (LRC) 502-564-8100 Dennis Parrett (10) Whitney Westerfield (3) David P. Givens (9) 731 Thomas Rd 700 South Main Street PO Box 12 Elizabethtown, KY 42701 PO Box 1107 Greensburg, KY 42743 (LRC) 502-564-8100 Hopkinsville, KY 42241 (LRC) 502-564-8100 (Home) 270-765-4565 (LRC) 502-564-8100 Denise Harper Angel (35) Dorsey Ridley (4) (Work) 270-885-7671 2521 Ransdell Ave 4030 Hidden Creek Dr Mike Wilson (32) Louisville, KY 40204 Henderson, KY 42420 631 Washington Avenue (LRC) 502-564-8100 (LRC) 502-564-8100 Bowling Green, KY 42103 (Home) 502-452-9130 (Home) 270-826-5402 (LRC) 502-564-8100 (Work) 270-869-0505 Max Wise (16) Ernie Harris (26) Albert Robinson (21) 126 Cox Cove PO Box 1073 1249 S Main St Campbellsville, KY 42718 Crestwood, KY 40014 London, KY 40741 (LRC) 502-564-8100 (LRC) 502-564-8100 (LRC) 502-564-8100 (Home) 502-241-8307 (Home) 606-878-6877 * Members of the Kentucky General Assembly may also be contacted by calling 502-564-8100.

6 2017 Interim LEGISLATIVE RECORD 2017 Kentucky General Assembly House Rocky Adkins (99) (6) Jeff Greer (27) PO Box 688 285 Oak Level Elva Rd PO Box 1007 Sandy Hook, KY 41171 Symsonia, KY 42082 Brandenburg, KY 40108 (LRC) 502-564-8100 (LRC) 502-564-8100 (LRC) 502-564-8100 (Home) 606-738-4242 (Home) 270-851-4433 (Home) 270-422-5100 (Work) 606-928-0407 Jim DeCesare (17) (Home FAX) 270-422-5100 (Work FAX) 606-929-5913 PO Box 122 David Hale (74) (4) Rockfield, KY 42274 11 Hales Ln 2359 Brown Mines Rd (LRC) 502-564-8100 Wellington, KY 40387 Marion, KY 42064 (Home) 270-792-5779 (LRC) 502-564-8100 (LRC) 502-564-8100 (Work) 270-792-5779 (Home) 606-768-3474 (Home) 270-988-4171 (37) Chris Harris (93) Danny Bentley (98) PO Box 509 719 Forest Hills Rd 702 Capitol Avenue Fairdale, KY 40118 Forest Hills, KY 41527 Annex Room 329J (LRC) 502-564-8100 (LRC) 502-564-8100 Frankfort KY 40601 (Work) 502-439-6175 (Home) 606-237-0055 (LRC) 502-564-8100 (9) Mark Hart (78) 491 E Nashville St 702 Capitol Avenue III (88) Pembroke, KY 42266 Annex Room 316E 2384 Abbeywood Rd (LRC) 502-564-8100 Frankfort, KY 40601 Lexington, KY 40515 (Home) 270-475-9503 (LRC) 502-564-8100 (LRC) 502-564-8100 Jim DuPlessis (25) (Home) 859-654-4278 (Home) 859-421-1464 102 Utah Court (94) Elizabethtown, KY 42701 20 Ohio St John Blanton (92) (LRC) 502-564-8100 Whitesburg, KY 41858 702 Capitol Avenue Daniel Elliott (54) (LRC) 502-564-8100 Annex Room 329H PO Box 2082 (2) Frankfort, KY 40601 Danville, KY 40423 438 Millers Chapel Rd (LRC) 502-564-8100 (LRC) 502-564-8100 Mayfield, KY 42066 (Home) 859-332-4204 (LRC) 502-564-8100 Kevin D. Bratcher (29) Joseph M. Fischer (68) (Home) 270-705-7539 10215 Landwood Dr 126 Dixie Place (Work) 270-247-2210 Louisville, KY 40291 Ft Thomas, KY 41075 (Work FAX) 270-247-2304 (LRC) 502-564-8100 (LRC) 502-564-8100 (91) (Home) 502-231-3311 (Home) 859-781-6965 702 Capitol Avenue (Work) 513-794-6442 Annex Room 329 B Larry Brown (95) Ken Fleming (48) Frankfort, KY 40601 702 Capitol Avenue 702 Capitol Avenue (LRC) 502-564-8100 Annex Room 329I Annex Room 351D (83) Frankfort, KY 40601 Frankfort, KY 40601 PO Box 985 (LRC) 502-564-8100 (LRC) 502-564-8100 Jamestown, KY 42629 (Work) 606-886-8132 (LRC) 502-564-8100 George Brown Jr. (77) Kelly Flood (75) (Home) 270-343-2264 424 E Fourth Street 121 Arcadia Park (Work) 270-343-5588 Lexington, KY 40508 Lexington, KY 40503 (40) (LRC) 502-564-8100 (LRC) 502-564-8100 1806 Farnsley Rd, Ste 6 (Home) 859-312-7513 (Home) 859-221-3107 Shively, KY 40216 (LRC) 502-564-8100 (30) (84) (Home) 502-447-2498 4012 Lambert Ave 702 Capitol Avenue (Work) 502-447-9000 Louisville, KY 40218 Annex Room 329G Regina Huff (82) (LRC) 502-564-8100 Frankfort, KY 40601 179 Mountain St (Home) 502-454-4002 (LRC) 502-564-8100 Williamsburg, KY 40769- McKenzie Cantrell (38) (Home) 606-233-5660 (LRC) 502-564-8100 702 Capitol Avenue Al Gentry (46) (Home) 606-549-3439 Annex Room 424A 702 Capitol Avenue (5) Frankfort, KY 40601 Annex Room 432D 4064 US 641 N (LRC) 502-564-8100 Frankfort, KY 40601 Murray, KY 42071 John Carney (51) (LRC) 502-564-8100 (LRC) 502-564-8100 PO Box 4064 Joni L. Jenkins (44) Campbellsville, KY 42719-4064 Jim Gooch Jr. (12) 2010 O’Brien Ct (LRC) 502-564-8100 714 N Broadway B2 Shively, KY 40216 (Home) 270-403-7980 Providence, KY 42450 (LRC) 502-564-8100 Matt Castlen (14) (LRC) 502-564-8100 (Home) 502-447-4324 7549 Iceland Road (Home) 270-667-7327 Dan Johnson (49) Maceo, KY 42355 (Work FAX) 270-667-5111 702 Capitol Avenue (LRC) 502-564-8100 Annex Room 413E Derrick Graham (57) Frankfort, KY 40601 (90) 702 Capitol Avenue (LRC) 502-564-8100 PO Box 710 Annex Room 429J (Home) 502-445-9355 Hyden, KY 41749 Frankfort, KY 40601 (Home FAX) 502-538-0877 (LRC) 502-564-8100 (LRC) 502-564-8100 (Home) (606) 672-8999 (Home) 502-223-1769 (Home FAX) 606-672-8998

THE KENTUCKY GENERAL ASSEMBLY 7 2017 Kentucky General Assembly

DJ Johnson (13) Jerry T. Miller (36) Melinda Gibbons Prunty (15) 702 Capitol Ave PO Box 36 PO Box 411 Annex Room 352B Eastwood, KY 40018 Greenville, KY 42345 Frankfort, KY 40601 (LRC) 502-564-8100 (LRC) 502-564-8100 (LRC) 502-564-8100 Robby Mills (11) James Kay (56) 702 Capitol Avenue (89) PO Box 1536 Annex Room 413C PO Box 323 Versailles, KY 40383 Frankfort, KY 40601 McKee, KY 40447 (LRC) 502-564-8100 (LRC/Home) 502-564-8100 (LRC) 502-564-8100 Dennis Keene (67) (Home) 606-287-7303 1040 Johns Hill Rd Phil Moffett (32) (Work) 606-287-3300 Wilder, KY 41076 812 Brookhill Rd (Work FAX) 606-287-3300 (LRC) 502-564-8100 Louisville, KY 40223 (47) (Home) 859-441-5894 (LRC) 502-564-8100 PO Box 273 (55) Tim Moore (18) Bedford, KY 40006 250 Bright Leaf Dr 417 Bates Rd (LRC) 502-564-8100 Harrodsburg, KY 40330 Elizabethtown, KY 42701 (Home) 502-255-3392 (LRC) 502-564-8100 (LRC) 502-564-8100 (Work) 502-255-3286 (Home) 859-734-2173 (Home) 270-769-5878 (Work FAX) 502-255-9911 (69) (24) 170 Herrington Ct #12 C. Wesley Morgan (81) 702 Capitol Avenue Erlanger, KY 41018 702 Capitol Avenue Annex Room 402 (LRC) 502-564-8100 Annex Room 405D Frankfort, KY 40601 (Home) 859-653-5312 Frankfort, KY 40601 (LRC) 502-564-8100 (45) (LRC) 502-564-8100 (Work) 270-358-0868 PO Box 2090 (64) Lexington, KY 40588 702 Capitol Avenue (20) (LRC) 502-564-8100 Annex Room 351C 817 Culpeper St (Home) 859-252-2202 Frankfort, KY 40601 Bowling Green, KY 42103 (Home FAX) 859-259-2927 (LRC) 502-564-8100 (LRC) 502-564-8100 (61) (Home) 270-842-6731 16 Ridgeview Cir Rick G. Nelson (87) (31) Dry Ridge, KY 41035 117 Gumwood Rd PO Box 24586 (LRC) 502-564-8100 Middlesboro, KY 40965 Louisville, KY 40224 (34) (LRC) 502-564-8100 (LRC) 502-564-8100 2007 Tyler Ln (Home) 606-248-8828 (LRC FAX) 502-564-6543 Louisville, KY 40205 (Home FAX) 606-248-8828 (23) (LRC) 502-564-8100 (33) 702 Capitol Avenue (Home) 502-451-5032 702 Capitol Avenue Annex Room 352C (73) Annex Room 416C Frankfort, KY 40601 2059 Elkin Station Rd Frankfort, KY 40601 (LRC) 502-564-8100 Winchester, KY 40391 (LRC) 502-564-8100 (Home)270-646-6821 (LRC) 502-564-8100 (59) Rob Rothenburger (58) (Home) 859-745-5941 PO Box 8 702 Capitol Avenue Chad McCoy (50) Prospect, KY 40059 Annex Room 351E 702 Capitol Avenue (LRC) 502-564-8100 Frankfort, KY 40601 Annex Room 416B (Home) 502-228-3201 (LRC) 502-564-8100 Frankfort, KY 40601 (Work) 502-645-2186 (Home) 502-633-5832 (LRC) 502-564-8100 Sannie Overly (72) (80) 340 Main St (21) PO Box 121 Paris, KY 40361 PO Box 336 Stanford, KY 40484 (LRC) 502-564-8100 Tompkinsville, KY 42167 (LRC) 502-564-8100 (Home) 859-987-9879 (LRC) 502-564-8100 (42) PO Box 757 Darryl T. Owens (43) (1) Louisville, KY 40201 1018 S 4th St, Ste 100 350 Peppers Mill Drive (LRC) 502-564-8100 Louisville, KY 40203 Paducah, KY 42001 (Work) 502-741-7464 (LRC) 502-564-8100 (Home) 270-744-8137 Michael Meredith (19) (Home) 502-584-6341 (LRC) 502-564-8100 PO Box 292 (76) (60) Brownsville, KY 42210 10 Deepwood Dr 12094 Jockey Club Dr (LRC) 502-564-8100 Lexington, KY 40505 Union, KY 41091 (Work) 270-597-6049 (LRC) 502-564-8100 (LRC) 502-564-8100 Russ A. Meyer (39) (Home) 859-299-2597 (Home) 859-371-8840 106 Lone Oak Drive (16) (Home FAX) 859-371-4060 Nicholasville, KY 40356 702 Capitol Avenue Dean Schamore (10) (LRC) 502-564-8100 Annex Room 351B 120 Ball Park Rd Suzanne Miles (7) Frankfort, KY 40601 Hardinsburg, KY 40143 PO Box 21592 (LRC) 502-564-8100 (LRC) 502-564-8100 Owensboro, KY 42304 (Home) 270-265-3163 (LRC) 502-564-8100 (Home FAX) 270-265-3164 (41) (62) 702 Capitol Avenue Charles Miller (28) 702 Capitol Avenue Annex Room 432C 3608 Gateview Cir Annex Room 316A Frankfort, KY 40601 Louisville, KY 40272 Frankfort, KY 40601 (LRC) 502-564-8100 (LRC) 502-564-8100 (LRC) 502-564-8100 (Home) 502-937-7788

8 2017 Interim LEGISLATIVE RECORD 2017 Kentucky LRC General Assembly Publications 2018 Price List (71) Tommy Turner (85) PO Box 138 175 Clifty Grove Church Daily Record Pickup: $165 Lancaster, KY 40444 Somerset, KY 42501 (LRC) 502-564-8100 (LRC) 502-564-8100 Daily Record Mailed: $165 (plus (65) (Home) 606-274-5175 112 W 11th St postage) Covington, KY 41011 (LRC) 502-564-8100 Ken Upchurch (52) PO Box 969 Friday Record Mailed: $38.50 (plus (Home) 859-581-6521 Monticello, KY 42633 (Home FAX) 859-261-6582 postage) (LRC) 502-564-8100 (Work) 859-261-6577 (Home) 606-340-8490 John Sims Jr (70) Individual Record Pickup: $2.75 702 Capitol Avenue (3) 4317 Pines Rd Annex Room 429C Individual Record Mailed: $2.75 (plus Paducah, KY 42001 Frankfort, KY 40601 (LRC) 502-564-8100 (LRC) 502-564-8100 postage) (Home) 270-558-5139 (Home) 606-748-1839 (35) 1280 Royal Ave Kevin Sinnette (100) Louisville, KY 40204 Bills PO Box 1358 (LRC) 502-564-8100 Ashland KY 41105 (Work) 502-303-3732 Complete Set of Bills and Resolutions (LRC) 502-564-8100 (Home) 606-324-5711 (26) PO Box 6605 (Pick-up): $630 (Home FAX) 606-329-1430 Shepherdsville, KY 40165 (LRC) 502-564-8100 Individual Bills Per Page: $.05 Diane St. Onge (63) (Home) 502-543-8209 523 Kluemper Court Amendments Per Page: $.05 Fort Wright KY 41011 Scott Wells (97) (LRC) 502-564-8100 702 Capitol Avenue Roll Call Votes: $.15 Per Page (Home) 859-341-1231 Annex Room 413D III (86) Frankfort, KY 40601 545 KY 223 (LRC) 502-564-8100 Flat Lick, KY 40935 Publications (LRC) 502-564-8100 1-10 copies: Free to general public; (Home) 606-542-5210 (79) PO Box 22778 (22) Lexington, KY 40522 larger numbers of free copies available 1481 Jefferson School Road (LRC) 502-564-8100 Scottsville, KY 42164 (Copies (Work) 859-266-7581 to schools and state agencies (LRC) 502-564-8100 (Home) 270-622-5054 (66) over preapproved limits require approval PO Box 911 Burlington, KY 41005 of LRC Director’s Office) Walker Thomas (8) (LRC) 502-564-8100 702 Capitol Avenue (Work) 859-525-6698 Annex Room 413F Frankfort, KY 40601 (96) PO Box 591 (LRC) 502-564-8100 Administrative Regulations (2017) Grayson, KY 41143 (Home) 270-889-8091 (LRC) 502-564-8100 (Home FAX) 270-885-5335 Bound Volumes: $253.12 (Work) 606-474-7263 (Work FAX) 606-474-7638 Administrative Register: $120.00 James Tipton (53) 8151 Little Mount Rd Volumes and Register: $373.12 Taylorsville, KY 40071 (LRC) 502-564-8100 * Members of the Kentucky General Assembly may also be contacted by calling 502-564-8100. Acts of the General Assembly Regular Sessions: Priced after printing Special Sessions: Priced after printing

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THE KENTUCKY GENERAL ASSEMBLY 9 Committee Meetings

INTERIM JOINT COMMITTEE first half of 2017 and is projected to remain Index ON NATURAL RESOURCES AND at 30 percent for the next 15 years. The coal A ENERGY fleet produced about 50 percent of the nation’s Agriculture, 11 Minutes of the 5th Meeting electricity in 2007. Appropriations and Revenue, 28, 29, 32, 34 of the 2017 Interim The coal fleet was at its peak in 2010 with October 5, 2017 a generating capacity of 318,000 megawatts. B Banking and Insurance, 17 Call to Order and Roll Call In 2017, the generating capacity is 262,000 The 5th meeting of the Interim Joint megawatts. About one-third of the coal fleet C Committee on Natural Resources and Energy has been retired or has announced plans to be Capital Planning Advisory Board, 59 was held on Thursday, October 5, 2017, at retired. In Kentucky, eighteen coal-fired electric Capital Projects and Bond Oversight, 53 1:00 PM, in Room 149 of the Capitol Annex. generating units have been retired or have E Representative Jim Gooch Jr., Chair, called the announced plans to be retired, representing Economic Development and Workforce Investment, meeting to order, and the secretary called the 3,900 megawatts of electric generating capacity. 23 roll. Since 1970 the coal fleet has reduced Education, 12 Present were: Education Assessment and Accountability Review emissions of traditional air pollutants by 92 Subcommittee, 55 Members: Representative Jim Gooch Jr., Co- percent per kilowatt-hour and will invest $127 Chair; Senators C.B. Embry Jr., Ernie Harris, John billion for emission controls by the end of 2020. H Schickel, Brandon Smith, Johnny Ray Turner, The biggest obstacle for the coal fleet is Health and Welfare and Family Services, 18 and Whitney Westerfield; Representatives John policies from the Environmental Protection J Blanton, McKenzie Cantrell, Matt Castlen, Tim Agency (EPA). The Trump Administration has Judiciary, 30, 33 Couch, Jeffery Donohue, Jim DuPlessis, Daniel not appointed half of the fifteen key positions Elliott, Chris Fugate, Dennis Keene, Reginald in the EPA, which has slowed how quickly L Meeks, Suzanne Miles, Marie Rader, Jim Stewart the change from Obama-era environmental Licensing, Occupations, and Administrative Regu- lations, 20 III, Jim Wayne, and Jill York. policy can be accomplished. The Clean Local Government, 38 Guests: Paul Bailey, President and Chief Power Plan will be withdrawn. The Effluent Executive Officer, American Coalition for Limitations Guidelines for liquid waste and Coal M Clean Coal Electricity (ACCCE); Terrance Combustion Residual rules for ash ponds will Medicaid Oversight and Advisory Committee, 50 Naulty, General Manager and Chief Executive be rewritten. The New Source Review and New N Officer, Owensboro Municipal Utilities (OMU), Source Performance Standards will be changed, Natural Resources and Energy, 10 and Treasurer, Kentucky Municipal Energy and there is an expected change to the Regional Agency (KyMEA); Josh Callihan, Vice-Chair of Haze and Cross-State Air Pollution Rules. P 2018 Prefiled Bills, 62 KyMEA, President, Kentucky Municipal Utilities According to the Department of Energy Program Review and Investigations Committee, 39 Association (KMUA), and General Manager, (DOE), natural gas and renewables will comprise Public Pension Oversight Board, 47 Barbourville Utility Commission; Ron Herd, almost 75 percent of electric generating capacity Chair of KyMEA, and General Manager, City by 2040. The remaining 25 percent will be S State Government, 35 Utilities Commission of Corbin; and Rusty traditional baseload sources including coal and Cress, Kentucky League of Cities. nuclear. A regional transmission organization T LRC Staff: Tanya Monsanto, Stefan and an independent system operator are crucial Tobacco Settlement Agreement Fund Oversight Kasacavage, Janine Coy-Geeslin, Nathan Smith, components to the future of the coal fleet. Committee, 60 and Rachel Hartley. Tourism, Small Business and Information Technol- ACCCE is an advocate for policy that ogy, 26 The September 7, 2017, minutes were recognizes the value of the coal fleet in approved by unanimous voice vote. maintaining grid reliability and resilience. Mr. V The Status of the National Coal Fleet Bailey defined resilience as maintaining a reliable Veterans, Military Affairs and Public Protection, 16 Paul Bailey provided a brief overview of grid in the event of high-impact, low-frequency ACCCE and stated its mission was to advocate for events such as a polar vortex or disruptions in the coal-fired electric generation fleet. ACCCE the natural gas infrastructure. The average on- members include coal producers, railroads, site coal stockpile during February 2017 had the and equipment manufacturers. The coal fleet is ability to generate electricity for one hundred needed to provide reliable power, fuel security days, which provides the coal fleet with fuel and diversity for grid reliability and resilience, security. and affordable electricity. On September 28, 2017, the DOE directed The coal fleet produced 30 percent of the the Federal Energy Regulatory Commission to electricity in the United States through the issue grid resiliency rules, because fuel-secure

10 2017 Interim LEGISLATIVE RECORD baseload generating resources are not being The 11 members service approximately 80,000 the concepts on previous legislation. adequately compensated by the wholesale retail electric customers. Ten of the members In response to Senator Westerfield, Mr. electricity markets. The new rule would require are underserved by KMUA for their wholesale Naulty stated Tennessee Valley Authority is grid operators to fully compensate grid reliability power supply, because the members were able to neutral towards joint action. and resiliency generating units if they provide source wholesale energy at a significant discount In response to Representative Castlen, Mr. reliability services, have a ninety day on-site to the KMUA rates. Those ten members gave Naulty stated the peak demand will be between fuel supply, and are not subject to cost of service notice to terminate the deal with KMUA in 2014. 250-300 megawatts. OMU had planned to sell regulation. The DOE created a 105 day schedule KyMEA is seeking legislative changes. The surplus natural gas to extend the life of the plant to finalize the proposal. Interlocal Cooperation Act is ambiguous because that is closing in Owensboro. However, public According to public opinion, a majority all members are not authorized under the same agencies are subject to the model procurement of Americans agree that coal is necessary to KRS provisions and are subject to four different code, so OMU was not able to sell natural gas supplement other energy sources. Americans are statutes. A single statutory authority will allow below their cost. more focused on electricity price and reliability for quicker decision making and a higher agency In response to Representative Miles, Mr. than clean energy. credit rating that will lower electric rates. Naulty stated the primary change to previous bills In response to Senator Harris, Mr. Bailey The Joint Action Agency was formed because is a proposal for the Public Service Commission stated he does not know how many active coal- the individual municipal utilities are too small to to hold hearings. fired power plants there are in Kentucky. gain economies of scale. A significant economy In response to Representative Stewart, In response to Representative Blanton, Mr. of scale can be created by bonding together Mr. Naulty stated the legislation is requesting Bailey stated one of the reasons President Trump power generation and the wholesale market. clarification on ambiguity. If joint action passes was elected was due to the decline of the coal Other benefits to joint action are power supply it will save $200 million over first 10 years. industry and believes the administration will expertise, enhanced member services, wholesale The next meeting of the Interim Joint work to restore it. ACCCE is working with the market access, and revenue bonds that will not Committee on Natural Resources and Energy National Mining Association on a grid operator create liability to individual cities. Protections will be on November 2, 2017. Documents project. for rate payers regarding power supply decisions distributed during the meeting are available in In response to Representative Gooch, will have at least three levels of review, approval, the LRC Library. Mr. Bailey said the electricity grid is rapidly and public comment. The Kentucky Public There being no further business, the meeting changing. ACCCE is attempting to elevate the Service Commission was added to the approval was adjourned. importance of the coal fleet and the need for process. diversity in electricity sources. The United States The current supply portfolio precludes the INTERIM JOINT COMMITTEE ON House Energy and Commerce Committee met need for KyMEA ownership, and there are no AGRICULTURE on October 3, 2017. Most of the discussion was plans to build new power generation. There Minutes of the 5th Meeting about gas, hydro, solar, and wind. Mr. Bailey are contracts with Big Rivers, Dynergy, and of the 2017 Interim estimates that 5 percent of the meeting was used Paducah Power System. There is consideration of October 6, 2017 to discuss the two largest sources of energy: coal renewable energy; however, non-taxed entities Call to Order and Roll Call and nuclear. do not receive the available tax credits. The 5th meeting of the Interim Joint In response to Representative Wayne, Mr. Natural gas is a commodity, and its trade Committee on Agriculture was held on Friday, Bailey stated that due to conservation, the growth is comparable to the stock market. A contract October 6, 2017, at 10:00 AM, at the E.S. Good in demand for electricity has been flat. for natural gas will be structured as a tolling Barn, University of Kentucky, Lexington, In response to Representative DuPlessis, agreement. A portion of the facility is leased and Kentucky. Senator Paul Hornback, Chair, called Mr. Bailey stated that he did not know whether natural gas that has already been acquired will be the meeting to order, and the secretary called the adding solar energy capacity in eastern Kentucky utilized. The sale of surplus natural gas requires roll. or removing regulatory constraints on coal a willing buyer and willing seller along with a Present were: mining and coal-fired electric generation sources contract. Members: Senator Paul Hornback, Co- in the area would lead to the quickest economic The bond market is a cost effective way to Chair; Representative Richard Heath, Co-Chair; development. issue debt. Municipal utility revenue bonds are Senators C.B. Embry Jr., Stan Humphries, Dennis In response to Representative Couch, Mr. rated independently based on the strength of Parrett, Damon Thayer, Stephen West, and Bailey stated there are currently more than revenue certainty. Access to low-cost debt for the Whitney Westerfield; Representatives Derrick one thousand individual coal-fired electric benefit of citizen ratepayers through KyMEA is Graham, Mark Hart, Angie Hatton, James generating units in the nation. less risky than incurring debt at the municipal Kay, Kim King, Suzanne Miles, Sannie Overly, Municipal Utility Joint Action Benefits to level. Jason Petrie, Phillip Pratt, Brandon Reed, Rob the Citizens of the Commonwealth In response to Representative Gooch, Mr. Rothenburger, Dean Schamore, Wilson Stone, Terrance Naulty stated legislation was Naulty stated the OMU coal unit is closing Walker Thomas, James Tipton, Tommy Turner, needed to most effectively use joint action to due to economic reasons. Josh Callihan stated and Susan Westrom. keep municipal electric rates as low as possible. Barbourville Utilities will save approximately Guests: Dr. Nancy Cox, Dean, College of Low municipal electric rates aid in economic $950,000 annually due to joint action. Agriculture, Food and Environment, University development and protect the customer. In response to Senator Embry, Rusty Cress of Kentucky; Drew Graham, Assistant Dean, UK KyMEA has eleven members ranging from a stated joint action will be a legislative priority for College of Agriculture, Food and Environment; small utility of 300 megawatts in Benham to a large the Kentucky League of Cities during the coming Fabian Leon, Agricultural Biotechnology utility of over 30,000 megawatts in Owensboro. regular session. The board voted in support of student, UK College of Agriculture, Food and THE KENTUCKY GENERAL ASSEMBLY 11 Environment; Dr. Chad Lee, Director, Grain Forage Center of Excellence (Center) explained materials. and Forage Center of Excellence, University of that the concept of the Grain and Forage Center In response to Chairman Hornback, Dr. Ling Kentucky; Dr. Orlando Chambers, Director, of Excellence began as a conversation about Yuan said that research is looking at ways to Kentucky Tobacco Research and Development, how the University of Kentucky College of prevent hemp seed shattering. University of Kentucky and Dr. Ling Yuan, Agriculture, Food and Environment could attract In response to Representative Stone, Dr. Research Director, Kentucky Tobacco Research talented people to study relevant questions Chambers said that KTRDC is continuing with and Development Center, University of Kentucky. on production agriculture. The Kentucky tobacco production research. LRC Staff: Tanya Monsanto, Stephen Agricultural Development Board awarded UK Upon conclusion of the tour, the meeting was Kasacavage, Nathan Smith, and Susan a $15 million grant and UK is charged with adjourned. Spoonamore, Committee Assistant. matching another $15 million over five years. The September 13, 2017 minutes were The University of Kentucky is in the final phases INTERIM JOINT COMMITTEE ON approved, by voice vote without objection, of architectural drawings and is about to launch EDUCATION upon motion made by Senator Westerfield and the bidding process. The scheduled date for Minutes of the 5th Meeting seconded by Representative Reed. the official groundbreaking ceremony is March of the 2017 Interim Welcome and Opening Remarks 15, 2018. There are several partners helping October 9, 2017 Dr. Nancy Cox, Dean, UK College of with fundraising and the Center received Call to Order and Roll Call Agriculture, Food and Environment, welcomed contributions from Kentucky’s commodity The 5th meeting of the Interim Joint members to the 12th year of meeting during UK organizations. UK has raised approximately $5 Committee on Education was held on Monday, Roundup. Dr. Cox said that there had been a million, between research dollars and donations. October 9, 2017, at 1:30 PM, in the North 16 percent increase in freshmen enrollment/ In response to Representative Rothenburger, American Production Support Center at Toyota admissions, and there are now more prospective Dr. Lee said that part of the fundraising is to Motor Manufacturing, Georgetown, Kentucky. students looking at the College than at any point help with endowments as well as research grant Representative John Carney, Chair, called the in the last ten years, looking at the college. money to sustain the financial sustainability of meeting to order, and the secretary called the Dr. Cox introduced Fabian Leon, agricultural the center. roll. biotechnology student. Mr. Leon plans to obtain Dr. Lee stated that because of the investments Present were: his Masters and Ph.D. in the plant and soil being made in the Center, the Center has attracted Members: Representative John Carney, Co- sciences discipline. Mr. Leon worked at the new faculty, graduate and undergraduate student Chair; Senator Max Wise, Interim Co-Chair; International Potato Center in Peru as an intern interns. The center has the best applied plant Senators Julie Raque Adams, Jimmy Higdon, and as a Wallace Carver fellow for the USDA pathologists in the country to work on corn, Alice Forgy Kerr, Stephen Meredith, Gerald A. National Laboratory for Agriculture and the soybeans and wheat research. Neal, Reginald Thomas, Johnny Ray Turner, Environment. Dr. Cox noted that Mr. Leon has Technology in Tobacco Research and Stephen West, and Mike Wilson; Representatives also been working in tobacco research as well. Regulation Danny Bentley, Mark Hart, Regina Huff, Mr. Leon is a third year student in the College Dr. Orlando Chambers, Director, Kentucky Reginald Meeks, Phil Moffett, Kimberly Poore of Agriculture, Food and Environment (CAFÉ). Tobacco Research and Development Center Moser, Rick G. Nelson, Jody Richards, Steve The CAFÉ network has faculty and students (KTRDC) said that over the last few years the Riley, Attica Scott, James Tipton, Russell Webber, who have helped him become a scientific facilities and research equipment have been and Jill York. researcher, and he has had the privilege of being upgraded with some funding from the Food Legislative Guests: Senator Damon Thayer, a cooperative extension intern and worked for a and Drug Administration (FDA). Tobacco is Senate Majority Floor Leader; Representative tobacco specialist. Mr. Leon has published as a still a very important crop to Kentucky with Johnathan Shell, House Majority Floor Leader. co-author of a scientific paper and has traveled cash receipts of $285 million. There is a next Guests: Eric Kennedy, Director of across the United States attending professional generation of tobacco products, such as heat-not- Governmental Relations, Kentucky School Board development conferences and competing in burn and electronic nicotine delivery systems Association; Jo Ellen Reed, Bluegrass Community national contests with Kentucky’s Chapter of (ENDS), that are changing the market and and Technical College; Mark Manuel, Vice MANRRS (Minorities in Agriculture, National regulations. The FDA will continue to propose President of Advancement and Organizational Resources and Related Sciences). Kentucky’s new standards and levels of certain constituents Development, Bluegrass Community and Chapter of MANRRS has won the award for in tobacco products. Changing markets and new Technical College; Wayne Young, Executive best chapter for the last five years. MANRRS is regulations guide research at the KTRDC to Director, Kentucky Association of School a national society that is centered on academic address issues and help growers to be sustainable. Administrators; Jennifer Krieger, Budget Review and professional leadership, and currently serves Dr. Chambers said that the tour of the Analyst, Legislative Research Commission; as the national undergraduate parliamentarian. KTRDC facility would include discussion on the Sharon Johnston, Director of College and Career In response to Representative Tipton, Mr. tobacco breeding program, disease screening and Prep, Kentucky Adult Education. Leon explained that his research goal was the use of technological programs to develop new LRC Staff: Jo Carole Ellis, Joshua Collins, to determine the X protein interactions to varieties of tobacco. The world-class academic Lauren Busch, and Maurya Allen. complete localization map of the Sanguinolenta analytical lab provides production research such Approval of Minutes strain of potato yellow dwarf virus. “Genetically as measuring constituents in tobacco products Representative York made a motion, engineered” is a broad term that can be used and highlights the tobacco reference products. seconded by Representative Nelson, to approve when researching DNA of an organism. The final discussion would be on research of the minutes of the September 18, 2017, meeting. Grain and Forage Center of Excellence new crop opportunities including industrial The motion passed by voice vote. Dr. Chad Lee, Director, UK Grain and hemp, Artemisia, and tobacco-derived industrial Senator Damon Thayer, Senate Majority Floor

12 2017 Interim LEGISLATIVE RECORD Leader, and Representative Mark Hart welcomed punctuality, problem resolution, and a drug- displayed conflict resolution skills, and these members to their districts and thanked the staff free lifestyle. The lack of these skills is a problem were things that some simply did not know how of Toyota Motor Manufacturing for opening in across the state and is a problem of the to do. All it would take to elevate them would their doors to the committee. Senator Thayer current society. He recognizes that some school be the time necessary to teach these simple, asked the committee to observe a moment districts are doing exemplary work in these but essential, skills. Since then, he has begun a of silence for former State Senator Richard areas and whose efforts are not being taken training program specifically for those skills that L. “Dick” Roeding who passed away Friday, into consideration in the current accountability are essential to keeping a job. This was not just October 6, 2017. Senator Roeding represented model. Many of the larger districts are doing another thing for teachers to do because it is Senate District 24 and then Senate District 11 very well, but the models need to be spread to necessary to fully prepare students. from 1991 to 2009, also serving in various Senate other districts. Chairman Carney agreed that these skills leadership positions. Representative Shell said that Kentucky has should not be called “soft skills” because there is Chairman Carney thanked staff for their made great strides to level the field for economic nothing soft about losing a job over lack of a job. assistance in organizing the meeting. He development with neighboring states. Now is In response to questions from Representative congratulated Senator Wilson on his election to the time to make sure that schools are providing Tipton, Mr. Adkisson stated that he did not know Senate Majority Whip and welcomed Senator the necessary workforce to attract and retain the exact number of jobs that were remaining Max Wise as the Interim Co-Chair. businesses. He addressed misconceptions about unfilled due to lack of qualified applicants, but Welcome – Toyota Motor Manufacturing his bill, specifically the drug testing element, that he estimated it to be in the tens of thousands. Mr. Kim Menke, Regional Director, which he said is a strictly optional component He discussed studies in Bowling Green and Government Affairs Office, Toyota Motor North and should be supported with a robust K-12 Northern Kentucky about the precise needs of America, welcomed members and presented drug-free education program. those regions and said the Cabinet for Education background about Toyota Motor Manufacturing Essential Skills and Kentucky’s Workforce and Workforce Development may have more in Georgetown. Toyota is equally committed to Dave Adkisson, President and CEO, precise data. Mr. Adkisson acknowledged that developing a college and career ready workforce Kentucky Chamber of Commerce, and Ankur workforce participation is critical for supporting through its investment of over $1.5 billion in Gopal, CEO, Interapt, discussed essential skills the pension systems and a key part to addressing the Georgetown factory to maintain its global from the point of view of business owners. Mr. that is addressing the large numbers of current competitiveness, making it the largest and Adkisson echoed that these skills are important unemployed and getting them skilled for the most complete Toyota manufacturing facility to Chamber members. Since the recession, there workforce. Mr. Gopal added that companies in the world. This investment is also going to have been issues finding the necessary numbers should get involved in the development of support the supply chain of industries, not of employees, which has been made worse with training programs for those that have technical just the Georgetown plant, so the impact will the large number of Baby Boomers retiring. skills but need the essential skills, particularly be felt throughout the region. The team of Companies that wish to expand are finding apprenticeship style programs for non-college industries supporting this initiative will need a it difficult because they cannot find needed graduates. Mr. Adkisson stated that if Kentucky broad spectrum of career pathways that require employees; even Toyota faced this challenge could reach the national average for workforce both technical and essential skills to succeed. when it accepted the new Lexus contract because participation, there would be approximately Mr. Menke thanked the committee for their of the aging workforce. These struggles are felt 165,000 more workers and there are at least that commitment to skills development and being a all along the supply chain among businesses of many job openings already available. Kentucky workforce development partner with Toyota. all sizes and kinds of industry. The discussion of needs to think about incarceration differently and 2017 House Bill 454 – Essential Skills essential skills sometimes involves comparisons take strides to better reintroduction programs. Representative Johnathan Shell, House of the work ethic of Boomers versus Millennials, Workforce development and economic Majority Floor Leader, provided an overview but it really boils down to the skills needed to get development are synonymous. Mr. Gopal said of his essential skills legislation from the 2017 and maintain employment. Mr. Adkisson said that his company was in the process of taking his Regular Session and discussed ways that it had this was such an important topic that he and the essential skills training program to high schools been improved during the interim. Throughout Chamber had worked with Commissioner Pruitt with assistance from the Fund for Transforming his legislative career, he has repeatedly heard to include these skills in the new accountability Education in an effort to reach those students from employers that their second biggest program; this will remain a top priority of the who were already disillusioned by the traditional concern was finding employees with soft skills Chamber agenda in the next year. education setting. or essential skills and drug-free lifestyles. His Mr. Gopal is an owner of a software Chairman Carney commented that bill was an attempt to address this by providing development firm in Louisville who has worked businesses need to be willing to create that kind a framework for schools to require students to with other companies to develop technology. The of partnership with schools in order to offset the develop these skills and be drug-free. While average age of his employees is 27 to 28 years old. costs of developing and implementing essential students are graduating with the necessary Because of the difficulty he was having in finding skills training programs. Representative Riley technical knowledge, they are not employable qualified work-ready employees, he began a agreed. because they were not trained in essential skills. training program to teach potential employees In response to a question from Representative He mentioned a discussion with a teacher who the skills necessary to work in a software Meeks, Mr. Adkisson said that essential skills did not want her students to be the smartest ones development environment. The difference in legislation as presented in Representative in an unemployment line; she supported efforts those that were successful and those that were Shell’s bill was not a silver bullet, but rather to require essential skills education. not was based more on lack of essential skills is seeking to address concerns that have been Some examples of essential skills targeted by than technical knowledge. Successful employees growing over the last three to five years. Because his legislation are teamwork, communication, had the ability to communicate effectively and education and workforce development are so THE KENTUCKY GENERAL ASSEMBLY 13 closely linked, it is necessary to incorporate students in essential skills training. Students who students whether they are doing a college or a these measures in schools now, but that may not participate also have opportunities to interview career track as they feel the skills are valuable mean there are no other steps that will need to with area employers and successful program life skills regardless of whether students plan to be taken in the future. Mr. Gopal said that as a completion results in a seal on their diploma, immediately enter the workforce upon graduation business owner in a rapidly changing technology which is a signifier to future employers. While or go to a postsecondary institution. Students industry, he is willing to teach the necessary this is not the only answer to the problems his who complete the program are also guaranteed technical skills to an employee who has already area faces in regards to workforce participation an interview with local employers upon high demonstrated the essential skills for workplace and economic development, he feels this is a step school graduation or college graduation. In success. Twelve-month employability, completed in the right direction. keeping with their attempts to make students of apprenticeships, and taking advantage of on- John Wright, Community Relations Director, their program life ready, they have recently added the-job training opportunities are all good Hardin County Public Schools, spoke next on a financial management portion. Mr. Barger said metrics to use to determine if a program is the development of an essential skills program in that it truly represents a paradigm shift in what working. Representative Shell said that his bill his schools, called the Work Ethic Certification is important to be teaching and he is a believer from last session did include a framework for Program. In 2012, he had accompanied some after seeing the results they have achieved. forming a collaborative group of educators local business leaders on a visit to the Elkhorn Chairman Carney said that this panel well- and business leaders who would determine Crossing School, an area college and career center, represented the breadth of Kentucky. If all of which essential skills would be included in the as a way to preview the kinds of instruction they these various interests are coming to the General required curriculum. That group would also were anticipating starting in the Hardin County Assembly to ask for support, then the legislature have authority to re-evaluate and change the Early College and Career Center. Unfortunately, should step up this coming legislative session to requirements in the future if necessary. As it was he said, they were not as enthusiastic as he had answer the call. Senator Wilson commended the so important, he agreed to include that flexibility hoped, saying that instead of so much focus on presenters for their efforts and for the ways they in the new bill as it was being drafted. technical skills, they would prefer more emphasis were requiring students to prove themselves. Representative Moffett said he appreciated placed on teaching essential skills. At that time, The variety of programs showed the creativity the emphasis being placed on cracking the 1950s they developed and implemented their essential and innovation that schools were capable of to model of education and shifting to technical skills program, graduating 61 students as work address Kentucky’s needs. certifications over traditional degrees. He also ethic certified out of 800-900 high school seniors. Representative Tipton said that the passion stated that he appreciated efforts to change While school staff felt that was a very poor ratio, of the members of the panel was evident, and he the framework to alleviate state control over the local papers lauded the achievement and the looked forward to visiting several of their schools education paradigms. program has continued to grow. Mr. Wright said to witness the programs in action and learn how In response to Representative Turner’s that last year in Hardin County, 450 students best to assist them in their efforts. question, Mr. Gopal answered that he had earned a work ethic certification. The intensive In response to a question from Representative worked with Bitsource in the past and considered program they developed requires students to York regarding the Junior Achievement program, them pioneers in eastern Kentucky. He said the strive to achieve the certification. In addition Ms. Scott said that the curriculum comes as a work he did with industry partners all over the to receiving the certification, students are also resource kit that is paid for through sponsorships state had really highlighted that this is a state- guaranteed an interview with a local employer from community partners. The larger issue is in wide concern that would build up all areas if upon graduation. However, this has not resulted getting volunteer instructors, so many teachers addressed. Planting the seeds for success was in an increase of students becoming employed, have stepped in to assist in implementation by critical for creating opportunity for all. so Mr. Wright noted there are clearly aspects of incorporating it into their classrooms. The best Senator Meredith said that largely these their program that need continued work. As a part of the Junior Achievement program is its programs did not seem to be intervening first step, they have expanded emphasis on work ability to get buy in from the students as well. soon enough. He hopes to see these programs ethic to all grade levels by displaying their “Great Mr. Wright added that the difficulty getting implemented in elementary schools and Eight” standards on posters in classrooms from volunteers was also a barrier for Hardin County be combined with a change in the welfare kindergarten through high school. He said the Public Schools and that was what led them to distribution system to incentivize change. approach is similar to that of the program “The create their own high school curriculum. They He hopes to see tangible measures of success Leader in Me” which is too costly for Hardin use Junior Achievement in the 8th Grade via tele- included in the bill. County Public Schools to implement at all grade teaching methods from which they have gotten Implementing Essential Skills levels. positive feedback. Daniel Carney, Executive Director, Lee Barger, Director of College and Career Representative York commented that these Springfield/Washington County EconomicReadiness/Innovative Programs, Bullitt County skills should be seen as more than workforce Development, spoke of the disconnect in Public Schools and Brandy Scott, College and skills, but rather as life skills that bring stability to Washington County between schools and Career Coach, Spencer County Public Schools, children coming from chaotic lives. Mr. Wright business leaders when first developing their presented a regional approach they had taken agreed that the world has significantly changed career pathways programs. After creating that combines the needs of both counties. Ms. in the last 30 years and schools need to change collaborative partnerships, it was evident that Scott said that there is mandatory participation with it. In many ways, teaching students these essential skills education was a need faced by in their essential skills program starting in life skills is easier than getting them proficient or all businesses, regardless of specialty. Resulting 4th Grade. The program has different areas distinguished on K-PREP tests. from that, Washington County developed a of focus and different requirements for each In response to a question from Representative voluntary program, called the Work Ready grade level in elementary, middle, and high Meeks, Mr. Wright said that in the same time Seal, with some scholarship incentive to enroll school. Additionally, the program targets all that the program has been in effect, there has

14 2017 Interim LEGISLATIVE RECORD been an increase in the number of college- essential skills. The most effective tactic was creating a network of support for students and bound graduates. He is not sure that can be framing essential skills as employability skills so instantaneous feedback for students and staff. fully attributed to the work ethic program, his students could get and keep jobs, something In response to a question from Senator but it is likely a contributing factor. Students students had expressed as their only desire upon Thomas, Mr. Wilson said that students at the have reported that being part of the work ethic graduation. Josh Wilson, small business owner Learning Center come to the school lacking program makes them more productive and and guidance counselor, said that the purpose of in many social skills, lacking motivation, and employers have been highly supportive of the any school should be to take kids and make them frequently with mood or anxiety disorders. These shift. Mr. Barger said that they have begun life ready, especially those already struggling in a emotional deficits make it difficult for them to collecting data on what prevents a student from traditional school setting. These goals were what engage at school and result in discipline and achieving work ethic certifications in order to inspired the creation of the eOS or Employability truancy problems. The first element the Learning know what areas to address in order to graduate Operating System used by three high schools and Center addresses is the truancy problem through more students with the certification. Mr. Carney growing. The eOS is a web-based data collection intentional intervention and daily mentoring. commented that he did not have any hard data, and analysis system that was developed with Over time these also help remediate other but overwhelming he had heard anecdotal the assistance of teachers so it would be an aid behavior problems and help students address all support that the skills are a benefit to students at to them and not a burden. Mr. Wilson thanked their needs. Responding to a follow-up question, all levels and in all pathways. Ryan McQuerry, Applications Solutions Ms. Lyon answered that the most critical element Representative Moser commented that all of Specialist, Fayette County Public Schools for for Fayette County Public Schools to continue the models were impressive, but the inclusion of his work maintaining and improving the system its success with the academies is business a drug control policy was particularly important. from a software development perspective. engagement. Restructuring the high schools Understanding and addressing the underlying Teachers record data about students every day into academies has made them more business causes of problems in our society was essential into the eOS, such as being on time, on task, and friendly and changing these sorts of structures to success and drug use is a critical concern behavior, both good and bad. The data becomes is not something that needs to be legislated. in so many homes. She would like to see all of not a way to judge students, but a way for teachers Identifying the values that schools should be the programs implement an early childhood to know when and how to intervene, essentially upholding is key and finding ways to incorporate intervention element which included not creating data-fueled mentoring on a daily basis. those values, and attainment of them, into the simply living drug-free, but also coping skills This wrap-around approach, as opposed to the accountability system would also be something and resilience for young children who may classic referral model, is more effective because she felt would help the schools flourish. encounter drug abuse at home. She said that this of its immediacy. The data can also be beneficial In response to a question from Representative is a philosophy that needs to permeate the school to parents and potential employers by rating Scott, Mr. Salyers said that there was a parent atmosphere. how employable an individual student is, as portal, but that it is currently offline for recoding Essential Skills Through Technology – well as how employable a school is. The result is and should be relaunched in the future. There Fayette County Public Schools evidence-supported efforts at helping students have not been any complaints from parents that Kim Lyon, Strategic Partnership Manager, succeed. their students are being monitored in this way, Fayette County Public Schools said that in Ms. Lyon said that they used this as a in fact, quite the opposite. By communicating regards to teaching essential skills, the “devil is in starting point to incorporate the essential skills concerns instantly with parents it has enhanced the details.” Throughout the many presentations monitoring into the Academies as they were communication between school and home and it had been proven that there is no question that developed. It has become an important tool has directly highlighted areas for students and essential skills should be taught but questions in impressing upon students and parents how parents to work on at home. remained of how they should be taught to important these skills are to lifelong success. Responding to a question from Senator West, ensure that all students are prepared for life Working with business partners has helped to Mr. Salyers said the technology has been used by after high school. To that end, Fayette County further refine the system and customize it for other schools, proving that it is customizable Public Schools had partnered with the Chamber each of the high schools in the Fayette County and replicable. The usage and support of the of Commerce and the Ford Next Generation Public Schools system. Donte’ Tichenor, Sr., program vary by school however. For a school Learning Initiative to create the Academies of Behavior Coach, The Learning Center, said the to begin using it, he strongly recommends that Lexington. This resulted in the restructuring application is one that teachers can use at their they have an in-house technology support of three high schools into academies, similar desks, but also on their phones during breaks person to handle technical bugs and continued to magnet schools, which create a learning between classes. Each student receives an development personalized for that schools’ and teaching environment more conducive to employability average and there are incentives needs. The collaboration has been an excellent business partnerships. Essential skills training to reach higher average levels, which further part of sharing the technology with other is incorporated into all aspects of teaching and translates into job opportunities with community schools as it has led to some unique innovations, therefore students develop the skills over time partners. Students have personal log-in access to and currently the software is not proprietary to through experiences which require their use view their status and track their own progress. Fayette County Schools. and practice. And because these skills cannot be This dramatically increases student buy-in to Senator Kerr said she was proud to represent tested in the same way that technical skills are, the program and encourages more immediate such excellent educators who did not look Fayette County Public Schools uses technology correction of negative behaviors. Mr. Salyers said to solve problems through the purchase of to measure each student’s success. the dashboard is available on all teacher desktops expensive curriculums, but rather used creativity Chris Salyers, Principal, The Learning Center, as a result of teacher feedback. Additionally, to solve their own problems. And the ability for said that his school is an alternative school and any teacher can step in to address an issue, students to take ownership of their own behavior as such presented unique challenges to teaching regardless of which teacher noted a problem, and progress with the tap of a button is inspired. THE KENTUCKY GENERAL ASSEMBLY 15 Mr. Salyers agreed, sharing a story of a student Candace Curtis, Amy Stalker, Kiven Nethery, fifteen percent of marijuana users will develop who had had a multitude of behavior issues Eric Crawford, Sally O’Boyle, Michelle Krueger, an addiction and stop acting as functioning prior to coming to the Learning Center, who Julie Cantrell, James McKee, Jon Bontfield; Jason members of society. He said that increasing the after viewing his data on eOS asked for specific Warf, Alliance for the Adoption of Innovations availability of another addictive substance not guidance on how to improve and now has no in Medicine; and Ret. Sgt. Brent Goss. good public policy. behavioral referrals. LRC Staff: Erica Warren, Jessica Zeh, Tony Coder, Director, State and Local There were no further questions and no Jonathan Philpot, and Rhonda Schierer. Affairs, Smart Approaches to Marijuana, other business. Chairman Carney announced Minutes explained his organization’s goal to bridge the that the next meeting of the committee would Senator Parrett moved to adopt the September gap in the dichotomy between legalization of be Monday, November 13, 2017, at 1:00 p.m. in 14, 2017, meeting minutes. Representative marijuana use and incarceration for marijuana Room 154 of the Capitol Annex. The meeting DuPlessis seconded the motion. The minutes use. The organization focuses on the safety of the was adjourned at 3:30 p.m. were adopted. state’s economy and workplaces with regard to Pledge of Allegiance marijuana usage, and in doing so, he speaks to INTERIM JOINT COMMITTEE ON Chairman Tim Moore led the Pledge of numerous chambers of commerce. VETERANS, MILITARY AFFAIRS, Allegiance. Marijuana is a federally listed Schedule I AND PUBLIC PROTECTION Distinguished Veteran drug, but 29 states and D.C. have legalized the Minutes of the 5th Meeting Staff Sergeant Michael Tester, Kentucky use of medical marijuana in some form. This of the 2017 Interim National Guard, was the recipient of the sets up several potential conflicts, including October 12, 2017 Kentucky Medal of Valor for actions taken the effect of state legalized medical marijuana Call to Order and Roll Call when he witnessed a devastating crash near his usage in conjunction with ensuring the safety The 5th meeting of the Interim Joint home that resulted in a fatality, and where other in transportation, commerce, and workplaces. Committee on Veterans, Military Affairs, and fatalities could have resulted without his actions. An employer can get rid of employees because Public Protection was held on Thursday, October Marijuana and Public Safety of marijuana usage, but in states where medical 12, 2017, at 1:00 PM, in Room 154 of the Capitol Ed Shemelya, Director, National Marijuana marijuana or marijuana usage has been legalized, Annex. Representative Tim Moore, Chair, called Initiative, discussed how today’s recreational industries and labor are having trouble finding the meeting to order, and the secretary called the marijuana has evolved since 2012, when workers who can pass drug tests. The conflicts roll. Colorado first legalized marijuana. Colorado is in laws also create the possibility of lawsuits for Present were: the only state to have enough data over time to businesses. Members: Senator Albert Robinson, Co- analyze. The peer reviewed studies being used to Legal decisions around the country have Chair; Representative Tim Moore, Co-Chair; justify legalizing marijuana are based on lower varied outcomes. The Colorado Supreme Court Senators Julian M. Carroll, Perry B. Clark, levels of THC in marijuana than those currently has held that federal laws preempt state laws. C.B. Embry Jr., Denise Harper Angel, Stan being cultivated and sold. Scientific studies have New England states claim that the Americans Humphries, Dennis Parrett, Mike Wilson, and not caught up to the current botany of the plants. with Disabilities Act covers the use of marijuana Max Wise; Representatives Robert Benvenuti The main issue that legislators should for medical reasons. It is still an open question III, Tom Burch, Will Coursey, Jeffery Donohue, consider as they make policy decisions is as different federal administrations and agencies Myron Dossett, Jim DuPlessis, Chris Fugate, Jeff whether legalizing marijuana creates additional have changed their positions over the years, even Greer, Chris Harris, Dan Johnson, DJ Johnson, quality of life issues including arrests, fatalities, in the midst of prosecuting cases or submitting Donna Mayfield, Ruth Ann Palumbo, Brandon and hospitalizations versus tax revenue and amicus briefs in various legal challenges around Reed, Rob Rothenburger, and Walker Thomas. how generated revenue is being applied to other the country. Guests: Richard W. Sanders, Commissioner, public policy concerns. In Colorado, driving The costs of legalization also show up Kentucky State Police, Van Ingram, Executive under the influence of drugs (DUID) fatalities are in the increased number of arrests and the Director, Kentucky Office of Drug Control up 101 percent even though overall deaths have racial disparity of those arrests in states where Policy Staff; Ed Schemelya, Director, National decreased. Hospitalizations and drug violations marijuana usage has been legalized. Businesses Marijuana Initiative; Tony Coder, Director, due to marijuana usage have increased. selling marijuana can be found predominantly in State and Local Affairs, Smart Approaches to On the revenue side, Colorado reported poorer and minority communities. Marijuana; Lewis Priddy; Alex Payne, Deputy that 2016’s taxes from the sale of marijuana Richard W. Sanders, Commissioner, Commissioner Kentucky State Police; Mark comprised one-half of one percent of its general Kentucky State Police, said that the argument that Filburn, Commissioner, Department of Criminal fund revenue. All revenue generated from legalizing marijuana would save law enforcement Justice Training; Scott Thalman, Students for marijuana sales has been spent on regulating and allow officers to focus on bigger issues by Concealed Carry, University of Kentucky; Ilya the industry and harm reduction, based on the eliminating the black market is a myth. He stated Chernyavskiy, Students for Concealed Carry, Substance Abuse and Mental Health Services that legalizing marijuana increases black market University of Louisville; Deborah Doyle, Shelly Administration survey results. sales. The public policy debate needs to consider Steiner, Pathways RPC; Dianna McFarling, River Van Ingram, Executive Director, Kentucky both the benefits as well as the risks. Nationwide, Valley Behavioral Health; Masona Castleberry, Office of Drug Control Policy, discussed 88,000 people die due to alcohol use every year. Dee Snyder, Sylvia Burns, Sue Chmilewski, tobacco industry testimony in Congress years More people die of tobacco use per year, and Nancy Birdwhistell, Amanda Clark, Betty ago indicating that tobacco was not harmful to even more die of opioid use yearly. Increased McTymear, Sharon Mitchell, LaVonne Fingerson, health. He equated that message to what the pro- marijuana use will lead to more deaths. Moms Demand Action for Gun Sense; Jaime decriminalization of marijuana contingencies In response to a question from Representative Montalvo, Aaron Wilson, KY4MM; Carol Hurn, now claim about using marijuana. Ten to Benvenuti, Mr. Coder explained that the

16 2017 Interim LEGISLATIVE RECORD difference between marijuana and medical the recommendations in that legislation are not and FDA encouraging continued scientific marijuana in stores is simply a red line in the being followed. Often the reason for this is a lack study of potential medical uses of the chemical middle of the store that has medical marijuana of funding. Commissioner Filburn reiterated components derived from cannabis for safe, on one side and marijuana on the other. Mr. that a layered approach is critical. For example, regulated treatment of various medical conditions Coder said that his organization researched the Sandy Hook had many of these protections, will be drafted by Representative Moore with difference and found that there was no difference; but the perpetrator was able to access the the assistance of Representative Benvenuti. All rather, the two kinds of marijuana were simply building by shooting through the glass door. members will see a copy of the letter before it is labeled differently. The recommendations enacted five years ago sent. Senator Embry moved to adopt the letter, In response to a question from Representative were a starting point. Administrators, educators, which was seconded by Representative Fugate Benvenuti, Mr. Coder stated that they do not and law enforcement must continually consider and adopted by a voice vote. have a specific dosage for medical marijuana or additional measures. There being no further business, the meeting how much or how often it should be used. More Scott Thalman, Students for Concealed Carry, was adjourned. research needs to be done. University of Kentucky, and Ilya Chernyavskiy, School and Campus Safety Students for Concealed Carry, University of INTERIM JOINT COMMITTEE ON Lewis Priddy, a retired principal, testified Louisville, expressed their concerns for safety on BANKING AND INSURANCE that everyone is aware that there have been lots and off the university campuses. Scott Thalman Minutes of the 4th Meeting of changes in schools over the years in response stated that more than 200 public universities allow of the 2017 Interim to school shootings. Kentucky itself experienced and have a great deal of data and experience with October 24, 2017 an early one in Paducah, which occurred almost allowing concealed carry on college campuses. Call to Order and Roll Call twenty years ago. The challenge is to maintain a The data indicate that there has not been one The 4th meeting of the Interim Joint safe and secure environment to foster learning violent incident by a student who has a concealed Committee on Banking and Insurance was held while also being ready to diffuse any problems. carry license on those campuses. He believes that on Tuesday, October 24, 2017, at 10:00 AM, in When Mr. Priddy was a principal at Magnolia concealed carry offers the best tool for students Room 149 of the Capitol Annex. Senator Tom Elementary in LaRue County, there were times to defend themselves if an incident occurs on Buford, Chair, called the meeting to order, and when it would take 15 to 25 minutes for police campus, but more importantly, it allows them the secretary called the roll. to arrive at the school because of its geographic to defend themselves as they travel onto and off Present were: location on the edge of the county. He wished he of campus. Mr. Thalman promised to provide Members: Senator Tom Buford, Co-Chair; had personal protection to help keep the school members with a map showing the high number Representative Bart Rowland, Co-Chair; safe and be able to react effectively. His school of crimes that take place immediately around Senators Julie Raque Adams, Rick Girdler, did not have secure doors or buzzers at the UK and UofL. Morgan McGarvey, Dennis Parrett, Albert entrance to restrict outsiders from entering the Ilya Chernyavskiy discussed how prohibiting Robinson, John Schickel, and Dan “Malano” facility. Because of firearms restrictions, he could concealed carry on campus put students at Seum; Representatives Will Coursey, Jim not even keep a gun in his car to retrieve in an greater risk of being victims of crimes just off DuPlessis, Joseph M. Fischer, Jim Gooch Jr., emergency, and he felt restricted in his burden to campus. The 2012 Mitchell v. UK decision has Dennis Keene, Adam Koenig, Stan Lee, Chad care for students. helped by confirming that students were allowed McCoy, Michael Meredith, Steve Riggs, Wilson Alex Payne Deputy Commissioner, to keep their weapons secured in their cars, but Stone, Scott Wells, and Addia Wuchner. KSP, explained that he and Mark Filburn, that decision does not protect those who walk Guests: Patrick O’Connor, Deputy Commissioner, Department of Criminal Justice, and bike to campus or those who utilize public Commissioner of Policy, Kentucky Department have spent a great deal of time studying school transportation. of Insurance; Ballard Cassady, President and shootings and coming up with recommendations In response to a question from Representative Chief Executive Officer and John Cooper, to prevent them. Over the years they have come Duplessis, Mr. Payne emphasized that the vast Governmental Affairs Consultant, Kentucky to agree on three things that schools should have: majority of teachers want to teach and not have Bankers Association. (1) an early warning system to enable prevention to police the schools and would prefer to have LRC Staff: Sean Donaldson, Jessica Sharpe, through detection; (2) controlled access to a a School Resource Officer. Mark Filburn added and Dawn Johnson. school; and (3) school resource officers in schools that elementary school students are the most Approval of Minutes to handle dangerous situations. These things are important because they cannot run, hide, and A motion by Representative Lee and second particularly important at elementary schools protect themselves. He stated that people will by Senator Girdler to approve the minutes of the where young children do not yet know how to pay to protect their children. September 26, 2017, meeting carried by voice make safety decisions quickly. College students Other Business vote. immediately know ways to protect themselves A committee resolution was presented to the Department of Insurance Administrative when there is a threat, but six-year olds do not. committee honoring Brigadier General Steven P. Regulations Schools that take actions to implement these Bullard upon his military retirement. A motion The committee reviewed administrative procedures are in a much better position to keep was made by Co-Chair Representative Moore regulations 806 KAR 5:031, 806 KAR 7:011, their students safe. and seconded by Co-Chair Senator Robinson to 806 KAR 9:051, 806 KAR 17:575, and 806 KAR Mark Filburn explained that the topic of adopt the resolution. The resolution was adopted. 24:022. Patrick O’Connor, Deputy Commissioner school safety is important and emotional for Representative Moore will present the resolution of Policy, Kentucky Department of Insurance him. He and Alex Payne were integral in helping to General Bullard at his retirement ceremony was available for questions. Chairman Buford the legislature pass school safety legislation five on October 22nd. asked for clarification on 806 KAR 7:011. Mr. years ago. The concern today is that most of A letter from committee members to VA O’Connor said the department would like to THE KENTUCKY GENERAL ASSEMBLY 17 rely on statutes that address restricting insurers’ called the meeting to order at 10:03 a.m., and the ordered outpatient mental health treatment. ability to either issue a security or guarantee for secretary called the roll. The objective of SB 91 is for individuals with an officer or director. The department will no Present were: serious mental illness to receive treatment to longer prohibit the investment in indebtedness Members: Senator Julie Raque Adams, Co- improve their lives in recovery and to prevent in a spouse or relative by blood or marriage who Chair; Representative Addia Wuchner, Co-Chair; further court, hospital, and law enforcement is living in the same household but will rely on Senators Ralph Alvarado, Tom Buford, Danny involvement. fiduciary duty doctrines to determine whether Carroll, Julian M. Carroll, Stephen Meredith, Kelly Gunning, Director of Advocacy and those transactions are prohibited, allowing and Reginald Thomas; Representatives Danny Public Policy, NAMI Lexington, stated that insurance companies to decide whether it is a Bentley, Robert Benvenuti III, George Brown AOT has been successful in other 44 states. An worthwhile transaction. Jr, Mary Lou Marzian, Chad McCoy, Russ A. individual is four times less likely to be involved Issues Related to the Kentucky Banking Meyer, Kimberly Poore Moser, Steve Riley, and in violent crimes if an AOT plan is in place. People Industry Russell Webber. with untreated illness commit crimes. There is a Ballard Cassady, President and CEO, and Guests: Kelly Gunning, Director of Advocacy 44 percent reduction in harmful behaviors such John Cooper, Kentucky Bankers Association, and Public Affairs, NAMI Lexington; Michael as homelessness, substance use disorder, and spoke on the status of Kentucky’s independent Gray, Advocacy Coordinator, NAMI Kentucky; mental illness. The number one reason AOT banking industry. Mr. Cassady explained that Stephanie Pearce Burke, Judge, District Court, is needed is that it addresses the number one the primary focus of state community banks Jefferson County; Lara MacGregor, Hope Scarves; problem with serious mental illness which is the is to serve Kentuckians and contribute to the Darrin McCauley, Twisted Pink Board Member, problem of recidivism. The number one reason overall success of the Commonwealth. He Old National Bank; Julie W. McKee, DMD, for recidivism is nonadherence to prescribed stressed the need for tax reform noting that the Dental Program Administrator, Department treatment. Patients with mental illness are not proportionate tax being paid by community for Public Health, Cabinet for Health and aware that they are ill and, therefore, do not think banks has increased even though their numbers Family Services; Tara Grieshop-Goodwin, Chief they need to take medication. AOT is not about are dwindling. Regulatory and compliance Policy Officer, Kentucky Youth Advocates; Ron taking away an individual’s rights but to help the costs as a result of the Dodd-Frank Act and the Hatfield, Cellarian Health; Jan Bright, Henrietta individual to engage in community resources burden of accounting standards designed for Bada, Lindsey Meadors, and Bill Bishop, that will keep them out of the revolving door of international banks being applied to all United Department for Public Health, Cabinet for hospitals, jails, or homelessness. There needs to States institutions have reduced profit margins. Health and Family Services; Mike Bishop, Health be a mechanism that monitors someone to make The tax structure for Kentucky’s independent Kentucky; Dr. Jerry Caudill, State Director, sure they continue to be engaged in the system banks is less advantageous than that of nearly Avesis, Incorporated; Mary Maupin, Anthem that will cause accountability and compliance. every other state. The banking industry pays at Kentucky Medicaid; Amanda Ferrill and Peg There is a 90 percent failure rate of individuals least 60 percent more in taxes than any other Patton, Mortenson Dental; Carol Hura; Sarah S. keeping first appointments after being released corporation in the Commonwealth. Mr. Cassady Nicholson, Kentucky Hospital Association; Steve from a facility. AOT saves allot of money. North said the increased and inequitable tax burden, Davis, Acting Inspector General, Cabinet for Carolina reported a 40 percent cost savings in along with federal regulatory and capital reserve Health and Family Services; Wendy Morris and the treatment of individuals who were identified burdens placed on community banks, have Rita Ruggles, Department for Behavioral Health, as high utilizers. Ohio had a 40 percent reduction contributed to the stress seen in Kentucky’s Developmental and Intellectual Disabilities, rate in spending on individuals involved in the independent banking industry. Despite these Cabinet for Health and Family Services; Eric recidivism cycle. Twenty percent of all Medicaid trends, community banks continue to be the Clark, Chief of Staff, Cabinet for Health and readmissions involved serious mental illness. In strongest lenders in small business holding Family Services; Stephanie Brammer-Barnes, one year, approximately 75,000 individuals on 43 percent of all small loans to businesses and Cabinet for Health and Family Services; and Medicaid are readmitted to a hospital within farms in the United States. Mr. Cassady asked Jennifer Wilson, General Counsel, Cabinet for 30 days. The money saved far outweighs the the committee to consider these matters in the Health and Family Services. cost to implement AOT programs. States that upcoming legislative session. LRC Staff: DeeAnn Wenk, Ben Payne, implemented AOT did not implement the AOT There being no further business to come Jonathan Scott, Heather Scott, and Gina Rigsby. statewide at first but used funding streams from before the committee, the meeting was adjourned Minutes county, state, and local entities. In counties where at 10:25 AM. A motion to approve the minutes of the there were already existing drug courts and September 20, 2017 meeting was made by mental health courts, it was a natural extension INTERIM JOINT COMMITTEE Representative Marzian, seconded by Senator of these courts. Hamilton, Ohio pays a probate ON HEALTH AND WELFARE AND Alvarado, and approved by voice vote. court navigator approximately $50,000 a year to FAMILY SERVICES An Update on Tim’s Law (2017 Senate Bill oversee AOT treatment individuals from state Minutes of the Fifth Meeting 91) and local funds. of the 2017 Interim Senator Adams stated that 2017 Senate Bill 91, Michael Gray, Advocacy Coordinator and October 11, 2017 Tim’s Law, addresses the problem of individuals Legislative Agent, NAMI Kentucky, stated that if Call to Order and Roll Call with the most serious mental illness revolving in individuals follow treatment plans, they are able The fifth meeting of the Interim Joint and out of state hospitals, the court system, jails, to lead normal productive lives. AOT courts can Committee on Health and Welfare and Family and out of homelessness. The approach is called help people who suffer with mental illness by Services was held on Wednesday, October 11, Assisted Outpatient Treatment (AOT) and it helping them in the right direction. 2017, at 10:00 a.m., in Room 129 of the Capitol creates a mechanism in civil court to require and Stephanie Pearce Burke, Judge, District Court Annex. Senator Julie Raque Adams, Co-Chair, monitor individuals who are eligible for court- and Drug Court, Jefferson County, stated that the

18 2017 Interim LEGISLATIVE RECORD Kentucky District Court Judges Association was to see patients in the hospital, but it is more and friends. It can tear families apart. The same in opposition to SB 91, but she has seen that AOT effective when an individual has to appear in the amount of individuals die of breast cancer today can be easily implemented. It needs to be started courtroom in front of the judge. Ms. Gunning that did 30 years ago. as a pilot project to learn how to implement it stated that allot of individuals are paranoid of Darrin McCauley, Old National Bank, and appropriately statewide. The model that will the video screen. Twisted Pink Board Member, stated that his work best for Kentucky is to operate it within In response to a question by Representative wife, Janice, was diagnosed with stage 3 breast the confines of existing mental health courts, Wuchner, Judge Burke stated that she does wear cancer that metastasized in her lower spine and regular drug courts, or veterans’ treatment her robe for a hearing at the hospital to help have bones. She took extra precautions by staying courts. SB 91 is an unfunded mandate, so there the same effect as if someone was appearing healthy because there was a family history of is no ability to create new courts to hear cases before her in the courtroom. breast cancer. More research needs to be done of individuals who are still in hospitals. Jefferson In response to questions by Representative on metastatic breast cancer. County has a designated judge who hears all Moser, Judge Burke stated that the court is Senator Adams stated that there needs to be mental inquest warrants in hospitals for patients connected to medical team is through the a review of where the money donated for breast who have been involuntarily hospitalized or who Assistant County Attorney who is on the mental cancer is spent. are awaiting a hearing on a petition under a 72- inquest warrant (MIW) docket and through In response to a question by Senator Thomas, hour hold. Approximately 85 percent of mental the clerk who will call the hospital and obtain Mr. McCauley stated that less than ten percent inquest hearings are held in hospitals before an information and schedule the hearing. Ms. of breast cancer funds goes to metastatic breast individual is released. AOT is only needed for Gunning stated that in Fayette County there is cancer research. Two and a half years ago the a small number of individuals who have been a coordinator who is in contact with the medical General Assembly appropriated $132.5 million involved in the court system continuously and team for the mental health court. Judge Burke to the University of Kentucky to build a health are not compliant with the treatment plan after stated that a person cannot be held in contempt disparities clinic because there are significant being released from a facility. There needs to be a if they fail to appear in court. A summons can health disparities in Kentucky. Mr. McCauley good coordinator who works with the individual, be issued for someone in the sheriff’s office to stated less than ten percent of money donated treatment team members, and the judge to transport a person to court, but the sheriff’s to breast cancer goes to metastatic research. conduct the mental inquest hearings. Seeing a office does not like to take someone into custody Ms. MacGregor stated that the organization judge each week is the key to the success of AOT, if they are not under arrest. Ms. Gunning stated she founded, Hope Scarves, has raised because the individual and treatment provider that in Ohio, someone from the treatment team $150,000 for metastatic breast cancer research. are accountable for steps taken or not taken to is sent to the individual who is not compliant. Medical hospitals in Kentucky are interested in adhere to the treatment plan. Judges listen to In response to a question by Representative conducting clinical trials that are accessible to individuals, and it helps the individual to remain Wuchner, Judge Burke stated that an individual more people. on the treatment plan. The Administrative can have a support person with them throughout In response to questions by Representative Office of the Courts (AOC) created the petition, the process. It could be very beneficial to have Marzian, Ms. MacGregor stated that National application, and transfer order forms the day SB a program structured like CASA that would Institute of Health budget appears to fund a large 91 went into effect. Circuit Court clerks could provide assistance to individuals. Ms. Gunning amount of breast cancer research, but a small designate someone in its office to temporarily stated that certified peer specialists are used in percent is spent on metastatic breast cancer serve as the coordinator until funds are allocated Fayette County. research. Thirty percent of funds are needed to for a full-time coordinator. Metastatic Breast Cancer research metastatic breast cancer and treatments. Ms. Gunning stated that individuals who do Lara MacGregor, Hope Scarves, stated that There needs to be a better understanding not adhere to the treatment plan do not stay off October is breast cancer awareness month. No between the difference of early breast cancer and the radar for long. one dies of cancer found in the breast, because metastatic breast cancer. Once it goes beyond the In response to questions by Representative it is treatable and survivable at this point. breast it is hard, if not impossible, to cure. McCoy, Judge Burke stated the requirement Metastatic breast cancer is a stage 4 cancer Senator Alvarado stated that someone’s odds in KRS 202A.0811(6)(b) says to set a date for and is terminal. Approximately 30 percent of dying increase when they have metastatic a hearing within six (6) days from the date of people diagnosed with early stage breast cancer. In 1975, breast cancer survival rates were of the examination by a qualified mental cancer will have it become metastatic with a life 65 percent, in 2010 it was 83 percent, currently health professional to determine whether the expectancy of two to three years. There will be is 89 percent. Allot of focus has been on early respondent meets the criteria for court-ordered 111 individuals who die from metastatic breast detection. One in eight women are diagnosed assisted outpatient treatment set forth in KRS cancer daily. There are no records of how many with breast cancer. The medical community is 202A.0815, excluding weekends and holidays, individuals who have metastatic breast cancer, becoming aware that individuals need to stay to determine if the respondent should be court- because someone is only counted for the original on medications longer to help the cancer from ordered to assisted outpatient treatment. The diagnosis. While it is important to celebrate reoccurring. statute needs to clarify when to set the hearing individuals who are in remission, it is just as In response to a statement by Representative if the examination was five days prior to the important to raise awareness of individuals who Wuchner, Ms. MacGregor stated that there needs petition. Hearings in the hospitals are not open are dying of cancer. There needs to be more to be an awareness of all preventive access to care. to the public. There are no other counties besides research conducted to understand why and Representative George Brown stated that Jefferson County that send judges to hospitals how the cancer metastasizes. Questions need individuals need good health insurance that will to conduct hearings. Ms. Gunning stated that to be raised about where research dollars are help individuals receive the best treatment and in Fayette County there is a judge that comes to being spent. Breast cancer is painful and very care. the hospital. Videoconferencing could be used terrifying for not only the patient but for family Update on the State Dental Health Plan THE KENTUCKY GENERAL ASSEMBLY 19 Tara Grieshop-Goodwin, Chief Policy if a county only has one dentist available. Dr. and George Brown requested to be recorded as Officer, Kentucky Youth Advocates (KYA), stated McKee stated that children in pain, especially voting against 902 KAR 20:360 & E. that approximately a year ago the KYA partnered dental pain, cannot learn. Adjournment with Delta Dental of Kentucky to conduct an Senator Alvarado stated that there has been There being no further business, the meeting updated survey of children’s oral health in a dramatic reduction in cavities rates in children was adjourned at 11:47 a.m. Kentucky. A dentist and assistant performed in Clark County because of dental varnishings. a random sample of screenings statewide and Dr. McKee stated that dental varnish is different INTERIM JOINT COMMITTEE ON found there was a higher percentage of third and from silver diamine fluoride that arrests current LICENSING, OCCUPATIONS, AND sixth graders that needed dental care. Two out of decay and eliminates pain. Medicaid covers ADMINISTRATIVE REGULATIONS five third and sixth graders had untreated cavities dental varnish for children up to the age of 19 Minutes of the 5th Meeting and over half of third and sixth graders did not years. of the 2017 Interim have sealants. One recommendation of the Consideration of Referred Administrative October 13, 2017 report was to develop comprehensive goals and Regulations Call to Order and Roll Call objectives for an updated state oral health plan. The following administrative regulations The 5th meeting of the Interim Joint The Cabinet for Health and Families Services has were referred to the committee for consideration: Committee on Licensing, Occupations, and begun updating the state oral health plan. 902 KAR 20:360 & E – establishes licensure Administrative Regulations was held on Friday, Julie Watts McKee, DMD, Dental Program requirements, standards, and procedures for October 13, 2017, at 10:00 AM, in Room 129 Administrator, Department for Public Health, abortion facilities that comply with KRS 311.727 of the Capitol Annex. Representative Adam Cabinet for Health and Family Services, the goals and adds new transport agreement requirements; Koenig, Chair, called the meeting to order, and of the 2006 Statewide Oral health Strategic Plan, 921 KAR 3:025 – sets forth the technical the secretary called the roll. Healthy Kentucky Smiles: A Lifetime of Oral eligibility requirements used by the cabinet in Present were: Health, were to increase the number of dental the administration of SNAP; and 921 KAR 3:042 Members: Senator John Schickel, Co- professionals to underserved areas to assure – establishes technical eligibility requirements Chair; Representative Adam Koenig, Co-Chair; access to care, to increase and sustain funding for used by the cabinet in the administration of Senators Joe Bowen, Tom Buford, Julian M. oral health programs, to recognize stakeholder the SNAP Employment and Training Program Carroll, Denise Harper Angel, Jimmy Higdon, involvement to expand awareness and education, (E&T). Paul Hornback, Ray S. Jones II, Christian and that oral health should be a full component In response to questions by Representative McDaniel, Dan “Malano” Seum, and Damon of coordinated, integrated, and comprehensive Marzian about 902 KAR 20:360 & E, Steve Davis, Thayer; Representatives Al Gentry, Dennis services. There is still a problem with childhood Acting Inspector General, Office of Inspector Keene, Chad McCoy, Jerry T. Miller, C. Wesley dental decay. There is a disproportionate General, Cabinet for Health and Family Services, Morgan, Kimberly Poore Moser, David Osborne, percentage of dentists statewide. Insurance stated that it is important to main the status quo Ruth Ann Palumbo, Phillip Pratt, Arnold coverage for dental services is always changing. until litigation and final ruling is complete. The Simpson, Diane St. Onge, Walker Thomas, and Approximately 50 percent of Kentucky’s children ultrasound legislation has been on hold until the Susan Westrom. have KCHIP, and a huge problem is that there federal court rules in the case. Guests: Representative Jason Nemes; Adam are still counties that do not have dentists who Jennifer Wilson, General Counsel, Cabinet Watson, President, Daniel “DH” Harrison, accept Medicaid. The cost of a dental education for Health and Family Services, stated that Vice President, Kentucky Guild of Brewers; has skyrocketed leaving some dentists with over 902 KAR 20:360 & E relates to transfer and Jennifer Doering, General Manager, Chas a $237,000 college debt. The updated oral health transportation agreements. It references the Seligman Distributing; Donald Cole, Director, plan is undergoing final edits and revisions and ultrasound portion, but the primary changes Kentucky League on Alcohol and Gambling should be released on November 1, 2017. There are made in Section 10. Mr. Davis stated that Problems; Karen Lentz, Kentucky Association of is a need to educate everyone on the dental needs the administrative regulation is a cross reference Beverage Retailers; Jason Baird, Kentucky Malt of the population. Oral health literacy is needed to a statute with the ultrasound provision. Mr. Beverage Council; Dan Meyer, Wine and Spirits for individuals to make good decisions about Davis stated that EMS does not have to have a Wholesalers of Kentucky; Drew Chambers, CPA, oral health. Children need to be taught good floor plan for every outpatient service, but the Mountjoy Chilton Medley (MCM); Christy oral health habits and break bad cycles. There is administrative regulation is a safety measure Trout, Commissioner, Trina Summers, Distilled also a need to have more oral health education in that is meant to help provide advance notice to Spirits Administrator, Carol Beth Martin, the medical and nursing fields. Good oral health providers who seek to address emergencies and Malt Beverage Administrator, Department of reduces some morbidity of chronic diseases. be able to get to the patient promptly. There is a Alcoholic Beverage Control. Some key points to prevention are to expand certificate of need (CON) law that applies to allot LRC Staff: Tom Hewlett, Bryce Amburgey, the Department for Public Health’s Dental of categories of facilities including ambulatory Jasmine Williams, Melissa McQueen, and Susan Hygiene Program, to promote the use and surgery centers. When the law was adopted Cunningham. training of silver diamine fluoride, to create in 1998, abortion facilities were regulated as Minutes consistent oral health education in health ambulatory surgery centers. The cabinet is The minutes from the September 8, 2017 departments, and to review school pre-entry implementing the provisions of KRS 216B.0435 meeting were approved without objection. screening requirements. Good data and metrics enacted by the General Assembly. Senator Schickel asked for a moment of drive good policy. Goals can only be met with A motion to accept the referred administrative silence to commemorate Senator Dick Roeding sustainable funding. Everyone will benefit from regulations was made by Representative who recently passed away. Several other Senator the oral health plan. Benvenuti, seconded by Senator Alvarado, and also commented on Senator Roeding and his Representative Riley stated that it is difficult accepted by voice vote. Representatives Marzian exemplary service to the Commonwealth.

20 2017 Interim LEGISLATIVE RECORD Kentucky Guild of Brewers 2018 Legislative the industry has transformed the urban core is by-passes the distributor level, making it difficult Agenda amazing. for the DOR to collect taxes. Distributors feel that Adam Watson, President, Kentucky Guild Senator Harper-Angel commented that she the costs of the proposal to the industry outweigh of Brewers, Co-Founder of Against the Grain would like to see craft beer in Kentucky State its unproven benefits. They want the system of in Louisville, said that Kentucky Craft Brewers Parks. checks and balances preserved. This ensures that are growing faster than ever. However, Kentucky In response to a question from Representative consumers have access to products they want, is still behind neighboring states. The brewers Morgan, Mr. Watson said the brewers fill out and producers compete on a level playing field. association’s definition of “small” is six million tax forms and write checks to their distributor Additionally, it ensures the timely collection of barrels, or the federal tax and trade bureau line for the wholesale tax. The distributor keeps one taxes and protects our communities. of two million. The Kentucky definition is 50,000 percent of that money and forwards the rest on Drew Chambers, CPA Partner with barrels. Two new breweries have opened recently. to the DOR. Mountjoy Chilton Medley, said the Kentucky One of them, Third Turn in Oldham County, is Senator Higdon asked for clarification Beer Wholesalers Association had hired the firm already expanding to accommodate larger than regarding a distributor collecting one percent, to assist in describing the current tax structure expected traffic. Mile Wide, in Louisville, won a which seems high to collect a tax. for alcohol sales in Kentucky. The current medal at this year’s Great American Beer Festival Direct Shipment of Alcohol – A Response system provides critical checks and balances and has invested in a new canning line that allows to the Previous Proposal that protect the industry and the safety of the them to add new products. This year the guild Jennifer Doering, owner of Chas Seligman consumers. They extend to the tax collection is partnering with the Kentucky Department of Distributing, told members that she and her process, allowing for an efficient and reliable Agriculture, uniting craft brewers with Kentucky family employ 100 people, and operate in 14 system to collect a significant amount of annual Proud farmers to create three unique flavors. counties with 1200 accounts and 1400 different tax revenue for the state. The Kentucky Guild of Brewers supports Stock Keeping Units (SKUs). While the system for Currently, wholesalers and distributors remit open competition and market access. They the distribution and sale of alcoholic beverages both a wholesale sales tax based on sales dollars, believe in responsible consumption and using is complex it provides a system of checks and and a wholesale excise tax based on product their success to support their local communities balances. It fosters the growth of Kentucky’s volume sold. The wholesale sales tax ranges from and growing number of Kentucky employees. robust alcoholic beverage industry, including 10.25 percent for beer and wine to 11 percent Neighboring states have higher production the craft beer and wine business. Distributors for distilled spirits. This tax does not include limits, modernized tax codes, growth incentive help all brands into the market place, facilitating the retail level sales tax collected by retailers, or programs, greater contractual freedom, and visibility and marketing. Distributors also collect local taxes imposed in some areas. The excise fewer restrictions to market access. It is the almost $150 million in taxes from alcohol sales tax is based on volume, generally measured in guild’s belief that there is discrimination between each year. Their combined operations provide gallons, and the rate varies based on the type of small farm wineries and the craft brewers. The million in economic benefits to communities beverage. Administratively, the wholesale sales brewers do not self-distribute. Craft beer goes throughout the state purchasing and maintaining tax and excise tax are reported on a single tax through the three-tier system. They are allowed facilities, trucks, and other equipment. form that is filed monthly. Separate forms do to self-sell directly to customers who visit their Distributors ensure products on the shelves exist for the wholesalers or distributors of beer, facilities. They would like to remove the limit of are safe and fresh. Should there be a product wine and distilled spirits. The forms provide 288 ounces per day that a taproom can sell. This recall they can remove any product quickly. information related to the product received creates an unnecessary barrier to commerce. If a Distributors understand that the market place during the month, as well as the beginning and customer walks into the Country Boy taproom is evolving and are adapting to meet consumer ending inventory levels. This data is used to to purchase a case of Cougar Bait, they are not demand. They support the desire of consumers to compute the volume subject to the excise tax and allowed to buy a glass of the newest IPA while receive products in the manner of their choosing, the gross receipts from sales in order to compute there. At Against The Grain’s taproom, because whether that is through a licensed retailer or a the wholesale level sales tax. A separate form the cans are 16 ounces, cans have to be removed verified delivery method, as long as it complies is used for wholesalers to report the individual from a case before they can be sold. with the existing system of checks and balances. product shipments received from breweries or Kentucky breweries pay federal and state Distributors feel that direct shipment is distilleries. In addition to the forms completed excise tax, state wholesale tax, and state and not a responsible approach. Changing to direct by the wholesalers, producers and transporters local taxes. The guild is asking the legislature to shipment will turn the entire state wet, make also report sales in Kentucky. Brewers provide a make a change so that the breweries can send alcoholic beverages more easily accessible to monthly report of sales by specified distributor their wholesale tax payments directly to the minors, and cede Kentucky’s authority to control and date. This is a form of corroboration of Department of Revenue (DOR). Wholesale taxes the sale and distribution of alcoholic beverages the information filed by the wholesalers. This are paid to distributors, who keep one percent within the state. Common carriers will be put in enhances the state’s ability to monitor and audit and then forward the forms and payments charge of distributing alcohol at any time of any the forms and collections. Kentucky’s collection to DOR. New brewers are required to sign a day of the week. from beer wholesalers consistently exceeds $60 contract with a distributor, even though they Allowing direct shipment of alcohol, most of million. The industry as a whole exceeded $147 are not distributing, so that they can pay their which will occur from out-of-state businesses, million in tax collection in 2017. taxes. Essentially, distributors are acting as tax creates a loophole in the current tax scheme Information from the Federal Bureau of Labor collectors while the state is giving up one percent as it relates to alcoholic beverages. Currently, Statistics confirms that Kentucky wholesalers of its beer wholesale tax revenue. All other taxes Kentucky has the fifth highest tax on alcohol employ thousands of people. In the first quarter are submitted by the brewers directly to DOR. products, and most of the taxes collected and of 2017, the census data reported malt beverage Senator Schickel commented that the way paid are through a distributor. Direct shipment wholesalers employed 1,302 people as of March. THE KENTUCKY GENERAL ASSEMBLY 21 Annualizing this data suggests payroll in though there are sales by the drink in restaurants. be cut out of any tax reform meetings. excess of $70 million. This data relates to direct There are wet counties that have dry precincts. In response to a question from Representative employment only. As pointed out, these small How will a carrier know they are delivering to a St. Onge, Ms. Doering said regarding wholesaler businesses contribute millions to Kentucky’s wet area? Will the carrier be required to have a loss of revenue, there is not a study because economy through employment opportunities license? Is the driver required to be insured? Will there is no range or limit on direct shipment in and the operation of facilities within the state. It is the company making a delivery be required to the proposed bill. There is a major difference clear that the current system provides assurances confirm that the person receiving the delivery is between getting a case of wine shipped to a home that tax amounts are properly reported and over twenty-one? Will the delivery be to a retailer verses a brewer directly shipping to a large box collected, it is administratively efficient and or to a residence? FedEx or other carriers leave a store that demands direct shipping. She further beneficial to the DOR, and provides thousands package with no signature that the package was stated that if there is a product that someone of jobs in Kentucky. received. This could allow a minor to order wine, wants, a distributor can get that product. Adam Karen Lentz, Executive Director and watch for the delivery at a neighbor’s house who Watson responded that the Guild is in support of Legislative Agent for the Kentucky Association is not home, and go pick it up. Cheap products direct ship. of Beverage Retailers, representing both large encourage more drinkers. Cities are looking for Representative McCoy said that every day and small package stores across the state said more revenue, and direct shipment of alcohol will there are tourist visiting his county, in fact one feedback from members has been broad. The siphon more money out of Kentucky’s economy. group from Australia comes every year for the biggest issues are the level playing field and tax Kentucky wineries are required to follow certain Bourbon Festival, and there is an obstacle for collection. As more communities go wet there laws to regulate the wine industry. Opening them to ship bourbon back home. is an implementation of license fees, or a gross up sales will pit breweries against wineries. All In response to a question from Representative receipts tax. Some communities collect a tax in alcohol entities should operate by the same laws Moffett, Karen Lentz said the national association addition to the wholesale and sales tax. Courts to level the playing field. said that they are having a hard time keeping have already ruled that doing business in a state Dan Meyer, Executive Director and General track of direct shipping laws because every state does not create nexus so if a Kentucky resident Counsel, Wine and Spirits Wholesalers of is different, some requiring in person, some purchased alcohol online from another state Kentucky, said the current system provides requiring limits on the amount that can be direct and had it shipped, there would be no sales safeguards for consumers. There have been shipped. Some states only allow direct ship from tax collected. The state allows distributors to problems with counterfeit products in other a winery and some states allow direct ship from withhold a portion of the sales tax collected. countries. Tainted products poisoned vacationers a retailer. Representative Moffett said an NCSL There is a maximum of $50 allowed to be collected in a resort in Mexico. Tainted products are report states that in the last couple of years direct per reporting period. However, out-of-state common in Europe as well. The United States shipment has expanded. companies who voluntarily elect to submit taxes does not have that problem. Alcohol is highly Representative Moffett also stated that he did are classified as model sellers and are allowed to regulated for a good reason. The current market not believe that there was tainted alcohol being keep as much as 8 percent of what they ship into provides the consumer with broad choices. direct shipped from state to state by licensed the state. Another concern is what other states Responsibility, accountability, and public vineyards or brewers. Mr. Meyer said the direct are doing. According to FedEx only 14 states safety concerns should outweigh consumer shipment is unregulated. Ms. Doering added allow direct shipping into the state. Many states convenience. that MSNBC had recently reported a 13 year old require a license specific to that states. There is Representative Morgan opined that the real had recently answered the door on five different also a concern regarding Kentucky shipping out argument is competition. However, he stated he occasions. On three of the occasions she was not and similar businesses shipping into the state. does not support direct shipments into Kentucky. given the alcohol. However, on two occasions An NCSL study was very limited showing which The real solution is to allow competitive she was allowed to receive the alcohol, no ID states allow direct shipment. distributors so that any licensed wholesaler can required. Representative Moffett said that most Jason Baird, Executive Director, Kentucky sell any brand they would like to sell. Another verification procedures he is aware of work. He Malt Beverage Council, said all members of the problem is that 65 percent of sales are by credit added the subject is complex and he is looking council also have liquor and wine wholesalers cards, which charge a percentage for card use. forward to working with all parties to work out license. These small business owners have seen Representative Keene told the committee a solution. brands, brewers, and retailers come and go; that in considering this change care should be In response to a question from Representative however, many small family businesses like taken so as to avoid unintended consequences. Miller, Ms. Doering said that the down side of Seligman have been in the distribution business The number one responsibility the legislature direct ship to a Sam’s Club is that independent since the end of prohibition. Members are has is public protection. players in the market will suffer due to the buying concerned about public safety and take that In response to a question from Senator power of a large retailer. responsibility seriously. A mandate to collect McDaniel, Mr. Meyer stated that there is no Senator Thayer cautioned the industry for wholesale, excise and retail taxes does not provide cap on collection of the wholesale tax. The talking against each other. There is a relationship a nexus of the sale for out-of-state shipments DOR agreed that the wholesales could keep between tourism and the alcohol business. and Kentucky is at a competitive disadvantage 1 percent of the total amount of the wholesale A reasonable way to move forward on direct because of current high alcohol taxes. Members tax collected. Karen Lentz added that she was shipping is to allow an individual visiting tourist are also concerned about loss of jobs. referring to KRS 139.570 relating to retailers. sites such as a brewery, small farm winery, Donald Cole, Executive Director, Kentucky There is a structure that is capped at $50, for sales or a distillery to purchase, under the limits League on Alcohol and Gambling Problems said tax, per month. Senator McDaniel warned that established by the General Assembly, alcohol Kentucky still has many dry areas. There are during the upcoming session, groups who come that they can ship to their home. This will show places where package sales are not allowed even with misleading or inaccurate information will immediate results for our tourism business.

22 2017 Interim LEGISLATIVE RECORD In response to a question from Representative will lose your professional license if convicted of who do not want to have sales by the drink with Koenig, Ms. Doering said that of her 14,000 a felony. ordinances. SKUs 12,000 are alcohol. Representative Koenig said that Kentucky has Steve Humphress and his team are working Administrative Regulation Process been selected to be one of 11 states to participate on a Frequently Asked Questions database. Revision in a study with NCSL to streamline licensing and These will be available on the ABC website. Representative Nemes said that his bill is certification regulations. In response to a question from Representative known in other states as the “Right to Earn a Alcoholic Beverage Control update on Miller, Ms. Trout said she was not aware of the Living” bill. It takes a close look at occupational implementation of HB 183 from 2017 Regular origin of the education fund for malt beverages. licensing regulations. Occupational licensing Session She said will find the information and provide it requirements raise the price of goods and Trina Summers, Distilled Spirits to him at a later date. services, restrict employment opportunities, and Administrator, said HB 183 looked at the In response to a question from Representative make it more difficult for workers to take their statutory requirements for all licenses. The Morgan, Ms. Trout said that due to pending skills across state lines. Often policy makers bill removed language that was not statutorily action of the board she could not comment do not carefully weigh the cost and benefits necessary. Applications were shortened. regarding the sale or transfer of a license that when making decisions to regulate a profession Instructions for applying for a licenses were must be held for three years. through licensing. Licensing, when overdone, standardized and have been put online. Other Senator Thayer said there was an important impacts lower wage workers, minorities and revisions were for making language consistent announcement at the Country Boy taproom veterans in a significant way in our state. In on forms for private party requests, minors on at 1:30 PM, regarding the collaboration of the a survey, veterans said it was hard for them to premises, payment forms, and dormancy forms. Department of Agriculture and the Kentucky translate their military service into sufficient These are required for licensees in their business. Guild of Brewers. requirements to become licensed in Kentucky. Also, in the interest of “red tape reduction” they Representative Koenig reminded the This is a problem the General Assembly needs to eliminated unnecessary forms. members that the next meeting was November address. Kentucky licenses more of its workforce Carol Beth Martin, Malt Beverage 17, which is not the usual meeting day. that any surrounding states, with more onerous Administrator, said administrative regulations There being no further business to come obligations. SB 120 took steps to reduce licensing were submitted to reflect changes from HB 183. before the committee, the meeting was adjourned requirements. The state ABC was granted the same discretion at 11:45 AM. This bill seeks to preserve the protection as local governments in terms of setting Sunday for consumers to make sure that legitimate sales hours for extended hours supplemental INTERIM JOINT COMMITTEE ON professions are licensed and providing quality licenses. License renewal administrative ECONOMIC DEVELOPMENT AND workers. There will be periodic review to regulations were updated to reflect the change in WORKFORCE INVESTMENT recognize unnecessary licensing regulations. the reduced fee for the class B rectifiers license Minutes of the 5th Meeting There will be a requirement for licensing and, applications were updated and incorporated of the 2017 Interim boards to report to the Legislative Research by reference. October 19, 2017 Commission every five years. This report will The signs on vehicles regulation dictates Call to Order and Roll Call explain the licensing process for that profession what information should be displayed on trucks. The 5th meeting of the Interim Joint and document reason for change or repeal. Also, The new regulation allows for larger numbers in Committee on Economic Development and during those five years, citizens will have access the license number displayed on the side of their Workforce Investment was held on Thursday, to challenge particular licensing provisions. The transport vehicles. The appointment notification October 19, 2017, at 11:00 AM, in Wilmore, KY gives the professional the opportunity to go of local administrators was changed because at Asbury University in the Andrew S. Miller directly to the board rather than to court. This it is no longer required for administrators to Center for Communication Arts. The meeting eliminates legal fees for the state. take out a bond. Finally, the equipment and was a joint meeting with the Interim Joint Representative Westrom stated that she supplies regulation has just been filed. This was Committee on Tourism, Small Business, and had just received a call from a constituent who necessary because HB 183 took out the language Information Technology. Senator Alice Forgy had been an EMT in the military. However, his allowing producers and distributors to give away Kerr, Chair, called the meeting to order, and the license from the military is not recognized in the refrigerated coolers. secretary called the roll. state of Kentucky. Christy Trout, Commissioner, Department Present were: Representative Nemes said that military of Alcohol Beverage Control, said ABC has Members: Senator Alice Forgy Kerr, Co- spouses are also included in his bill. held workshops across the state. They have Chair; Senators Perry B. Clark, Denise Harper Senator Bowen said that he had been in a worked with KACo in talking about alcohol Angel, Ernie Harris, Stephen Meredith, Wil profession where there was licensing as well related issues. The ABC also participated in the Schroder, and Reginald Thomas; Representatives as certification. He stated that in some cases Kentucky League of Cities bi-annual summit. Lynn Bechler, McKenzie Cantrell, Daniel Elliott, certification can take the place of burdensome They are working on incorporating the ABC Al Gentry, Dennis Horlander, Joni L. Jenkins, licensing process. For instance, ASC has website into the local administrator’s websites. James Kay, Kim King, Adam Koenig, Russ A. certification for mechanics that is just as stringent The change in HB 183 to allow retail drink Meyer, C. Wesley Morgan, Jason Nemes, Jason as a licensing test or program. licenses in a city of any size has changed the Petrie, Philip Pratt, Steve Riley, Dean Schamore, In response to a question from Senator Seum, quota number for sale in each community. The Diane St. Onge, Wilson Stone, Russell Webber, Representative Nemes said SB 120 removed the department is working on a data base to provide and Addia Wuchner. automatic removal requirement for convicted information on the quota and prohibitions by Guests: Dr. Sandra Gray, President, Asbury felons. However, the presumption is that yes, you community. They have assisted communities University; Dr. Jim Owens, Dean of the School THE KENTUCKY GENERAL ASSEMBLY 23 of Communication Arts and Professor of Media, directing for various networks, national Emmy laundry facilities, rental car companies, and Asbury University; Judge Terry Martin, Judge awards, and prestigious honors for work on the even construction businesses. Residents also Executive, Hart County; Brandon Jennings, National Geographic and Smithsonian channels. rented out their homes and were compensated Director, Harlan County Tourism; David In addition, Dr. Owens also discussed the long for being extras in the film. Harlan County Cottingham, COO, Post Time Studios; Stephanie term contract that the university holds with the saw a $3 million economic impact during the Stumbo, Executive Director, Kentucky Film Broadcast Division of the International Olympic filming of Above Suspicion. Displaced coal mine Association; Deputy Secretary Regina, Kentucky Committee to provide broadcast training to workers’ skills can also be funneled into the film Tourism, Arts and Heritage Cabinet; Jay Hall, students and personnel. industry by utilizing their talents as electricians, Executive Director, Office of Film and Tourism Kentucky Film and Digital Media carpenters, and painters. Development, Kentucky Tourism, Arts and Industry Efforts and Opportunities Across the Heritage Cabinet; and Mary Ramer, President, Commonwealth David Cottingham, COO of Post Time Visit Lex. Judge Terry Martin, Judge Executive of Hart Studios, offered a film industry viewpoint LRC Staff: Carla Montgomery, Andrew County, gave a local perspective of the economic by giving an overview of Post Time Studios. Manno, and Sasche Allen impact seen in his area from the film tax Post Time Studios is a full service production Approval of Minutes incentives that the General Assembly approved company that was established in Lexington in A motion to approve the minutes of the in 2015. Several different projects have been 1993. In 2003, it was one of the first production September 12, 2017 meeting was made by filmed in Hart County and surrounding counties studios in the region to have a high definition Representative Adam Koenig, seconded by including one for the Hallmark Channel called An editing system, which over the years led to an Representative Kim King, and approved by voice Uncommon Grace that added about $500,000 to increased volume of clients and productions. Mr. vote. the local area economies. Judge Martin attributed Cottingham described the two factors he believes Asbury University producers choosing to film in his area to the have made Post Time Studios successful. First, Dr. Sandra Gray, President of Asbury beautiful scenery, the hospitality of the residents, the studio considers their clients as partners and University, gave a brief overview of the university and the level playing field that was created by the this allows for returning and continued business. after thanking members for continuing to tax incentives for film production. As a result Secondly, Post Time Studios is not industry invest in the progress and development of the of the successful completion of projects such specific and productions include a wide variety Commonwealth. Asbury University was founded as Mail Order Monster and Runaway Romance, of projects in areas such as long form, short in 1890 and at the time was one of few institutions the Southern Kentucky Film Commission was form, documentary film, marketing, training, that admitted women. In the early 1900s, it created by Hart, Barren, Warren, and Edmonson safety, healthcare, tourism and athletics. Most began offering business and commerce courses Counties to assist in attracting film producers to of the talented staff that make these productions which was uncommon during that period. Southern Kentucky. Judge Martin explained that possible are natives of Kentucky and several are Presently, half of the students come from out of although the introduction of the film industry as Asbury University graduates. In the last two state, and 16 percent of those students become a new form of revenue for the Southern Kentucky years, the company has doubled its employees Kentucky residents upon graduating. Dr. Gray region is nontraditional economic development, and moved into a larger facility. The new commented on the recent partnership with The it has the potential to add jobs in businesses facility and increased staff has helped to attract Kentucky Film Commission which has led to that will be needed to supply materials and larger budgeted productions. Mr. Cottingham the creation of a certification program that will services to film production teams. In an effort expressed optimism about the current climate of increase the labor force in the film industry. She to continue film industry development in the the film industry in the state and will continue extended the invitation to return the university Commonwealth, a new infrastructure is needed, to develop in the future in part due to the film at a later time to explore other programs besides as well as the training of Kentuckians in order tax incentives. The incentives help with overall the School of Communication Arts such as the to provide a skilled film industry workforce. production plans, investments, and local spend; equine program, The Howard Dayton School of He suggested production studio being located lock productions into longer contracts, which in Business, and the School of Education. in Southern Kentucky, internships and co- turn can provide employment opportunities; and Dr. Jim Owens, Dean of the School of ops being offered to high school students, and generate new tax revenue for the Commonwealth. Communication Arts and Professor of Media training being done throughout the Kentucky Stephanie Stumbo, Executive Director of Communication, stated that the School of Community and Technical College System. the Kentucky Film Association, gave a detailed Communication Arts has approximately 450 Brandon Pennington, Director of Harlan overview of Kentucky’s Film Tax Incentives, students majoring in programs such as journalism, County Tourism, also gave a local perspective statistics and growth projections of the film theater and cinema production, worship arts, of the possibility for film to be a viable industry industry since the incentives were passed and media communication. Students majoring in the state. Above Suspicion, which was a $13.5 in 2015, and industry needs. The purpose in media communication comprise nearly half million budgeted film and the largest budgeted of the statutory provisions in KRS 148.544 of the School of Communication Arts. Media film to come to Kentucky since Secretariat, was was to encourage the film and entertainment communication students have the opportunity recently filmed in Harlan County. After learning industry to choose locations in Kentucky for to study areas of film, television, multi-media, that the movie would be filmed in Harlan County, filming and production, increase employment media performance, media management, audio, the tourism officials and the community became opportunities within the film and entertainment and production design. Dr. Owens added that dedicated to ensuring they were equipped with industry in the state, and develop a production the academic excellence of the program can the proper resources, tools, and skills to be a film and postproduction infrastructure in the be attributed to a combination of education, host. Mr. Pennington stated that the positive Commonwealth. Since the start of the program experience, and industry recognition of the economic impact of being a film host can benefit in 2009 there has been a 900 percent growth in faculty that includes production design, sitcom local restaurants, hotels, law enforcement, the number of productions coming to Kentucky.

24 2017 Interim LEGISLATIVE RECORD Additionally, after the modifications of the film successful if it maintains three components locations to promote the Commonwealth. The tax incentives, 20 productions were completed which include film incentives, crew, and studios. film commissions and associations also travel to in 2016 that generated $32 million in new The Kentucky Film Incentive is a 30 to 35 percent market Kentucky. economic activity, created 384 new jobs, and refundable tax credit. There is a 35 percent Responding to Representative Kim King, yielded approximately $3.2 million in new tax refundable tax credit for filming in an enhanced Dr. Owens said that there are currently 15 revenue for Kentucky. Thus far in 2017, there incentive county. Counties are certified or students who are enrolled in the Kentucky Film are 111 productions currently approved and decertified every year based on factors such as Certification Program and the goal is to have there has been a 169 percent increase in growth unemployment rate and median income. Out of approximately 100 individuals complete the from previous 12 months. Projections were all the applications received to date by the Office program in the next year. completed by the Kentucky film Association for of Film and Tourism Development, production After Representative Chris Harris expressed 2017 and 2018 using actual data from 2016 and companies have identified 60 out of 120 counties concern about in-state corporations using taking into account variables such as percent of in Kentucky as potential film locations. The crew the incentive program for the filming of productions approved, percent of productions component is being fulfilled by developing the commercials, Mr. Hall confirmed that Kentucky that are completed, production periods, and film industry workforce through the Kentucky businesses do film commercials under the cost of projects. It is projected that 33 projects Film Certification Program. The program was program. Ms. Stumbo stated that those in- will be completed in 2017 that could potentially recently announced by Asbury University and state business commercials are included in the generate $86 million in new economic activity, consists of online training modules and hands 111 currently approved projects. Kentucky has create 1,038 new jobs, and yield $8.6 million on training at a local university or production $12.1 billion in tax expenditures that includes in new tax revenue for the Commonwealth. It company. The third factor involves constructing incentives, tax deductions, and credits. The is projected that projects completed in 2018 studios in the Commonwealth. Every $1 million Kentucky Film Incentive Program accounts for could potentially generate $146 million in new in studio construction will support 10 jobs, have a one hundredth of a percent of the total tax economic activity, create 1,754 new jobs, and an economic impact of $1.6 million, and other expenditures in the state. Answering a follow up yield $14.6 million in new tax revenue for the businesses enjoy an additional $600,000 in question, Mr. Hall said that a full data set will Commonwealth. Ms. Stumbo said in order for sales. Every 100 jobs created by having studios be available for statistical analysis in July 2018 the film industry to continue to thrive in the supports 80 additional jobs in other businesses that will assist in determining how well the film state the film workforce must be expanded to and has a $25 million economic impact. Mr. Hall industry has developed in the state since the increase the crew base, dislocated workers must said that some studios have had apprehension implementation of the incentive program by the be retrained to maximize their skills that can be about locating in Kentucky in the past due to General Assembly. used in the industry, and an infrastructure must the lack of crew base and the uncertainty of Visit LEX be more fully developed, specifically a studio the stability an incentive program. Benefits of Mary Ramer, President of Visit LEX, gave being located in Kentucky. a successfully developed film industry includes updates on the status of the tourism industry in Kentucky Tourism, Arts and Heritage positive changes to the perception of Kentucky, the Lexington area and several Lexington and Cabinet an increase in film tourism, and potential city Fayette County projects and expansions. The Deputy Secretary Regina Stivers expressed revitalization of film communities across the Lexington area currently employs about 26,000 her thoughts on the film industry providing state. in the hospitality industry and Ms. Ramer said great opportunities to dislocated workers and In response to Senator Ernie Harris, Mr. Hall she expects that number to increase in the future. others across the Commonwealth. She also said the Office of Film and Tourism Development For every dollar that the Department of Tourism complimented Jay Hall, Executive Director of tries to post on its website and Facebook page spends on advertising the return on investment the Office of Film and Tourism Development, the productions that have been filmed Kentucky. is $151 back to the state. Ms. Ramer said that that for learning the film industry and promoting Judge Martin added that the Southern Kentucky the areas of tourism and economic development Kentucky to producers. Film Commission also posts about movies and often work together and she works closely with According to Jay Hall, in the United States in others projects being filmed in the state on its the city of Lexington, Commerce Lexington, and 2016 there were a total of 455 original scripted website and social media accounts. the universities. shows and 718 films released nationwide. There Answering questions from Representative The Lexington Convention Center are two million people employed in the film Wilson Stone, Mr. Hall explained that the Expansion is moving forward partly due to the industry totaling around $51 billion in wages reason that only about 30 percent of approved 2015 legislation that loaned $60 million for its paid. Between 2011 and 2016 there was an annual productions actual come to fruition is ultimately expansion. Construction will start in spring growth of 2.7 percent and there is a projected due to issues with financing, crew base, and 2018 and is scheduled to be complete in about 45 growth from 2016 to 2021 of 3.1 percent. In scheduling of actors. The two years window that months. The expansion will include an additional Kentucky from 2009 to 2015, there was $16 was included in the film incentive legislation 100,000 square feet of contiguous exhibit space million spent by the film industry that supported helps solve some of these issues. Ms. Stumbo and 25,000 square foot ballroom. The Old Fayette 192 direct jobs. The total investment made by the stated that the 30 percent statistic is from 2016, Courthouse is currently being renovated with industry from 2016 to the present is $46 million the percentage will be higher from 2017, and the an expected completion date being in 2018 and that is supporting 552 direct jobs. The direct jobs 2017 statistics will be available in 2018. She also will house administrative offices and a visitors’ include those that are working directly on the stated that in an effort to increase the number of center for Visit LEX, offices for Breeders’ Cup, production itself and does not include the jobs productions that film in the state, Jay Hall and and a restaurant. Construction for Centerpointe that are from the ancillary industries that service the Office of Film and Tourism Development in downtown Lexington is also underway and the film communities. travel to and have lines of communication with will include a Residence Inn, a full-service The film industry in Kentucky will only be directors, producers, and those who scout movie Marriott, restaurants, and retail space. Ms. THE KENTUCKY GENERAL ASSEMBLY 25 Ramer also detailed the planning of a park called Director, Harlan County Tourism; David In addition, Dr. Owens also discussed the long Town Branch Commons that is slated to have an Cottingham, COO, Post Time Studios; Stephanie term contract that the university holds with the event space, amphitheater, several children’s play Stumbo, Executive Director, Kentucky Film Broadcast Division of the International Olympic areas, dining options, and a water feature. Town Association; Deputy Secretary Regina, Kentucky Committee to provide broadcast training to Branch Commons is privately funded. Near the Tourism, Arts and Heritage Cabinet; Jay Hall, students and personnel. park will also be Town Branch Greenway, which Executive Director, Office of Film and Tourism Kentucky Film and Digital Media will be almost three miles of greenway and has Development, Kentucky Tourism, Arts and Industry Efforts and Opportunities Across the been supported through public funds. Heritage Cabinet; and Mary Ramer, President, Commonwealth The hospitality industry uses occupancy, Visit Lex. Judge Terry Martin, Judge Executive of Hart average daily rate, and revue per average room LRC Staff: John Buckner, Chip Smith and County, gave a local perspective of the economic for market analysis. For 2017 year to date, all Emma Mills. impact seen in his area from the film tax three of these areas have increased from previous Approval of Minutes incentives that the General Assembly approved years’ statistics. The revenue per average room is A motion to approve the minutes of the in 2015. Several different projects have been up 5.7 percent. Lexington as a total of 7,790 hotel September 21, 2017 meeting was made by filmed in Hart County and surrounding counties room spread out through 70 properties. Seven Representative Michael Meredith, seconded by including one for the Hallmark Channel called An new hotels are scheduled to open in Fayette Representative Larry Brown, and approved by Uncommon Grace that added about $500,000 to County between now and 2023. Ms. Ramer voice vote. the local area economies. Judge Martin attributed expressed her appreciation for the continued Asbury University producers choosing to film in his area to the support of the legislature for its support of the Dr. Sandra Gray, President of Asbury beautiful scenery, the hospitality of the residents, tourism industry. University, gave a brief overview of the university and the level playing field that was created by the With no further business to come before the after thanking members for continuing to tax incentives for film production. As a result committee, the meeting was adjourned at 12:40 invest in the progress and development of the of the successful completion of projects such p.m. Commonwealth. Asbury University was founded as Mail Order Monster and Runaway Romance, in 1890 and at the time was one of few institutions the Southern Kentucky Film Commission was INTERIM JOINT COMMITTEE that admitted women. In the early 1900s, it created by Hart, Barren, Warren, and Edmonson ON TOURISM, SMALL began offering business and commerce courses Counties to assist in attracting film producers to BUSINESS, AND INFORMATION which was uncommon during that period. Southern Kentucky. Judge Martin explained that Presently, half of the students come from out of although the introduction of the film industry as TECHNOLOGY Minutes of the 5th Meeting state, and 16 percent of those students become a new form of revenue for the Southern Kentucky of the 2017 Interim Kentucky residents upon graduating. Dr. Gray region is nontraditional economic development, October 19, 2017 commented on the recent partnership with The it has the potential to add jobs in businesses Call to Order and Roll Call Kentucky Film Commission which has led to that will be needed to supply materials and The 5th meeting of the Interim Joint the creation of a certification program that will services to film production teams. In an effort Committee on Tourism, Small Business and increase the labor force in the film industry. She to continue film industry development in the Information Technology was held on Thursday, extended the invitation to return the university Commonwealth, a new infrastructure is needed, October 19, 2017, at 11:00 AM, in Wilmore, KY at a later time to explore other programs besides as well as the training of Kentuckians in order at Asbury University in the Andrew S. Miller the School of Communication Arts such as the to provide a skilled film industry workforce. Center for Communication Arts. The meeting equine program, The Howard Dayton School of He suggested production studio being located was a joint meeting with the Interim Joint Business, and the School of Education. in Southern Kentucky, internships and co- Committee on Tourism, Small Business, and Dr. Jim Owens, Dean of the School of ops being offered to high school students, and Information Technology. Senator Alice Forgy Communication Arts and Professor of Media training being done throughout the Kentucky Kerr, Chair, called the meeting to order, and the Communication, stated that the School of Community and Technical College System. secretary called the roll. Communication Arts has approximately 450 Brandon Pennington, Director of Harlan Present were: students majoring in programs such as journalism, County Tourism, also gave a local perspective Members: Senator Alice Forgy Kerr, Co- theater and cinema production, worship arts, of the possibility for film to be a viable industry Chair; Senators Perry B. Clark, Denise Harper and media communication. Students majoring in the state. Above Suspicion, which was a $13.5 Angel, Ernie Harris, Stephen Meredith, Wil in media communication comprise nearly half million budgeted film and the largest budgeted Schroder, and Reginald Thomas; Representatives of the School of Communication Arts. Media film to come to Kentucky since Secretariat, was John Blanton, Larry Brown, Matt Castlen, communication students have the opportunity recently filmed in Harlan County. After learning Jeffery Donohue, Chris Fugate, David Hale, to study areas of film, television, multi-media, that the movie would be filmed in Harlan County, Chris Harris, Dan Johnson, Kim King, Michael media performance, media management, audio, the tourism officials and the community became Meredith, Russ Meyer, , Sannie and production design. Dr. Owens added that dedicated to ensuring they were equipped with Overly, Melinda Gibbons Prunty, Bart Rowland, the academic excellence of the program can the proper resources, tools, and skills to be a film John Sims, and Diane St. Onge. be attributed to a combination of education, host. Mr. Pennington stated that the positive Guests: Dr. Sandra Gray, President, Asbury experience, and industry recognition of the economic impact of being a film host can benefit University; Dr. Jim Owens, Dean of the School faculty that includes production design, sitcom local restaurants, hotels, law enforcement, of Communication Arts and Professor of Media, directing for various networks, national Emmy laundry facilities, rental car companies, and Asbury University; Judge Terry Martin, Judge awards, and prestigious honors for work on the even construction businesses. Residents also Executive, Hart County; Brandon Jennings, National Geographic and Smithsonian channels. rented out their homes and were compensated

26 2017 Interim LEGISLATIVE RECORD for being extras in the film. Harlan County yielded approximately $3.2 million in new tax refundable tax credit for filming in an enhanced saw a $3 million economic impact during the revenue for Kentucky. Thus far in 2017, there incentive county. Counties are certified or filming of Above Suspicion. Displaced coal mine are 111 productions currently approved and decertified every year based on factors such as workers’ skills can also be funneled into the film there has been a 169 percent increase in growth unemployment rate and median income. Out of industry by utilizing their talents as electricians, from previous 12 months. Projections were all the applications received to date by the Office carpenters, and painters. completed by the Kentucky film Association for of Film and Tourism Development, production David Cottingham, COO of Post Time 2017 and 2018 using actual data from 2016 and companies have identified 60 out of 120 counties Studios, offered a film industry viewpoint taking into account variables such as percent of in Kentucky as potential film locations. The crew by giving an overview of Post Time Studios. productions approved, percent of productions component is being fulfilled by developing the Post Time Studios is a full service production that are completed, production periods, and film industry workforce through the Kentucky company that was established in Lexington in cost of projects. It is projected that 33 projects Film Certification Program. The program was 1993. In 2003, it was one of the first production will be completed in 2017 that could potentially recently announced by Asbury University and studios in the region to have a high definition generate $86 million in new economic activity, consists of online training modules and hands editing system, which over the years led to an create 1,038 new jobs, and yield $8.6 million on training at a local university or production increased volume of clients and productions. Mr. in new tax revenue for the Commonwealth. It company. The third factor involves constructing Cottingham described the two factors he believes is projected that projects completed in 2018 studios in the Commonwealth. Every $1 million have made Post Time Studios successful. First, could potentially generate $146 million in new in studio construction will support 10 jobs, have the studio considers their clients as partners and economic activity, create 1,754 new jobs, and an economic impact of $1.6 million, and other this allows for returning and continued business. yield $14.6 million in new tax revenue for the businesses enjoy an additional $600,000 in Secondly, Post Time Studios is not industry Commonwealth. Ms. Stumbo said in order for sales. Every 100 jobs created by having studios specific and productions include a wide variety the film industry to continue to thrive in the supports 80 additional jobs in other businesses of projects in areas such as long form, short state the film workforce must be expanded to and has a $25 million economic impact. Mr. Hall form, documentary film, marketing, training, increase the crew base, dislocated workers must said that some studios have had apprehension safety, healthcare, tourism and athletics. Most be retrained to maximize their skills that can be about locating in Kentucky in the past due to of the talented staff that make these productions used in the industry, and an infrastructure must the lack of crew base and the uncertainty of possible are natives of Kentucky and several are be more fully developed, specifically a studio the stability an incentive program. Benefits of Asbury University graduates. In the last two being located in Kentucky. a successfully developed film industry includes years, the company has doubled its employees Kentucky Tourism, Arts and Heritage positive changes to the perception of Kentucky, and moved into a larger facility. The new Cabinet an increase in film tourism, and potential city facility and increased staff has helped to attract Deputy Secretary Regina Stivers expressed revitalization of film communities across the larger budgeted productions. Mr. Cottingham her thoughts on the film industry providing state. expressed optimism about the current climate of great opportunities to dislocated workers and In response to Senator Ernie Harris, Mr. Hall the film industry in the state and will continue others across the Commonwealth. She also said the Office of Film and Tourism Development to develop in the future in part due to the film complimented Jay Hall, Executive Director of tries to post on its website and Facebook page tax incentives. The incentives help with overall the Office of Film and Tourism Development, the productions that have been filmed Kentucky. production plans, investments, and local spend; for learning the film industry and promoting Judge Martin added that the Southern Kentucky lock productions into longer contracts, which in Kentucky to producers. Film Commission also posts about movies and turn can provide employment opportunities; and According to Jay Hall, in the United States in others projects being filmed in the state on its generate new tax revenue for the Commonwealth. 2016 there were a total of 455 original scripted website and social media accounts. Stephanie Stumbo, Executive Director of shows and 718 films released nationwide. There Answering questions from Representative the Kentucky Film Association, gave a detailed are two million people employed in the film Wilson Stone, Mr. Hall explained that the overview of Kentucky’s Film Tax Incentives, industry totaling around $51 billion in wages reason that only about 30 percent of approved statistics and growth projections of the film paid. Between 2011 and 2016 there was an annual productions actual come to fruition is ultimately industry since the incentives were passed growth of 2.7 percent and there is a projected due to issues with financing, crew base, and in 2015, and industry needs. The purpose growth from 2016 to 2021 of 3.1 percent. In scheduling of actors. The two years window that of the statutory provisions in KRS 148.544 Kentucky from 2009 to 2015, there was $16 was included in the film incentive legislation was to encourage the film and entertainment million spent by the film industry that supported helps solve some of these issues. Ms. Stumbo industry to choose locations in Kentucky for 192 direct jobs. The total investment made by the stated that the 30 percent statistic is from 2016, filming and production, increase employment industry from 2016 to the present is $46 million the percentage will be higher from 2017, and the opportunities within the film and entertainment that is supporting 552 direct jobs. The direct jobs 2017 statistics will be available in 2018. She also industry in the state, and develop a production include those that are working directly on the stated that in an effort to increase the number of and postproduction infrastructure in the production itself and does not include the jobs productions that film in the state, Jay Hall and Commonwealth. Since the start of the program that are from the ancillary industries that service the Office of Film and Tourism Development in 2009 there has been a 900 percent growth in the film communities. travel to and have lines of communication with the number of productions coming to Kentucky. The film industry in Kentucky will only be directors, producers, and those who scout movie Additionally, after the modifications of the film successful if it maintains three components locations to promote the Commonwealth. The tax incentives, 20 productions were completed which include film incentives, crew, and studios. film commissions and associations also travel to in 2016 that generated $32 million in new The Kentucky Film Incentive is a 30 to 35 percent market Kentucky. economic activity, created 384 new jobs, and refundable tax credit. There is a 35 percent Responding to Representative Kim King, THE KENTUCKY GENERAL ASSEMBLY 27 Dr. Owens said that there are currently 15 Branch Commons is privately funded. Near the Forecasting Group meeting and the students who are enrolled in the Kentucky Film park will also be Town Branch Greenway, which Administration’s response Certification Program and the goal is to have will be almost three miles of greenway and has John Chilton, State Budget Director and Greg approximately 100 individuals complete the been supported through public funds. Harkenrider, Deputy Executive Director, Office program in the next year. The hospitality industry uses occupancy, of the State Budget Director gave an update since After Representative Chris Harris expressed average daily rate, and revue per average room the July 2017 A&R meeting. concern about in-state corporations using for market analysis. For 2017 year to date, all Mr. Harkenrider updated the committee on the incentive program for the filming of three of these areas have increased from previous the new revenue estimates from the Consensus commercials, Mr. Hall confirmed that Kentucky years’ statistics. The revenue per average room is Forecasting Group (CFG). FY 2017 ended with businesses do film commercials under the up 5.7 percent. Lexington as a total of 7,790 hotel a $138.5 million General Fund shortfall. After program. Ms. Stumbo stated that those in- room spread out through 70 properties. Seven the CFG met in August, there was an estimated state business commercials are included in the new hotels are scheduled to open in Fayette $206.2 million FY 2018 shortfall. Governor 111 currently approved projects. Kentucky has County between now and 2023. Ms. Ramer Bevin put Cabinets on alert that budget cuts $12.1 billion in tax expenditures that includes expressed her appreciation for the continued were imminent and asked for reduction plans. incentives, tax deductions, and credits. The support of the legislature for its support of the He explained that the CFG met again in Kentucky Film Incentive Program accounts for tourism industry. October for preliminary budget estimates and a one hundredth of a percent of the total tax With no further business to come before the an official revision to FY 2018 General Fund expenditures in the state. Answering a follow up committee, the meeting was adjourned at 12:40 enacted estimate. He reported that the shortfall question, Mr. Hall said that a full data set will p.m would be $155.6 million. be available for statistical analysis in July 2018 INTERIM JOINT COMMITTEE Mr. Harkenrider concluded with multiple that will assist in determining how well the film ON APPROPRIATIONS AND slides pertaining to projections on revenue for industry has developed in the state since the REVENUE the next fiscal year and what the outlook would implementation of the incentive program by the Minutes of the 5th Meeting be for the Commonwealth. General Assembly. of the 2017 Interim In response to a question from Chairman Visit LEX October 26, 2017 Rudy, Director Chilton explained that all Mary Ramer, President of Visit LEX, gave Call to Order and Roll Call Cabinets were told to develop a plan to reduce updates on the status of the tourism industry in The 5th meeting of the Interim Joint spending during this fiscal year in anticipation the Lexington area and several Lexington and Committee on Appropriations and Revenue was of the $200 million shortfall. All agencies Fayette County projects and expansions. The held on Thursday, October 26, 2017, at 1:00 PM, in have presented plans, but there are additional Lexington area currently employs about 26,000 Room 154 of the Capitol Annex. Representative questions on where expenditures might be cut. in the hospitality industry and Ms. Ramer said Steven Rudy, Chair, called the meeting to order, In response to a question from Chairman she expects that number to increase in the future. and the secretary called the roll. Rudy, Director Chilton stated that the agencies For every dollar that the Department of Tourism Present were: have been directed to include the spending spends on advertising the return on investment Members: Senator Christian McDaniel, Co- reductions in the upcoming budget plans. is $151 back to the state. Ms. Ramer said that that Chair; Representative Steven Rudy, Co-Chair; With no further business before the the areas of tourism and economic development Senators Ralph Alvarado, Danny Carroll, Rick committee, the meeting was adjourned. often work together and she works closely with Girdler, Morgan McGarvey, Gerald A. Neal, the city of Lexington, Commerce Lexington, and Dennis Parrett, Wil Schroder, Brandon Smith, INTERIM JOINT COMMITTEE ON the universities. Robin L. Webb, Stephen West, and Max Wise; APPROPRIATIONS AND REVENUE The Lexington Convention CenterRepresentatives Rocky Adkins, Myron Dossett, Budget Review Subcommittee on General Expansion is moving forward partly due to the Ken Fleming, Jeff Greer, David Hale, Brian Government, 2015 legislation that loaned $60 million for its Linder, Donna Mayfield, Suzanne Miles, Jason Finance, Personnel, and Public Retirement expansion. Construction will start in spring Nemes, Phillip Pratt, Jody Richards, Sal Santoro, Minutes of the 3rd Meeting 2018 and is scheduled to be complete in about 45 Arnold Simpson, Jim Stewart III, James Tipton, of the 2017 Interim October 26, 2017 months. The expansion will include an additional Ken Upchurch, Jim Wayne, Russell Webber, Call to Order and Roll Call 100,000 square feet of contiguous exhibit space Susan Westrom, and Jill York. The third meeting of the Budget Review and 25,000 square foot ballroom. The Old Fayette Guests: John Chilton, State Budget Director; Subcommittee on General Government, Courthouse is currently being renovated with Greg Harkenrider, Deputy Executive Director, Finance, Personnel, and Public Retirement of an expected completion date being in 2018 and Office of the State Budget Director; Michael the Interim Joint Committee on Appropriations will house administrative offices and a visitors’ Jones, Governor’s Office for Policy Research. and Revenue was held on Thursday, October 26, center for Visit LEX, offices for Breeders’ Cup, LRC Staff: Jennifer Hays, Cynthia Brown, 2017, at 10:00 AM, in Room 131 of the Capitol and a restaurant. Construction for Centerpointe Amit Shanker, Hannah Walker, Charlotte Annex. Senator Danny Carroll, Co-Chair, called in downtown Lexington is also underway and Quarles, and Jennifer Beeler. the meeting to order, and the secretary called the will include a Residence Inn, a full-service Approval of the Minutes roll. Marriott, restaurants, and retail space. Ms. Senator Alvarado made a motion, seconded Present were: Ramer also detailed the planning of a park called by Representative Santoro, to approve the Members: Senator Danny Carroll, Co-Chair; Town Branch Commons that is slated to have an minutes of the September 28, 2017 meeting. The Representative Suzanne Miles, Co-Chair; Senator event space, amphitheater, several children’s play motion carried by voice vote. Dennis Parrett; Representatives Tim Couch, Will areas, dining options, and a water feature. Town Presentation regarding the Consensus Coursey, Kenny Imes, Adam Koenig, Michael

28 2017 Interim LEGISLATIVE RECORD Meredith, Russ A. Meyer, Jerry T. Miller, Phil Generation 911 program is being developed. Representative Jill York, Co-Chair; Senators Moffett, Rick G. Nelson, and Steven Rudy. Mr. Sunseri added that the last statewide plan in Perry B. Clark, Denise Harper Angel, and Alice Guests: John Holiday, Executive Director, 2009 is now completely obsolete. Mr. Ball said Forgy Kerr; Representatives Jim Gooch Jr., Steve Kentucky Office of Homeland Security (KOHS); the Next Generation 911 will move from the Riggs, Diane St. Onge, Tommy Turner, and Ken Mike Sunseri, Deputy Executive Director, KOHS; traditional phone system to an Internet Protocol Upchurch. and, Jarred Ball, KY 911 Board Administrator, (IP) network, which will allow calls to be able Guests: Don Parkinson, Secretary, Tourism, KOHS. to accept texts, photos, and videos. Mr. Holiday Arts, and Heritage Cabinet (TAHC); Regina LRC Staff: Liz Columbia and Spring Emerson. added that it would also decrease the response Stivers, Deputy Secretary, TAHC; Laura Prewitt, Kentucky Office of Homeland Security time. Executive Director, Kentucky Horse Park, John Holiday, Executive Director, KOHS; In response to questions from Representative TAHC; Kristen Branscum, Commissioner, Mike Sunseri, Deputy Executive Director, KOHS; Moffett, Mr. Holiday said the KOHS is a state Department of Tourism, TAHC; Representative and, Jarred Ball, KY 911 Board Administrator, group in the Executive Branch, but is federally Dan Johnson; Gregory Johnson, Commissioner, KOHS; provided a brief overview of the agency funded. Federal funds do not pay for guns and Department of Fish and Wildlife Resources, budget. ammunition; those are funded 100 percent TAHC; Chris Reece, Executive Director, Office Co-Chair Carroll commented that Executive by state funds through the Law Enforcement of Finance, TAHC; Charles Snavely, Secretary, Director Holiday is very qualified for the position. Protection Program. Energy and Environment Cabinet (EEC); and In response to a question from Co-Chair Carroll In response to a question from Representative Bruce Scott, Deputy Secretary, EEC. regarding the use of law enforcement grants, Mr. Miller, Mr. Holiday said there would be no LRC Staff: Sara Rome, Greg Troutman, and Holiday said the funds are used primarily for change in the agency budget request. Jennifer Luttrell. replacement of firearms, which last for about ten Representative Meredith commented that Tourism, Arts, and Heritage Cabinet years, and body armor, which lasts for about five ambulance services in Edmonson County are Budget Update to seven years. A breakdown of the latest grants passing on an unfunded mandate for certain Secretary Parkinson provided a brief update that were awarded throughout the state was equipment. Mr. Sunseri said there are commonly on the budget of the Tourism, Arts, and Heritage provided in the meeting packet. matching funds. Cabinet (TAHC). In response to questions from Co-Chair Senator Parrett pointed out that the City of In response to questions from Rep. St. Miles regarding expired equipment, Mr. Holiday Lowell was listed in the documents as being in Onge, Secretary Parkinson stated that the said it depends on the type of equipment as to Hardin County; however, it is actually in Harlan cabinet is looking at starting a yearly event at how long it lasts. A common sense element of County. the Kentucky Horse Park (KHP) beginning in judgement would have to be used by the local Co-Chair Carroll called for a motion to 2019. Ms. Prewitt stated that the annual three authorities in determining whether certain approve the minutes of the last meeting, held day equestrian event will no longer be named equipment could be used after the expiration on September 28, 2017. The motion was made for Rolex after 2019, as the new named sponsor date. Mr. Sunseri added that teams of peers by Representative Miller and seconded by is Land Rover. Ms. Prewitt noted that the KHP review the grant applications for equipment. In Representative Moffett, and the minutes were polo fields are not up to professional standard, some cases, even though a piece of equipment approved without objection. which creates difficulty when attempting to lure may have expired without ever being used, it There being no further business before the polo teams for exhibitions. may still be unusable after the expiration date. subcommittee, the meeting was adjourned at In response to questions from Rep. Riggs, Grants were distributed equally across the state, 11:00 AM. Secretary Parkinson noted that Asbury and funding was provided for equipment for University spent $50,000 creating a training communications, personal protection, detection, INTERIM JOINT COMMITTEE program for film workers to assist in bringing chemical/biological, search and rescue, explosive ON APPROPRIATIONS AND film business to the state. Secretary Parkinson device remediation, and medical equipment. REVENUE noted that the cabinet has granted incentives to Mr. Holiday said technology changes almost Budget Review Subcommittee on Economic 25 film projects in 2017. daily, and becomes obsolete. Mr. Sunseri said Development, Tourism, and Environmental In response to questions from Sen. Kerr, it is important to bridge the inter-operability Protection Commissioner Branscum said that the cabinet is gaps. Representative Miles commented that Minutes of the 4th Meeting attempting to bring more attention to Kentucky’s communication is a major concern. Co-Chair of the 2017 Interim regional cuisine because culinary tourism is a big Carroll commented that it is a very valid concern October 26, 2017 business. and remembers the safety risk involved with the Call to Order and Roll Call In response to a question from Rep. Johnson, communications issues during ice storms in the The 4th meeting of the Budget Review Commissioner Johnson said that Asian Carp sells past. Subcommittee on Economic Development, for $.15 to $.17 per steak. Secretary Parkinson In response to questions from Representative Tourism, and Environmental Protection of the noted that about five million pounds of Asian Koenig, Mr. Ball said the extra $1.4 million comes Interim Joint Committee on Appropriations Carp are removed from Kentucky Lake and from a combination of both salary reductions and Revenue was held on Thursday, October 26, Lake Barkley every year. Secretary Parkinson and the point of sale legislation in the 911 Bill, 2017, at 10:00 AM, in Room 169 of the Capitol noted that the cabinet’s goal is to remove around which increases the collectability of 911 usage on Annex. Representative Jill York, Chair, called the seventeen million pounds from Kentucky cell phones. Mr. Sunseri added that the maps in meeting to order, and the secretary called the waterways per year. the packet show the Homeland Security Grant roll. In response to questions from Chair York, Program and the Law Enforcement Protection Present were: Deputy Secretary Stivers noted that the cabinet Program separately. Mr. Ball said the Next Members: Senator Rick Girdler, Co-Chair; leases marinas to private companies. Secretary THE KENTUCKY GENERAL ASSEMBLY 29 Parkinson stated that the Berea Artisan Center and Jay Jacobs. money AOC would have spent to detain youth sits on interstate-75. Secretary Parkinson stated State of the Judiciary will instead be used to provide resources and that the welcome centers on the southern edge of Chief Justice of Kentucky John D. Minton Jr. treatment services to young people. AOC will the state on interstate-75 and interstate-65 both presented the 2017 State of the Judiciary address. support the incentive fund by acting as the fiscal need to be rebuilt. He began by thanking the General Assembly for agent, providing assistance for grant applications, Energy and Environment Cabinet Budget allowing him to present and the nearly 3,800 and collecting and reporting the data required Update individuals that work for Kentucky’s judicial from judicial districts. The AOC Department of Secretary Snavely provided a brief update branch. Family and Juvenile Services and the Department on the budget of the Energy and Environment Chief Justice Minton stated the of Juvenile Justice began this support by hosting Cabinet (EEC). Administrative Office of the Courts (AOC) community partner meetings in each of the 66 In response to questions from Rep. St. Onge, is currently facing several challenges. AOC is judicial districts to educate those jurisdictions Secretary Snavely stated that two thousand tons grappling to keep up with rapid technological about how the fund will work. of radioactive fracking waste from other states and social developments, the opioid epidemic In response to Governor Bevin’s call to was brought in to Kentucky and dumped in has expanded court caseloads and altered Drug improve Kentucky’s adoption process, Chief a solid waste landfill in Estill County. Deputy Court treatment, and juvenile justice reform Justice Minton created a Dependency, Neglect Secretary Scott said that there is a plan in place and pretrial justice reform are top priorities. and Abuse (DNA) Judicial Workgroup. This to remove the radioactive waste. These forces have led AOC to put aside business workgroup identifies policies that would reduce In response to a question from Rep. Riggs, practices that no longer work and adopt new the adoption timeline, and addresses inefficient Secretary Snavely noted that it is easier to get practices that meet current needs. policies and redundant paperwork. The into the natural gas business than it is to get into Kentucky Pretrial Services continues to lead workgroup will focus specifically on policies and the coal business. Secretary Snavely said that the nation. In 1976, Kentucky was one of the first processes that directly impact the permanency, Kentucky just doesn’t have as much natural gas states in the country to abolish bail bonding for safety, and well-being of children. Also, the in the ground as other states and the economics profit and AOC’s leadership continues today as DNA Judicial Workgroup is collaborating with make it less attractive to businesses. AOC managers share their expertise on pretrial the Cabinet for Health and Family Services, the In response to a question from Rep. St. Onge, programs each year. The goals of pretrial release Justice and Public Safety Cabinet, the Finance and Deputy Secretary Scott said the cabinet uses are to ensure public safety by determining which Administration Cabinet, and the Department drones for a variety of scientific purposes. people should be released and which people of Education to resolve local court-community There being no further business before the should stay in jail, and to help ensure that those barriers, enhance support for various initiatives, subcommittee, the meeting was adjourned at released come back to court. To meet these goals, and determine how to better serve Kentucky’s 11:55 AM. pretrial officers apply a validated risk assessment children and families. to the defendant’s criminal history. The risk of Chief Justice Minton spoke on AOC’s INTERIM JOINT COMMITTEE ON the defendant to fail to appear or to be arrested investments in court technology, which was one JUDICIARY again is then reported to the court. Properly of his biggest goals when becoming the Chief Minutes of the 5th Meeting assessing and determining pretrial release is Justice in 2008. Nearly 900,000 court cases are of the 2017 Interim extremely important, and AOC continues to filed in Kentucky state courts each year, and October 20, 2017 refine that process. he stated that adapting to the rapid changes in Call to Order and Roll Call Chief Justice Minton announced that AOC’s technology for use by the courts was one of the The 5th meeting of the Interim Joint Department of Pretrial Services has recently biggest challenges. In 2013, the Administrative Committee on Judiciary was held on Friday, undergone its most extensive reorganization in Office of the Courts started KYeCourts, a multi- October 20, 2017, at 10:00 AM, in Room 154 several years. Pretrial officers must apply the risk year initiative to update court technology. Four of the Capitol Annex. Representative Joseph M. assessment tool consistently statewide so that years later, AOC is upgrading the hardware Fischer, Chair, called the meeting to order, and all judges can be confident they are receiving and network infrastructure, replacing trial the secretary called the roll. reliable, accurate information. Also, AOC is and appellate case management systems, and Present were: improving how pretrial officers report risk providing a document management system Members: Senator Whitney Westerfield, Co- assessment information. The scoring process that will electronically store and index court Chair; Representative Joseph M. Fischer, Co- has recently been revised and AOC believes this documents. Also, eFiling is now available in all Chair; Senators Danny Carroll, Perry B. Clark, change will increase the accuracy of the scoring. 120 Kentucky counties for civil and criminal Ray S. Jones II, Alice Forgy Kerr, John Schickel, AOC’s Department of Pretrial Services is offering cases in Circuit and District courts. AOC’s next Dan “Malano” Seum, and Robin L. Webb; an Updates to Risk Assessment Scoring seminar steps include expanding eFiling to juvenile, Representatives Robert Benvenuti III, John for judges, prosecutors, and public defenders in forcible detainer, and probate and appeals cases, Blanton, Larry Brown, Tom Burch, McKenzie eight locations across the state in October. and offering eFiling to self-represented litigants. Cantrell, Daniel Elliott, Angie Hatton, Joni Chief Justice Minton spoke about the While there has been success with eFiling, the L. Jenkins, Stan Lee, Chad McCoy, C. Wesley financial incentive fund from Senate Bill 200. paper file is still the official court record in Morgan, Jason Nemes, Jason Petrie, Brandon AOC is working with the Kentucky Justice and Kentucky and AOC is unsure of when it will move Reed, and Kevin Sinnette. Public Safety Cabinet and the Department of completely to a paperless system. In addition, Guests: Chief Justice John D. Minton Jr. and Juvenile Justice to launch the financial incentive AOC anticipates rolling out a new appellate Representative Diane St. Onge. fund. Senate Bill 200 requires the savings realized case management system and an eFiling system LRC Staff: Katie Comstock, Alice Lyon, from juvenile justice reform to be reinvested for the Supreme Court and Court of Appeals in Chandani Kemper, Dale Hardy, Matt Trebelhorn, in programs that supervise low-risk youth. The 2018. CourtNet 2.0, which provides near real-

30 2017 Interim LEGISLATIVE RECORD time, online access to Kentucky civil and criminal public defenders, treatment providers, and have also been created to address the issues of cases, also continues to expand. AOC has started others who are part of Specialty Court teams access to justice, transitions within the practice a pilot project in Trimble County that will be were invited. The sessions covered the latest of law, sustainability of the legal profession, and the basis for a new, statewide case management trends in treatment for participants in Drug technology. system and electronic court record. Court, Veterans Treatment Court, DUI Court As mandated by the legislature in the Judicial Chief Justice Minton also spoke about new and Mental Health Court. Branch budget bill in the 2014 Regular Session, policies that will save money while improving On the regional level, Chief Justice Minton the General Assembly received a comprehensive, juror reporting and making jury management was part of a team from Kentucky that statewide judicial redistricting plan. Chief more uniform statewide. The Supreme Court participated in the first Regional Judicial Opioid Justice Minton stated that research shows the last recently adopted amendments to the Rules of Initiative (RJOI) in August 2016. Participants statewide redistricting took place in 1893. AOC’s Administrative Procedures for Jury Selection included teams from Kentucky, Ohio, Illinois, statewide plan responds to access to justice needs and Management. The changes took effect Indiana, Michigan, Pennsylvania, Tennessee, across the commonwealth. While the legislature October 1. The new rules call for centralized Virginia, and West Virginia, along with critical did not take up judicial redistricting during mailing of juror summonses, which will save public and private partners. The goal of the the 2017 regular session, Chief Justice Minton time and money. Also, each county will now use summit was to create a framework that would stressed the need for statewide redistricting. AOC’s electronic Jury Management Program coordinate the state and federal policymakers He stated that the jurisdictions in urgent need to administer jury management practices and who are confronting the opioid problem. Several of redistricting include: Lincoln, Pulaski, and procedures. The Jury Management Program will Supreme Court justices and court administrators Rockcastle; Boone and Gallatin; Kenton; Floyd; record disqualifications, excuses, and permanent from this region have committed to serving on Knott and Magoffin; Bourbon, Scott, and exemptions of summoned jurors. the RJOI Leadership Committee. The Supreme Woodford; and Daviess. The plan certified by the Another important change clarifies how Court of Ohio, on behalf of the RJOI, has been Supreme Court is still valid, but AOC is open to AOC compiles the master list of prospective awarded a three-year, $1 million grant from modifying that plan. jurors from the statutorily required source the Bureau of Justice Assistance to improve Chief Justice Minton discussed the need to lists. In an effort to reduce the number of prescription drug monitoring exchanges across improve Judicial Branch salaries. Despite some undeliverable summonses, AOC worked with state lines, establish regional best practices, and recent improvements in compensation for the source list providers to ensure the availability standardize procedures to provide a more unified elected circuit clerks and non-elected employees, of the most accurate information about people regional response to the opioid epidemic. The those salaries still fall short. He also stated that who are eligible for service. AOC is also making Conference of Chief Justices and the Conference a growing number of non-elected employees’ an effort to reduce the number of people who of State Court Administrators have formed a joint compensation falls below the federal poverty fail to appear for jury service, and has developed Opioid Task Force with funding from the State guidelines. Since 2007, judges have received only a postcard to notify prospective jurors of their Justice Institute. The task force will encourage two years of 1 percent raises and two years of $400 delinquent status with directions to contact the the sharing of strategies and will identify raises. A January 2017 Survey of Judicial Salaries court. unmet needs, create partnerships to address the by the National Center for State Courts shows This summer, the seven Supreme Court impact of opioids on children and families, and that Kentucky has fallen in national rankings, Justices voted unanimously to approve an develop principles for state courts to use when with Circuit Court salaries ranked 48 out of Open Records Policy. The policy took effect collaborating with treatment providers, criminal 50 states. Chief Justice Minton said he will be August 15, 2017. This is the first Open Records justice systems, and child welfare agencies. including a request to increase compensation for Policy for AOC. The policy is in the form of Chief Justice Minton discussed changes to judges, circuit clerks, and non-elected employees an Administrative Procedure of the Court of Kentucky’s guardian ad litem program. More in AOC’s biennial budget. Justice, which carries the weight of law under than 11,300 Kentucky children are in state Responding to a question from Senator Seum, the Kentucky Constitution. Chief Justice Minton custody because they have been removed from Chief Justice Minton stated that depending on stated that while the Judicial Branch has long their homes due to dependency, neglect, or abuse. circumstances, a person who does not attend complied with the spirit of the Open Records Guardians ad litem are attorneys who provide jury duty may be charged with contempt of court. Act, he was proud that AOC’s commitment was legal representation to these children. The Responding to a follow-up question from written into policy. Judicial Branch is working with the Executive and Senator Seum, Kelly Stevens, Manager of AOC’s Chief Justice Minton addressed the opioid Legislative Branches to establish more consistent Court Services Division, stated that eWarrents epidemic in Kentucky and how it is effecting payment practices statewide. The Supreme Court are state-wide and that statistics remain high. Kentucky families and children. To help judges and the Finance and Administration Cabinet are Responding to a question from Senator handle drug-related cases, and give judges a finding ways to clarify practices and jointly create Webb, Lori Dudgeon, Director of AOC, stated better understanding of addiction and treatment, rules and forms that will increase accountability that the DNA Judicial Workgroup will provide AOC hosted the first statewide Opioid Summit for the state dollars that pay for these services. suggestions that it feels will improve foster care in January 2017. Judges learned about the AOC wants to be proactive in helping and adoption in Kentucky. science of treating addiction; case law, statutes, Kentucky attorneys adapt to new trends in the Responding to a question from Representative and regulations regarding medication-assisted practice of law. To achieve this, the Kentucky Cantrell, Carole Henderson, AOC Budget treatment; and the role of the government in Bar Association has created a Commission Director, stated that AOC’s current fiscal health the opioid epidemic. In August 2017, AOC on the Future of the Legal Profession. The is good. held a statewide conference for the Department commission is designed to identify and explore Responding to a question from Representative of Specialty Courts, where judges, court staff, all areas relevant to the practice of law and the Blanton, Chief Justice Minton stated that the probation and parole officials, prosecutors, delivery of legal services. Four subcommittees open records changes includes furnishing tax THE KENTUCKY GENERAL ASSEMBLY 31 information on request. collected can be used in court. In response to a question from Chair Webber, Responding to a question from Senator Responding to a question from Representative Mr. Lowery stated that CHFS had submitted a Schickel, Chief Justice Minton stated that AOC is Benvenuti, Representative St. Onge stated that budget reduction plan to the Governor’s Office readdressing the Code of Judicial Conduct to the concerns about this expressed by the Kentucky of Policy and Management (GOPM) but had not most recent federal ruling regarding candidates State Police (KSP) have been addressed and KSP received a determination yet. associating with political parties. supports the bill. In response to questions from Sen. Alvarado, Responding to a question from Representative Responding to a question from Senator Deputy Secretary Feeley said that additional Morgan, Chief Justice Minton stated that a Carroll, Representative St. Onge stated that she 1915(c) waiver slots had been put on hold until the Circuit Court judge’s salary is $124,780 per year. is waiting to hear from the Federal Aviation cabinet receives a response from GOPM on the Ms. Henderson stated that a 10 percent salary Administration (FAA) to move forward with a budget reduction plan. Deputy Secretary Feeley increase over the next two years would rank separate bill. noted that the cabinet is ready to implement the Kentucky at 39 out of 50 states. There being no further business, the meeting Medicaid 1115 waiver with the Governor’s office Responding to a follow-up question from adjourned at 11:34 AM. but is waiting for a response from the federal Representative Morgan, Chief Justice Minton Department for Health and Human Services. stated that the amount of children entering INTERIM JOINT COMMITTEE In response to questions from Rep. Jenkins, the foster system is extremely high and, in his ON APPROPRIATIONS AND Mr. Lowery stated that between sixty to seventy opinion, a real problem in the Commonwealth. REVENUE percent of the cabinet’s funding is from the Responding to questions from Representative Budget Review Subcommittee on Human federal government. Mr. Lowery confirmed that Nemes, Chief Justice Minton stated that AOC’s Resources the budget reduction plan could result in a loss emails are exempted from the Open Records Minutes of the 2nd Meeting of federal funds. rule because of prohibition against judges of the 2017 Interim Medicaid Budget Overview and Update having contact with parties or lawyers involved October 26, 2017 Commissioner Miller provided an overview in litigation. Chief Justice Minton stated that Call to Order and Roll Call of the budget for the Department for Medicaid Kentucky does the best job in the area of pretrial. The 2nd meeting of the Budget Review Services. Brian Cumbo, President of the Martin Subcommittee on Human Resources of the In response to a question from Rep. Wuchner, County Bar Association, expressed opposition Interim Joint Committee on Appropriations Commissioner Miller stated that the decrease for judicial redistricting in Martin County. He and Revenue was held on Thursday, October 26, in per member costs for Medicaid was not and many others do not support moving Martin 2017, at 10:00 AM, in Room 149 of the Capitol due to Managed Care Organizations (MCOs) County from the 24th Judicial circuit. Annex. Representative Russell Webber, Chair, neglecting to pay providers. Unmanned Aircraft Systems: BR 2 called the meeting to order, and the secretary In response to questions from Sen. Alvarado, Representative Diane St. Onge presented BR called the roll. Commissioner Miller noted that MCO contracts 2, which is the same as House Bill 291 from the Present were: for plans beginning January 1, 2019 would be 2017 Regular Session. BR 2 is a bill that attempts Members: Senator Ralph Alvarado, Co- up for bid in the spring of 2018. Commissioner to balance privacy rights with drone usage in Chair; Representative Russell Webber, Co- Miller said that the cabinet is looking at limiting Kentucky. Chair; Senators Morgan McGarvey and Stephen the number of MCOs beginning with the new Use of drones by law enforcement officers Meredith; Representatives Joni L. Jenkins, contracts that will start on January 1, 2019. would also be regulated under this bill. If law Kimberly Poore Moser, Susan Westrom, and Commissioner Miller stated that fee-for-service enforcement wishes to use a drone during an Addia Wuchner. Medicaid members are primarily the long term investigation and search, a search warrant must Guests: Tim Feeley, Deputy Secretary, care and waiver populations. be obtained and it must specifically authorize the Cabinet for Health and Family Services (CHFS); In response to questions from Sen. Meredith, use of an unmanned aircraft system (UAS). Also, Eric Lowery, Acting Executive Director, Office Commissioner Miller noted that the Medicaid when law enforcement uses a drone in a search or of Policy and Budget, CHFS; Eric Clark, Chief 1115 waiver, if approved, would incentivize for legitimate government purposes, limited data of Staff, Secretary’s Office, CHFS; Steve Miller, improving health outcomes. Commissioner shall be collected on non-suspects. Disclosure of Commissioner, Department for Medicaid Miller stated that the cabinet anticipates a data is prohibited except by court order. Services (DMS), CHFS; Veronica Cecil, Deputy savings of two billion dollars over five years if Representative St. Onge said that, with this Commissioner, DMS, CHFS; Russ Ranallo, the Medicaid 1115 waiver is approved, with $300 bill, a person is guilty of an offense with the aid Vice President, Finance, Owensboro Health million of that total being saved by the state. of a UAS if it is under his or her control and Systems; Carl Herde, Vice President, Finance, Medicaid Disproportionate Share Hospital the conduct would have given rise to criminal Kentucky Hospital Association; Senator Dennis (DSH) Payments liability for the offense if preformed directly Parrett, Norma Hatfield, Kinship Care Program Mr. Ranallo and Mr. Herde presented an by the person. A person is guilty of an offense Participant; and Adria Johnson, Commissioner, update on DSH payments and the concerns of for intentionally obstructing or disrupting an Department for Community Based Services, the Kentucky Hospital Association. emergency responder from preforming official CHFS. In response to questions from Sen. Alvarado, duties. The first offense would be a violation and LRC Staff: Miriam Fordham, Jake Fouts, and Mr. Ranallo confirmed that DSH payments help second or subsequent offenses would be a Class Benjamin Thompson. smaller hospitals to set yearly budgets. B misdemeanor Cabinet for Health and Family Services Kinship Care Responding to a question from Representative Budget Overview Senator Parrett and Ms. Hatfield presented McCoy, Representative St. Onge stated that as a Deputy Secretary Feeley provided a brief on the issue of kinship care in Kentucky. recreational user or a commercial user, evidence overview of the budget for CHFS. In response to questions from Chair Webber,

32 2017 Interim LEGISLATIVE RECORD Commissioner Johnson noted that 350 children Right to be treated with fairness and respect Caroline Ruschell, Executive Director for the are impacted by a recent court ruling on kinship for the victim’s safety, dignity, and privacy; Kentucky Association of Children’s Advocacy care and that the cost to the state would be Right to due process and a meaningful role in Centers, and Winn Stephens, Executive Director between three and a half and four million the criminal justice system; for the Children’s Advocacy Center of the dollars. Commissioner Johnson stated that she Right to be informed of the constitutional Bluegrass, testified. was unsure of the time frame needed to fulfil the rights afforded to victims of crime; Before the Children’s Advocacy Center court order. Right to full and timely restitution; and (CAC) model, many children were required to There being no further business before the Right to constitutional standing. tell the stories of their abuse to several different subcommittee, the meeting was adjourned at Senator Westerfield stated that while it is people and may have been asked inappropriate 11:54 AM. important that the accused have constitutional questions by someone not trained in post- rights, the victims deserve them as well and this traumatic investigation tactics. Not only did this INTERIM JOINT COMMITTEE ON bill would not infringe on the constitutional make it difficult for victims to get the help that JUDICIARY rights of the accused. they needed, but it also made it difficult to get Minutes of the 6th Meeting Ms. Christiansen thanked many legislators convictions. of the 2017 Interim for their support of Marsy’s Law. Marsy’s Law The CAC model, which was adopted in 1998, November 3, 2017 is named after Marsy Nicholas, a woman who allows children to come to a comfortable location Call to Order and Roll Call was murdered by her ex-boyfriend. After her and tell their story only once. Once an officer or The 6th meeting of the Interim Joint death, her family was harassed by the suspect case worker receives a report, they can bring the Committee on Judiciary was held on Friday, and was not informed of his release. Ms. child to a CAC. The child tells their story once to November 3, 2017, at 10:00 AM, in Room 169 of Christiansen stated that enacting Marsy’s Law in a trained interviewer who knows the questions the Capitol Annex. Senator Whitney Westerfield, Kentucky would help ensure that no other family to ask without retraumatizing the child, then a Chair, called the meeting to order, and the experiences this type of retraumatization. She team of professionals make a decision on how to secretary called the roll. also stated that Marsy’s Law is needed because proceed with the case. CACs also offer therapy, Present were: when the accused is arrested and charged it is medical examines, courtroom preparation, Members: Senator Whitney Westerfield, considered a crime against the state and victims victim advocacy, case management, and other Co-Chair; Representative Joseph M. Fischer, become only witnesses. Marsy’s Law would services. All services offered are provided Co-Chair; Senators Joe Bowen, Danny Carroll, create a meaningful role in the criminal justice in one location that is made as comfortable, Perry B. Clark, John Schickel, Dan “Malano” system for victims. private, and safe for these children as possible. Seum, and Robin L. Webb; Representatives John Ms. Moore, a Marsy’s Law advocate, also All children in the 120 counties in Kentucky Blanton, Larry Brown, Tom Burch, McKenzie spoke in support of the bill. She told the story of are represented by one of the 15 CACs across Cantrell, Daniel Elliott, Angie Hatton, Joni how her 21 year old grandson, Skyler, was shot. the Commonwealth. Although many CACs are L. Jenkins, Chad McCoy, C. Wesley Morgan, For three months, Skyler suffered physically involved in cases of sexual abuse, there are also Kimberly Poore Moser, Jason Nemes, Jason before passing away. Since his passing, Ms. Moore cases of physical abuse, neglect, and children Petrie, Brandon Reed, and Ken Upchurch. stated that she has had very little information on who witness violence. Also, four of the 15 centers Guests: Senator Whitney Westerfield, Ashlea the person accused of shooting her grandson. are considered dual centers, which means they Christiansen, Stella Moore, Caroline Ruschell, She urged the General Assembly to consider serve other programs outside of the CAC. Winn Stephens, Laura Sudkamp, and Michelle passing Marsy’s Law in the 2018 Regular Session. Ms. Ruschell stated that Kentucky is not the Kuiper. Senator Westerfield stated that Marsy’s Law is only state with CACs, but there are over 820 LRC Staff: Katie Comstock, Alice Lyon, a nonpartisan issue that stands for crime victims. CACs across the country. Also, every state has Chandani Kemper, Dale Hardy, Matt Trebelhorn, Responding to a question from Senator Seum, legislation that requires multiple agencies and and Elishea Schweickart. Senator Westerfield stated that prosecutors communities to work together on cases of child Constitutional Rights for Crime Victims would shoulder most of the burden from Marcy’s abuse. Kentucky’s CACs adhere to statutes and Senator Westerfield, along with Ashlea Law. However, prosecutors’ offices already have a regulations placed upon them from the state, as Christiansen, Kentucky Executive Director for victims advocate. well as the National Children’s Alliance standards Marsy’s Law, and Stella Moore, discussed Marsy’s Responding to a question from Representative for accreditation. Law. Cantrell, Senator Westerfield stated that the State funding received by CACs is $3.4 Legislation for Marsy’s Law was filed in current version of Marsy’s Law does not contain million, which includes some tobacco funding 2016 and again in 2017. Marsy’s Law proposes many changes from the version that was filed in and funds for retirement. CACs also received a changing Kentucky’s constitution to create rights the 2017 Regular Session. slight increase in the last budget session, which for crime victims. Kentucky is one of 15 states Responding to a follow-up question from Ms. Ruschell was thankful for. CACs are also in the country that does not have some form of Representative Cantrell, Senator Westerfield non-profit organizations, which allows them to crime victim rights codified in their constitution. stated that workplace protection to allow victims receive private donations. The total cost for all 15 These constitutional rights would include: to exercise their rights is not explicitly in the bill centers is about $15 million annually. Right to notice of court proceedings; but it is something they are willing to consider. In fiscal year 2017, 6674 new children were Right to be present at court proceedings; Responding to a question from Representative seen at CACs across the state. CACs conducted Right to be heard at plea, sentencing, or any Jenkins, Senator Westerfield stated that he does 5217 interviews, 887 medical examines, and other proceeding implicating the victim’s rights; not believe there will be an appropriations provided 8788 mental health services. Ms. Right to notification of the release or escapes measure in this bill. Ruschell stated that they saw a nine percent of the accused; Overview of Child Advocacy Centers increase from the year before in unduplicated THE KENTUCKY GENERAL ASSEMBLY 33 children, an eight percent increase in forensic to make sure everyone involved complies with 46,000 cases every year. interviews, a six percent increase in mental KRS 524.140. Of all the kits in the system, Ms. Responding to a question from Senator health, and a slight trend toward female victims. Sudkamp stated that most kits are submitted Carroll, Ms. Sudkamp stated that if KSP Ms. Ruschell attributed some of the growth to within 30 days. Not all hospitals have access to laboratory is invited to speak at a college fair or additional satellite centers that are being opened the tracking system but KSP laboratory is rolling career day, they will go and try to speak with new across the state. These satellites are currently it out to everyone as quickly as possible. Along recruits. located in Franklin County, Prestonsburg, with the tracking system, KSP’s laboratory is Responding to a question from Harlan, and Murray. educating hospitals and law enforcement when Representative Cantrell, Ms. Sudkamp stated Ms. Ruschell discussed the CACs’ program possible. that KSP’s laboratory has a starting salary of development. She stated that there has been The DANY Grant, a grant awarded to KSP’s $32,000, and many times the low starting salary expansions with the mental health programming, laboratory from the District Attorney of New is the reason the laboratory has a difficult time including the use of art and music therapy. CACs York, has proven extremely useful so far. The retaining employees. have started to use “coaching parents in real outsourcing results are as follows: “I Am Evidence” Documentary time”, which allows a therapist to work with a Kits sent for testing – 3173; Michelle Kuiper, a victim advocate, told the parent on interacting with their child. There have KSP reviewed kits – 1129; emotional story of how she and many others have also been improvements with responses to sub- Profiles added to CODIS – 356; been sexually assaulted. Ms. Kuiper then showed populations. Number of current hits – 150. a 20 minute clip from an HBO documentary Responding to a question from Senator KSP laboratory worked with the Attorney called “I Am Evidence.” The documentary is Carroll, Ms. Ruschell stated that the Purchase General’s office on a grant where KSP received about sexual assault in America. Ms. Kuiper Area Sexual Assault and Child Advocacy Center additional funding to test “boomerang” kits. asked the committee to view the complete is the designated center in Paducah, Kentucky. Ms. Sudkamp explained that boomerang kits are documentary. Responding to a question from Senator kits that at some point came to the laboratory, Responding to a comment from Senator Webb, Ms. Ruschell stated that many of the were sent back without being tested, and are now Carroll, Ms. Kuiper stated that statistics show satellite centers are located in space within other returning to the lab to be retested that only two to ten percent of sexual assault existing facilities which also helps with funding. Ms. Sudkamp discussed DNA expansion. allegations are false. She also spoke in favor of The rest of the funding is raised by CACs. Currently, the laboratory is getting outpaced in trauma based-training for law enforcement, Responding to a question from Representative forensic biology assignments. There were 46,000 victim advocates, nurses, and doctors. Moser, Ms. Ruschell stated that part of their cases in 2016, and there have already been more Responding to a comment from growth is from the new types of abuse cases that cases this year than last. Ms. Sudkamp stated that Representative Cantrell, Ms. Kuiper stated that are coming in. Law enforcement officers and it is taking the lab over a year to complete DNA she believes there are myths that surround sexual social workers are referring more cases to CACs. analysis. The slow turnaround from the loss of assault and that they need to be broken, which is Responding to a question from Representative employees is due to the low salaries of laboratory why research and training is important. Morgan, Mr. Stephens stated that while many technicians. KSP hopes the turnaround time There being no further business, the meeting child victims come from homes where drug shortens in the near future. was adjourned at 12:03 PM. abuse is involved, he is not qualified to say that With some of the $4,500,000 KSP’s drug abuse is abuse of a child. laboratory received, renovations were made to INTERIM JOINT COMMITTEE Safe Act Update the lab. Space was increased, which included the ON APPROPRIATIONS AND Laura Sudkamp, Laboratory Director for evidence intake area. Money was also spent on REVENUE Kentucky State Police (KSP), presented a Safe new equipment. These changes allowed for an Budget Review Subcommittee on Justice Act testified. increase in productivity so that the kits can be and Judiciary The Sexual Assault Forensic Evidence completed. Minutes of the 2nd Meeting Act, also known as the Safe Act, addresses Ten forensic biologists were hired, seven of the 2017 Interim the sexual assault kit back log and attempts to remain on staff and should be finished with their October 26, 2017 prevent a future backlog from taking place. The training by the end of December. Training for the Call to Order and Roll Call requirements of the Safe Act that are associated forensic biologists was contracted out in order The 2nd meeting of the Budget Review with the laboratory include: to keep all the current analysts working. The Subcommittee on Justice and Judiciary of the Kits to be turned into the lab within 30 days; laboratory also hired three evidence technicians Interim Joint Committee on Appropriations Kits to be completed within an average of 90 and two laboratory technicians. Ms. Sudkamp and Revenue was held on Thursday, October 26, days by 07/01/2018; stated that they hope they will be able to keep 2017, at 10:00 AM, in Room 129 of the Capitol Kits to be completed within an average of 60 the remaining new employees and not lose them Annex. Representative Jason Nemes, Chair, days by 07/01/2020; to other laboratories. She stated that once all the called the meeting to order, and the secretary Rules on Evidence Retention; and new employees begin working she believes the called the roll. $4,500,000 in fiscal year 2015-2016 shall laboratory DNA turnaround time will drop. Present were: be transferred to the KSP to support statewide Responding to a question from Members: Senator Wil Schroder, Co-Chair; law enforcement purposes, including funding Representative Blanton, Ms. Sudkamp stated Representative Jason Nemes, Co-Chair; Senators to reduce the DNA backlog at KSP Forensic that KSP’s laboratory is the only public crime Ray S. Jones II, John Schickel, and Robin L. Laboratories. laboratory in Kentucky and they service every Webb; Representatives John Blanton, Joseph KSP’s laboratory has created an online kit law enforcement agency across the state for no M. Fischer, Stan Lee, Jason Petrie, Phillip Pratt, tracking system and each kit is stickered in order charge. KSP’s laboratory gets about 45,000 to Brandon Reed, and Kevin Sinnette.

34 2017 Interim LEGISLATIVE RECORD Guests: Rick Sanders, Commissioner, he believes KSP should have access to criminal INTERIM JOINT COMMITTEE ON Kentucky State Police; Chad White, Lieutenant records that have been expunged. STATE GOVERNMENT Colonel, Administrative Division, Kentucky In response to a question from Rep. Blanton, Minutes of the 5th Meeting State Police; Carole Henderson, Budget Director, Commissioner Sanders confirmed that many of the 2017 Interim Administration Office of the Courts (AOC); and KSP posts around the state are in disrepair. October 25, 2017 Paul Harnice, Attorney, Stoll Keenon Ogden Call to Order and Roll Call PLLC. Kentucky Court of Justice The fifth meeting of the Interim Joint LRC Staff: Zachary Ireland, Savannah Wiley, Ms. Henderson provided an overview of the Committee on State Government was held on and Jennifer Beeler. Judicial Branch’s internal funds transfers. Wednesday, October 25, 2017, at 1:00 PM, in Kentucky State Police Budget Update In response to a question from Chair Nemes, Room 154 of the Capitol Annex. Representative Commissioner Sanders provided a brief Ms. Henderson stated that the court facilities Jerry T. Miller, Chair, called the meeting to order, update on the budget of the Kentucky State budget is roughly $108 million in Fiscal Year and the secretary called the roll. Police (KSP). 2018. Ms. Henderson stated that the judicial Present were: In response to questions from Rep. Blanton, branch is required by statute to continue paying Members: Representatives Jerry T. Miller, Commissioner Sanders stated that there four percent of original court house capital Co-Chair, and Kenny Imes, Co-Chair; Senators are between 35 and 40 Trooper Rs, who are construction costs to the county after the debt Ralph Alvarado, Denise Harper Angel, Morgan retired troopers that have come back to work. is paid off. Ms. Henderson confirmed that the McGarvey, Dorsey Ridley, and Albert Robinson; Commissioner Sanders noted that at one point court facilities budget contains funds to pay for Representatives Lynn Bechler, , KSP was authorized 1,070 Troopers, but there facility maintenance issues such as roof repairs Tom Burch, John Carney, Will Coursey, Joseph are currently 848 troopers. Lt. Col. White stated or carpet replacements. Ms. Henderson stated Fischer, Derrick Graham, Dennis Horlander, that KSP is required to contribute $.91 to the that the judicial branch does not pay bailiffs, Dan Johnson, DJ Johnson, Mary Lou Marzian, state police retirement system for every $1 paid those salaries come directly from the finance Reginald Meeks, Phil Moffett, C. Wesley Morgan, in salary. cabinet. Ms. Henderson stated that $74 million Jason Nemes, Sannie Overly, Jason Petrie, Rick In response to questions from Sen. Schickel, of the $108 million facilities budget goes to bond Rand, Jody Richards, Bart Rowland, Tommy Commissioner Sanders noted that the Angel payments for courthouse construction. Ms. Turner, Ken Upchurch, Jim Wayne, and Scott Initiative had not yet been implemented. Henderson stated that $30 million of that budget Wells. Lt. Col. White noted that KSP does full 911 goes to counties. Ms. Henderson stated that the Guests: Thomas Stephens and Jenny Goins, dispatching for 13 counties. Lt. Col. White noted remaining $4 million goes toward emergency Personnel Cabinet; John Steffen and Emily that those counties pay a set annual amount to repairs, utility bills, and private sector leases. Dennis, Registry of Election Finance. utilize KSP dispatch services. Commissioner In response to questions from Rep. Blanton, LRC Staff: Judy Fritz, Alisha Miller, Karen Sanders confirmed that KSP’s long-term plan is Ms. Henderson stated that the facility budget Powell, Kevin Devlin, Michael Callan, Roberta to integrate Commercial Vehicle Enforcement is appropriated by the general assembly. Ms. Kiser, and Peggy Sciantarelli. (CVE) officers into the Trooper ranks. Henderson stated that the judicial branch leased Approval of Minutes Commissioner Sanders stated that KSP trains all to purchase AOC’s office building and was able A motion to approve the minutes of the cadets as Troopers, noting that eventually there to pay off the building early with carryforward September 27 meeting was seconded and passed won’t be any more tan uniformed CVE officers. funds in fiscal year 2014, saving $750 thousand. without objection. In response to a question from Sen. Schroder, Ms. Henderson stated that the total cost of 2018 Kentucky Employees’ Health Plan Commissioner Sanders noted that while the building was roughly $12.5 million. Ms. Thomas Stephens, Secretary of the Personnel there are different radio systems through the Henderson stated that in 2008 the court Cabinet, and Jenny Goins, Commissioner of the commonwealth, KSP is able to set them to the operations budget was in a $30 million deficit. cabinet’s Department of Employee Insurance, same frequency in order to communicate with In response to a question from Sen Schroder, discussed the Kentucky Employee’s Health Plan other counties and departments. Ms. Henderson stated that the lease on the court (KEHP) and highlights of the 2018 plan year. In response to questions from Sen. Jones, of appeals building is $212,500 per year. Ms. They said that KEHP is the largest self-funded Lt. Col. White stated that KSP has the budget Henderson stated that the AOC has used that health insurance plan in the state. School boards to afford 890 to 900 Troopers. Commissioner building since 1990 or 1991. comprise 54 percent of the membership, early Sanders stated that there were 200 to 300 In response to questions from Chair Nemes, retirees 20 percent, state agencies 20 percent, and applicants to the most recent KSP cadet class. Ms. Henderson stated that in fiscal year 2024 the quasi-governmental agencies 6 percent. KEHP In response to a question from Rep. Reed, Lt. bond payments will reduce from $74 million to became self-funded in 2006. Annual amount Col. White stated that KSP’s budget for FY 2018 about $65 million due to debt being paid off. Mr. spent is approximately $1.7 billion, with 296,000 is $228 million. Commissioner Sanders stated Harnice stated that it would be inappropriate covered lives. that KSP’s ideal budget would be $245 million for AOC to make public comments on pending In 2017, KEHP received the “health per year. litigation. Mr. Harnice stated that AOC champion” designation from the American In response to a question from Rep. Lee, vehemently disputes all of Scott Brown’s claims, Diabetes Association. The State Wellness Director Commissioner Sanders noted that cadet including that he is a whistle blower. is Twany Beckham—formerly on the 2012 applicants go through a criminal background There being no further business before the University of Kentucky NCAA championship check. Commissioner Sanders stated that an subcommittee, the meeting was adjourned at team—has worked with the statewide wellness applicant with a criminal history of marijuana 11:34 AM. champions. They now number more than 140. possession would not be automatically There is an increased focus on engagement and disqualified. Commissioner Sanders stated that outreach. First quarter data for 2017 shows that THE KENTUCKY GENERAL ASSEMBLY 35 10 or more public schools have reached silver able to achieve a 11 percent negative cost trend there have been more than 15,000 life insurance status, which means each member averaged in 2015. Since then the trend has increased additions or changes. 4,000 points in the Go365 LivingWell initiative. somewhat, which is typical. The allowed The Cabinet has combined some staff About five schools and two state agencies— pharmacy and medical costs per member per operations that resulted in a cost saving. Part of including the Personnel Cabinet—have reached month is now $486, which is $5 more than in that money will be used to decrease premiums for platinum level. 2014. Medical care costs tend to increase, but optional coverage. The Department of Employee In the LivingWell plans, there was 94 percent KEHP is continuing to look at ways to lower Insurance has 47 staff members, but its operating completion of the LivingWell Promise in 2017, cost—for example, through LiveHealth Online, costs amount to less than .63 percent of the which allows members a premium discount the diabetes value benefit, and the wellness overall $1.7 billion health plan budget. in plan year 2018. Since the Go365 (formerly program. Concluding the presentation, Secretary named Humana Vitality) health initiative was The total allowed cost per member per year Stephens complimented Commissioner Goins started in 2012, there has been a 702 percent for KEHP is 6.8 percent higher than in the public and her staff and thanked them for their increase in wellness activities. The “wellness sector and 3 percent higher than in the private contribution to a well-run operation. age” of members in the LivingWell plans who sector. Based on claims data, KEHP has more Responding to an inquiry from Representative completed a health assessment or biometric members with chronic or crisis conditions than Miller, Commissioner Goins explained how screening has been reduced by a half year. the benchmark. The goal is to transition them members earn cash rewards through the Vitals The LiveHealth Online Medical benefit is free from at risk status to a condition that is more SmartShopper program. KEHP saves money to members and has saved KEHP approximately sustainable. through the program and has also given back $1.9 million. It provides access to a physician For plan year 2018, the employer cost $1.5 million to members as rewards since the 24 hours a day, seven days a week. The benefit, increase was 1 percent, and the cost increase program went into effect in 2013. which is intended for general care, has been used for employees was 3 percent. The LivingWell In response to Representative Carney, by 9,545 persons. LiveHealth Online Psychology PPO couple and family coverage had the Commissioner Goins said that KEHP pays was added in 2017 and has been used by 475 highest premium increase. The premium for $49 for each call to LiveHealth Online Medical persons. Vitals SmartShopper is another cost- single coverage in the Standard CDHP plan and about $80 per visit to LiveHealth Online saving program, in which members shop for increased from $13.10 to $26.20 per month. Psychology. Both services are free to members. cost-effective health care services and earn cash KEHP considers the rates good when compared Representative Carney said he learned about rewards. Nine percent of households use this to surrounding states. The last rate increase was LiveHealth Online from a colleague at the benefit. in 2014, except for a 1 percent increase last year school where he worked. He suggested that it The Diabetes Value Benefit, which started in the two standard plans. For 2018, no changes might be beneficial for schools to have on-site in 2016, provides diabetic medications and were made to deductibles, co-insurance, or co- coordinators to promote interest in the program. supplies at low or no cost. Although pharmacy payments. The healthcare FSA maximum annual Commissioner Goins agreed and said that state costs increased 13.9 percent, KEHP costs stayed contribution increased to $2,600. The HRA wellness director Twany Beckham is working flat for those members because medical cost maximum carryover is $7,500, and the cabinet with schools as part of the Go365 LivingWell decreased seven percent. The number of scripts has been communicating with members who initiative. per patient decreased 3.5 percent. There has are approaching their maximum. The number of Responding to questions from Representative also been 10.3 percent less emergency room members affected by the carryover maximum is Bechler, Commissioner Goins explained how to utilization and 6.5 percent fewer hospital acute low. use Vitals SmartShopper for an MRI procedure admissions. KEHP has been working with the As of October 23, enrollment in the when an x-ray is required beforehand. She states of Georgia, Tennessee, North Carolina, LivingWell CDHP plan is 55 percent, LivingWell said she would double-check on this question and Oklahoma regarding diabetes prevention. PPO 35 percent, Standard CDHP 7 percent, and and reply back to him. She also explained the Program successes will also be discussed with Standard PPO 3 percent. These numbers will grievance process and procedures to follow for the Chamber of Commerce in Louisville next change daily until open enrollment finalizes those who miss the open enrollment deadline week. in December and do not include all retirees. or want to change plan selection subsequent to As part of engagement and outreach to Enrollment in the Flexible Spending Account enrollment. She said that KEHP will make things explain programs and benefits, KEHP has (FSA) Healthcare benefit increased 9 percent right for people as much as possible, as long as committed to a “feet on the street” approach to from last year; enrollment in the Dependent IRS rules are complied with. meet with people where they are. Programs need Care FSA benefit increased 13 percent. Representative Graham asked for clarification to be marketed to consumers and users in ways KEHP has issued a Request for Proposal of what happens to excess funds in health other than direct mail. (RFP) for a dependent eligibility audit. The RFP reimbursement accounts when the carryover In 2016 and 2017, the trend increase for closes November 9. The last audit was completed balance exceeds the $7,500 cap. Commissioner medical and pharmacy costs was seven percent. in 2010 and resulted in a savings of about $5 Goins said it is employer money. For the Waiver In an effort to ensure good benefits and lower million when dependents no longer eligible were General Purpose HRA or the Waiver Dental/ costs, in 2015 KEHP changed vendors. Anthem removed from the plan. This type of audit should Vision HRA, the excess goes back into the trust became the third party administrator, CVS/ be done every 5-7 years. fund. Caremark the pharmacy benefits manager, and Two new employee voluntary life insurance Senator Alvarado asked what has led to WageWorks the FSA/HRA administrator. Go365 plans have been added in 2018, along with three higher premium costs in 2018. Commissioner stayed as wellness program administrator, and new dependent life insurance plan options. Goins said that the amount of chronic conditions Vitals SmartShopper remained as transparency All life insurance plans have lower monthly has changed little since about 2002. After KEHP vendor. Through the new contracts, KEHP was premiums. During open enrollment, so far experienced a negative cost trend in 2015,

36 2017 Interim LEGISLATIVE RECORD medical and pharmacy costs increased in 2016, because it includes those words the court found system will be much more mobile than before. and usage has also increased. Anthem, which that the legislature was giving deference to those Senator Ridley asked whether the court became the TPA in 2015, has a large network political parties and, in so doing, was violating decision changed the function of the caucuses of providers, and people are becoming more the Equal Protection Clause. The change that of each chamber and party. Ms. Dennis said comfortable about seeing their doctors. needs to be made to the definition is a simple there has been no immediate change because the There were no further questions.one, and it is important to resolve the matter. Mr. motion to amend is still pending, but that is part Representative Miller thanked Secretary Stephens Steffen and Ms. Dennis asked that the legislature of the problem. The court’s order, by determining and Commissioner Goins for their presentation consider making this a priority in the 2018 the definition to be unconstitutional, makes and their assistance to the Committee. legislative session. it void in the statute because caucus campaign Registry of Election Finance – Status Ms. Dennis went on to say that she has committee is not defined elsewhere. The plaintiff Report and Priorities for the 2018 Legislative made a good faith argument that the definition offered two alternative arguments of what caucus Session is constitutional as written. By alerting the campaign committees could do. The way the Guest speakers from the Registry of Election State Government Committee today regarding order is written, not even the plaintiffs know Finance were John Steffen, Executive Director, the federal lawsuit, the Registry is in no way what it means. and Emily Dennis, General Counsel. Mr. Steffen waiving that argument, because the caucus When asked by Senator Ridley, Mr. Steffen said that since the 2017 enactment of Senate Bill campaign committees as they are presently confirmed that KREF Form 001 (Appointment 75, relating to campaign finance, the Registry constituted do emanate from the rules of the of Campaign Treasurer) is available and was has been in the process of updating its website, House and the Senate. The Registry was able revised to eliminate the $1,000 checkmark. reporting forms, guidebooks, and informational to find that Republican caucus groups had Senator Ridley questioned whether a and training materials. The forms and their online given to Independent candidates in the past. candidate for office is permitted to open a bank presentation are being remodeled to make them Caucus groups are not in any way bound to account, requiring money to be deposited, before clearer to users. With funds budgeted to improve give to members of a certain political party, so the Registry gives a campaign number to the the “IT” system, Kentucky Interactive LLC was this is not a concession that the provision is letter of intent to file for office. He said this should contracted to do the work. The Registry thinks unconstitutional. The Registry does, though, be explained in writing to potential candidates. it now has a more reliable and secure system. see why there is reason for concern. She said she Mr. Steffen acknowledged that money must be The main focus is to upgrade and improve the would be happy to provide copies of the order paid to the bank to open an account and said operation going forward. and the arguments she has made to amend the that the Registry will not “nitpick.” He added Ms. Dennis said the Registry is defending a order. Representative Imes thanked Ms. Dennis that they have recently worked on language in federal lawsuit. The case involves challenges to for the explanation and said that clearing up the handbook to help address that question. various aspects of Kentucky’s campaign finance ambiguity about the definition should be a Senator Ridley asked whether the Registry laws, as well as challenges to the Legislative relatively easy fix. is going to send notification to candidates in a Code of Ethics. In June, the court issued a When Representative Miller asked about primary regarding report filing prior to the date Memorandum Opinion and Order that found all the software packages used by candidates, Mr. the report is due. Mr. Steffen stated that the of the claims of the plaintiffs against the Registry Steffen said the systems are cumbersome and Registry’s new system should be able to send moot except for one claim that involved the difficult to use. It is his goal to replace those and out reliable reminders electronically for most constitutionality of caucus campaign committees. for the Registry, rather than an outside party, to reports, perhaps even the annual report. He The court’s order upheld the contribution limit ultimately be the provider. stated that the Registry would be sending out of caucus campaign committees as defined in When asked by Representative Imes, Mr. reminder cards in about two weeks. the statute but invalidated the definition of Steffen reviewed the changes made by Senate Representative Graham said that, in “caucus campaign committee” as violative of Bill 75 to primary and regular election filing advance of a potential special session to address the Equal Protection Clause [of the Fourteenth deadlines. They agreed that the filing deadline for underfunding of the pension systems, he hopes Amendment to the United States Constitution]. the annual report probably should be December the interim State Government Committee will The Registry believes that the court applied an 31 and that it would not be unreasonable to have a meeting for the purpose of discussing and incorrect standard of review and made a clearly make the candidate’s 60-day post report serve as debating the recent proposals. Representative erroneous finding of fact. In addition, the Registry the annual report due on December 31. Miller said he would pass along Representative thinks that the court’s action may not have been In response to a question from Representative Graham’s comments and that he believes there authorized, because the plaintiff’s complaint did Imes, Mr. Steffen said that with the changes in are plans to hold a hearing at some point, perhaps not specifically challenge the definition of caucus Senate Bill 75, the 15-day pre-election report in a special meeting of the Public Pension campaign committee. The complaint was never must now be received by the Registry 15 days Oversight Board. amended to challenge the constitutionality of before the election, when it only had to be Representative Miller thanked the speakers that provision. For this reason, the Registry has postmarked 15 days before the election prior from the Registry. With business concluded, the filed a motion to reconsider and amend the order to the 2017 changes. This eases earlier concerns meeting was adjourned at 2:32 p.m. and to stay enforcement of the order. While about having the reports available for public confident that the order should be amended, the review in a timely manner. Registry is also arguing that a stay is appropriate Representative Moffett said he hopes the new in order to give the legislature the opportunity “IT” system will include a function for importing to remedy the issue by amending the statute. from a candidate’s bank account. Mr. Steffen said The definition as it is currently written includes he cannot answer that definitely today but that a the words “Republican” and “Democrat,” and phone app will be created for that purpose. The THE KENTUCKY GENERAL ASSEMBLY 37 INTERIM JOINT COMMITTEE ON KHC has developed investment projects Landbank Authority. The Authority was LOCAL GOVERNMENT through community revitalization programs, one established in 1989 and is a partnership between Minutes of the 5th Meeting being Recovery Kentucky, a vital program created the Commonwealth of Kentucky, Jefferson of the 2017 Interim to help Kentuckians recover from substance County Public Schools, and Louisville Metro October 25, 2017 abuse, which often leads to chronic homelessness. Government. The purpose of the Authority Call to Order and Roll Call In a joint effort with the Department for Local is to return vacant and abandoned properties The fifth meeting of the Interim Joint Government (DLG) and the Department of to productive use and place them back on the Committee on Local Government was held on Corrections (DOC), KHC allocated low income tax rolls. Acquisition of vacant and abandoned Wednesday, October 25, 2017, at 10:00 AM, in housing tax credits and other resources for the properties is through voluntary donations and Room 171 of the Capitol Annex. Representative construction of 14 Recovery Kentucky Centers. foreclosures. Disposition is to residents, non- Rob Rothenburger, Vice-Chair, called the Operational funding included approximately $3 profits, developers, and others. More than 300 meeting to order, and the secretary called the million from DLG’s Community Development properties have been converted to productive roll. Block Grant program and approximately $5 use since 1996. Present were: million from DOC. The Authority’s recent legislative changes Members: Representative Rob Rothenburger, Programs which KHC supports provide include: (1) elevating Louisville Metro Vice-Chair; Senators Ralph Alvarado, Denise economic impacts for Kentucky. Some of these lien priority allowing Louisville Metro to Harper Angel, Morgan McGarvey, Dorsey Ridley, include: the Men’s Addition Recovery Campus in initiate foreclosure program. Since 2012, 563 Albert Robinson, Dan “Malano” Seum, and Bowling Green, for a total economic impact of $11 foreclosures have been initiated, with 366 Damon Thayer; Representatives Danny Bentley, million; Scholar Houses in Lexington, Louisville, completed; (2) reducing processing time for George Brown Jr, Ken Fleming, Toby Herald, Bowling Green, Paducah, Owensboro, Pikeville, foreclosures. The average time to complete DJ Johnson, Kim King, Adam Koenig, Stan Lee, Newport, and Richmond; and the Lincoln Grant foreclosure was cut from 24 to 12 months; (3) Jerry T. Miller, Robby Mills, Phil Moffett, Steve Scholar House in Covington, which just opened, making condemnation of blighted properties Riggs, Arnold Simpson, John Sims Jr, and Kevin for a total economic impact of $13 million. more financially feasible; (4) prohibiting the Sinnette. Ms. Lisa Beran, Deputy Executive Director sale of delinquent tax certificates to third-party Guests: Edwin King, Jeremy Ratliff, and Lisa of KHC’s Housing Production and Programs, purchasers in designated areas through the use Beran, Kentucky Housing Corporation; Deborah discussed KHC’s revitalization projects in the of the Tax Delinquency Diversion Program; and Bilitski and Laura Grabowski, Develop Louisville; City of Somerset, in conjunction with DLG, for (5) providing a funding mechanism by directing Latondra Yates and Mary McGuire, Louisville a total economic impact of $719,000; Robertson 50 percent of tax proceeds from sales to the Vacant and Public Property Administration; Apartments in Washington County, for a total landbank for five years. Tammy Vernon, Darren Sammons, Greg economic impact of $1.4 million; and Maple Lick The Authority’s new Disposition Programs Ladd, and Travis Weber, Department for Local and Milltown Subdivisions in Owsley County, include “Last Look,” “Cut It Keep It,” and “Flex Government; Michael Kurtsinger and Chuck for a total economic impact of $655,000. Rate Policy.” Bonta, Kentucky Fire Commission; and Sara In response to a question from Representative The Vacant and Public Property Massey, Louisville Metro Government. Miller, Mr. King said that KHC does partner Administration’s targeted approach includes LRC Staff: Mark Mitchell, John Ryan, Joe with the Family Scholar House in Louisville. Mr. targeting efforts in support of neighborhood Pinczewski-Lee, and Cheryl Walters. Jeremy Ratliff, KHC’s General Counsel, added redevelopment efforts, layering resources, and Approval of Minutes that Louisville partners with KHC including measuring results of strategies to optimize the Upon the motion of Senator Thayer, seconded the Riverport Scholar House. Ms. Beran noted outcomes of vacant and abandoned property by Representative Johnson, the minutes of the that KHC does provide some funding for The solutions. September 27, 2017 meeting were approved. Healing Place from money provided by the U.S. Regarding the Clear Boarding Pilot Project, Vacant, Blighted, and Abandoned Department of Housing and Urban Development Polycarbonate sheets are used instead of Properties (HUD). plywood for boarding up vacant and abandoned Mr. Edwin King, Executive Director and In response to a question from Representative structures. A portion of the funds is for a CEO of the Kentucky Housing Corporation Bentley, Mr. Travis Weber, with DLG, said that targeted neighborhood and the remainder will (KHC), gave the committee background mayors are educated on how to get funds for the be used Louisville Metro-wide. The timeline is information about KHC and its function. Since revitalization of slums and blighted areas, and November, 2017 through February, 2018. 1972, KHC has been Kentucky’s state housing the options that are available. In response to a question from Senator finance agency. KHC is a self-supporting, quasi- In response to a question from Representative Seum, Ms. Grabowski said that the involvement governmental agency that invests in affordable Rothenburger, Mr. King said people can stay of Jefferson County Public Schools with the housing solutions for Kentucky. KHC receives in the Scholar Houses until they finish their abandoned property issue is that the schools use no state general funds. Corporate expenses education as long as they continue to meet the tax revenue for funding. Abandoned property are paid through income from the tax-exempt program requirements. In response to another lowers the tax base and the school district’s mortgage bond program and fee income from comment from Representative Rothenburger, resultant income. the U.S. Department of Housing and Urban Mr. King noted that senior housing is going to be In response to another question from Senator Development (HUD). a large component of housing in the immediate Seum, Ms. Grabowski stated that the vacant KHC offers programs to create, preserve, and future. property, when the owner cannot be located, sustain affordable housing through many means Ms. Laura Grabowski, Director of Vacant will go through the foreclosure process and the including the single family mortgage program and Public Properties with Develop Louisville, new owner will get a clear title in the event of and multi-family tax credit programs. discussed the Louisville/Jefferson Countyoutstanding property taxes.

38 2017 Interim LEGISLATIVE RECORD In response to a question from Representative deadline approaches. There are approximately Representative Miller commented that the Brown, Ms. Grabowski said that clear boarding is 7,600 individual records, four records for each election date for the fire commission should be more expensive initially, around $800 to $1,000 SPGE, and compliance is by fiscal year. The moved from June. per house depending upon the use of the clear compliance report percentage for FY 2015 is Representative Riggs commented that boarding, but it is more cost effective as plywood 99%; 97% for FY 2016; 94% for FY 2017; and HB 1 was a great step forward in improving is often removed by persons seeking entry into 93% for FY 2018. transparency. More accountability should yet be the property. Representative Brown commented The SPGE program for the future includes pursued. that clear boarding should be considered to be active communication with the Commonwealth Mr. Michael Kurtsinger, Legislative Director implemented statewide. Office of Technology to design software to allow for the Kentucky Fire Commission, said that, Representative Riggs commented that it is the creation of a new SPGE report portal and as of October 17, there were 427 Chapter 273 very rewarding to see legislative changes that are central registry, and public portal for citizens volunteer fire departments with revenues making improvements. In response to a question to view current and historical submissions, or expenditures under $100,000 required to from Representative Riggs, Ms. Bilitski, Director and automating existing manual processes report to the commission. Fifty-four were non- of Develop Louisville, stated that she does not such as compliance administration, reporting compliant in submitting their SPGE reports, 47 anticipate coming before the legislature during and notifications, fire departments exiting and were compliant, and 33 of the 47 were trying to the next session of the General Assembly with entering the system, and municipal utilities get their numbers in. The total revenue received changes relative to the vacant and abandoned buying and selling components. DLG also plans was $16,566,000, which was an average total property issue. to provide online tutorials for submitting and per department of $44,000. The commission In response to a question from Representative reviewing data, and continued annual SPGE makes great efforts in trying to contact the fire Miller, Ms. Grabowski said the agency has a training for financial disclosure and tax rate departments for the information. great relationship with non-profits, and the non- calculation, to be held at area development Mr. Chuck Bonta, auditor with the Kentucky profits have to apply for vacant lots and come to districts. Fire Commission, exhibited and explained the the Authority with a plan and a budget, but seem Senator Alvarado commented that the forms the commission uses to collect the fire to do so very easily. definition of a SPGE does not mention the ability department fiscal and demographic data. In response to a question from Representative to tax citizens. Mr. Darren Sammons, DLG staff In response to a question from Representative Rothenburger, Ms. Grabowski said the Tax attorney, stated that the definition is taken from Sims, Mr. Kurtsinger said there were 427 Chapter Delinquency Diversion Program is enacted by the statute and the one DLG crafted is a rough 273 volunteer fire departments with revenues of local ordinance, and Ms. Bilitski stated that the definition. $100,000 or less, but close to 830 volunteer fire enabling legislation is applicable statewide, but In response to a question from Senator departments in total. that she would confirm that applicability. Alvarado, Mr. Sammons said the SPGE board There being no further questions, the meeting In response to a question from Representative members are not elected. was adjourned at 11:15 a.m. Bentley, Ms. Grabowski said the Last Look In response to another question from program has a time limit of 60 days. Senator Alvarado, Mr. Sammons said that HB 1, PROGRAM REVIEW AND Special Purpose Government Entity which passed during the 2013 legislative session, INVESTIGATIONS COMMITTEE Compliance Reports provided for more accountability. Minutes Ms. Tammy Vernon, Cities and Special Senator Alvarado commented that he will 2017 Interim Districts Branch Manager with DLG, said that file a bill for the 2018 session of the General October 12, 2017 Special Purpose Governmental Entities (SPGEs) Assembly to give taxing veto power to the elected Call to Order and Roll Call are independent, political subdivisions of the local government officials. The Program Review and Investigations state, government entities that exercise less In response to a question from Senator Seum, Committee met on Thursday, October 12, 2017, than statewide jurisdiction, and are organized Mr. Sammons said that all of the SPGEs have a at 10:00 AM, in Room 131 of the Capitol Annex. for the purpose of performing specific services statutory taxing limit. Representative Lynn Bechler, Chair, called the within limited boundaries. DLG will continue to Senator Seum requested that DLG provide meeting to order and led the audience in the monitor the requirements under KRS Chapter a list of all of the taxing districts to committee Pledge of Allegiance. A moment of silence was 65A that SPGEs register and submit certain members. observed for the death of former Senate President financials online. The Cities and Special Districts Senator Thayer commented that the elected Pro Tem Dick Roeding and the victims of the Las Branch developed and implemented manual governing body having oversight over the Vegas shooting. The secretary called the roll. processes to assist SPGE compliance. Moving SPGE should have some controls over SPGE Present were: forward, DLG plans to transition to a new tax increases or budgets, or that SPGE board Members: Senator Danny Carroll, Co- automated system for SPGEs. members should be elected instead of being Chair; Representative Lynn Bechler, Co-Chair; DLG’s responsibility per KRS Chapter 65A is appointed. There may be other ideas, too. There Senators Tom Buford, Dan “Malano” Seum, to create and maintain an online central registry, should yet be more accountability and disclosure. Reginald Thomas, Stephen West, and Whitney reporting portal, and public access portal, and to In response to a question from Representative Westerfield; Representatives Chris Fugate, Brian monitor compliance by tracking status changes, Moffett, Mr. Sammons said in 2012, over $2.7 Linder, Ruth Ann Palumbo, Rob Rothenburger, preparing statutorily required reports, and billion was received by the special districts from Arnold Simpson, and Walker Thomas. activating noncompliance procedures. local funds and that 2,000 statutes would have Guests: Andy Beshear, Attorney General, J. The SPGE compliance report submitted to to be researched in order to determine whether Michael Brown, Deputy Attorney General, and LRC includes data as of October 12, 2017. The or not the SPGEs are authorized to use federal Holly McCoy-Johnson, Administrative Services, compliance percentages will increase as the funds. Office of the Attorney General; and John Roach, THE KENTUCKY GENERAL ASSEMBLY 39 Ransdell Roach & Royce. and clinics are not flooding communities to file lawsuits against opioid manufacturers, LRC Staff: Greg Hager, Committee Staff with prescription pills illegally. They perform national wholesalers, and distributors. Over 23 Administrator; Chris Hall, Colleen Kennedy, investigations that go to the US Attorney’s Office Kentucky counties have filed lawsuits. An RFP Van Knowles, Jean Ann Myatt, William Spears, and Kentucky’s Medicaid Fraud Unit. There have was issued to aid the Attorney General’s Office Shane Stevens, Joel Thomas; and Kate Talley, been several prosecutions of individuals who in handling the lawsuits. The RFP asked for Committee Assistant. have broken the law for profit. Recently, the first extensive experience, background knowledge, Minutes for September 14, 2017 set of search warrants was served on a string of speed, and keeping costs within the parameters of Upon motion by Representative Thomas and rogue Suboxone clinics. Legislation is needed to HB 281. A team of two merit and two non-merit second by Representative Fugate, the minutes address these clinics, much like the legislation employees scored the RFP bidders. The RFP was for September 14, 2017, were approved by voice that was enacted on pill mills. awarded to a team of law firms including Joseph vote. Second, prevention is key to addressing the Rice of Motley Rice, Mark Lanier of The Lanier Presentation on Potential Legal Action opioid epidemic. There are a number of counties Law Firm, James Young of Morgan & Morgan, Against Drug Industry for Contributing to in which a staggering number of opioids are and John Roach of Ransdell Roach & Royce. Opioid Abuse in Kentucky; Purdue Pharma prescribed, for example, Perry County (202 Justice Roach said that he was shocked by the Settlement opioid pills per resident) and Crittenden County statistic that 80 percent of heroin addicts began General Beshear said the opioid epidemic (145 opioid pills per resident). This epidemic is with opioids pills. The opioid epidemic is not is the largest challenge the state has ever faced. driven by prescription medications. Currently, 80 a partisan issue. Mark Lanier is considered the In the audience are parents from the North percent of people using heroin became addicted premier trial lawyer and has gotten over three Kentucky Hates Heroin organization. There are through prescription pills. Of those addicts, 70 $1 billion verdicts. Linda Singer, who works more grandparents raising children than ever percent acquired prescription pills from a family for Motley Rice, is the former attorney general in the state’s history. Since 2000, deaths have member or a friend, not a doctor. In August, the for the District of Columbia. She is leading the increased 570 percent. Since 2009, the overdose Attorney General’s Office launched the Kentucky efforts in the opioid litigation for Alaska and rate has doubled. Heroin is one of the scariest Opioid Disposal Program, a pilot project to clean New Hampshire. Joe Rice and his partner were drugs, but fentanyl is 30 to 50 times more out home medicine cabinets. Currently, there are the leaders in the tobacco master settlement powerful than heroin. Carfentanil is 10,000 times over 50,000 drug deactivation pouches that can agreement. Our team has people that have more powerful than morphine. New analogs of eliminate over 2.24 million opioid pills. This is the been part of the biggest pieces of litigation in these drugs appear weekly. first program that allows people to safely dispose American history. Through the DEA [US Drug Enforcement of medication in their own homes. Each pouch Attorney General Beshear said it is important Administration] Task Force, more than 114 can deactivate 45 pills and is environmentally that we move quickly. Based on statistics from overdoses were connected to one bad batch of friendly. The Attorney General’s Office has 2000, four people die of overdoses each day. It fentanyl. It started in Huntington, WV, moved teamed with West Virginia Attorney General has been 21 days since the Office of the Attorney to Cincinnati to Indiana to Mount Sterling, and Morrisey to pressure national and state insurers General submitted the contract to the Finance ultimately into Louisville. Staff of the Attorney to prioritize non-opioid alternatives to dealing and Administration Cabinet (FAC) for approval. General’s Office, working with the federal with pain. The Attorney General from Ohio and That period of time represents 84 overdoses. As government, were able to make a high-level arrest Attorneys General Morrisey and Beshear are attorney general, he has not restricted settlement primarily because of the number of overdoses in holding faith-based drug forums. funding. He will be encouraging the General Mount Sterling, the largest single-day number of Third, treatment and recovery are needed Assembly that money that has caused addiction overdoses in the state. to address the opioid epidemic. Along with 38 should be used to get us out of addiction, such The opioid epidemic also affects economic other state attorneys general, Attorney General as treatment, law enforcement, and education, development. Many businesses cannot find Beshear is calling for Congress to pass the but the Attorney General’s Office will not restrict healthy workers to employ. He said that a recent Road to Recovery Act, which will help open appropriations from any funds received from personal experience made a big impression. new avenues for addiction treatment while these cases. Four weeks ago, while sitting at a red light at a maintaining appropriate restrictions on mental Representative Palumbo thanked Attorney downtown Lexington intersection at 4:00 PM, health facilities. The Attorney General’s Office General Beshear for his work on this issue. Attorney General Beshear and a staff member is also asking the national government not to The $24 million received is incredible given responded to an overdose. The passenger of the cut funding for addiction treatment. Over $8 that Canada received $20 million. She thanked car next to them overdosed on carfentanil. They million has been provided to drug treatment Justice Roach for the work that he will be doing. performed CPR until a police officer arrived with centers from the appropriation of the $24 million Attorney General Beshear said that $9 million Narcan. It took four doses of Narcan to revive the OxyContin settlement. Freedom House, Hope in from that settlement remains to be appropriated individual. the Mountains, and Mary Hurst are organizations by the General Assembly over the next three The Attorney General’s Office is taking a that have benefited from the settlement. The only budget sessions. comprehensive approach to the opioid epidemic. other state to have a similar settlement was West Representative Fugate said that he served 20 First, there are three units in the law enforcement Virginia in 2004 for $10 million. In 2007, the years with the Kentucky State Police, including category that fight this epidemic every day. The United States settled with a fine of $634 million, the last 9 1/2 years as part of a task force that did Attorney General’s Office has two investigators which went to Medicaid, of which Kentucky drug investigations. He has had direct experience on the DEA Task Force, which chases the worst received $500,000. Canada also recently settled with the opioid epidemic and has seen lives fentanyl and carfentanil dealers. The Appalachian a case against Purdue Pharma totaling up to $20 destroyed because of some doctors who only High Intensity Drug Trafficking Area Task Force million. care about money. He has also seen this become is dedicated to making sure rogue doctors Attorneys general across the US are beginning a political issue.

40 2017 Interim LEGISLATIVE RECORD In response to a question from Representative submitted to FAC earlier. Attorney General compared to the market, which would typically Fugate, Attorney General Beshear said that Beshear said that this was done in the same way be 33 to 40 percent. To get this quality of lawyers Deterra makes the deactivation pouches. He as every other RFP from the Attorney General’s to commit to this is commendable. Average learned about these from the attorney general of Office. The announcement and submission of hourly rates for attorneys for Big Pharma are Pennsylvania, where the pouches are distributed the contract were the same. $1,000 per hour for partners, $750 for others. through pharmacies. Senator Carroll asked how there could be an In response to a question from Senator Representative Fugate asked whether announcement when the contract has not been Thomas, Attorney General Beshear said that he any settlement funding goes to faith-based approved by FAC. Attorney General Beshear did not know why there has been a delay of 21 rehabilitation facilities. Attorney General replied that once the contract is awarded, you days since contracts were submitted to FAC. He Beshear said that a number of facilities use a have to notify everyone and it becomes an open hopes there are legitimate reasons. faith-based approach, including Hope in the record. This is standard operating procedure Senator Thomas said the delay is Mountains. Freedom House uses a portion of its for his office and, he believes, for others. FAC’s incomprehensible and immoral given the lives at funding for a faith-based approach. Most of the authority is to make sure all documents are in stake. recipients have 12-step programs, which would order and all steps are followed. The actual Justice Roach said that some work cannot be include a faith-based component. The only contracting authority is with the Attorney done without a contract, but the team is already thing the Attorney General’s Office looked for General’s Office. working. in the programs it recommended to the General Senator West thanked Attorney General Attorney General Beshear said that there Assembly was effectiveness. Beshear and Justice Roach. He said that we can were 17 bidders for these cases. Seven of the top Senator Carroll thanked Attorney General agree that this is a bipartisan issue. He asked what 10 bidders refused to bid within the parameters Beshear for his testimony and said that we are type of work has been done within the Attorney of HB 281. He is especially concerned that this all in agreement about the opioid epidemic. He General’s Office. Attorney General Beshear said will be an issue with smaller cases for which has relevant experience, having served 24 years that he would have to be careful in answering, outside counsel is needed. in law enforcement, including commanding a to not give anything away. He can say that the Senator Thomas noted that he was not in drug unit. Some of the things that we will get Attorney General’s Office has done significant favor of HB 281. into today have nothing to do with that. There research, identifying at least eight causes of Senator Thomas said that one of the will be some difficult questions today that will be action. He feels comfortable today, without extra presentation slides showed high numbers separate from this. assistance, suing at least one company. With extra of fentanyl deaths in Fayette and Jefferson Senator Carroll asked why it was necessary assistance, there could be a better complaint that Counties. He asked what are local officials saying to go outside the Attorney General’s Office to would allow cases to move faster from day one. about what can be done to address this. Attorney pursue these cases. Attorney General Beshear Senator West asked whether all the work will General Beshear said that multiple approaches said that the costs of staying in house, which be on contingency. Attorney General Beshear are necessary. Law enforcement is focusing on could be in the millions of dollars, would require said that it will be 100 percent contingency except fentanyl. Dealers are being prosecuted federally. an additional appropriation. Funding for hiring for four attorneys from the Attorney General’s Regarding prevention, most users do not go more staff would be required. Private firms are Office, which will retain control of the litigation. from a street-level drug to fentanyl and heroin, handling this on contingency. They bear all the Senator West asked whether there is an pills are a problem. Prescription pills in medicine costs and take the risk. No tax dollars are going to agreed-upon percentage for the contingency. cabinets are the driver of addiction. the firms. The Attorney General’s Office cannot Attorney General Beshear said that there is a Representative Simpson said that first major afford to hire someone like Mark Lanier, who has cascading fee structure from HB 281 based on issue to be dealt with regarding settlement is to secured more than three $1 billion verdicts. This the amount recovered. remediate damages caused by business practices gives Kentucky the chance to have attorneys with Senator West asked what percentage the through a cash settlement. The second issue similar experience to the hundreds of attorneys state of Kentucky can expect to receive and is to alter the practice protocol of the industry. that the drug companies will have. what attorney fees will be. Attorney General He asked whether there is any evidence that the Senator Carroll said that there have been Beshear said that costs are paid first, then latter has occurred. Attorney General Beshear questions about the contracts. The RFP was the contingency. There is also the cost of the said that two forms of recovery are being sought: approved June 16. He asked whether the Attorney General’s Office staff working on this. monetary and injunctive, which is through a contracts have been approved by FAC. Attorney Justice Roach said that for a $20 million recovery court order to change practices. We are starting General Beshear said that it is an award when against one entity, the contingency is around 16 to see change since lawsuits have been filed. CVS the top bidder is determined and the contract percent. Attorney General Beshear said that the will no longer fill opioid prescriptions for longer is signed. He is comfortable that the Attorney specific contingency fee structure is 20 percent than 7 days. Kentucky has already been more General’s Office followed the proper policies of first $10 million recovered, 15 percent for $10 aggressive than that. He thinks that one of the and procedures of FAC. There has been no million to $15 million, 10 percent for $15 million wholesalers is going to do a Narcan program. communication from the cabinet in the 21 days to $20 million, and 5 percent for more than $20 Justice Roach said that what is different about since submission. If something else is needed, he million. this team compared to other states is that it is would be happy to comply. It has taken FAC so Senator West asked whether hourly rates are preparing cases to go to trial, not settlements. long that the contract will have to be resubmitted included in the contingency. Attorney General In response to a question from Representative because the start work date has lapsed. He is Beshear said that there are no hourly rates, those Simpson, Attorney General Beshear said that the willing to work with the cabinet to resolve this. costs ae included in contingency. attorney general’s office will make the decision to Senator Carroll asked whether it would have Senator Thomas said that the parameters in settle or go to trial. He added that appropriation alleviated some of the problem if this had been HB 281 for contingency fees are conservative authority for any funding from verdicts or THE KENTUCKY GENERAL ASSEMBLY 41 settlements will be with the General Assembly. weeks of research on the Purdue Pharma case, The following month, in response to questions In response to a question from Representative there are blatant concerns with the settlement. In about settling the case, Conway told CN2 that Bechler, Attorney General Beshear said that 2007, then Attorney General Greg Stumbo sued he would not be negotiating much less than deactivation pouches cost about $4 each if Purdue Pharma over its deceptive marketing of nine figures and that he wanted something well $200,000 worth are purchased. The Attorney the drug OxyContin. He claimed that the case into nine figures. In 2014, the Court of Appeals General’s Office will be submitting a budget would be worth at least $1 billion to Kentucky. rejected Purdue Pharma’s request, thereby request to the General Assembly for an The Attorney General’s Office submitted to leaving in place the ruling of the Pike County additional $200,000. Some counties are putting Purdue Pharma a request for admissions, which circuit judge. Purdue Pharma appealed to the together funding to do their own programs, as is a request by lawyers that the opponents in a Kentucky Supreme Court, where proceedings are churches and businesses. case admit that specified facts are true. Admitted carried on into 2014 and 2015. Representative Bechler said that there seem facts are conclusively established and need not be Suddenly, a month after the 2015 election, to be more overdose deaths in central and eastern proven. The deadline for answering a request for the Attorney General’s Office settled the case for Kentucky. He asked why this would be the case. admissions is 30 days. If the deadline is missed, $24 million, roughly 2 percent of the minimum Attorney General Beshear said that western the request is automatically deemed to be value placed on the case by former Attorney Kentucky still has more methamphetamine, admitted. If a request for admissions addresses General Stumbo and a principal with Stites & especially crystal, compared to heroin. A lot of the central issues in the case, failure to answer by Harbison. So what had changed? Andy Beshear, heroin comes in through northern Kentucky and the deadline means, in effect, that the defendant a Stites & Harbison partner, was elected attorney Louisville. has conceded that it is liable to the plaintiff. general in 2015. In addition to Purdue Pharma Representative Bechler asked whether the Stites & Harbison, the law firm Purdue getting a low-ball settlement, its law firm, Stites slides on the number of prescriptions per county Pharma hired to represent it, moved to remove & Harbison, benefited. The agreement contained indicated prescriptions or doses. Attorney the case to federal court but did not respond to an unusual provision stating that the request General Beshear said that both are shown. the request for admissions. The parties disputed for admissions was deemed not to have been Representative Bechler asked how successful whether the case was actually eligible for removal admitted and that the response that Stites & the practice of going after the worst of the worst to federal court, and the case was eventually sent Harbison had submitted to the court was deemed dealers is. Attorney General Beshear said that back to state court. When the case returned to to be properly filed. This ended the possibility he would have to get this information; he would state court in 2013, the Pike County circuit that the firm might be sued for malpractice. have to go through DEA. He can say there is an judge ruled that the request for admissions was Roughly 1 month after the settlement increase in cases being tried as murder. deemed admitted and that the admissions were agreement, the Attorney General’s Office, now Representative Bechler asked whether the permissible at trial. This essentially ended Purdue led by Andy Beshear, entered into a contingency first payment from a verdict or settlement is Pharma’s defense. Purdue Pharma immediately contract with the law firm Dolt, Thompson, to an outside firm. Ms. McCoy-Johnson said asked the Kentucky Court of Appeals to overturn Shepherd & Kenny. The contract was for that typically it will be to pay the firm’s costs. the ruling, arguing that it would not be able to representation of the Commonwealth in the Attorney General Beshear said that in some survive the effects of the admission as to liability, lawsuit against Purdue Pharma, which had been cases, Medicaid will be paid. thereby leaving damages the only remaining settled in December 2015. The contract stated Senator Carroll asked whether there is a issue. that it was for settlement distribution only, in conflict of interest with any manufacturers or One of the lead attorneys for Stites & Harbison effect, giving $3.7 million in settlement proceeds distributors related to the Purdue Pharma case. indicated that there was a potential $1 billion to Dolt, Thompson. Former Attorney General Attorney General Beshear said that he did not settlement, which meant that the firm could be Conway soon joined that firm as a partner. Dolt, work on the Purdue Pharma case. facing at a legal malpractice liability of the same Thompson had initially been given a contract Senator Carroll said that the attorney general amount because of the missed deadline. Senator to represent the Commonwealth in the Purdue worked for the firm that represented Purdue Carroll said that among the materials distributed Pharma case in 2014, shortly after Conway Pharma. Attorney General Beshear said that he to Program Review and Investigations members announced that he was running for governor. has not seen a single name on any list that he at today’s meeting was an April 15, 2013 letter The contract provided that the firm would be perceives as a conflict. If that arises, it will go to from the Attorney General’s Office to the paid on a contingency basis, meaning that it the Bar Association. chairman of Stites & Harbison stating that would be paid a percentage of any amount Senator Carroll asked whether the only the failure to timely respond to the request for recovered from Purdue Pharma. However, the connection with the Attorney General’s Office admissions constitutes a possible basis for a contract expired at the end of June 2015, and the is former Attorney General Stumbo being legal malpractice claim by the firm’s clients. Jack evidence indicates that that it was never renewed. employed by Morgan and Morgan. Attorney Conway was attorney general at the time. Andy If it had been, there would have been no need for General Beshear said that Mr. Stumbo is the only Beshear, as a Stites & Harbison partner, might the Attorney General’s Office to enter into a new person with the firms who has been in Kentucky’s have been liable for a portion of any malpractice contract with the firm in January 2016. The firm Attorney General’s Office. claim. had continued working the case after its contract Senator Carroll asked whether former Speaker Attorney General Beshear noted that he expired in June 2015. It did so at its own peril; Stumbo would be working on the case. Attorney wanted to clarify for the record that he was not Kentucky law is clear that a vendor cannot be General Beshear said that his understanding is an equity partner. paid for work that is not performed pursuant that he will not be an active participant. He is the Continuing, Senator Carroll said that in to a written contract. There is no question that attorney general who filed the Purdue Pharma August 2013 Attorney General Conway told such a respectable, experienced firm should have lawsuit, so he will be available for consultation. CN2 Pure Politics that liability was essentially known this. Senator Carroll said that based on his several established and the remaining issue was damages. Senator Carroll asked Attorney General

42 2017 Interim LEGISLATIVE RECORD Beshear why he entered into a contract with not live up to its obligations. would not get paid. Dolt, Thompson, Shepherd & Kenny at the end Senator Carroll said that the firm was not Ms. McCoy-Johnson said that the contract of January 2016. Attorney General Beshear said under contract at the time and that Attorney expired prior to Attorney General Beshear that he wished to apologize to the parents in the General Beshear initiated a new contract in order assuming office in January 2016. At this point, audience for what was happening at this meeting. to pay them. The Attorney General said that it is staff were unaware that the contract had expired Senator Carroll said that the Attorney General basic contract law that a firm that has been under and did not allow any law firm to proceed with any had been asked to come before the committee to a contract that secured a legal settlement should work on any contract. The prior administration discuss law firms. The Attorney General replied ultimately get paid for its work. had proceeded with the negotiations and the that he was called before the committee for a Senator Carroll asked whether the contract settlement on December 22. When it was discussion, not to be attacked politically. with Dolt, Thompson that he signed was discovered that there was no active contract, staff Senator Carroll said that he is not a political retroactive. Attorney General Beshear replied discussed this with the FAC. Mitchell Denim, person and that he is pursuing this matter because that he did not sign the contract. the Assistant Deputy Attorney General for Civil his research has raised suspicions. Attorney Senator Carroll asked whether he had and Ms. McCoy-Johnson testified before the General Beshear said that he strongly disagreed knowledge of what goes on in his office. Attorney Government Contract Review Committee. The and that he was surprised at the argument that the General Beshear said that he did but that he contract was approved retroactively so that it state did not have to pay the lawyers who worked specifically decided not to be a part of anything could be paid and settle the agreement. the case. He was not involved in the contract having to do with Purdue Pharma. Senator Carroll said that as a layperson the renewal. His only participation in the case was Senator Carroll asked whether he knew how question comes from the fact that there was no to make a recommendation for appropriating much Dolt, Thompson was paid under the new contract at the time of the settlement. Attorney funds from the settlement. contract. Attorney General Beshear said that the General Beshear said that if the attorneys had In response to further questions from Senator amount that was received was negotiated down to not been paid the agreed-upon amount that, Carroll, Attorney General Beshear repeated that the present value because all $24 million does not through the court, the Commonwealth could he was not involved in the new contract. come in at once. By paying the firm for the first have also owed numerous attorney fees. Senator Carroll asked whether he was aware installment that came the amount was lessened. In response to a question from Senator West the new contract was being signed. He said that he did not negotiate the amount but about whether he worked on the Purdue Pharma Representative Palumbo said that the topic on that he is aware of it. It was $3,747,502.11. case while he was at Stites & Harbison, Attorney the agenda was potential legal action against the Senator Carroll asked whether he investigated General Beshear said no, he was not a part of that drug industry for contributing to opioid abuse. why there was a need for a new contract. Attorney litigation team. Senator Carroll responded that the Attorney General Beshear replied that he has intentionally Senator West asked whether he avoided this General was made aware of what was going to not touched anything having to do with the case because of a conflict of interest because he be discussed. Attorney General Beshear said that Purdue Pharma matter. worked for the firm. Attorney General Beshear he had emailed Program Review staff to say that Senator Carroll asked whether it would be said that he did not think that the Bar would he had no knowledge of the Purdue Pharma case his responsibility to determine whether there have recognized a conflict but he was unsure. To and was not a part of any settlement talks. The was a legal obligation from the state to make the be cautious since the matter had been settled, the email advised that another witness would need payment. Attorney General Beshear replied that right thing to do was to let others in the office to be secured to testify about the case. he has intentionally not touched anything having fully decide and control those decisions. In response to a question from Senator to do with the Purdue Pharma matter. Senator West clarified that Attorney General Carroll, Attorney General Beshear said that his Senator Carroll asked whether he was going Beshear did not work on the case at Stites & office did not pay Stites & Harbison. to ignore it if there was something improper Harbison but out of an abundance of caution Senator Carroll asked Attorney General about the payment. Attorney General Beshear decided to step back. The Attorney General Beshear whether his office had paid Dolt, said that the responsibility would be on the on agreed. Thompson for its services. He replied that the the chief deputy or others. That is how it would In response to questions from Senator West, team of lawyers involved in the Purdue Pharma normally be handled. Administrative staff were Attorney General Beshear said that the $3.7 case was paid under the contingency fee contract. working on this the entire time. He reiterated million for Dolt, Thompson was an agreed-upon The amount paid would have been determined by that he had made the important decision to not contingency fee. There were also payments for the settlement that occurred under the previous touch the Purdue Pharma litigation in any form attorney expenses and document management. administration. The payment to the firm was or fashion, and that he has not done so. Document management cost $418,000, which made during his administration. Senator Carroll asked whether, based on his shows why outside counsel are needed because Senator Carroll asked whether it was correct legal experience, it would be unusual for a firm just managing the millions of documents ended that Dolt, Thompson was paid for a settlement of that stature to let a contract expire before a up costing this much. that was made in December 2015 and the firm settlement was made. Attorney General Beshear In response to questions from Senator was not under contract then. Attorney General responded that based on his knowledge as an Thomas, Attorney General Beshear agreed Beshear said that he did not know whether the attorney one cannot get out of a signed contract that he was not an equity partner at Stites & firm was under contract. He said that it would for which the work has been performed. It would Harbison, which means that he could not be be difficult to argue before a court that the not say a lot about the Commonwealth to hire an liable for any claim against the firm. He said that Commonwealth could get out of paying lawyers attorney, agree to a fee, have the attorney do the his understanding is that the decision in this who were under a contingency fee contract. To work and secure a settlement that is the largest case was the first of its kind, but that he has not be able to secure future contingency fee work, it settlement by any state and larger than the entire researched it and was not part of it. would be a concern if the Commonwealth would country of Canada, and then say that the lawyers In response to a question from Senator THE KENTUCKY GENERAL ASSEMBLY 43 Thomas, Attorney General Beshear agreed that government. If this is true, we need to apologize with Larry Clark, a budget person who worked when this case was finally settled, the matter was to the families of Kentucky for what they saw for about 4 months into this administration. before the state Supreme Court on appeal. The with the previous attorney general. Assistant Deputy Attorney General Mitchel court was going to be asked whether this issue, Representative Bechler said that there was an Denhem was part of the transition on this. which is the first time that it ever happened, was open records request to the Attorney General’s In response to a question from Senator valid. Office last year asking for documents related to Carroll, Ms. McCoy-Johnson said that she did Senator Thomas said that, as Justice Roach Purdue Pharma. He asked why the request was not think there was a delay in payment to wait would acknowledge, when a case is before a court denied. Attorney General Beshear said that he has for the new contract to be in effect. for trial or on appeal, the ultimate outcome is not touched anything involving Purdue Pharma, Senator Carroll said that we have been unknown and this was not the first case that had so Deputy Attorney General Brown would need through the question about providing Purdue been settled prior to an appellate decision being to answer that question. Mr. Brown said that Pharma or anyone else acting on its behalf with rendered. Attorney General Beshear agreed. when the open records request was submitted any legal representation or advice of any kind in Senator Thomas said whatever decision was he reviewed two legal documents that were filed. relation to the Commonwealth’s litigation. He made was based on the fact that the Kentucky One was a settlement confidentiality agreement, asked Attorney General Beshear to clarify that he Supreme Court could have overturned the which is not unusual during litigation, in which is saying that he had no involvement whatsoever. appellate court decision. Attorney General parties exchange information during the course Senator Carroll said that he seemed to remember Beshear agreed that it could have and that of litigation and then it is agreed through the a quote the Attorney General made in a recent the case would still have had to return to trial court what will be held in confidence until the interview about answering some questions court for further proceedings. If the court had case goes to trial or there is a settlement. That related to the case within his firm. Attorney overturned the previous ruling, it could have was in 2013. In the final settlement entered General Beshear responded that he could have been an additional 10 years. December 22, 2015, there were agreements been asked a question about Attorney General Senator Thomas said that it would be fair about records that would either be returned Conway or anything dealing with personalities to say that both parties made a reasonable to the parties or destroyed. That was pursuant or the like, but that he was not a part of any decision given the risks regarding the outcome. to the court order in the settlement. When the litigation team or any settlement talks. As already indicated, the settlement was for open records request came in, the office had to Senator Carroll asked Attorney General significantly more than what Canada received. conform to the agreement of 2013 and the final Beshear whether he had ever talked to John Attorney General Beshear said that he had not settlement order of the court. Famularo about the Purdue Pharma case. The seen a state settlement against a single opioid In response to a question from Representative Attorney General said that Mr. Famularo has manufacturer that exceeds $24 million, a $35 Bechler, Mr. Brown said that it is not a matter passed away since that case. He did not recall million settlement was for multiple states. of redactions so that some materials could be any conversations, but Mr. Famularo could have Senator Thomas said that we ought to be clear provided, it is a matter of compliance with the asked about the players. The Attorney General that this case was settled before a final decision court order. said that he was not a part of that litigation. was made regarding the case. In response to his Senator Carroll asked how the money was In response to a similar question from questions, Attorney General Beshear agreed that paid from the Purdue Pharma settlement to Dolt, Senator Carroll, the Attorney General said that Dolt, Thompson had not been paid before and Thompson. Ms. McCoy-Johnson said that the Dan Danford is an attorney in the [Stites & that by paying them for legal services rendered money was transferred to an off-budget account, Harbison] Lexington office. He could have asked the state was honoring an obligation. and the firm was paid through that before the about the players. Attorney General Beshear said Senator Thomas said that he did not see what money was transferred into a restricted fund that he was not a part of that litigation. the problem is. If attorneys have done the work, account. Senator Carroll asked whether the answer they should be paid. Attorney General Beshear In response to a question from Senator would be the same for Ken Sagan. Attorney said that is basic contract law. Carroll, Ms. McCoy-Johnson said those funds General Beshear said that he did not know that Representative Linder said that he was trying were not paid directly from Purdue Pharma to Mr. Sagan worked on the matter; he is not a to understand why former Attorney General Dolt, Thompson. litigator. Stumbo and then current Attorney General In response to a question from Senator Senator Carroll asked Attorney General Conway mentioned a $1 billion settlement and Carroll, Ms. McCoy-Johnson said that she did Beshear whether he was head of the Stites & then the case was settled, apparently in a rush, not know when the first payment was made, she Harbison Attorney General Defense Practice for about 2 percent of what they said. He asked would have to check. It would have been very Group. He replied that ultimately people hire for an explanation of the sudden shift from $1 shortly after December 22. She said that she the lawyer they want to hire in any firm, and that billion to $24 million. Attorney General Beshear thought that the judgment required payment to person is the head of any suit. He said that he did responded that former Attorney General come within 30 days of that. not participate in the Purdue Pharma litigation Conway should be asked that. He can only Senator Carroll asked Ms. McCoy-Johnson or any settlement talks. show the numbers of actual settlements that are whether she had discussions of the payment with Senator Carroll asked whether he had an publicly available and how Kentucky’s settlement Attorney General Conway or any of his staff. official title as the head of the Attorney General compares. He was not part of the settlement and It was the end of his term and he was going to Defense Practice Group. Attorney General has no knowledge of the thinking that went into work for Dolt, Thompson, so there were issues Beshear said that it was not recognized as an it. related to paying the firm. She replied that the official title; it was part of the marketing of the Representative Linder said that Attorney only staff that that she spoke with were staff who firm. He said that the meeting was drifting into General Beshear had earlier apologized to the were retained from the Conway administration. things left over from the last campaign or that families in the audience for what they see in their She discussed some of the money transfers are grossly political and have nothing to do with

44 2017 Interim LEGISLATIVE RECORD fighting the opioid epidemic. He said that he returned to practice at Stites & Harbison was the end of November 2015. He said that this wants to work in a bipartisan way to hold these following his term as governor. Attorney General is getting far afield from the opioid crisis that we companies responsible. Beshear said that he did but not as an equity should all be fighting together. Before they left, Senator Carroll said that he wanted to focus partner. the parents who were here who have lost their on what is being discussed today. He asked In response to a question from Senator children said they are ashamed of what was whether Attorney General Beshear was saying Carroll, Attorney General Beshear said that going on here. that it was not his job to be involved in cases that he did not know any details of his father’s Senator Carroll said that is a separate issue involved the attorney general suing one of his compensation or partnership package. on which everyone is on the same page. This has firm’s clients. The Attorney General replied that Senator Carroll asked whether Attorney to do with Attorney General Beshear’s credibility a law firm does not work this way. Someone hires General Beshear knew whether his father receives and the way this case was handled. a specific lawyer in the firm. The client decides origination credit related to Purdue Pharma or Attorney General Beshear said that it has to who does the work. He said that he did not work any of its subsidiaries. The Attorney General said do with a political attack. on the Purdue Pharma matter in any way and that he knew nothing about origination credits Senator Carroll said that it has to do with was not involved in the settlement talks. because he knows nothing about the contract. concerns about where Attorney General Beshear Senator Carroll said that most firms have a He said that his father returned to the firm long is headed and his ability to handle the cases that system, sometimes called an origination credit, after the Purdue Pharma settlement. are coming. for tracking the amount of business that a lawyer Senator Carroll asked Attorney General Attorney General Beshear said this is based brings to the firm. He asked whether Stites & Beshear whether he was aware of the letter on a case that he was not a part of. Harbison had origination credits or something dated April 15, 2013, that establishes a notice of Senator Carroll said that citizens should similar when Attorney General Beshear was in potential legal malpractice. The Attorney General decide that for themselves. He asked Attorney practice there. The Attorney General responded said that he had not seen the letter, but that he General Beshear to describe the transition that it would definitely be inappropriate to talk believes he was told about it at some point. process that occurred between his election as about the internal business practices of a law In response to questions from Senator attorney general in 2015 and his swearing in to firm that is not present. Carroll, Attorney General Beshear said that he replace Attorney General Conway in January. In response to questions from Senator did not remember when he was told about the Attorney General Beshear said that he had Carroll, Attorney General Beshear said that he letter, but it was while he was at Stites & Harbison. a conversation with General Conway about did not receive origination credit for any work He said that he would not have worried about it, staffing, which he said he believed was the only that Stites & Harbison did on Purdue Pharma or the firm’s attorneys can handle their business. conversation. any work for subsidiaries. Senator Carroll asked Attorney General In response to a question from Senator Senator Carroll asked if subpoenaed records Beshear whether he was ever involved in any Carroll, Attorney General Beshear said that he from Stites & Harbison would be consistent with discussions related to the failure to comply with did not discuss pending litigation with Attorney what Attorney General Beshear has been saying. requests for admission. He replied that he was General Conway. At that point, he was not part The Attorney General said there would be no not involved in any discussion that he could of the attorney-client privilege with the office. record of an origination credit because he did recall on that. He said that he thinks he was told Representative Palumbo told Attorney not work on the Purdue Pharma case. about it. General Beshear that he should not stand for any Senator Carroll asked whether this would be Senator Carroll said that the Purdue Pharma more of these personal, political attacks. He said accurate for any subsidiary or anyone related to case started in 2007. He asked Attorney General that he appreciated this. the case. Attorney General Beshear said that not Beshear why he would not have been involved Senator Carroll asked Attorney General that he was aware of but that he did not know before he decided to run for attorney general. The Beshear whether he or anyone on his staff had the subsidiaries of Purdue Pharma. He said Attorney General replied that he did not move conversations with former Attorney General that he would look at a list of subsidiaries if the back to Kentucky until 2005. The case came to the Conway or anyone on his staff about the Purdue committee has one. He said that he was not aware Lexington office, which chose its own attorneys. Pharma case. Attorney General Beshear said that of any Purdue Pharma subsidiaries for which he At the time, there were more than 200 attorneys he did not. There were staff from the previous had ever received any type of origination credit. in the firm, so it would not be unusual for him administration who carried over. Senator Carroll asked whether Attorney not to have staffed one of the tens of thousands Senator Carroll asked Attorney General General Beshear would be willing to provide of cases the firm had. The same would be true Beshear whether he used information that he billing records to the committee. The Attorney of Governor Bevin’s General Counsel, whose learned during the transition period to help General responded strongly that you cannot do firm had represented Planned Parenthood. That Stites & Harbison settle the Purdue Pharma case. that as an attorney because you would violate does not mean that he represented Planned Attorney General Beshear responded that he was virtually every ethical obligation that you have, Parenthood, it just means that the firm did. not involved in any way with the settlement. and they are not his records. The attorney In response to a question from Senator In response to a question from Senator general’s office is the only office that has a Carroll, Attorney General Beshear said that he Carroll, Attorney General Beshear said that professional requirement related to it. You have did not know whether Stites & Harbison put he had no knowledge of any settlement to be a lawyer in good standing. Turning over its malpractice insurance carrier on notice for a discussions between Purdue Pharma and the billing records would change a lawyer in good potential claim, but that it would be a standard Commonwealth. standing to one that is not and could possibly practice. Senator Carroll asked whether the answers disqualify you from office. In response to a question from Senator of attorneys from Stites & Harbison would be Senator Carroll asked whether the Attorney Carroll, Attorney General Beshear said that his consistent with his if they were subpoenaed. General’s father, former Governor Steve Beshear, last day of employment with Stites & Harbison THE KENTUCKY GENERAL ASSEMBLY 45 Attorney General Beshear said that he did not the settlement agreement, which was entered into to the Commonwealth’s October 4, 2007, request know what Stites & Harbison attorneys knew if by the previous administration, could potentially for admissions. Attorney General Beshear said they were part of the settlement discussions. be breached by those actions. The committee that he had read the settlement but was not Representative Bechler said that given the should be very careful. If the settlement aware of any of the settlement discussions, so he length of this discussion, there would be no agreement is breached, the Commonwealth could not testify on any decisions related to the presentation at this meeting on the foster care may have to pay Purdue Pharma $24 million. settlement. report. He apologized to staff who were presenting Groups like “Hope in the Mountains” could Senator Carroll asked Attorney General the report and those who were to respond to it. have to return funds they have received via the Beshear whether his legal opinion is that the He invited Judge Walker-FitzGerald to testify settlement. provisions of the settlement get Stites & Harbison so that she would not have to return for next Senator Thomas said he did not understand off the hook for any potential malpractice claim. month’s meeting. [At this point, it was learned the relevance of former Governor Beshear’s Attorney General Beshear said that he would that Judge Walker-FitzGerald was no longer in compensation. He would welcome an explanation have to analyze the litigation. the audience.] of how this is relevant to the opioid addiction Senator Carroll asked why the Attorney Attorney General Beshear said that he would issue or the Purdue Pharma settlement. General’s Office would agree to such a provision be happy to take a few more questions, but that he Senator Carroll asked Attorney General and whether it was unusual. Attorney General was here voluntarily. He said that he has not seen Beshear whether he was aware that former Beshear responded that in every litigation that a constitutional officer treated this way before Attorney General Stumbo was on the record is settled the discovery ultimately goes away this body and that he has not treated legislators stating that the Purdue Pharma case was worth because the settlement says that no one is in a similar manner. He said that he wants to at least $1 billion dollars to the Commonwealth. admitting liability. work with legislators, drugs are not partisan, and Attorney General Beshear replied that if he said In response to questions from Senator today felt like an attack. We ought to be working it, he said it. Attorney General Beshear said that Carroll, Attorney General Beshear said that he together to hold these companies responsible for he was not part of this litigation or the settlement did not know if anyone at Stites & Harbison the opioid epidemic. talks. receives a success bonus for settling cases. He Senator Thomas said that he agreed with Senator Carroll asked Attorney General said he had never received one. General Beshear and Representative Palumbo Beshear whether he was aware that then Attorney In response to questions from Senator that this is a political action. To say that one is General Conway said that he would not sit Carroll as to whether anyone connected to not a politician in nature when one is an elected down at the table unless there was a nine figure Purdue Pharma or anyone from Dolt, Thompson official who conducts an inquiry like this, it is settlement offer. Attorney General Beshear said contributed to his campaign for attorney general, obviously political. Someone is at this hearing that former Attorney General Conway would Attorney General Beshear said that he did not who has already announced a decision to run need to be asked that. know. for attorney general in 2019. Senator Thomas Senator Carroll asked Attorney General Attorney General Beshear said that he had said that he wanted to follow up on some of Beshear whether he would agree that compared been more than patient in answering every the questions to be clear on the law. He asked to those statements, a $24 million settlement question he could. This has moved into issues whether his understanding was correct that is low. Attorney General Beshear replied that from a previous campaign. He said that he has under Kentucky law you cannot enter into a he had never seen a collected billion dollar been more transparent than any other attorney contract for retroactive payments. Attorney settlement against a pharmaceutical company. general, including releasing his tax returns, General Beshear said that he would have to look He continued by saying that, having not been a which no previous attorney general has. He said into that. Ms. McCoy-Johnson said that the part of the litigation and not having not seen the that he looked forward to working with those second Dolt, Thompson contract was a renewal, documents, all that he can show are the numbers who were not leading this questioning to address not a new contract. that others have settled for. There is no question the opioid epidemic. Senator Thomas asked whether he was that OxyContin ravaged our communities, but so [At this point, Attorney General Beshear and correct that a large law firm could have hundreds did other opioid pharmaceuticals that he is ready Ms. McCoy-Johnson left the meeting.] of clients, so not every member of the firm works to go after. He said that he wants to move forward Senator Buford asked former Justice Roach if on a particular case. Attorney General Beshear together to save a number of our children if we he had any idea of the settlement that would be replied that 98 to 99 percent of the members of can change the rates of addiction, but we cannot hoped or asked for with the new cases that are such a firm would not be working a specific case. do it that if we are engaged in this. being pursued. He responded that his approach In his experience, clients want a small group of Senator Carroll said that is why it is so is to treat every case like it is going to a jury, so people who they trust working on their matter. important that we get these questions asked it would be up to the other side to propose a Senator Thomas said that he applauded so that we can get it behind us. He asked resolution. Attorney General Beshear for his ethical Attorney General Beshear whether he was aware Senator Buford asked whether other states decision given the attention given to the Purdue that the settlement agreement between the have been successful and whether other states Pharma settlement to avoid any appearance of Commonwealth and Purdue Pharma specifically join with Kentucky on this matter. Justice Roach impropriety by removing himself from anything states that the requests for admission to Purdue said that the earlier presentation listed some that the Attorney General’s Office did with case. Pharma were deemed admitted by Purdue states that have broad actions. Everything is Senator Thomas said that he would have done Pharma under oath by the Pike County Circuit early. There are also county cases. the same thing. Court dated April 1, 2013, and September 25, Senator Buford said that in previous Attorney General Beshear said that he 2013, are hereby withdrawn pursuant to CR 36.02 administrations it could take 2 to 3 months to appreciated that. In reference to previous and Purdue Pharma’s April 12, 2013, responses get a response from the FAC. questions that mentioned subpoenas, he said that are accepted into the record as proper responses Justice Roach said that his job is to help

46 2017 Interim LEGISLATIVE RECORD this team become acquainted with Kentucky. Deputy Executive Director, Teachers’ Retirement strong performance from the late 1990s was now Ultimately, the attorney general can make a System; and David Eager, Interim Executive dropping out of the 20-year period. Looking decision about how to resolve cases. Director, Kentucky Retirement Systems. beyond, at 30-years, both KRS and TRS had Senator Buford asked Justice Roach whether LRC Staff: Brad Gross, Jennifer Black Hans, returns above 8 percent, while since inception he had an opinion on how the Purdue Pharma Bo Cracraft, and Angela Rhodes. the Judiciary Form Retirement System (JFRS) case was so mishandled. He replied that he only Approval of Minutes was also above 8 percent. knew what he has read in newspapers. Senator Bowen moved that minutes of the June Mr. Cracraft provided an update to recent Senator Buford asked whether there was 26, 2017 meeting be approved. Representative changes to return assumptions for several of the information that could be released as an open Webber seconded the motion, and the minutes plans. He noted recent discussion regarding plan record about the Purdue Pharma case since it were approved without objection. assumptions and changes currently occurring was resolved. Senator Carroll said Mr. Brown Semi-Annual Investment Review within the industry. A lot of plans across the addressed this; there are stipulations in the Bo Cracraft, Legislative Researchcountry are changing assumptions, with 35 out agreement that say that none of that can be Commission, discussed the total assets of the 69 plans included in staff’s peer group released. under management for all state administered having adjusted their assumption either for their In response to a question from Representative pension and insurance plans. Total assets were most recent or upcoming valuations. While more Bechler, Justice Roach said that he did not know approximately $36.6 billion, with the pension plans are lowering assumptions, the median what percentage of opioid abusers started with assets totaling $31 billion and the insurance and average for the industry is still 7.5 percent, marijuana. assets totaling $5.6 billion. Mr. Cracraft noted which is a reflection of the slow, incremental Mr. Brown said that about 6 years into the case a couple unique differences between the two nature of changes being experienced. Within a protective order was issued, which is, in effect a trusts, highlighting the Teachers’ Retirement Kentucky, two of the systems have made changes confidentiality order concerning the documents System (TRS) accounted for approximately 60 to assumptions. First, KRS changed assumptions that were being produced. During the course of percent of the assets on the pension side, while for all ten of their underlying plans on the discovery, parties exchanged information and the underlying five systems of the Kentucky pension and insurance side, while JFRS also documents as part of civil procedure. When the Retirement Systems (KRS) accounted for the reduced their assumption. TRS has been having case was finally adjudicated and settled, there majority of insurance assets. active discussions but, as of today, there have not was no admission of liability. Therefore, the Mr. Cracraft provided a market review and been any changes to their assumption. information that had been exchanged goes back noted that, overall, the 2017 fiscal year was a Mr. Cracraft asset allocation and highlighted to the owner or is disposed of as per order of the positive year for investment markets, with several that a plan’s underlying return is largely driven court. Nothing becomes an open record, it is the asset classes posting strong positive returns. by the way a plan allocates assets. Staff discussed opposite of that. Most notably, the more traditional asset classes, more traditional asset classes, such as public Representative Bechler thanked everyone such as public equity, that almost every pension equities and fixed income, noting most are and said that the next meeting of committee plan is utilizing, were top performers. Equity utilized by every plan in the peer group, liquid would be November 9. markets, including U.S. and Non-U.S., bounced in nature, and well-known. Other options, such The meeting adjourned at 12:20 PM. back from tough 2016 performance. Outside of as Alternative Assets, include real estate, private equity markets, non-investment grade, or higher equity, and absolute return. Mr. Cracraft noted PUBLIC PENSION OVERSIGHT yielding, bonds performed well and provided a that most plans allocate 75 to 80 percent of their BOARD little over 12.5 percent return. Private Real Estate assets in traditional assets and that, historically, Minutes provided 7.9 percent return, while U.S. Core 90 percent of plan returns were dictated by how September 25, 2017 Fixed and Treasury Inflation Protected Securities they decided to allocate among these asset classes. Call to Order and Roll Call (TIPS) were slightly down. Mr. Cracraft discussed the larger universe, noting The 8th meeting of the Public Pension Mr. Cracraft provided a summary of annual that, across public pension funds, the average Oversight Board was held on Monday, September fiscal year returns for plans over the past 20 allocations had remained relatively unchanged. 25, 2017, at 1:00 PM, in Room 154 of the Capitol years. Mr. Cracraft highlighted a slight change In the mid-1980s, it was predominantly fixed Annex. Representative Brian Linder, Chair, made from prior staff reviews to report the income with a healthy allocation of public equity, called the meeting to order, and the secretary Kentucky Employee Retirement System (KERS) which rotated over in the mid-1990s. Within called the roll. and County Employees Retirement System the last few decades, alternative assets begun to Present were: (CERS) independently. Reporting the plans increase, and the peer group has had a consistent Members: Senator Joe Bowen, Co-Chair; independently makes more sense as the plans allocation of around 25 percent the past several Representative Brian Linder, Co-Chair; Senators begin to perform differently, as evident over the years. Jimmy Higdon, Christian McDaniel, Gerald past three plus years. In response to a question from Senator A. Neal, Dennis Parrett, and Wil Schroder; Moving to trailing performance, Mr. Bowen, Mr. Cracraft stated that not all of Representatives Ken Fleming, James Kay, Jerry Cracraft highlight one year returns that ranged Kentucky’s plans mirror the larger universe. He T. Miller, Arnold Simpson, and Russell Webber; from 12 to 15 percent, noting that all the plans noted the differences between TRS and KRS, J. Michael Brown, John Chilton, Timothy Fyffe, had performed well relative to assumptions, where TRS is following the larger trend of adding Mike Harmon, James M. “Mac” Jefferson, and performance benchmarks, and median returns alternative assets, but has been slower and less Sharon Mattingly. of public or staff developed peer groups. Taking aggressive than KRS. Ultimately, this is driven Guests: Bo Cracraft, Legislative Research a longer term view, Mr. Cracraft noted that 10- by Investment Committees, who perform asset Commission; Donna Early, Executive Director, and 20-year returns had come down from prior liability modeling studies and have consultants Judicial Form Retirement System; Beau Barnes, years, which was largely due to the fact that help present the data before making a decision THE KENTUCKY GENERAL ASSEMBLY 47 on how to allocate assets. a bit over valued. Capital market assumptions code of conduct language in statute, has already Mr. Cracraft discussed recently approved and expectations have come down, so there is required existing managers to comply and has new targets for KRS’ asset allocation. The KRS concern going forward. Within fixed income, assured that new contracts will incorporate SB2 Investment Committee has been evaluating their Kentucky has entered a period where most feel requirements where not already in place. Public asset allocation over the last several quarters and rates have to go up, so the opportunity in core disclosure of investment contracts is likely the recently approved new targets for each plan that U.S. fixed income is also not overly attractive. most labor intensive of the new requirements, staff will begin transitioning to over the course So, a lot of plans are trying to be more credit with several hundred managers across the larger of fiscal year 2018. KRS has decided to reclassify oriented, more private. Both TRS and KRS, have plans. Both TRS and KRS are in the process of assets into three new strategic allocations: Equity, been diversifying their fixed income portfolios reviewing their contracts for redaction purposes, Credit, and Diversifying Assets. The underlying out of traditional public into more opportunistic and TRS has recently started to post contracts asset classes remain the same, but how staff credit oriented mandates. End to end, Mr. online. Lastly, all three plans have adopted new aggregates will look different as they target 45 Cracraft noted that much of this had more to do Investment Procurement policies and submitted percent to Equity, 30 percent to Credit, and 25 with concern over the next 5 to 10 years of equity them to the Finance Secretary for certification. percent to Diversifying Assets. The most notable markets. The TRS and JFRS policies have been approved reduction is in Non U.S. Equity and U.S. Equity, Mr. Cracraft provided a summary of by the Finance Secretary. which is being reallocated into Global Fixed and reported fees and noted that, while passage of Biennial Budget Request – Judicial Form Credit or Illiquid Fixed. SB2 during the 2017 regular session introduced Retirement System In response to a question from Representative new reporting requirements, the majority of Donna Early, Executive Director, Judicial Miller, Mr. Cracraft stated the difference between changes are not required until the upcoming Form Retirement System, noted the agency real return and absolute return is real return fiscal year. For fiscal year 2017, the average administers both the Judicial Retirement Plan includes hard assets, commodities, inflation management fees, which are based upon market (JRP) and the Legislators’ Retirement Plan linked assets, or total return products, while or committed value, were 41 basis points for (LRP). Ms. Early reviewed return and asset absolute returns are fund of fund or direct hedge KRS, 31 basis points for TRS, and 6 basis points allocation information for both the defined funds and are treated as a separate allocation. for JFRS. Other Fees and Incentives, which are benefit and hybrid cash balance plans of JRP In response to questions from Representative items that were incorporated into SB2, included and LRP. The board is pleased with performance Kay, Mr. Cracraft indicated he did not believe carried interest and profit sharing, are expenses and all portfolios have outperformed their KRS had taken a fully passive approach on the that will be begin being reported in the first policy benchmarks for all trailing periods equity side just yet, and that KRS’ decision likely quarter of the 2018 fiscal year. For fiscal year except the final quarter of fiscal year 2017. The is dependent on the upcoming budget and cash 2017, KRS included these fees, which added JRP defined benefit plan total portfolio market flow. If the plan continues to sell assets at a 31 additional basis points to management fees, value was $371 million and the hybrid cash regular rate, it is more difficult to invest in active, resulting in a total fee of 72.6 basis points. JFRS plan is $542,775, while the Legislators’ defined niche strategies that tend to be more volatile. does not utilize performance incentives, while benefit plan totaled $110 million and the Hybrid A portfolio that is consistently having to sell TRS will begin reporting in the future. KRS cash plan was $145,643. Ms. Early stated that assets would rather passively invest in the larger Insurance Fund fees are pretty consistent with performance trends from fiscal year 2017 are market. the pension fund on a basis point comparison. expected to continue through the first quarter of In response to questions from Representative TRS fees are slightly higher for their insurance fiscal year 2018. Kay, Mr. Cracraft noted that if a plan does have fund, which is a product of the fund having a Ms. Early provided preliminary information a large number of retirements then one would more growth-oriented allocation that includes a on cash flow from fiscal year 2017 and noted that expect total benefit payments to increase, while higher allocation to additional categories. both JRP and LRP saw assets grow 10.1 percent the level of active employee contributions would In a response to Senator Parrett, Mr. Cracraft over the fiscal year. decline. In that scenario, there would be a need stated that when management fees are compared Ms. Early discussed funding data and noted for additional employer contributions to make to other pensions in the U.S., TRS is likely slightly a change in the long-term interest rate for the up the difference. below peers, while KRS is average to slightly defined benefit plans to 6.5 percent from 7 In response to a question from Representative below average of peers. percent. In regard to the ARC payment, Ms. Early Fleming, Mr. Cracraft clarified that Credit Fixed Mr. Cracraft provide an update on the pointed out that the funding formula for JFRS are strategies that a lot of plans call opportunistic how the plans were transitioning in regard to is a statutory formula, which provides for the or illiquid credit. Some of these are below new SB 2 compliance requirements. At a high same appropriation each year of the biennium. investment grade strategies, some are bank loan level, each of the plans are working diligently For the JRP defined benefit plan, the 2016-2018 or direct lending approaches, while others might to meet the requirements if they have not biennium budgeted amount was $13.1 million be distressed debt. The strategies are structured already. As of August 2017, both KRS and TRS and the preliminary estimates for 2018-2020 are more like private partnerships, generally have met new requirements regarding investment expected to be $8.6 million, which is a decrease longer time horizons, and are more speculative. expertise on their boards. JFRS cannot comply of $4.5 million, or 34.36 percent. Using a percent In response to a question from Representative until current terms expire, but will do so with of payroll formula, the JRP contribution rate is Fleming, Mr. Cracraft indicated he believed the future appointments. In regard to the Asset expected to decline from 43.66 percent of pay recent allocation changes were more reflective of Code of Conduct requirement, KRS staff has to 31.31 percent. Estimated contributions for KRS’s concern over equity returns in the short incorporated additional language for new the JRP hybrid cash balance plan is estimated term. Public equity markets, especially in the contracts or renewals, while existing managers to increase $94,000, or 35 percent, which is an U.S., have had a tremendous period of growth, have been notified of the law change regarding increase in dollars, but not percent of pay. For and valuations across the board are considered Code of Conduct. TRS, which had existing the LRP defined benefit plan, the 2016-2018

48 2017 Interim LEGISLATIVE RECORD biennium budgeted amount was almost $2.4 by just under $1.3 billion. Mr. Eager provided a summary of unfunded million and the preliminary estimates for 2018- In response to a question from Representative liabilities for each system. He highlighted 2020 are expected to be $1.1 million, which is a Miller, Mr. Barnes stated that TRS continually KERS non-hazardous, which, when the revised decrease of $1.2 million, or 53.87 percent. Using a monitors its actuarial assumptions and can assumptions were used, was 14 percent funded percent of payroll formula, the JRP contribution assure the Public Pension Oversight Board in fiscal year 2016. Mr. Eager stated that to his rate is expected to decline from 53.38 percent of (PPOB) all the assumptions are developed knowledge, KERS was the most underfunded pay to 29.75 percent. Estimated contributions fully in compliance with actuarial standards of plan in the country, and the collective funds are for the JRP hybrid cash balance plan is estimated practice, which are promulgated by the Actuarial at a tie with New Jersey. Looking at projections to increase $5,000, or 35 percent, which is an Standards Board. Mr. Barnes stated that TRS’ going forward, incorporating the additional increase in dollars, but not percent of pay. recent payroll growth was 3.5 percent. funding requested, KERS’ unfunded position Biennial Budget Request – Kentucky Mr. Barnes discussed cash flow from the should bottom out at about $13.45 billion in Teachers’ Retirement System recent fiscal year and highlighted the $495 fiscal year 2018, before beginning to fall. Beau Barnes, Deputy Executive Director, million increase in employer contributions. Total Mr. Eager discussed cash flow for the fiscal Teachers’ Retirement System, discussed the assets for TRS were $16.8 billion at the beginning year. While the asset levels for all five pension investment performance and rankings relative to of fiscal year 2017 and $18.7 billion at the end of plans have gone up, they still are not in great public peers. In the past year, TRS’ investment fiscal year 2017. He stated there were still some shape and relied on investment income. He return was in the top 8 percent of the country. negative cash flow but still had investment gains highlighted the KERS non-hazardous, noting Over a 3-year period, TRS ranks in the top 11 of approximately $2 billion. it had $913 million in total cash inflows, which percent, over 5 years in the top 13 percent, and Biennial Budget Request – Kentucky included member contributions of $105 million, over the 10-year period in the top 9 percent. Retirement System employer contributions of $703 million (from Mr. Barnes discussed TRS’ gross and net David Eager, Interim Executive Director, $513 million), and the remaining from employer returns. He stated TRS has been able to negotiate Kentucky Retirement Systems (KRS), made a cessation payments and investment income. The among the lowest investment fees in the country. few opening comments. KRS is beginning to total outflow was $971 million so the net cash Over the 1 year, net of fee returns were are 15.02 see projections for the first time in quite a while flow was still negative. Mr. Eager stated there was percent, 3 year are 6.03 percent, 5 year are 9.87 where the unfunded liability is flattening out. All a similar pattern for all KRS plans. percent, 10 year are 6.09 percent, 20 year are 6.55 10 plans experienced an increase in plan assets Representative Kay asked if Mr. Eager percent, and the 30 year period gross return is over the past year and received $98 million thought it would be an advantage to KERS if the 8.1 percent. over the ARC. Mr. Eager highlighted how hard Legislators’ Retirement Plan were to share in the Mr. Barnes provided the systems budget KRS is working to drive fees down, saying that KERS non-hazardous retirement plan. Mr. Eager request and highlighted several key components, retirements are up 13.5 percent as of the end stated he would defer the question to the General such as annual budget expenditures, amortized of September. About 6,000 additional active Assembly. payments, actuarial determined employer members are eligible to retire with full benefits. Representative Kay made a comment that contributions (ADEC), and statutory Mr. Eager discussed recent assumption he believed it would be a good avenue for the contributions. First, Mr. Barnes discussed changes and highlighted the inflation assumption, legislators to move their retirement to KERS. He annual budget expenditures, which represent which he believes is the key assumption. This noted several comments had been made today normal, recurring budget expenses. The assumption drives the investment assumption that indicate the Legislature’s underfunding has largest and majority of this component is the and he referenced the Federal Reserve’s target not been the main source of the problem, but Commonwealth’s share of the 2010 shared of 2 percent, which is just below KRS’ new he referenced the PFM Group Consulting, LLC responsibility legislation regarding retired assumption of 2.3 percent. (PFM) report #2 that noted underfunding as teachers’ health insurance. Next, Mr. Barnes Mr. Eager discussed the estimated annual a huge portion of the problem and estimated described total amortized payments, which required contributions for each underlying total underfunding of KERS non-hazardous to represent past benefit adjustments that the state plan. He highlighted the KERS non-hazardous the tune of $2.6 billion. He noted the plan only is amortizing over time, such as prior ad hoc plan, where contributions for fiscal year 2017 held $2.1 billion in assets for the plan and the COLA adjustments. Third, Mr. Barnes outlined were $772.9 million, or 48.59 percent of pay, underfunded amount totaled more than what ADEC, which includes any prior year shortfalls but are estimated in fiscal year 2019 to total is currently in the plan. Rep. Kay noted past and the remaining funding needed to pay down $1,338.1 million, or 84.06 percent of pay. When COLAs, which were passed without funding, the current unfunded liability. Next, Mr. Barnes incorporating all five pension plans and using and highlighted the Legislature’s passage of the referenced statutory contributions included in the revised assumptions for payroll, inflation, law requiring the calculation for the ARC. Mr. the Department of Education budget, which and investment return, the total increase in Kay stated the Legislature will stand upon its represented the 13.105 percent statutory rate contributions from fiscal year 2018 is expected responsibility to fund these systems and not pass for all employers. Lastly, Mr. Barnes highlighted to be just under $1.0 billion. the buck. one additional state expenditure related to Mr. Eager discussed investment returns and Representative Linder noted that HB 238 in the system, which is an expense required for stated that from an actuarial standpoint, using 2016 required the PPOB to retain an actuary to the state to service bonds issued as part of the the smoothing 5-year model, the return is going be paid for by the systems and to evaluate the shared solution. This expense is included in the to be about 8 percent, while the actual market funding needs prior to each budget biennium. TRS budget, although all proceeds are used to return was about 13 percent. The actuarial value In June, an RFP was issued and it closed on pay down the existing bonds. Mr. Barnes noted, of assets has been about $800 million more than August 8, 2017. During the August meeting, when all dollars are incorporated, the TRS total real market value, so KRS is going to close that a three-member review panel consisting of budget request for fiscal year 2019 is estimated to gap by about $300 million. Representative Linder, Senator Schroeder, and THE KENTUCKY GENERAL ASSEMBLY 49 Co-Chairman Bowen was assigned to review the Association, St. Matthews Pharmacy; Rosemary insurance payer, PBMs, group purchasing proposals. Unfortunately, the panel only received C. Smith, R.Ph., Co-Founder, Kentucky organizations (GPOs), and pharmacy services two proposals. Therefore, it is the opinion of Independent Pharmacist Alliance, Jordan administrative organizations (PSAOs). GPOs the Co-Chairs to not reward a contract based Drug, Inc.; Alyson Roby, PharmD, CDE, allow the independent pharmacy to take on the following information. First, it would Medica Pharmacy; Trevor Ray, PharmD, advantage of aggregate purchasing power save the systems taxpayer dollars due to the Midway Pharmacy, Independent Pharmacist; to obtain better discounts and rebates from requirement already fulfilled by PFM, which Melodie Shrader, Senior Director, State Affairs, manufactures. Chain pharmacies have a higher sufficiently answered the question of funding, Pharmaceutical Care Management Association; purchasing volume and have more success and would therefore be redundant. Second, there Rosmond J. Dolen, Kentucky Association negotiating on their own behalf. was a lack responses, with only two qualified of Health Plans; Kasey L. Alford, PharmD, parties. Representative Linder entertained President, CEO, Alford’s Pharmacy and Drive- PBMs developed from the reimbursement a motion to recommend to the Legislative Thru; and Richard Ponesse, Senior Director of side as an opportunity to confront escalating Research Commission (LRC) that no contract Trade and Finance, Industry Analytics, CVS costs of the drug market. PBMs can be owned be awarded under the solicitation and that it be Caremark. by insurance companies, health maintenance cancelled. Senator Bowen moved that the PPOB LRC Staff: Jonathan Scott, Becky Lancaster, organizations (HMO), manufacturers, retail recommend to the LRC that RFP be cancelled. and Heather Scott. pharmacies, or private entities. Health plans Representative Webber seconded the motion, Approval of the Minutes from the contract with PBMs to process and pay for and the cancellation was approved without September 20, 2017 Meeting prescription drug claims for its network objection. A motion to approve the minutes of the pharmacies. PBMs also contract with pharmacies Public Comment September 20, 2017 meeting was made by to create networks to dispense medications. Gregg Riggs, retired Chief Officer, Frankfort Senator Alvarado, seconded by Representative PBMs establish the reimbursement levels in Fire & EMS, wanted to know why the legislative Gooch, and approved by voice vote. those contracts. PSAOs provide services to and judicial retirement was treated differently. Presentation on the Regulation and pharmacies that include contracting, financial He stated the JFRS is better funded and does Oversight of Pharmacy Benefit Managers intermediation, and other supportive activities not take the chances like the other systems. Mr. Steve Miller, Commissioner, Department for with PBMs. DMS contracts directly and only Riggs wanted to know why the legislators even Medicaid Services, Cabinet for Health and Family with MCOs for the delivery of the pharmacy had a retirement plan due to being considered Services (CHFS), stated that the Department for benefit on a capitation basis. DMS is not a party part-time employees under the Constitution. He Medicaid Services (DMS) annual budget is $11 to the other agreements in the pharmaceutical pleaded for the legislators to either drop their billion, of which $1.6 billion is for pharmacy supply chain. retirement or pool together in the other systems. costs. By having the pharmacy benefits handled Deputy Commissioner Cecil stated that With no further business, the meeting was through the managed care organizations DMS has requirements in the MCO contracts adjourned. (MCOs), Kentucky saves 10 to 12 percent or regarding conforming to applicable law, $150 to $180 million a year. DMS implemented policies, and procedures. DMS has provider MEDICAID OVERSIGHT AND a 90 percent medical loss ratio (MLR) for the network requirements that would apply to ADVISORY COMMITTEE Medicaid population in the MCOs contracts. subcontractors. DMS has a required corrective Minutes Veronica Cecil, Deputy Commissioner, action process that could result in civil money October 11, 2017 Department for Medicaid Services, Cabinet penalties or sanctions. MCO contracts contain a Call to Order and Roll Call for Health and Family Services, stated that the withhold provision, where DMS may withhold a The Medicaid Oversight and Advisory MCOs monthly capitation rates are developed portion of its monthly capitation payment until Committee meeting was held on Wednesday, for each contract period by an actuarial firm. the violation is corrected. October 11, 2017, at 1:30 PM, in Room 131 of MCOs utilize eligibility, use actual claim In response to questions from Senator the Capitol Annex. Representative Kimberly experience, and apply adjustments to the base Alvarado, Ms. McKinley referenced the Poore Moser, Chair, called the meeting to order, data. In regards to the pharmacy benefit, MCOs DMS contracts with MCOs. MCOs are held and the secretary called the roll. may waive or impose lower co-payments but responsible for any violations made by one of its Present were: not exceed the maximum co-payments. DMS subcontractors, such as PBMs. Commissioner Members: Senator Ralph Alvarado, Co- allows each of the MCOs to delegate authority to Miller stated that the state law requiring a notice Chair; Representative Kimberly Poore Moser, Pharmacy Benefit Managers (PBMs). The PBMs of change in rates does apply to MCOs. Ms. Co-Chair; Senators Julie Raque Adams, Danny are a subcontractor of the MCOs. Subcontractors McKinley stated that if PBMs do not notify its Carroll, Morgan McGarvey, and Stephen must comply with the provisions of the MCOs pharmacies of a change in rates, MCOs would Meredith; Representatives Robert Benvenuti III, contract. MCOs must provide oversight to the be responsible for the violation. She stated that Jim Gooch Jr., and Joni L. Jenkins. subcontractor. she did not explore the amount of money spent Guest Legislators: Representatives Danny Samantha McKinley, Pharmacy Director, on the oversight of the pharmaceutical supply Bentley and Addia Wuchner. Department for Medicaid Services, Cabinet chain. Deputy Commissioner Cecil stated that Guests: Steve Miller, Commissioner, Veronica for Health and Family Services, stated that in regards to the MLR, costs are not broken Cecil, Deputy Commissioner, and participants in the pharmaceutical supply chain out specifically for the pharmacy costs. When Samantha McKinley, Pharmacy Director, may not handle the drug but have significant the actuary sets the MCOs’ capitation rates, Department for Medicaid Services, Cabinet influence over the distribution to the consumer. the pharmacy costs are in the aggregate of the for Health and Family Services; Chris Harlow, The additional participants mentioned in the 90 percent MLR. The actuary will look at the Pharm.D, President, Kentucky Pharmacists pharmaceutical supply chain are the health outliers and evaluate the information to ensure

50 2017 Interim LEGISLATIVE RECORD there is cost efficiency in the development of the and PSAOs. in January 2017, Senate Bill 117 required DOI rates. In response to questions from Representative to license PBMs and mandated additional In response to questions from Senator Bentley, Commissioner Miller stated that it transparency requirements so that pharmacists Meredith, Deputy Commissioner Cecil stated would require a total restructure within DMS could have better knowledge of what they will that DMS manages the MCOs and MCOs have to carve out pharmacy benefits from the MCOs’ be reimbursed when dispensing generic drug. oversight of the PBMs. Commissioner Miller contracts. A restructure would require an PBMs are not complying with provisions of the stated that DMS runs metrics on each of the increase in the internal amount of people, skill statute. Dr. Harlow has not received notifications MCOs on a monthly basis. DMS is not aware sets, and administrative costs. of reimbursement changes or dispensing fee of PBMs being out of compliance with MCOs’ In response to questions from Senator changes that meet the requirements of Senate contracts. CVS Caremark has over 50 percent McGarvey, Commissioner Miller stated that Bill 18, passed in 2016. He encourages DMS and of the Medicaid pharmacy business in the DMS did not anticipate that four of the five DOI to strengthen oversight of MCOs and PBMs Commonwealth. Deputy Commissioner Cecil MCOs would be using the same PBM. Deputy before more independent pharmacies have to stated that there is no contract or provision that Commissioner Cecil stated that each of the close. prohibits a company from owning a pharmacy MCOs has a different contract with its PBM. The Food and Drug Administration (FDA) and becoming a PBM. PBMs providing oversight Presentation on Independent Pharmacy does not recognize one definition of a specialty for its own pharmacies could be a federal trade Reimbursement Challenges drug instead each of the PBMs determine issue. Commissioner Miller stated that there is Rosemary C. Smith, R.Ph., Co-Founder, which drugs are defined as a specialty drug. The not a means to give local providers ownership Kentucky Independent Pharmacist Alliance, PBMs prohibit retail pharmacies from fulfilling of the process and have things mandated by Jordan Drug, Inc., stated that DMS does not have prescriptions for specialty drugs that are often the State under the state plan amendment that direct contracts with PBMs. Kentucky Medicaid high cost drugs and could be safely and effectively DMS is operating under. Providers could come cannot provide sufficient oversight over how the dispensed by retail pharmacists. Patients are together and work with MCOs on a risk sharing PBMs are treating Kentucky pharmacy providers. required to have the high cost medication plan. A number of changes would need to PBMs determine the amount that pharmacies dispensed by a mail order pharmacy that is often happen that are not anticipated and not a part will be reimbursed for each medication dispensed owned by the PBMs. PBMs that are determining of the 1115 Kentucky HEALTH waiver that is with no oversight from Kentucky Medicaid and reimbursements are also the competition, no one pending approval from the Centers for Medicare often with no oversight from the MCO. PBMs, entity should be allowed to participate on both and Medicaid Services (CMS). who own pharmacies and are direct competitors ends of the transaction. In response to questions from Representative with independent pharmacies, are allowed to In response to questions from Senator Bentley, Commissioner Miller stated that DMS determine what the independent pharmacies are Alvarado, Dr. Smith stated that pharmacists monitored the drug costs paid, national studies paid per drug. PBMs can require that a Medicaid do not always know what the reimbursement of the prices, and costs being incurred by MCOs recipient must purchase a drug from the PBMs will be at the time a claim is processed to fill that determined the 12 percent savings the PBMs mail order pharmacy with no oversight from a prescription. There are situations where provided to the Commonwealth. Outside the DMS. a reimbursement is reduced after the drug Medicaid population there may be more savings In 2016, Senate Bill 117 recognized that is dispensed. There are a number of fees in and DMS is closely monitoring the savings three years after the passage of Senate Bill 107, clawbacks when a claim is adjudicated. Money created by the MCOs. PBMs were not supplying an updated list of what is taken back from pharmacies as Direct and In response to questions from Senator PBMs would pay pharmacists to dispense each Indirect Remuneration (DIR) fees. CMS has Carroll, Commissioner Miller stated that medication. Senate Bill 117 clarified that PBMs established National Average Drug Acquisition determining if MCOs are efficient depends were to supply pharmacists with the list in a Cost (NADAC) pricing. CMS has specified on the how efficiency is measured. There are readily available format. Senate Bill 117 required that between $9 and $13 is the cost of filling a different levels of complaints that DMS receives PBMs to notify pharmacists if they had been prescription. She stated that is routine not to be on the MCOs. Deputy Commissioner Cecil underpaid. Senate Bill 117 required PBMs to notified of changes in reimbursements, pricing, stated that DMS does not track violations made be licensed by the DOI to conduct business in or contracts. by PBMs. The PBMs’ complaints are channeled Kentucky. She stated that the MCOs’ and PBMs’ In response to questions from Representative through the Department of Insurance (DOI). profits should not come at the cost of putting Benvenuti, Dr. Harlow stated that an Medicaid providers disagree as to which of the local pharmacies out of business. independent pharmacist sees more surprises MCOs is the best and worst at providing benefits. Chris Harlow, Pharm.D, President, Kentucky with reimbursements in the commercial business Commissioner Miller agreed that more MCOs Pharmacists Association, St. Matthews than in Medicaid. Dr. Smith stated that she still bring about more administrative burdens for all Pharmacy, stated that the passage of Senate Bill has fee-for-service Medicaid patients in eastern departments. 117 creates greater transparency in generic drug Kentucky. Independent pharmacies previously In response to questions from Senator pricing and will soon be fully implemented. had one formulary and a set rate. Before 2011, if Alvarado, Commissioner Miller stated that The PBMs continue to cost taxpayers, patients, there was an issue with pricing and a maximum access to local pharmacies for Medicaid members and pharmacists money and cause for concern. allowable cost (MAC) appeal was made, the would be an issue if the independent pharmacies He is asking for immediate action to address appeal was answered within hours or days. stopped participating in the MCOs’ plans. chronic under reimbursement by MCOs with Fee-for-service Medicaid has gone to NADAC In response to questions from Senator CVS Caremark as their PBM. PBMs determine pricing plus $10.64. Some MCOs now have a Meredith, Commissioner Miller stated that reimbursement rates for retail pharmacists, .35 cent dispensing fee which is unsustainable DMS is not privy to the details of the contracts establish formularies, and determine which for independent pharmacists. Kentucky between independent pharmacies and the PBMs drugs require prior authorizations. Effective Independent Pharmacist Alliance (KIPA) was THE KENTUCKY GENERAL ASSEMBLY 51 started with more than 520 pharmacists but 50 to actual drug acquisition cost dropped 86 percent carved out pharmacy benefits from its Medicaid 60 pharmacists have now closed their businesses. when CVS Caremark took over as the PBM managed care organizations. Dr. Ray stated that Many independent pharmacies are on the brink for Passport. The dispensing fee dropped from Texas redirected prescription benefits through of closing because of the drop in reimbursements. $2 to .45 cents and the number of below cost PBMs and put 40 to 50 independent pharmacies Alyson Roby, PharmD, CDE, Medica reimbursement for generic drugs went from out of business. DMS could contract directly Pharmacy, stated that Medicaid patients 4 percent to 32 percent. Passport claims are 25 with PBMs to eliminate going through MCOs represent more than 25 percent of her overall percent of his overall business and approximately and have direct oversight of PBMs. Prior to 2011, business. She has experienced a 105 percent 80 percent of Passport claims are for generic Kentucky Medicaid directly contracted with drop in reimbursement from Passport. The day medications. MAC appeals were filed with PBMs. CVS Caremark took over as Passport’s PBM, her CVS Caremark, all of the appeals were denied, reimbursement dropped 74.8 percent and her and then complaints were filed with DOI. DOI In response to questions from Representative dispensing fee dropped 77.5 percent. Four of the expressed to him that there was very little more Bentley, Dr. Ray stated that Medicaid contract five MCOs that are reimbursing below acquisition it could do until proposed regulations went into language specifies that in order to have Medicaid costs all have CVS Caremark serving as its PBM. effect. In Kentucky Medicaid, MCOs allow its MCOs and PBMs operate that there should have The number of prescriptions that are reimbursed PBMs to put pharmacies into an existing national specific BIN and PCN numbers. The intent would one dollar or less above the acquisition cost network of plans. The only way an independent be that one could discontinue business with one has increased, effectively eliminating the pharmacy can say no to Kentucky Medicaid is to of the MCOs or PBMs without discontinuing right to appeal. The acquisition cost does not drop out of the entire network. business with the other MCOs or PBMs. include the cost of the vial, the label, the cost of He stated that the MAC lists being used by Presentation on Pharmacy Benefit Manager submitting a claim for reimbursement, nor does several MCOs that have CVS Caremark as its Process and Legislative Initiatives it include labor costs associated with preparing PBM, continue to reimburse pharmacies under Melodie Shrader, Senior Director, State and dispensing a drug. If she rejects the PBMs’ cost on 30 percent to 50 percent of generic Affairs, Pharmaceutical Care Management contracts, she will lose the opportunity to drugs. Senate Bill 117 clearly recognized that a Association, stated that PBMs are health care provide care to patients in all the other health pharmacist should never be reimbursed for less companies that contract with insurers, employers, plans affiliated with the network, which could than the generic drug can be purchased for from and government programs to administer the include the state employees plan and other major a licensed wholesaler in Kentucky. CMS evaluates prescription drug portion of the health care employer plans. the pricing for drugs monthly and publishes the benefit. PBMs work with insurers and employers Dr. Roby stated that for a pharmacy to assist new pricing to be used as each drugs NADAC to perform a variety of services to ensure high- Medicaid patients with medication adherence, price. When CMS suggested NADAC pricing, quality, cost efficient delivery of prescription provide appropriate medication counseling, it recognized that this new option was going drugs to consumers. PBMs offer a set of core and other health care services necessary to to reduce drug reimbursement to very close services to clients designed to contain drug improve overall health, it must receive adequate to acquisition cost. CMS also advised that the expenditures such as; claims administration, reimbursements from the PBMs to maintain dispensing fee would need to be increased to fairly pharmacy network management, negotiate and necessary staffing levels. Spread pricing is simply and adequately reimbursement pharmacists for administer product discounts, mail-service the difference between what the health insurance their professional services. Kentucky Medicaid pharmacy and specialty pharmacy services. plans pays for the drug and what the pharmacy is adopted a dispensing fee for Medicaid fee-for- PBMs save plan sponsors and consumers an reimbursed for dispensing the drug. The average service within that suggested range of $9 to average of 35 percent compared to expenditures spread is between $8 and $10. Pharmacies are $13. Unlike Medicaid fee-for-service, under the made without pharmacy benefit management. not able to determine what is being paid for a jurisdiction of DMS, the MCOs through its PBMs The plan sponsor or MCOs have the final say prescription claim until weeks or months after are paying his pharmacy close to acquisition cost when creating a drug benefit plan with PBMs. a claim has been submitted. The independent for the drugs, but continue to have a dispensing The number of independent pharmacies has not pharmacies’ competitors are determining fee of .20 to .35 cents. decreased but increased at a rate higher rate than reimbursements for independent pharmacies. Dr. Ray referenced a review performed by chain retail pharmacies in Kentucky. CVS Caremark owns a PBM, retail pharmacies, many pharmacies which found that Passport, Independent pharmacies contract with and a mail-order pharmacy. Other PBMs own Aetna, and CareSource are reimbursing at PSAOs to provide many services such as; mail-order pharmacies only. PBMs should not or below NADAC without the adequate negotiating with PBMs for reimbursement be allowed to participate on both sides of the professional dispensing fee recommended by rates, audit services, purchasing, office services, transaction. Kentucky Medicaid should prohibit CMS. The MCOs and its PBMs are paying and marketing. PSAOs allow the independent its MCOs from contracting with PBMs who pharmacists based on an unsustainable model. pharmacies to be competitive with a chain drug own or operate a retail or mail order pharmacy PBMs will claim they save the MCOs money store. MAC lists standardize the reimbursement to reduce apparent conflicts of interest. DMS by administering pharmacy benefits, but no amount for identical products from various should require transparency in generic drug one seems to be able to verify the savings. manufacturers, regardless of each manufacturer’s reimbursement to include a reasonable Moving outpatient pharmacy benefits away price. PBMs develop and maintain its own dispensing fee. DMS should also conduct an from MCOs to the jurisdiction and authority of confidential MAC lists based on proprietary audit of the PBMs to better understand if the Kentucky Medicaid would enhance drug pricing methodologies. In Senate Bill 17, PBMs are taxpayers are saving money. transparency and stabilize reimbursements for required to be licensed at DOI. The commissioner Trevor Ray, PharmD, Midway Pharmacy, all pharmacies. has authority to suspend, revoke, or refuse to Independent Pharmacist, stated that his In response to questions from Senator renew a license. Since the enactment of Senate pharmacies’ Passport reimbursement above Carroll, Dr. Smith stated that West Virginia has Bill 117, pharmacists have been utilizing the

52 2017 Interim LEGISLATIVE RECORD maximum allowable cost appeal process with a commodity. Kasey L. Alford, PharmD, Managers, Managed Care, and Legislative pharmacy benefit managers. President, CEO, Alford’s Pharmacy and Drive- Oversight In response to questions from Senator Thru, stated that it took months to have one Rosmond J. Dolen, Kentucky Association Meredith, Ms. Shrader stated that PBMs compete prescription appealed and justified through of Health Plans, stated that the PBMs’ with each other and information is proprietary DOI. Since August there have been dramatic responsibilities include; processing pharmacy regarding reimbursements. PBMs must go into cuts in Passport prescription reimbursements. claims, developing drug formularies, operating the marketplace to survey prices, review invoices, To cover all overhead, independent pharmacists programs to manage utilization, operating mail and evaluate the costs that manufacturers are are requesting to use a NADAC Plus model. In order systems, creating and managing pharmacy selling products. Each company must come up an appeal, PBMs do not have to show where the networks, managing the appeal process, with a pricing mechanism that fairly represents drug could be purchased for MAC price. negotiating and collecting supplemental rebates. the acquisition costs plus an additional margin. Patrick O’Connor, Deputy Commissioner In general, the United States does not regulate There is an external appeal processes so that if an of Policy, Department of Insurance, stated prescription drug prices. A statutory provision independent pharmacy was reimbursed under that Medicaid and MCOs’ appeals make up in the Medicaid program allows states to use the MAC list and not the acquisition cost then the majority of the appeals received. Since many of the same prescription drug management the independent pharmacy could appeal to the September, the anticipated number of appeals is tools available to insurers in the private sector. DOI. The law requires that with any changes in the thousands. The main issue of the appeals In a study from the Menges Group in April of or appeals that are justified, the drug price is is the reimbursement from Medicaid MCOs or 2015, found $2.06 billion net savings in state immediately and retrospectively corrected. PBMs. To appeal a reimbursement, DOI has a and federal expenditures in Federal Fiscal Year PBMs must reimburse the pharmacy that made form on its website that pharmacists can fill out (FFY) 2014 for states whose Medicaid contracts the appeal and the entire network. If a MAC list and submit by prescription. The form requires included pharmacy benefits. did not accurately reflect the market price then specific information regarding the prescription, In response to questions from Senator all of the pharmacies within the network would the National Drug Code (NDC), the pricing Meredith, Ms. Dolen stated that she is not aware appeal. that was used, the date of fill, MCOs at issue, if the PBMs are required to meet a 90 percent In response to questions from Representative and the plan at issue. DOI is improving the MLR. The PBMs are held to an aggregate number. Gooch, Ms. Shrader stated that PBMs cover communications between all groups involved to She is not aware who provides compliance approximately 256 million Americans. The facilitate a process that works more efficiently. accountability to PBMs. MCOs and insurers in PBMs’ tools and services used are standard with In response to questions from Senator the state are partners in providing access and government plans, Medicaid, Medicare, as well as Carroll, Deputy Commissioner O’Connor stated quality of care to the Medicaid members. PSAOs private employers. Independent pharmacies are that the pricing methodology that is used by contract on behalf of the independent pharmacies partners to the PBMs. PBMs need independent PBMs in reimbursement is defined in KRS entering into agreements with PBMs. pharmacies in its network to help provide 304.17A-162. PBMs can disclose the sources In response to questions from Senator Carroll, services to the clients. of information used to create the MAC list. Richard Ponesse, Senior Director of Trade and In response to questions from Representative However, the methodology or how the PBMs use Finance, Industry Analytics, CVS Caremark, Moser, Ms. Shrader stated that it could be those sources when coming up with numbers on stated that the only requirement regarding the possible for Kentucky Medicaid to work directly the MAC list is not disclosed, it is considered percentage of money received from MCOs to fill with only one PBM. However, that would need proprietary and confidential information. In prescription benefits, is the open and free market. to be studied by DMS because that pricing model determining the price for a drug, there could CVS Caremark is competing against other PBMs may not be the most cost effective. be multiple generics of the same drug, multiple to win business. CVS Caremark agrees that it has In response to questions from Representative manufacturers, purchased at different price the majority of the pharmacy business because it Bentley, Ms. Shrader stated that PBMs do levels on the date of fill. The pharmacist is going provides the lowest net cost to the plan sponsors make money in administration fees. Each to use the cheapest generic that works with the who hire CVS Caremark. He does not know of the PBMs’ clients dictate in contract how plan MAC list. the total Medicaid profit margin in Kentucky. PBMs are managed or how transparent PBMs In response to questions from Representative He is confident that if DMS eliminates PBMs it will operate. Some clients come with a defined Benvenuti, Ms. Shrader stated that CVS will increase pharmacy costs. On average, CVS number of dollars but want to make sure benefits Caremark does not have a direct contract with Caremark reimburses large chains 20 to 25 and employees are covered. PBMs are a vendor DMS but does have contracts with MCOs in percent less than independent pharmacies. for the client. In regards to using a trade name Kentucky. Kentucky is an any-willing-provider Adjournment drug with an incentive rebate or a generic drug, state and contracts have to be built on market There being no further business, the meeting determinations are made by the client. based principles. The MCOs have a MLR was adjourned at 4:51 PM. In response to questions from Senator required by contract, at least 90 percent of every Alvarado, Ms. Shrader agreed that PBMs should dollar must be paid out in claims. If the price CAPITAL PROJECTS AND BOND abide by the state laws as written. to providers increases then DMS will have to OVERSIGHT COMMITTEE In response to questions from Senator increase the amount of dollars available. Minutes Carroll, Ms. Shrader stated that the MAC list is In response to questions from Senator October 17, 2017 designed to encourage efficient shopping. PBMs Meredith, Deputy Commissioner O’Connor Call to Order and Roll Call would have to present data that shows when stated that there are multiple MAC lists for each The Capital Projects and Bond Oversight the claim was processed that particular drug health benefit plan, for Medicaid, and for the Committee meeting was held on Tuesday, could be bought at the PBMs’ MAC price. Drug MCOs. October 17, 2017, at 1:00 PM, in Room 169 of the prices change frequently because it is considered Presentation on Pharmacy BenefitCapitol Annex. Senator Stan Humphries, Chair, THE KENTUCKY GENERAL ASSEMBLY 53 called the meeting to order, and the secretary percent federal funds and 25 percent agency No action was required. called the roll. restricted funds from the Combined Clothing Report from the Office of Financial Present were: Distribution Facility (CCDF). The facility will Management Members: Senator Stan Humphries, Co- consist of administrative and storage areas, Mr. Barrow submitted two new conduit bond Chair; Representative Phil Moffett, Co-Chair; mechanical/electrical room, communications issues for approval. The first was the Kentucky Senators Julian M. Carroll, Rick Girdler, and closet, HVAC, and plumbing and lighting Economic Development Authority (KEDFA), Christian McDaniel; Representatives Larry systems. Louisville Arena Project Refunding Revenue Brown and Will Coursey. The third was for $1,379,097 for the Interior Bonds, Series 2017 (Louisville Arena Authority, Guests: Ms. Janice Tomes, Deputy State Renovation Wellman Armory at the Boone Inc.) in an aggregate principal amount not Budget Director; Mr. Scott Aubrey, Director, Real National Guard Center; funded with 75 percent to exceed $450 million. The bond issue will Properties; Mr. Ryan Barrow, Executive Director, federal funds and 25 percent agency restricted restructure KEDFA’s current outstanding Office of Financial Management; Mr. Eric funds from the CCDF. bonds issued on behalf of the Louisville Arena Rockhold, Bank of America Merrill Lynch; Mr. A motion was made by Senator Carroll to Authority (LAA) and be issued in three series Chip Sutherland, Hilliard Lyons; and Mr. Scott roll the three projects into one roll call vote. The (Series 2017A, Taxable Series 2017B, and Taxable Cox, Chairman, Louisville Arena Authority. motion was seconded by Representative Moffett Subordinate Series 2017C). Pricing is tentatively LRC Staff: Katherine Halloran, Committee and approved by voice vote. scheduled for mid-November. Revenue sources Staff Administrator; Julia Wang, Legislative A motion was made by Senator Carroll for debt service include tax increment financing Analyst; and Jenny Wells Lathrem, Committee to approve the three projects, seconded by (TIF) revenues, payments from Metro Louisville Assistant. Representative Moffett, and approved by as well as contractually obligated and event- Approval of Minutes (September 19, 2017) unanimous roll call vote. generated income through the lease agreement A motion was made by Senator Carroll Ms. Tomes reported one pool project in with the University of Louisville Athletic to approve the minutes of the September 19, excess of $600,000 for Minor’s Creek, Owen Association (ULAA). 2017 meeting. The motion was seconded by County from the Fees-In-Lieu-Of (FILO) In response to questions from Senator Representative Brown and approved by voice Stream Mitigation Projects Pool. The $4,442,429 McDaniel, Mr. Sutherland clarified that there vote. was 100 percent funded from the Kentucky are present value savings with a traditional Information Items Wetland and Stream Mitigation Fund pursuant refinancing. Rather than a traditional financing, Ms. Halloran reported three information to KRS 150.255. This project is a headwater the submitted transaction was a restructuring, items for review: the quarterly status reports on stream restoration with rock/wood structures to where the maturity schedule is lengthened to capital projects from the Administrative Office reduce erosion. The property was acquired and lower debt service payments, to avert a potential of the Courts, the Finance and Administration permanently protected via deed restrictions as default [due to the impending increased Cabinet (with the Commonwealth Office of required by the U.S. Army Corp of Engineers, payments on the current bonds]. Mr. Sutherland Technology reporting independently), and which has authority over the FILO program. No confirmed that the term of a pilot TIF was the universities managing their own capital action was required. extended in order to execute the restructuring. construction programs; the Semi-Annual Report Lease Report from the Finance and Senator McDaniel voiced his hope that of the Kentucky Asset/Liability Commission; Administration Cabinet potential impact on ticket sales due to recent and Moody’s Investor’s Service ratings review Mr. Aubrey reported two Cabinet for events would have minimal effect on overall of the Commonwealth’s public postsecondary Health and Family Services (CHFS) renewals revenues as ticket sales are a small percentage of institutions. No action was required. for privately leased space with an annual cost those revenues. He stated that he thought that Project Report from the University of exceeding $100,000. Both leases will be renewed Dr. Postel was on the right path; that Dr. Postel Kentucky under the same terms and conditions: Franklin had taken some good steps for the University of Ms. Halloran said the University of Kentucky County, $7.55 per square foot for 15,465 square Louisville (UofL); and that, although there may reported the purchase of a digital x-ray totaling feet of office space through June 30, 2021, and be pain in the short term, steps taken over the $259,873 in restricted funds for orthopedic and Hardin County, $9.25 per square foot for 31,534 life of these bonds will prove to be worthwhile. sports medicine patients at UK’s Good Samaritan square feet of office space, through June 30, 2022. In response to a question from Senator Hospital. A motion was made by Representative Carroll, Mr. Sutherland referenced the efforts of Project Report from the Finance and Moffett to roll the lease renewals into one roll call the legislative body [House Bill 330] as well as Administration Cabinet vote. The motion was seconded by Representative the UofL’s and Metro Louisville’s commitment in Ms. Tomes submitted three projects from the Brown and approved by voice vote. extending and increasing payments. He said that Department of Military Affairs. The first was for A motion was made by Representative all of partners: the legislature, Metro Louisville, $1,273,737 for the Range Operations Expansion Moffett to approve the lease renewals, seconded UofL, LAA as well as the sponsors have assisted (about 3,800 square feet for a central security by Representative Brown, and approved by and that the goals were to enable the Arena, a check point) at Wendell H. Ford Regional unanimous roll call vote. state asset, to generate revenues to pay debt Training Center in Greenville, Kentucky; funded Mr. Aubrey lastly reported one lease service; to invest in the Arena for it to remain a with 100 percent federal funds. modification for the Department of Alcoholic top-tier facility; and to complete the refinancing. The second was for $1,056,245 for the Record Beverage Control in Franklin County to complete In response to a question from Senator Holding Facility (archival and storage of military safety, security, and ADA improvements. The Carroll, Mr. Rockhold stated that current market records for the Kentucky National Guard and one estimate obtained was for $15,000 from conditions are very favorable and there are mail operations) at the Boone National Guard Michael B. Oerther. The cost will be amortized potential improvements in the credit ratings and Center in Frankfort, Kentucky; funded with 75 to the current lease term expiring June 30, 2019. in the positioning in the marketplace.

54 2017 Interim LEGISLATIVE RECORD In response to questions from Representative A motion was made by Senator Carroll to County. Two of the issues were refundings. Moffett, Mr. Rockhold mentioned thatapprove the bond issue, seconded by Senator Three of the four issues for new projects, two the market continues to be very good for McDaniel, and approved by unanimous roll call for district-wide energy improvements and [one transactions at the lower end of the ratings scale. vote. for the purchase of a building to house the Area He referenced meetings with Assured Guaranty, The second new conduit bond issue was for Technology Center and superintendent offices] a credit enhancement provider, and its potential the Kentucky Housing Corporation (KHC) Tax- did not involve tax increases. The renovations to participation in the forthcoming transaction as Exempt Conduit Multifamily Housing Revenue the intermediate and high school in the Newport it insured the current outstanding bonds. With Bonds (Henry Green Apartments Project), Independent School District did involve the credit enhancement, the transaction could Series 2017. The project is located on Jefferson passage of a recallable nickel tax in 2017. No proceed without an improved credit rating. Street, Louisville, Kentucky. The anticipated date action was required. In response to questions from Representative of the unrated private placement is in November Updated Debt Issuance Calendar Moffett, Mr. Cox said that UofL agreed to pay with net proceeds of about $10.5 million. Mr. Also included in the members’ folders was the $2.42 million in cash per year in addition to Barrow stated that as a conduit transaction, debt issuance calendar. No action was required. its annual current payments for rent and its the Commonwealth’s balance sheet will not be With there being no further business the percentage of concessions, etc. for the life of the extended and referenced information about the meeting was adjourned at 1:35 p.m. bonds. In addition, LAA was hosting the UofL conduit borrower in the meeting materials. women’s volleyball team at a loss of $80,000 a year A motion was made by Senator Carroll EDUCATION ASSESSMENT AND and the team moved out of the Arena. Therefore, to approve the bond issue, seconded by ACCOUNTABILITY REVIEW there will be a $2.5 million dollar annual swing Representative Moffett, and approved by SUBCOMMITTEE in LAA’s favor, regardless of what happens with unanimous roll call vote. Minutes the NCAA. In a worst case scenario, with UofL Mr. Barrow reported one previously October 17, 2017 going on the “death penalty” and unable to approved conduit note issue, the Kentucky Call to Order and Roll Call compete for at least a season, Mr. Cox said that, Housing Corporation (KHC) Tax-Exempt The 4th meeting of the Education Assessment while not an expert on UofL, he believed that Conduit Multifamily Housing Revenue Note and Accountability Review Subcommittee was UofL could continue to make the $2.42 million (Bristol Bluffs Project), Series 2017. Bristol Bluffs held on Tuesday, October 17, 2017, at 1:00 PM, annual payment. is located in Louisville, Kentucky. The date of the in Room 129 of the Capitol Annex. Senator Max LAA has been reassured by individuals, unrated private placement with Citibank was Wise, Chair, called the meeting to order, and the including attorneys representing schools and September 7 for about $35 million. No action secretary called the roll. individuals before the NCAA, that the death was required. Present were: penalty will not occur. The NCAA is believed Mr. Barrow reported thirteen school district Members: Senator Max Wise, Co-Chair; to factor UofL’s decisive personnel moves, bond issues submitted with School Facilities Representative Daniel Elliott, Co-Chair; demonstrating strong institutional control. Mr. Construction Commission (SFCC) debt service Senators Alice Forgy Kerr, Gerald A. Neal, and Cox stated that he did not know that Adidas’s participation. Four of the bond issues were to Mike Wilson; Representatives Derrick Graham, new $160 million sponsorship contract was finance projects in the following school districts: and Steve Riley. in the works when the $2.42 million annual Clay County, Harlan Independent (Harlan Guests: Dr. Bart Liguori, Research Division payment was negotiated with UofL. County), Paintsville Independent (Johnson Director, Office of Education Accountability In response to a question from Senator County), and Rockcastle County; 42 percent (OEA); Dr. Deborah Nelson, Research Analyst, McDaniel, Mr. Cox said that there was an SFCC funded for a principal amount of around OEA; and Wayne Young, KASA. agreement with the Kentucky State Fair Board $13 million. Except for Clay County, which LRC Staff: Joshua Collins, Lauren Busch, and (KSFB) in which $100,000 per year would be paid passed a recallable nickel tax in 2017; no tax Chris White. [towards the $1,471,900 settlement negotiated increases were necessary to finance the projects. Presentation: High School Indicators of in May 2013; the amount remaining, $921,900, There were nine refunding bond issues: Postsecondary Success will be paid from bond proceeds] for KSFB’s Barren County, Boone County, Boyle County The Office of Education Accountability lost management fee when AEG took over (2), Caldwell County, Estill County, Hardin presented a report on High School Indicators of management of the Arena. Mr. Cox stated that County, and Ohio County (2); about 20 percent Postsecondary Success in Kentucky. The report, his predecessor believed the agreement settled SFCC, 75 percent local, and 5 percent urgent approved by the EAARS subcommittee as part of everything and that there was an [informal] need. The estimated total savings is $1.4 million the 2017 Research Agenda, shared indicators of Attorney General’s opinion that nothing further with a principal amount of around $29.5 million. academic progress in high school linked to post- was owed. Mr. Cox said that the issue was not A motion was made by Senator Carroll graduation success. discussed during his approximately 14 month to approve the school bond issues, seconded OEA staff identified themselves as Dr. Bart tenure on LAA’s Board. by Representative Brown, and approved by Liguori, Research Division Director, and Dr. Senator McDaniel commented that, based unanimous roll call vote. Deborah Nelson, Research Analyst. on his conversations with KSFB, KSFB believed New School Bond Issues with 100 Percent LAA’s obligations are both lost revenue and owed Locally-Funded Debt Service The report on High School Indicators of management fees and that KSFB doesn’t view the Ms. Halloran reported the submitted local Postsecondary Success in Kentucky documents matter as settled. school bond issues: Bardstown Independent outcomes of high school students with Senator Humphries stated that the committee (Nelson County), Clinton County, Hardin postsecondary degrees aligned with salaries and appreciated the time those testifying took in County, Henderson County, Newport indicators associated with postsecondary success. clarifying the transaction. Independent (Campbell County), and Knox The indicators relate to goals for students pursuing THE KENTUCKY GENERAL ASSEMBLY 55 postsecondary education or immediately policy areas. colleges compared with wages of non-college entering the workforce upon graduation. Other In the last decade, educational policies students. factors impacting postsecondary outcomes are have focused on strengthening the connection Data used for this study was provided motivation, student engagement, family income, between what happens in high school and the entirely by the Kentucky Center for Education and gender. Dr. Nelson said Kentucky’s yearly skills needed to be successful in the workforce, and Workforce Statistics (KCEWS), a nationally school report cards disclose percentages of high although debate continues about the level of recognized longitudinal data system linking K-12 school graduates who are considered college- continuing education required for jobs in the data from the Kentucky Department of Education and career-ready. future. Dr. Nelson said the consensus is most (KDE) with postsecondary data available from Higher ACT scores are a strong predictor highest-wage jobs demand an associate’s degree a variety of agencies and entities. Using unique of success for students seeking college degrees, or above. By the most aggressive labor market identifiers, KCEWS staff linked data from but have relatively less impact on the wages of projections, Dr. Nelson said up to two thirds various sources and ensured that no individual graduates who enter the workforce without of jobs in the future will require some type of identifiable data was shared. The analysis of earning a college degree. This is a result of postsecondary education while one third of the study was prepared from reports published various Career and Technical Education (CTE) projected growth rate jobs are not likely to require by KCEWS and are available on its website. Dr. courses being associated with higher wages for a postsecondary degree. She said Kentucky Nelson said every figure and table in today’s graduates immediately entering the workforce. lags the nation at all levels of postsecondary presentation was a collaboration of agencies The study revealed a student’s Grade Point educational attainment and state leaders have and the KCEWS Research and Programming Average (GPA) and attendance likely reflects pushed to increase the percentages of high staff. She said through the KCEWS system, the student engagement and motivation and predicts school graduates earning college degrees, not General Assembly has access to data available in postsecondary success more than can be known only for the economic benefit of individuals but few other states, and may provide information to from test scores alone. ACT scores of 21 or above the ability of the state to attract potential higher- be considered for future study topics. are indicators associated with earning a college wage industries. With these indicators in mind, The analysis of average wages from the Class degree. The study found students entering the Dr. Nelson said the study focuses primarily on of 2010 included students who were working workforce without a college degree, averaged 15 two indicators of postsecondary success - the in Kentucky in 2016 and students who never on their ACT score. Students with a GPA of 3.5 or rate at which graduates earn an associate degree enrolled in college as well as students who had above are four times more likely to earn a college or above and the wages of high school graduates earned a degree and returned to the workforce. degree than a graduate with the same ACT test entering the working with no postsecondary Approximately 60 percent of the Class of 2010 score but a lower GPA. Graduates who entered degree. was included in this analysis. Consistent with the workforce without earning a postsecondary The data and design of the study focused on existing State and National data, wages increased degree and who maintained good attendance indicators and outcomes previously mentioned. at each level of educational attainment. At entry and behavior in high school are more likely to The study analyzed college-degree data for level positions, individuals with bachelor degrees earn higher wages than a graduate with similar Kentucky students who earned degrees as well earned more than twice as much as students who test scores and poor attendance. as graduates who earned a degree in almost did not graduate from high school. The relationship between high school every two- or four-year institution nationwide. In reviewing the percentage of students who indicators and postsecondary outcomes is Capturing 90 percent of workers, the wage data earned degrees associated with higher wages affected by student demographic areas. A does not include individuals outside of Kentucky and compared the percentages to Kentucky’s college-ready graduate from a lower-income or individuals who were self-employed, military current workforce demand, 22 percent of the family, as measured by the Free and Reduced or federal employees working inside Kentucky. Class of 2010 had earned a bachelor’s degree Price Lunch (FRPL) program, is less likely to Dr. Nelson said the full report includes a brief, or above by 2016. An additional 4 percent had earn a degree than a college-ready peer from a preliminary analysis of the relationship between earned an associate’s degree, for a total of 26 higher-income family. A female graduate with high school indicators and incarceration, percent. A total of 6 percent of students had a CTE that proceeded into the workforce was although it is not covered in the presentation. earned workforce certificates and half of this likely to earn less than a male graduate with the The study focused primarily on outcomes group earned an associates or bachelor’s degree. same preparation. Beyond test scores, measures of the graduating class of 2010 and included Dr. Nelson said the rates are approaching the of student engagement and motivation have a any student who was ever enrolled in that class workforce demand but the demand estimates are strong influence on outcomes. Independent of and included more than 50,000 students in based on minimum requirements and aspires to high school indicators, demographic factors such the analysis. The report analyzes indicators of attract higher industry wages to the state. Based as gender, family, and poverty have an influence students as early as tenth grade and on outcomes on census data with the same college degree, on outcomes. found in degree and wage data through 2016. the Class of 2010 did not earn degrees at a rate Dr. Nelson said workforce demands shaped Eighty-three percent of the class was included that will substantially narrow the educational the analysis of data in this study. She discussed in data for at least one of the outcome indicators attainment gap between Kentucky and the the background data, the design of the study, included in the report. Dr. Nelson said Chapter 1 nation. She said given the aspiration of many the relationship between high school indicators provides a broad summary of the outcomes. policymakers to close or narrow the gap, these and postsecondary education, the relationship The preliminary study examined the class of results may lead to possible future studies. with workforce outcomes, and the study’s major 2015 and the associated high school indicators The ACT college readiness test is taken by conclusions. Dr. Nelson said the report findings back through the 8th grade. This class was all 11th Grade Kentucky students. It was the only are not a review of any particular policy or specifically included to look at the college- and standardized test for which data was available program but may prompt the committee to career-ready measures implemented in 2012 for the entire class in this study to calculate propose future study ideas related to particular and included first semester grades in Kentucky high school indicators. Kentucky’s CPE has

56 2017 Interim LEGISLATIVE RECORD established ACT readiness benchmarks with who met only one ACT benchmark decreased with high GPA’s of 3.5 or above earned college scores of 18 in English, 19 in math, and 20 in gradually. Less than 50 percent of students who degrees at a substantially higher rate. OEA reading which allow students to begin taking achieved no ACT benchmarks in high school but showed that all students become likely to graduate credit-bearing college classes. Under Kentucky’s maintained a GPA of 2.0 or above during their with an ACT composite of 21 and students with current accountability system, a student who freshman year of college were no better than a GPA of 3.5 or above became likely to graduate meets benchmarks in all three subjects is students who were not college ready at all. with an ACT composite of 18. The average ACT considered college ready. While previous data was provided in the score for 2017 in Kentucky was 20. Depending Although ACT scores range from 1 to 36, beginning of the college freshman year, OEA on how this particular class applied themselves in 99 percent of the students represented scores used 2010 data to project the likelihood that 2015 high school, a large percentage may be prepared between 11 and 35. The average ACT score for graduates who were college ready by various to earn college degrees. the class of 2010 was 18 and reveals decreasing measures will ultimately earn a degree. Students Dr. Nelson said that 2010 graduates who percentages to the maximum score of 35. Dr. with an average ACT score of 22.3 had 57 earned an Associate’s Degree were 32 percent Nelson said the reason for the odd distribution percent eventually earn a college degree. Sixty- females and 21 percent males. Consistent with is that all Kentucky 11th grade students are nine percent of students who met all three ACT national data, female graduates earned degrees at required to take the ACT whereas other states benchmarks and averaged 24.9 ACT composite a rate of one and one-half times the rate of male only require students take the ACT if they plan score earned a degree. Only 25 percent of graduates. This disparity is not explained since to attend college. students who were deemed college ready but did the percentage of males and females deemed For the Class of 2010, students who enrolled not meet any 11th grade ACT benchmarks and college ready are approximately the same rate. in college immediately following graduation had an ACT composite score of 15.9 earned a She said the disparity in degree earning rates earned a degree within six years. The graduation college degree within six years. possibly exists because the labor market is an pace accelerated greatly as ACT composite Based on this data, OEA’s concern is influencing factor. As previously noted, male scores improved, with 90 percent of students that college-readiness data for students who graduates who entered the workforce without earning a degree within six years. Fifty percent demonstrate readiness based primarily on the earning a degree are much more likely to earn a of students with a composite score of 21 or more ACT versus other measures are not directly living wage than female graduates. were likely to earn a college degree and students comparable. Although the data that appears Also consistent with national data, Asian scoring below 21 are likely to graduate but at a on the school report cards may change once students earned degrees at the highest rate at slower rate. the new accountability system is implemented, 49 percent, and black students earned degrees Looking at the predictive power of additional OEA suggested two recommendations related to at the lowest rate at 15 percent. As shown in college readiness measures introduced in 2012, the reporting of college readiness data on state the report, Dr. Nelson said black and Hispanic high school students could demonstrate college report cards. students who were college ready earned degrees readiness and begin take credit-bearing classes OEA recommended in reporting college at approximately the same rate as white students; without remedial work by achieving Council on readiness measures on state, district, and however, this is not true for FRPL students. Postsecondary Education (CPE) benchmarks school report cards, the KDE should indicate Students who were not FRPL earned degrees at or by taking CPE approved college placement the number and percentage of students who more than three times the rate of FRPL students. tests such as Kentucky Online Testing System are considered college ready due to meeting This is not explained entirely by the college (KYOTE) or COMPASS, a set of college entrance benchmarks in each of the required subject readiness of FRPL graduates. exams which were phased out and are no longer areas of reading, English, and math on the ACT; Dr. Nelson compared the ACT composite as administered. those who are college ready on a combination of linked to FRPL students. The six-year graduation Students who did not meet reading and ACT tests and placement tests approved by the rate of students with the same ACT composite math ACT benchmark administered in the 11th CPE; and those who are college ready on CPE- scores who were not FRPL students shows a grade were required to take transitional courses approved placement tests alone. difference as much as 20 percentage points in the or receive intervention to be recognized as a OEA also recommended the KDE should graduation rates of these two groups of students high school graduate. Since 2012, an increasing provide to the Kentucky Center for Education with similar ACT composite scores. She said if number of students who did not meet ACT And Workforce Statistics data that indicates 2010 FRPL graduates had earned college degrees benchmarks have been deemed college ready whether students were considered college at the same rate as their similarly qualified non- prior to high school graduation as a result of ready because they met benchmarks in each of FRPL peers, more than 2,300 additional students retaking the ACT test or meeting benchmarks the required subject areas of reading, English, would have earned a degree. These differences on COMPASS OR KYOTE tests. This created and math on the ACT; met benchmarks on a have substantial economic consequences for dramatic reductions in college remediation rates combination of ACT tests and placement tests individual students and the state. and substantial savings to college students. approved by the (CPE); or met benchmarks on FRPL students working in 2016, as grouped The Class of 2015 students were college-ready CPE-approved placement tests alone. by the ACT composite scores, revealed those based on various measures. For students who Dr. Nelson said data presented shows without a college degree earned substantially enrolled in a Kentucky 2- or 4-year institution, the power of the ACT test to predict college lower wages as compared to a graduate’s earning earned a first semester of 2.0 or above, and were outcomes, the outcomes based on standardized at every ACT composite range, but is especially college ready before graduation, 80 percent of tests changed when GPA data was included. A great as a percentage of income for the lower students meeting these three benchmarks on percentage of all students who had high ACT scoring students with an ACT composite of 14 or the ACT earned a first semester GPA of 2.0 or composite levels was compared to students who less. Using these wage premiums as the basis for above. Students who met two benchmarks had had a GPA of 2.5 to 2.9. Students who maintained calculation, if FRPL students had earned degrees similar outcomes and the percentage of students a GPA of 3 to 3.49 and the percentage of students at the same rate as similarly qualified non-FRPL THE KENTUCKY GENERAL ASSEMBLY 57 students in 2016, the may have earned combined lower salaries. Students with positive behavior the same educational criteria. over $13 million in additional wages. indicators, even students with similar ACT Gender-based differences of 2010 high Dr. Nelson discussed the relationship scores, could earn up to 25 percent more in salary. school graduates linked lower-wage sector job between high school indicators and the Regarding the ACT distribution, 25 percent of wages as half of higher-wage sector job. This workforce outcomes for high school graduates the class fall in the group of ACT scores of 14 or was explained in part by workforce sectors in with no postsecondary degree. Regarding below. which females and males are more commonly attendance, wages of high school students who Dr. Nelson explained the association between employed. Although both genders had no college were absent from school from a low of zero Kentucky’s career-ready measures and wages of and similar education, female workers were 1.5 to nine days to a high of 50 days and above graduates working with either a postsecondary times more likely than male graduates to work in decreased substantially for students as absences degree or certificate. To be considered career lower-wage sectors such as food services, health increased. Workers who were absent nine days ready, students must complete a sequence of services, and administrative support whereas or less in high school earned one and one-half three specific pathway CTE preparatory courses, male graduates were 2.4 times more likely to work times more in 2016 than workers who are absent a technical component demonstrating skill or an in higher-wage sectors including construction, 50 days or more. approved KOSSA certificate, and an academic transportation, and manufacturing. Average Dr. Nelson said students with good component as demonstrated by WorkKeys wages of 2015 graduates earning various levels of attendance are much more likely to have or military ASVAB tests. OEA included a CTE credentials but no college degree earned 16 positive academic outcomes. The data provided preliminary analysis on all three components. percent more than non-CTE students. Graduates indicated attendance is associated with salary The average wages by ACT composite for who were career ready earned an additional 20 beyond its relationship with academic outcomes. students who graduated in 2010 and did not percent more than those who completed CTE A likely explanation is that students with poor complete a CTE preparatory course were 25 preparatory sequences but were not deemed attendance in high school are less consistent percent lower than students who completed the career ready. in the workforce. The full report shows 2016 course in the two lower ACT groups. Not much Dr. Nelson said while the 11th grade ACT is graduates who worked all four quarters have difference was found in the other levels of the a powerful predictor of success for college-going substantially higher wages than those who do ACT composite scores. The substantial wage students, higher ACT scores are less critical for not. The average four-quarter worker who did premium at each level of achievement is more workforce success of non-degreed graduates, not graduate from high school is earning a living significant for students with an ACT composite while CTE credentials are associated with higher wage. Over half of the students who were absent of 14 or less. Twenty-five percent of students wages, especially for students with ACT scores 50 or more days were working all four quarters fell in this group. Despite the notably high CTE 14 or less. compared to more than 75 percent of students wage premium for students with a composite Dr. Nelson said when compared, degree data who were absent nine days or less. score of 14 or less, only one-third of graduates and wage data for non-degree graduates suggests In addition to poor attendance, poor who were working in 2016 had completed a that high school priorities may differ based on behavior is associated with lower salaries. CTE course. There was no notable difference in student’s postsecondary goals. The study does Salaries decrease substantially for students with college graduation rates among those who had not include a review of Kentucky’s high school law violations and modestly for board violations. completed CTE preparatory courses and those curriculum and graduation requirements; The report grouped student behavior indicators who had not. however, based on the findings of the study, OEA into positive and negative groups. Students In a review of graduates who completed CTE supports KDE’s announced intention to review identified with positive behavior indicators were courses and immediately entered the workforce high school graduation requirements, which led absent nine days or less and had no board or in 2016, 35 percent were White, 24 percent to Recommendation 3.1 law violations. Students with negative behavior were Hispanic graduates and 18 percent were Recommendation 3.1 states the Kentucky indicators include those who exhibit chronic black. This is associated with differences among Department of Education should examine the absences of 18 or more days and had one or more workforce regions in the percentage of graduates minimum high school graduation requirements board or law violation. who completed CTE courses. The Kentuckiana outlined in 703 KAR 3:305 Section 2 to determine The average wages of 2010 graduates with Region, which includes Jefferson County and whether those requirements offer local districts no college degree or credentials by 11th grade has the greatest number of black students, had and schools sufficient flexibility to tailor high indicates a substantial association between the lowest rate of CTE completion in the state. school programs to meet the needs of students behavior indicators and salaries, even for students Although all groups had similar education, with different postsecondary goals. with similar academic achievement based on Hispanics earned $6,236, more than double the Dr. Nelson summarized OEA’s findings for the ACT test. In comparison, average wages premium of $3,042 for white graduates and over increasing the rate at which Kentucky students by ACT composite scores for students without two and one-half times the premium of $2,427 earn postsecondary degrees. She said the postsecondary degrees who were working in for Black students. Dr. Nelson said the race- transition to college readiness during a student’s 2016 exposed an increase for students with an associated differences in the wage premium senior year is too late for many students. Students ACT score of 14 or below to those with 15 or is unexplained although it is possibly due to a with interest in or potential to attend college above. There is little or no increase in average smaller percentage of Hispanic students being must be challenged to meet rigorous standards salaries for students with ACT scores higher located in data for 2016. earlier in high school, by the ACT or by meeting than 15, a sharp contrast with the relationship to With nearly equal percentages of male and academic standards by earning a 3.5 or higher. students with college degrees previously shown. female graduates completing a CTE preparatory Many qualified Kentucky students have not The average salary for students with positive course and no college degree or credential, the completed college degrees, especially students behavior indicators is higher at all salary levels CTE premium for male graduates was nearly six from lower-income families and male students, and negative student behavior indicators show times more than their female counterparts with not only for the class of 2010, but also for previous

58 2017 Interim LEGISLATIVE RECORD and succeeding classes. These individuals are school report cards, but outcomes that caused a On a motion by Senator Neal and a second potential targets for policy initiatives aimed at great deal of concern. Students from homeless by Senator Kerr, the report was accepted by voice increasing college graduation. or low-income families were incarcerated at vote. Relating to preparing graduates to enter the a rate of three times higher than those of non Other Business workforce without a degree, it is important to FRPL. Dr. Ligouri said foster children, single- Senator Wise announced the next meeting understand the apparent disparities in access parent children, and children living with both will be Tuesday, November 21, at 1:00 p.m. The to CTE education among student groups and parents is not historic information available adoption of the 2018 OEA Research Agenda regions and to ensure that students, especially in the data system. Representative Riley said is anticipated to be adopted at this time, and female and black students, are informed about family background has a significant impact on reminded committee members to forward the potential benefits of CTE in the workforce the academic achievement of student and their suggested study topics to Joshua Collins. and the career pathways that are aligned with future success. Adjournment higher-wage sectors. In response to a question from Senator There being no further business, the meeting Dr. Nelson said engagement and motivation Wise, Dr. Nelson said the number of students was adjourned at 2:15 p.m. matter beyond raising test scores. This who became college ready without meeting reflects discussions across the nation about benchmarks and their option of enrollment CAPITAL PLANNING ADVISORY the importance in education qualities such in a two- or four-year college can be provided. BOARD as soft skills, social and emotional learning, She clarified that many data points included in Minutes of the 4th Meeting persistence, and grit. The policy implications the KCEWS report are now configured so the of the 2017 Calendar is these discussions are not yet clear. While the information can easily answer many questions October 17, 2017 Federal Every Student Succeeds Act (ESSA) when the data is entered. Dr. Nelson added that Call to Order and Roll Call permits states to include such measures in their the average ACT composite of those earning a The 4th meeting of the Capital Planning accountability systems, researchers and policy 2-yr degree were lower than students seeking a Advisory Board was held on Tuesday, October makers have concerns about the reliability and 4-year degree. 17, 2017, at 10:00 AM, in Room 169 of the validity of existing measures. However, flexibility Senator Wise stressed the need to identify Capitol Annex. Senator Stan Humphries, Chair, in Kentucky’s proposed accountability system students and educate them about options for called the meeting to order, and the secretary may allow districts to experiment with new career pathway for those not wishing to pursue called the roll. measures, some of which may address student a college degree. Present were: engagement and motivation. In response to a question from Representative Members: Senator Stan Humphries, Co- Approval of September 26, 2017 Minutes Graham, Dr. Nelson said although data Chair; Representative Daniel Elliott, Co-Chair; On a motion by Senator Wilson and a second identifying students in foster care was not crafted Senator Whitney Westerfield, Representative DJ by Representative Riley, the minutes of the for this particular report, the existing data on the Johnson; Charles Byers, John Chilton, Carole September 26, 2017, meeting were approved by K-12 site can be entered into the KCEWS system Henderson, Stephen Knipper, William M. voice vote. and linked to gather specific data requests and Landrum, Mark Overstreet, and Katie Shepherd. In response to a question by Senator Neal, will provide the information. Guest: Katherine Halloran, Committee Dr. Nelson said the CTE completion rates in Responding to another question from Staff Administrator, Capital Projects and Bond Jefferson County were not assessed by particular Representative Graham, Dr. Nelson said the Oversight Committee. areas, but said this may be a future study topic average salary for a Bachelor’s Degree is $30,000. LRC Staff: Shawn Bowen, Julia Wang, and which would allow OEA to delve more fully into She said the best trend data on wage information Jennifer Luttrell. this issue. is from KCEWS, which has post-graduation Approval of Minutes In response to a question from Senator Wise, salary data for one-, three-, and five-year A motion to approve the minutes of the Dr. Nelson said data on students who earned increments and increases thereafter. Over 70 August 15, 2017 meeting was made by Senator a masters or doctorate within six years is not percent of teachers who obtained a bachelor’s Westerfield, seconded by Representative Elliott, available but an overwhelming percentage of degree or above and worked all four quarters, and approved by voice vote. students earned a bachelor’s degree within six relating to regular attendance in the workforce Information Item years. Dr. Nelson said the impact of students which equals higher salaries. Because the Mr. Landrum updated the members on the earning dual credits and enabling students to differentiation of full-time or part-time teachers Beaver Dam Service Area project. A 20-year complete their degrees in less than six years is was not noted, the pay scale could be adversely contract to renovate and operate the service area not readily available and said that as well could affected if, in fact, more females were working was recently awarded to Martin and Bayley, Inc. be a future study topic for the committee. part time. Regarding the maximum of 30 dual- The service area, located on the Wendell H. Ford In response to a question by Representative credit hours, Representative Graham expressed Western Kentucky Parkway, is scheduled to open Riley, Dr. Nelson said the closest study relating interest in knowing if students are earning January 26, 2018. The contract included two to foster children or students raised in a single- their bachelor’s degree in a shorter time frame. 5-year renewal options for a total up to 30 years. parent home is a study of homeless students in Dr. Nelson said OEA does not have enough Rent to the commonwealth will be paid quarterly temporary or unsafe conditions; however, she standard information available regarding dual with payments determined as a percentage of said the majority of those students live with credit classes for comparison at this time. OEA gross receipts. family members other than their parents. Dr. included six-year graduation rates to capture Staff Report on Kentucky’s Bonded Nelson said students were grouped according to as many student outcomes as possible and that Indebtedness positive and negative outcomes. This group is a CPE has data available on 4-year and 6-year An in-depth analysis of the historic, current, target for indicators that normally appear on the graduation rates. and projected debt position of the commonwealth THE KENTUCKY GENERAL ASSEMBLY 59 was included in members’ binders. The report potential recommendations are formally Development Board’s projects for October also addressed factors that influence the cost of approved by members, they become policy under the program. Mr. McCloskey highlighted issuing debt. Katherine Halloran, Committee recommendations. programs including the County Agricultural Staff Administrator, Capital Projects and Bond There was a motion made by Representative Investment Program (CAIP), Next Generation Oversight Committee, prepared the report on Johnson, seconded by Senator Westerfield, and Beginning Farmer, Shared-use Equipment, and behalf of the board, and was available to respond adopted by roll call vote to approve the draft Youth Agriculture Incentives Program. to questions. 2018-2024 Statewide Capital Improvements Requested program amendments discussed 2018-2024 Statewide Capital Improvements Plan, including the policy recommendations included: Plan and the state-funded project recommendations. Rockcastle County Conversation District, Senator Humphries said the one item The motion also included the authorization for additional $13,879 for CAIP. The board of business was approval of the 2018-2024 staff to make the necessary editing changes in recommended approval, which would bring the Statewide Capital Improvements Plan. The finalizing the plan for publication. program total to $281, 677. capital plan consisted in part of three sets of Adjournment Johnson County Agricultural Advancement state-funded project recommendations in the There being no further business, the meeting Council, Inc., additional $3,700 for CAIP. The categories of construction to protect investment was adjourned at 10:25 AM. board recommended approval, which would in plant, information technology, and new bring the program total to $51,950. construction. These projects were selected TOBACCO SETTLEMENT Oldham County Farm Bureau, additional individually by members and submitted to the AGREEMENT FUND OVERSIGHT $4,450 for CAIP. The board recommended board’s staff in late August. The capital plan also COMMITTEE approval, which would bring the program total included three updated policy recommendations Minutes to $29,099. used in previous plans. There were no new November 1, 2017 Trimble County Cattleman’s Association, recommendations from members this year. Call to Order and Roll Call Inc., additional $16,900 for CAIP. The board The policy recommendations include: 1) The 9th meeting of the Tobacco Settlement recommended approval, which would bring the funding the Budget Reserve Trust Fund at a Agreement Fund Oversight Committee was held program total to $139,540. level based on available revenues. In the past, the on Wednesday, November 1, 2017, at 10:00 AM, Washington County Cattlemen Association, board has recommended five percent of General in Room 129 of the Capitol Annex. Senator C.B. Inc., additional $40,000 for CAIP. The board Fund revenues be allocated to the Budget Embry Jr., Chair, called the meeting to order, and recommended approval, which would bring the Reserve Trust Fund. However, considering the the secretary called the roll. program total to $142,000. General Fund budget reduction order issued by Present were: Garrard County Farm Bureau, Inc., additional the Governor in July, and given that previous Members: Senator C.B. Embry Jr., Co- $42,944 for CAIP. The board recommended fund balances have historically been below Chair; Representative Myron Dossett, Co-Chair; approval, which would bring the program total five percent, it is highly unlikely five percent Senators Paul Hornback, Stephen Meredith, to $242,944. will be achieved; 2) support for the Council Dennis Parrett, Robin L. Webb, and Whitney Morgan County Fiscal Court, additional on Postsecondary Education’s (CPE) revised Westerfield; Representatives Kim King, Phillip $19,011 for CAIP. The board recommended approach to funding postsecondary capital Pratt, Rick Rand, Brandon Reed, and Dean approval, which would bring the program total needs. In its upcoming budget request, CPE will Schamore. to $220,093. request state funds for an asset preservation pool Guests: Warren Beeler, Executive Director, Mercer County Conservation District, and an information technology and equipment Governor’s Office of Agricultural Policyadditional $22,423 for CAIP. The board pool only. In the past, CPE has requested state (GOAP); Bill McCloskey, Deputy Executive recommended approval, which would bring the funds for new construction, but due to the Director, GOAP; Aleta Botts, Executive Director, program total to $157,423. deteriorating conditions of the postsecondary Kentucky Center for Agriculture and Rural Allen County Conservation District, facilities, as well as other factors, CPE will focus Development (KCARD); B. Mark Evers, M.D., additional $14,987 for CAIP. The board on preserving existing facilities; and 3) urging the Director, University of Kentucky Markey Cancer recommended approval, which would bring the General Assembly to allocate adequate funding Center (MCC); and Jason Chesney, M.D., Ph.D., program total to $203,206. for state agency maintenance pools in the next Director, University of Louisville James Graham Grant County Cattlemens Association, executive budget. Brown Cancer Center (JGBCC). Inc., additional $20,000 for CAIP. The board Mr. Landrum stated that in his position as LRC Staff: Stefan Kasacavage, Tanya recommended approval, which would bring the Secretary of the Finance and Administration Monsanto, Kelly Ludwig, Nathan Smith, and program total to $148,000. Cabinet, he oversees expenditures from the Rachel Hartley. Menifee County Beef Producers, Inc., Budget Reserve Trust Fund. He said the balance The October 4, 2017, minutes were approved additional $9,292 for CAIP. The board in the fund has an impact on how the state is by unanimous voice vote. recommended approval, which would bring the viewed with regard to its bonding and credit Governor’s Office of Agricultural Policy program total to $72,892. rating, and more should be done to protect these Report Meade County Cattleman Association funds. Warren Beeler discussed his schedule for the Corporation, additional $2,650 for CAIP. The In response to a question from Ms. Shepherd, months of October through December. board recommended approval, which would Senator Humphries explained that the policy In response to Senator Hornback, Mr. Beeler bring the program total to $48,290. recommendations to be included in the capital stated Breathitt Lab has increased its fees twice Projects discussed included: plan are considered potential recommendations in the last couple of years. Midway Christian Church (Disciples of until the board approves them. Once the Bill McCloskey described the Agricultural Christ), Inc., approved for $1,100 in Woodford

60 2017 Interim LEGISLATIVE RECORD County funds for purchasing a commercial 32 in the bone marrow transplant unit. The large have brakes that turn them on. The concept is refrigerator for its certified kitchen. rooms will be able to accommodate families as to block the brakes from allowing the cancer to Madison County Fiscal Court, approved for well as provide patient comfort. grow. $4,620 in Madison County funds to upgrade its In November 2017, the Early Phase Clinical The James Graham Brown Cancer Center dead animal removal truck. Trials Center will open and will be directed by Jill had successful clinical trials for melanoma Kentucky State University, approved for Kolesar, Pharm. D. It is a standalone clinic with patients. The patients had a 5 percent chance of $495,000 in state funds for calendar year 2018 expertise in early drug development and delivery survival, and most of them are alive today. The for personnel, demonstration projects, and and will offer early phase treatments. combination of drugs given to the patients was mini-grants to underserved small and limited- The Molecular Tumor Board (MTB) was approved by the Food and Drug Administration resource farmers. launched in October 2016. The board is now in 2015. The success of the drug combination Kentucky Center for Agricultural and Rural statewide and utilizes teleconferencing. The depends on how many mutations the cancer Development, Inc., approved for $700,000 in state MTB analyzes the molecular characteristics typically produces, and Melanoma has the most funds over two years as a grant to deliver technical of cancers on a case by case basis and provides mutations. Lung cancer has the second most assistance and provide educational opportunities individualized recommendations for treatment. mutations. James Graham Brown Cancer Center to agricultural and rural businesses. The Center for Cancer and Metabolism, is utilizing the same combination of drugs for In response to Senator Parrett, Aleta Botts UK Center for Appalachian Research in lung cancer. stated the increased fees related to the Kentucky Environmental Sciences, and the Lung Cancer The next meeting of the Tobacco Agreement Center for Agriculture Rural Development Education Awareness Detection Survivorship Oversight Committee is scheduled for December project will not come out of the $4 million Collaborative (LEADS) are new areas that are 6, 2017. Documents distributed during the federal reward. utilizing funds. meeting are available in the LRC Library. University of Kentucky Markey Cancer Through the NCI designation, MCC is able There being no further business, the meeting Center to supplement their grants to develop tobacco was adjourned. Dr. B. Mark Evers said that lung cancer cessation treatment capacity and infrastructure accounts for 35 percent of total cancer deaths in for cancer patients. Markey CARES (Cancer- Kentucky compared to 28 percent in the United specific, Assessment, Referral, Engagement, States from 2007 to 2011. In Kentucky, more and Support) Tobacco Program was created to than 28 percent of adults smoke and nearly 8,000 examine tobacco cessation after cancer diagnosis. adults die from tobacco related illnesses annually. Research shows highly effective efforts to Health care costs caused by tobacco use are $1.92 improve the health of Kentuckians. Thirty-four billion annually and productivity losses caused percent of the population is currently covered by smoking are $2.3 billion annually. by state-wide smoke-free acts. Kentucky has the The return on investment for the Kentucky highest percentage of adult cigarette use and the Lung Cancer Research Program (KLCRP), as a 12th lowest excise tax in the country. result of funding from the Tobacco Settlement University of Louisville James Graham is $11.34 per dollar invested. The total economic Brown Cancer Center impact is $707.4 million. The program has Dr. Jason Chesney stated Kentucky has created 5,426 jobs and generated $24 million in the highest rate of cancer related deaths in the state and local tax revenue. country, and approximately 3,500 Kentuckians The mission of MCC is to reduce cancer will succumb to lung cancer this year. mortality through a comprehensive program of The funds from the Tobacco Settlement are research, treatment, education, and community crucial to starting clinical trials for patients that engagement with a particular focus on the have a terminal illness. The expenditures of the underserved population of Appalachian Tobacco Settlement funds include those for Kentucky. administrative costs, NCI designation, clinical The program utilizes funding to develop trials, early detection, fellows, and competitive clinical trials and research that assists in research grants. leveraging larger funding from the National The focus of JGBCC is clinical trials to Institutes of Health (NIH). The Markey Cancer activate the immune system against cancer. The Center received a National Cancer Institute center consists of 26 staff members, three clinical (NCI) designation in July 2013, which increased investigators, and 59 translational scientists. funding by 36 percent. There are currently 130-140 open trials. The Markey Cancer Center has expanded its Approximately 700-750 cancer patients are now network throughout the state with affiliate and enrolled, and there are 250-300 accruals per year. research sites. There are currently 20 affiliate Most people have already had cancer at sites with seven in the recruitment process and some point in their lives. White blood cells exist six research sites with three in the recruitment to fight viruses and cancer. Eventually, with process. time and mutations, the cancer cells find ways In December 2017, MCC will open a new to evade the immune system. Within the last inpatient floor with 93 outpatient beds, including decade discoveries showed that immune cells THE KENTUCKY GENERAL ASSEMBLY 61 2018 Prefiled Bills (Prefiled by the sponsor(s).) 132.097 and 132.099 to amend the exemption BR1 - Representative Jerry Miller for personal property shipped out of state; (8/16/2017) BR15 - Representative Jim Wayne, amend KRS 139.105, 139.200, 139.220, Representative Tom Burch, Representative 139.270, 139.340 and 139.740 to impose sales AN ACT relating to the overtaking of bicycles Jeffery Donohue, Representative Joni tax on selected services; create a new section of on a roadway. Jenkins, Representative Mary Lou KRS Chapter 141 to provide for a refundable Amend KRS 189.300 to provide that the Marzian, Representative Reginald Meeks, Kentucky earned income tax credit; amend operator of any vehicle moving upon a Representative Attica Scott KRS 243.0305 and 243.990 to recognize highway is to keep to the right unless signage (7/13/2017) changes in the distilled spirits case tax; amend or markings indicate otherwise; amend KRS KRS 138.130, 138.140, and 138.143 to change 189.340 to require vehicles overtaking bicycles AN ACT relating to taxation. the tax on cigarette rolling papers, to raise the to pass at a distance of at least three feet; Amend KRS 140.130 to decouple from changes tobacco taxes, to impose a floor stock tax, and provide that if there not a minimum distance to the federal estate tax since 2003; amend to tax e-cigarettes; amend KRS 65.125, 65.674, of three feet available, the passing vehicle is to KRS 141.010 to provide for a reduction and 67.862, 67.938, 67A.843, 68.245, 68.248, use reasonable caution; specify when a motor phase-out of the pension exclusion, disallow 82.095, 97.590, 132.0225, 132.023, 132.024, vehicle may pass a bicycle to the left of the the domestic production activities deduction, 132.027, 132.029, 157.440, 160.470, 160.473, center of a roadway. establish a cap for itemized deductions, and 67C.147, 78.530, 342.340, and 134.810 to (Prefiled by the sponsor(s).) define “taxpayer”; amend KRS 141.020 to remove provisions that allow for recall of provide for changes to income tax rates; amend certain tax rates and make conforming and BR2 - Representative Diane St. Onge KRS 141.066 to make a technical correction; technical changes; create a new section of KRS (6/5/2017) amend KRS 141.0205 to recognize and order Chapter 141 to provide for a refundable noise changes in income tax credits; amend KRS mitigation credit; repeal KRS 132.017, 132.018, AN ACT relating to public safety. 141.0401 to lower the exclusion threshold; 132.025, 132.720, 143A.035, and 243.710, Amend KRS 446.010 to define “unmanned amend KRS 141.120 to change apportionment relating to recall petitions and to various tax aircraft system”; create a new section of methods to use a “throwback” rule and market- rates; provide that estate tax provisions apply KRS Chapter 500 to prescribe permitted and based sourcing for receipts; amend KRS for deaths occurring on or after August 1, 2018, prohibited uses of drones; provide exceptions; 141.200 to require “combined” reporting for sales tax provisions are effective for periods prohibit use of evidence obtained by a drone in corporations; amend KRS 134.810, 136.310, beginning on or after October 1, 2018, motor violation of stated prohibitions; authorize that 136.530, 141.040, 141.121, 141.206, and fuels compensation provisions are effective section to be cited as the “Citizens’ Freedom 141.420 to conform; amend KRS 141.205 to August 1, 2018, and property tax provisions are from Unwarranted Surveillance Act”; create recognize “tax haven” foreign countries and for assessments on and after January 1, 2019. a new section of KRS Chapter 501 to clarify tax all income apportioned or allocated to (Prefiled by the sponsor(s).) criminal liability for offenses committed using those countries; amend KRS 141.383, 148.544, a drone; create a new section of KRS Chapter and 148.546 to make the film industry tax BR18 - Senator Morgan McGarvey 525 to create the offense of obstructing an credit nonrefundable and nontransferable; (10/18/2017) emergency responder. create a new section of KRS 6.905 to 6.935 (Prefiled by the sponsor(s).) to require review and sunset of all economic AN ACT relating to telecommunications. development tax credits; amend KRS 131.190 Amend KRS 278.5461 to include a definition BR14 - Representative Tom Burch to allow LRC employees to review selected of “personally identifiable information”; (6/22/2017) tax documents; amend KRS 138.270 to reduce amend KRS 278.5462 to provide that no motor fuels dealer compensation to one telecommunications or Internet service provider AN ACT relating to the reporting of child percent; amend KRS 132.020 to make the real shall collect personally identifiable information abuse, neglect, or dependency. property tax rate 12.2 cents per $100, remove from a customer as a result of the customer’s Amend KRS 620.030 to establish that if a the rate adjustment provision, and remove use of the telecommunications or Internet person knows or has reasonable cause to the recall provisions; amend KRS 132.260 to services without the customer’s express written believe that a child is dependent, neglected, or clarify requirements for reporting of rental approval. abused, causes an oral or written report of the space for mobile or manufactured homes, (Prefiled by the sponsor(s).) dependency, neglect, or abuse to be made, is private aircraft, and certain boats or vessels; employed by a local law enforcement agency, amend KRS 132.730, 132.751, 132.810, and BR25 - Representative Jeffery Donohue the Department of Kentucky State Police, the 132.815 to clarify property tax treatment of (8/14/2017) cabinet or its designated representative, the manufactured homes; amend KRS 140.300 to Commonwealth’s attorney, or a county attorney, clarify the treatment of agricultural valuation AN ACT relating to death in the line of duty then that person shall make the oral or written on inherited property; amend KRS 279.200, benefits and declaring an emergency. report to his or her employer and to one of the 279.530, 279.220, and 139.530 to repeal rural Amend KRS 16.601 and 61.621 to increase other entities authorized to receive the report. electric and telephone co-op taxes; amend KRS minimum death benefits payable to the

62 2017 Interim LEGISLATIVE RECORD surviving spouse of a member of the state- (5/15/2017) of freight; establish civil penalties for failure to administered retirement systems from 25% have a two-person crew. to 50% of the deceased member’s final rate AN ACT relating to Kentucky school bus (Prefiled by the sponsor(s).) of pay if the member died as a result of an drivers. act occurring in the line of duty; amend KRS Create a new section of KRS Chapter 2 to BR57 - Representative Sal Santoro 61.542 to provide that the surviving spouse designate and observe May 1 of every year as (9/22/2017) shall supersede all previously designated “School Bus Driver Day.” beneficiaries in the case of line-of-duty death (Prefiled by the sponsor(s).) AN ACT relating to electric and hybrid vehicle benefits payable from the systems administered fees and making an appropriation therefor. by the Kentucky Retirement Systems unless the BR39 - Representative Sal Santoro Create a new section of KRS Chapter 186 member files a valid beneficiary designation (5/16/2017) to establish a base fee for hybrid vehicles, form after marriage to his or her spouse; hybrid electric plug-in vehicles, and non- provide that eligible surviving spouses of AN ACT relating to Kentucky school bus hybrid electric vehicles; require the fee to members who died in the line of duty prior to drivers. be adjusted with any increase or decrease in the effective date of the Act shall receive the Create a new section of KRS Chapter 2 to the gasoline tax established in KRS 138.228; increased line of duty death benefits; provide designate and observe May 1 of every year as require collection of the fee at the time of that a surviving spouse of a hazardous duty “School Bus Driver Day.” motor vehicle registration; require that all fees member who died as a result of an act occurring (Prefiled by the sponsor(s).) collected under this section be transferred to in the line of duty on or after January 1, 2017, the road fund; amend KRS 186.010 to define who was ineligible for the minimum monthly BR40 - Representative Kenny Imes the terms “hybrid vehicle,” “hybrid electric death benefits because he or she was not named (6/27/2017) plug-in vehicle,” and “non-hybrid electric beneficiary shall be eligible for the benefits vehicle”; amend KRS 186.050 to reference provided by this Act; EMERGENCY. AN ACT proposing to amend Section 29 the fees collected under this Act; amend KRS (Prefiled by the sponsor(s).) of the Constitution of Kentucky relating to 138.220 to provide notification to county clerks administrative regulations. of the fees provided in this Act; make technical BR28 - Representative Jason Nemes Propose to amend Section 29 of the correction; EFFECTIVE January 1, 2019. (9/20/2017) Constitution of Kentucky to permit the (Prefiled by the sponsor(s).) General Assembly or an agency or committee AN ACT proposing to amend Sections 117, it creates to review, approve, or disapprove BR64 - Senator Johnny Ray Turner 118, 119, and 122 of the Constitution of any administrative regulation of the executive (6/1/2017) Kentucky relating to the election of appellate branch during or between regular sessions of judges. the General Assembly; submit to the voters AN ACT relating to vacating convictions for Propose to amend Sections 117, 118, 119, and for approval or disapproval; supply ballot reckless homicide. 122 of the Constitution of Kentucky to fill language. Amend KRS 431.073 to allow convictions for terms of justices of the Supreme Court and (Prefiled by the sponsor(s).) reckless homicide to be vacated and expunged judges of the Court of Appeals by appointment if the offender has first been granted a partial by the Governor from a list of three nominees BR41 - Representative Kenny Imes pardon by the Governor. provided by the judicial nominating (6/6/2017) (Prefiled by the sponsor(s).) commission; provide for appointed justices and judges who seek additional terms to stand for AN ACT proposing to amend Section 95 of BR67 - Representative Jason Nemes elections in their districts; limit individuals to the Constitution of Kentucky relating to the (9/20/2017) two full terms of office; schedule transitional election of state officers. provisions; submit to the voters for approval or Propose to amend Section 95 of the AN ACT relating to appellate judges. disapproval. Constitution of Kentucky to hold the election of Amend KRS 118A.110 to define “retention (Prefiled by the sponsor(s).) the Governor, Lieutenant Governor, Treasurer, election” for appellate judges; create a new Auditor of Public Accounts, Attorney General, section of KRS Chapter 118A to create an BR37 - Representative Scott Wells Secretary of State, and Commissioner of election process for retaining appointed (8/25/2017) Agriculture, Labor and Statistics in even- appellate judges, following the ratification numbered years, every four years, beginning in of a constitutional amendment to provide for AN ACT relating to area development districts 2024; provide transitional calendar; submit to appointments of appellate judges; amend KRS and declaring an emergency. the voters for ratification or rejection; provide 118A.020, 118A.030, 118A.060, 118A.100, Amend KRS 147A.117 to require that the ballot language. and 118A.140 to conform; repeal, reenact, and Auditor of Public Accounts’ bill shall not (Prefiled by the sponsor(s).) amend KRS 21A.020 to set staggered terms for exceed a quote given to an area development appellate judges; EFFECTIVE contingently on district by a certified public accountant for the BR54 - Representative Jeffery Donohue January 1, 2020. same audit; EMERGENCY; EFFECTIVE July (6/8/2017) (Prefiled by the sponsor(s).) 1, 2018. (Prefiled by the sponsor(s).) AN ACT relating to railroads. Create a new section of KRS Chapter 277 to BR38 - Senator John Schickel require two-person crews on trains or light BR81 - Representative Brandon Reed engines used in connection with the movement (9/28/2017) THE KENTUCKY GENERAL ASSEMBLY 63 BR105 - Senator Danny Carroll (10/17/2017) Urge the United States Fish and Wildlife (10/12/2017) Service to issue more migratory bird AN ACT relating to the safe disposal of depredation permits and subpermits to allow AN ACT relating to sex offenses. controlled substances. Kentucky farmers to legally take black vultures Amend KRS 510.050, 510.060, 510.080, Amend KRS 218A.170 to require a practitioner that are depredating their livestock. 510.090, 510.110, and 510.120 to increase or a pharmacist to sell or distribute a nontoxic (Prefiled by the sponsor(s).) penalties for sex crimes against a victim who is composition, which permanently captures the a person with an intellectual disability. controlled substance, for the sequestration or BR91 - Representative Regina Huff (Prefiled by the sponsor(s).) deactivation and disposal of unused, unwanted, (7/25/2017) or expired controlled substances anytime a BR113 - Senator Brandon Smith controlled substance is sold or distributed. AN ACT relating to suicide prevention training. (9/8/2017) (Prefiled by the sponsor(s).) Amend KRS 156.095 to require two hours of in-person suicide prevention professional AN ACT relating to sign language BR143 - Representative Dan Johnson development training every other school year interpretation in the House and Senate (10/5/2017) for middle and high school principals, guidance chambers. counselors, and teachers; require a newly hired Amend KRS 7.100 to require the Legislative AN ACT relating to unborn children and staff member to receive a packet of information Research Commission to provide sign language declaring an emergency. on suicide prevention when the person is hired interpretation in each chamber of the General Amend KRS 507A.010 to redefine “abortion,” in a year training is not provided; amend KRS Assembly whenever the General Assembly is in “unborn child” and define “fertilization”; 158.070 to delete requirement for two hours session. amend the definition of unborn child; require of self-study review for suicide prevention (Prefiled by the sponsor(s).) prosecution for the death of an unborn child training. without limitation and not withstanding any (Prefiled by the sponsor(s).) BR114 - Representative Chris Harris, other state law regardless of the identity Representative Rocky Adkins, of the actor; create a new section of KRS BR97 - Representative George Brown Jr, Representative Angie Hatton, Representative Chapter 15 to require the Attorney General Representative Attica Scott Rick Nelson, Representative Kevin Sinnette and Commonwealth’s attorneys to monitor (7/12/2017) (6/30/2017) and enforce KRS Chapter 507A; amend KRS 211.027, 311.720, 311.727, and 311.760 to AN ACT relating to criminal histories of job AN ACT relating to the Public Service conform; repeal KRS 311.710 and 507A.060; applicants. Commission. permit the Act to be cited as the Abolition of Create a new section of KRS Chapter 344 Create a new section of KRS Chapter 278 Abortion in Kentucky Act; EMERGENCY. to prohibit employers from considering or to require the Public Service Commission to (Prefiled by the sponsor(s).) requiring disclosure of prior criminal history reconsider previously issued orders that involve as part of the initial job application; title the multistate transactions if the orders involve a BR149 - Representative Dennis Keene Act “Ban the Box - The Criminal Record multistate transaction that requires approval (9/18/2017) Employment Discrimination Act.” from another state public utility commission (Prefiled by the sponsor(s).) and the out-of-state public utility commission AN ACT relating to the expansion of gaming fails to approve the transaction or utility and making an appropriation therefor. BR102 - Representative Suzanne Miles, plan; require the Public Service Commission Create a noncodified section to state the Representative Jason Nemes to review its previous order and determine findings of the General Assembly; amend KRS (6/29/2017) whether the order is still in the public interest 154A.010 to define, “authorizing location,” of Kentucky ratepayers; provide that the “casino,” “county,” “county legislative body,” AN ACT relating to the natural resources provisions of this Act shall apply retroactively “department,” “full casino gaming,” “gaming severance and processing tax. to all Public Service Commission orders issued licensee,” “gross gaming revenue,” “handle,” Amend KRS 143A.010 to amend the definition on or after July 1, 2013. “licensee,” “limited casino gaming,” and of “processing” to include the act of loading (Prefiled by the sponsor(s).) “principal”; amend KRS 154A.030 to expand or unloading limestone that has not otherwise the Lottery Corporation board membership been severed or treated in the Commonwealth; BR115 - Representative Chris Harris, and duties; amend KRS 154A.040 to include amend KRS 143A.035 to allow a credit for Representative Rocky Adkins, casino licensees; amend 154A.063 to remove substantially identical severance or processing Representative Angie Hatton, Representative prohibition against casino gaming; create new taxes paid to another state or political Rick Nelson, Representative Kevin Sinnette sections of KRS Chapter 154A to require a subdivision thereof; provide that no taxpayer (6/30/2017) local option election in any precinct wanting may claim a total amount of credit that exceeds to host a casino; describe the duties of the his or her tax liability; allow the Department of Direct the Public Service Commission to county clerk and sheriff in a casino gaming Revenue to report tax credit information to the reexamine the electric rates charged to certain local option election; state requirements for Legislative Research Commission; amend other ratepayers to determine if they remain fair, just, local option elections held on a day other than sections to conform; EFFECTIVE August 1, and reasonable. a regular election day; require the corporation 2018. (Prefiled by the sponsor(s).) to advertise an invitation to bid for casinos; (Prefiled by the sponsor(s).) require the corporation to evaluate all proposals BR131 - Senator Alice Kerr for full casinos; establish initial licensing fees

64 2017 Interim LEGISLATIVE RECORD for full casinos at $50 million with an initial system; amend KRS 230.210 to define “exempt licensing period of 10 years and annual renewal sports contest,” “sports wagering,” and “sports AN ACT relating to animal safety. thereafter at $6 million per year; permit limited wagering facility”; amend KRS 230.215 to Amend KRS 411.245 to establish immunity casino gaming at horse racing tracks licensed declare it the policy of the Commonwealth to from civil liability for damage to a vehicle if under KRS Chapter 230; establish requirements encourage the conduct of wagering on sporting a person enters the vehicle for the purpose of for limited casinos; establish requirements events, when allowed by federal law, and to removing a domestic animal. for any track holding a limited casino license; vest forceful control over sports wagering in the (Prefiled by the sponsor(s).) establish requirements for principals of any racing commission; include consideration of corporation granted a casino license; create members of professional and collegiate sports BR165 - Representative Jim Wayne license application requirements for casino, organizations in the Governor’s appointments (8/8/2017) manufacturer, or supplier’s licenses; prohibit to the commission; amend KRS 230.240 to anyone not licensed from selling, leasing, allow the director of the racing commission AN ACT relating to firearms. or otherwise furnishing gaming supplies; to take personnel action relating to sports Create a new section of KRS Chapter 527 to prohibit anyone under the age of 21 from wagering; amend KRS 230.260 to include prohibit the unlawful storage of a firearm. participating in casino gaming; require the promotion of fair sports wagering among the (Prefiled by the sponsor(s).) Lottery Corporation to determine occupations purposes of the racing commission; create a related to casino gaming that require licensure new section of KRS Chapter 230 to establish BR170 - Representative Attica Scott, and establish criteria for occupational licensing; licensing requirements and establish a licensing Representative George Brown Jr, permit the corporation to initiate disciplinary fee of $250,000; create a new section of KRS Representative Kelly Flood action against applicants and license holders; Chapter 230 to require the racing commission (8/31/2017) establish an appeal process; establish a to promulgate administrative regulations gaming tax of 31% and limit that money to prescribing the manner in which sports AN ACT relating to student criminal history the benefit of the state retirement systems wagering shall be conducted; provide minimum background checks. for the first 10 years; establish an admission criteria; prohibit participants from wagering on Create a new section of KRS Chapter 164 tax of $3 per person per day; establish the a sporting event; create a new section of KRS to prohibit public postsecondary institutions casino gaming revenue distribution trust fund; Chapter 230 to establish a 20 percent tax on from inquiring about a prospective student’s establish the regional tourism and infrastructure the total amount wagered at sports wagering criminal history prior to admission, except for development fund and provide criteria for facilities; create a new section of KRS Chapter certain types of offenses; allow an institution projects seeking money from the fund; waive 230 to establish the sports wagering distribution to inquire about a student’s criminal history 15 U.S.C. sec. 1172, 1173 and 1174 for devices trust fund and appropriate moneys from that after admission, for the purposes of providing authorized by this Act; require the corporation fund; amend KRS 230.320 to include sports support services and informing decisions to promulgate administrative regulations to wagering among the activities that are regulated regarding a student’s participation in campus define and limit games and devices permitted by the racing commission; amend KRS activities, organizations, and residency; allow for gaming in casinos; provide guidelines for 230.360 to include sports wagering among the an institution to inquire about a student’s exclusion or ejection of certain persons; define activities that are not subject to local control; criminal history prior to admission into a “cheat” and provide penalties for those who amend KRS 230.990 to establish penalties for professional degree program, but prohibit cheat at casino games; amend KRS 243.500 to tampering with the outcome of a sporting event denial of admission based solely on criminal exempt limited or full casino gaming; amend and participant wagering on a sporting event; history; require institutions to provide KRS 525.090 to exempt persons engaged in EFFECTIVE UPON CONTINGENCY: Act counseling regarding occupational licensing casino gaming; amend KRS 528.010 to exempt takes effect only if the federal Professional and requirements to a professional degree student gambling activity and devices licensed under Amateur Sports Protection Act is repealed by who has a criminal history. KRS Chapter 154A; amend KRS 528.020 Congress or is rendered void by the United (Prefiled by the sponsor(s).) to conform; amend KRS 528.070 to exempt States Suprem Court. activity licensed under KRS Chapter 154A; (Prefiled by the sponsor(s).) BR172 - Representative C. Wesley Morgan amend KRS 528.080 to exempt those with (8/22/2017) the appropriate license required under KRS BR163 - Senator Julian Carroll Chapter 154A; amend KRS 528.100 to exempt (10/18/2017) AN ACT relating to carrying concealed limited or full casino gaming licensed under weapons. KRS Chapter 154A; EFFECTIVE DATE AN ACT relating to cannabidiol use. Create a new section of Chapter 237 to allow DELAYED. Create a new section of KRS Chapter 218A concealed deadly weapons to be carried without (Prefiled by the sponsor(s).) to permit a physician to recommend the use a license in same locations as concealed carry of cannabidiol or cannabidiol products; set license holders may carry them; amend KRS BR155 - Senator Julian Carroll criteria for recommendations; prohibit the 237.115 and 527.020 to conform. (9/20/2017) Board of Medical Licensure from prohibiting (Prefiled by the sponsor(s).) recommendations; amend KRS 218A.010 AN ACT relating to sports wagering and to add recommendation to the definition of BR173 - Representative C. Wesley Morgan making an appropriation therefor. marijuana. (8/18/2017) Create a new section of KRS Chapter 230 (Prefiled by the sponsor(s).) to require the Kentucky Horse Racing AN ACT relating to public assistance. Commission to institute a sports wagering BR164 - Senator Morgan McGarvey Amend KRS 205.200 to create a substance (10/19/2017) abuse screening program for adult recipients THE KENTUCKY GENERAL ASSEMBLY 65 of public assistance, food stamps, and state mail addresses for notification or opt out of General Assembly to allocate proceeds. medical assistance. notification; clarify that nonreceipt of a notice (Prefiled by the sponsor(s).) (Prefiled by the sponsor(s).) shall not constitute a defense to any offense regarding an expired permit or license. BR199 - Representative Kenny Imes BR174 - Representative C. Wesley Morgan (Prefiled by the sponsor(s).) (9/18/2017) (10/25/2017) BR192 - Representative Jason Nemes Urge the United States Congress to amend AN ACT relating to historical preservation. (10/13/2017) Title II of the Social Security Act to repeal the Create new sections of KRS Chapter 11 to Government Pension Offset provision. establish the Kentucky Memorial Preservation AN ACT relating to personal jurisdiction. (Prefiled by the sponsor(s).) Act of 2018; define terms; create standards Amend KRS 454.210 to expand personal for preservation; prohibit any person from jurisdiction of courts over nonresidents. BR204 - Senator Richard Girdler, Senator preventing maintenance of memorials under the (Prefiled by the sponsor(s).) Stephen Meredith jurisdiction of a governmental entity; establish (9/28/2017) the Committee on Kentucky Monument BR193 - Representative Jason Nemes Protection and provide the structure, process, (10/20/2017) AN ACT relating to retirement benefit and membership of the committee; establish participation for members of the General the duties of the committee; establish a petition AN ACT relating to occupational licensing Assembly. process for a waiver if an entity wants to regulations. Create a new section of KRS 6.145 to 6.237 to remove, alter, rename, relocate, or disturb Create new sections of KRS Chapter 12 to allow an individual who becomes a member of certain significant properties; create certain define terms; set forth requirements for all the General Assembly on or after the effective exemptions; authorize the Attorney General to occupational licensing regulations established date of the Act to make a one-time irrevocable determine whether an entity responsible for the by an agency on or after November 15, election to not participate in the Legislators’ architecturally significant building, memorial 2018; require each agency to conduct a Retirement Plan or the Kentucky Employees building, memorial school, memorial street, or comprehensive review of all occupational Retirement System for his or her service to the monument has complied with the provisions licensing regulations under its jurisdiction General Assembly; allow an individual who of this Act; require the Division of Historic every five years and to prepare and submit a has not yet met the requirements for vesting to Properties to promulgate administrative report of its review to the Legislative Research make a one-time irrevocable election within regulations under KRS Chapter 13A for the Commission; establish a process to petition 60 days of the effective date of this Act to implementation of this Act; amend KRS 11.026 an agency to repeal or modify an occupational discontinue participation in the Legislators’ to conform. licensing regulation; allow a petitioner to Retirement Plan or the Kentucky Employees (Prefiled by the sponsor(s).) appeal an agency’s actions or inaction to Circuit Retirement System for his or her service to Court. the General Assembly and receive a refund BR175 - Representative C. Wesley (Prefiled by the sponsor(s).) of his or her accumulated account balance; Morgan provide that the election to not participate or Oct 09-WITHDRAWN BR195 - Representative Regina Huff discontinue participation in the Legislators’ (9/15/2017) Retirement Plan or the Kentucky Employees BR182 - Representative Rick Nelson Retirement System shall apply to all future (8/17/2017) AN ACT relating to a day of prayer for service of the General Assembly; amend KRS students. 6.505, 61.510, 61.525, 61.535, and 61.625 to AN ACT relating to electric utility billing. Create a new section of KRS Chapter 2 conform. Create a new section of KRS Chapter 278 to designating the last Wednesday in September (Prefiled by the sponsor(s).) place a cap on the amount that an electric utility of each year as A Day of Prayer for Kentucky’s can bill for a basic service charge. Students. BR213 - Senator Richard Girdler, Senator (Prefiled by the sponsor(s).) (Prefiled by the sponsor(s).) Stephen Meredith (9/28/2017) BR187 - Senator Dorsey Ridley BR197 - Representative Dennis Keene, (9/27/2017) Representative Rick Rand AN ACT relating to retirement benefits for (9/18/2017) legislators. AN ACT relating to notification of the Amend KRS 6.505 to close the Legislators’ expiration date of an instruction permit, AN ACT proposing an amendment to Section Retirement Plan to new members effective operator’s license, or personal identification 226 of the Constitution of Kentucky relating to August 1, 2018; prohibit current legislators card. casino gaming. from participating in the Legislators’ Create a new section of KRS 186.400 Propose to amend Section 226 of the Retirement Plan on or after August 1, 2018; to186.640 to require the Transportation Constitution of Kentucky to authorize the provide that current and future legislators may Cabinet to notify holders of operator’s licenses, General Assembly to define and permit casino only participate in the Kentucky Employees instruction permits, and personal ID cards of gaming; prior to July 1, 2029, require that Retirement System for any service to the the impending expiration of these documents 45 proceeds be used to pay for oversight of General Assembly occurring on or after August days prior to their expiration; allow notice by casino gaming, and mandate that 100 percent 1, 2018. electronic or postal mail; allow license, permit, of proceeds in excess of oversight costs go to (Prefiled by the sponsor(s).) and ID card holders to provide electronic retirement systems; after July 1, 2029, allow the

66 2017 Interim LEGISLATIVE RECORD BR214 - Senator Johnny Ray Turner on the member’s effective election date, the to make a one-time irrevocable election to not (11/13/2017) value of the active member’s accumulated participate in the Legislators’ Retirement Plan account balance or a lump-sum payment of or the Kentucky Employees Retirement System Direct the Transportation Cabinet to designate a the actuarial value of the retiree’s benefits for their service to the General Assembly; allow Floyd County bridge in honor of Julius Mullins. be deposited into the member’s hybrid cash members of the General Assembly who began (Prefiled by the sponsor(s).) balance account and be considered part of the contributing to the Legislators’ Retirement Plan member’s accumulated account balance in or the Kentucky Employees Retirement System BR216 - Senator Max Wise the Kentucky Employees Retirement System; on or after December 31, 2014, but prior to (9/25/2017) specify that on an active member’s effective April 1, 2018, to make a one-time irrevocable election date, an employer pay credit shall election by December 31, 2018, to discontinue AN ACT relating to pharmacy benefits in the be applied to the member’s accumulated participation in the Legislators’ Retirement Plan Medicaid program. account balance for each contributing month or the Kentucky Employees Retirement System Create a new section of KRS Chapter 205 to prior to the effective election date; require for their service to the General Assembly and require the Department for Medicaid Services the Judicial Form Retirement System and the receive a refund of accumulated contributions; to directly administer all outpatient pharmacy Kentucky Retirement Systems to provide the provide that the election to not participate or benefits; prohibit renewal or negotiation of electing member with information detailing discontinue participation in the Legislators’ new contracts to provide Medicaid managed the consequences of the member’s or retiree’s Retirement Plan or the Kentucky Employees care that allow administration of outpatient election; specify that a member or retiree is not Retirement System applies to all future service benefits by any entity but the Department for eligible to make an election until a private letter of the General Assembly; amend KRS 6.505, Medicaid Services; reduce costs of future ruling by the IRS is received; make the benefit 61.510, and 61.525 to conform; EMERGENCY. Medicaid managed care contracts by costs of all election under this section irrevocable; amend (Prefiled by the sponsor(s).) outpatient pharmacy benefits as they existed on KRS 6.505 to close the Legislators’ Retirement January 1, 2017; allow the department to utilize Plan to new members effective August 1, BR247 - Senator Dennis Parrett managed care principles and techniques to 2018, and transfer all legislative members’ (10/4/2017) assist with member medication adherence and in the hybrid cash balance plan to the hybrid cost control; require the department to establish cash balance plan in the Kentucky Employees AN ACT relating to kinship care. a reasonable dispensing fee pursuant to Centers Retirement System; make conforming Amend KRS 605.120 to permanently establish for Medicare and Medicaid Services guidelines; amendments to KRS 21.374, 21.402, and a kinship care program. EFFECTIVE January 1, 2019. 61.597; amend KRS 141.010 and 141.020 to (Prefiled by the sponsor(s).) (Prefiled by the sponsor(s).) provide that, effective for taxable years on or after January 1, 2019, members and retirees of BR248 - Senator Dennis Parrett BR228 - Representative Joseph Fischer, the Legislators’ Retirement Plan who do not opt (9/29/2017) Representative Bart Rowland out of the traditional defined benefit plan and (9/26/2017) elect to participate in the Kentucky Employees AN ACT relating to educational programs. Retirement System’s hybrid cash balance plan Create a new section of KRS Chapter 158 to AN ACT relating to credit freezes and declaring have any retirement distributions exceeding require the Department of Education to develop an emergency. $80,000 taxed at a rate of 75%. academic standards for a financial literacy Amend KRS 367.365 to allow for security (Prefiled by the sponsor(s).) program to be implemented by each public high freezes to be requested by methods established school; require the financial literacy program to by the consumer reporting agency; allow BR234 - Representative Robby Mills be completed for high school graduation; direct consumers to request a replacement personal (9/28/2017) the department to determine the implementation identification number or password in the same date. manner as the original security freeze request; AN ACT relating to estheticians. (Prefiled by the sponsor(s).) remove the expiration of a credit freeze after Amend KRS 317B.025 to reduce from 1,000 seven years; include gender-neutral language; to 700 the hours of instruction required BR271 - Senator Danny Carroll EMERGENCY. for licensure as an esthetician; permit the (10/12/2017) (Prefiled by the sponsor(s).) instruction to be held in a school in another state if the school is licensed or approved by AN ACT relating to the safety of canines and BR230 - Representative Jason Nemes, that state. felines. Representative C. Wesley Morgan (Prefiled by the sponsor(s).) Create a new section of KRS Chapter 411 (10/20/2017) to provide civil immunity for damaging a BR235 - Representative Robby Mills vehicle if a person enters the vehicle with the AN ACT relating to retirement benefits for (9/28/2017) reasonable, good-faith belief that a dog or cat is legislators. in immediate danger of death if not removed. Create new sections of KRS 6.500 to 6.577 to AN ACT relating to retirement benefit (Prefiled by the sponsor(s).) permit a member or retiree of the Legislators’ participation for members of the General Retirement Plan to opt out of the traditional Assembly and declaring an emergency. BR275 - Representative C. Wesley defined benefit plan and elect to participate in Create a new section of KRS 6.145 to 6.237 to Morgan the Kentucky Employees Retirement System’s allow individuals who become members of the Oct 26-WITHDRAWN hybrid cash balance plan for nonhazardous General Assembly on or after April 1, 2018, employees under KRS 61.597; specify that, BR285 - Representative Regina Huff THE KENTUCKY GENERAL ASSEMBLY 67 (10/19/2017) abuse prevention and the connection between BR143* abuse and addiction to other drugs; require Keene, Dennis Apply to Congress Article V of the Constitution the Office of Drug Control Policy to develop BR149*, 197* of the United States for the calling of a recommendations for the instruction in drug Marzian, Mary Lou convention of the states limited to proposing abuse prevention to be published on the Web BR15 amendments to the Constitution of the United site of the Department of Education. Meeks, Reginald States that impose fiscal restraints on the (Prefiled by the sponsor(s).) BR15 federal government and that limit the powers Miles, Suzanne and jurisdiction of the federal government; BRs by Sponsor BR102* state that the application be aggregated with the * - denotes primary sponsorship of BRs Miller, Jerry T. applications of other states and limited for the BR1* purposes identified in the applications; state that Senate Mills, Robby the application be a continuing application until Carroll, Danny BR234*, 235* a convention is called or until the application is BR105*, 271* Morgan, C. Wesley withdrawn by the Kentucky General Assembly. Carroll, Julian M. BR172*, 173*, 174*, 175*, 230*, 275*, 305* (Prefiled by the sponsor(s).) BR155*, 163* Nelson, Rick G. Girdler, Rick BR114, 115, 182* BR305 - Representative C. Wesley Morgan BR204*, 213* Nemes, Jason (10/24/2017) Kerr, Alice Forgy BR28*, 67*, 102, 192*, 193*, 230* BR131* Rand, Rick AN ACT relating to public protests. McGarvey, Morgan BR197 Create a new section of KRS Chapter 525 BR18*, 164* Reed, Brandon to create a Class A misdemeanor, disruption Meredith, Stephen BR81* of a public protest, for a person who wears a BR204*, 213* Rowland, Bart mask or hood concealing his or her face while Parrett, Dennis BR228* engaging in a public protest; create a new BR247*, 248* Santoro, Sal section of KRS Chapter 525 to create a Class Ridley, Dorsey BR39*, 57* A misdemeanor, obstruction of traffic; abolish BR187* Scott, Attica criminal or civil liability for a motor vehicle Schickel, John BR15, 97*, 170* operator who causes injury or death to a person BR38* Sinnette, Kevin obstructing the flow of traffic during a public Smith, Brandon BR114, 115 demonstration for which a permit has not been BR113* St. Onge, Diane granted, unless the infliction of injury or death Turner, Johnny Ray BR2* is intentional; create a new section of KRS BR64*, 214* Tipton, James Chapter 522 to prohibit any person, including a Wise, Max BR310*, 312* public servant, from preventing a peace officer BR216* Wayne, Jim from performing official duties at a protest. BR15*, 165* (Prefiled by the sponsor(s).) House Wells, Scott Adkins, Rocky BR37* BR310 - Representative James Tipton BR114, 115 (10/31/2017) Brown Jr, George Index Headings BR97*, 170 AN ACT relating to educational programs. Burch, Tom A Create a new section of KRS Chapter 158 to BR14*, 15 Accountants require the Department of Education to develop Donohue, Jeffery Administrative Regulations and Proceedings academic standards for a financial literacy BR15, 25*, 54* Advisory Boards, Commissions, and program to be implemented by each public high Fischer, Joseph M. Committees school; require the financial literacy program to BR228* Aeronautics and Aviation be completed for high school graduation; direct Flood, Kelly Agriculture the department to determine the implementation BR170 Amusements and Recreation date. Harris, Chris Animals, Livestock, and Poultry (Prefiled by the sponsor(s).) BR114*, 115* Appropriations Hatton, Angie Area Development Districts BR312 - Representative James Tipton BR114, 115 Athletics (10/26/2017) Huff, Regina Attorney General BR91*, 195*, 285* Attorney, Commonwealth’s AN ACT relating to drug education. Imes, Kenny Auditor of Public Accounts Amend KRS 156.160 to require the BR40*, 41*, 199* Kentucky Board of Education to promulgate Jenkins, Joni L. B administrative regulations to require physical BR15 Barbers and Cosmetologists and health education instruction in drug Johnson, Dan Boats and Boating

68 2017 Interim LEGISLATIVE RECORD Budget and Financial Administration I Information Technology T C Taxation Children and Minors J Taxation, Income--Corporate Circuit Clerks Judges and Court Commissioners Taxation, Income--Individual Civil Actions Taxation, Inheritance and Estate Civil Procedure L Taxation, Property Civil Rights Labor and Industry Taxation, Sales and Use Claims Legislative Research Commission Taxation, Severance Commendations and Recognitions Licensing Teachers Commerce Lieutenant Governor Telecommunications Communications Loans and Credit Transportation Constitution, Ky. Lottery Treasurer Constitution, U.S. Consumer Affairs M U County Clerks Medicaid United States Court of Appeals Military Affairs and Civil Defense Universities and Colleges Court, Supreme Minerals and Mining Courts Motor Vehicles W Courts, Circuit Wills and Estates Crime Victims N Withdrawn Legislation Crimes and Punishments Notices Women Criminal Procedure O BR Index D Occupations and Professions Deaths Accountants Disabilities and the Disabled P Audits for area development districts - BR37 Dogs Parental Rights Drugs and Medicines Parks and Shrines Administrative Regulations and Proceedings Peace Officers and Law Enforcement Board of Education, drug abuse prevention E Personnel and Employment instruction, requirement - BR312 Economic Development Pharmacists Medicaid Services, prescription dispensing fees Education, Elementary and Secondary Physicians and Practitioners - BR216 Education, Higher Police, City and County Occupational licensing regulations, agency Education, Vocational Police, State review of - BR193 Effective Dates, Delayed Poverty Effective Dates, Emergency Property Advisory Boards, Commissions, and Elections and Voting Prosecutors Committees Emergency Medical Services Public Assistance Occupational licensing regulations, agency Energy Public Buildings and Grounds review of - BR193 Public Health F Public Medical Assistance Aeronautics and Aviation Federal Laws and Regulations Public Officers and Employees Aircraft, property tax, reporting requirements Fees Public Safety - BR15 Financial Responsibility Public Utilities Drone surveillance or use of armed drones by Firearms and Weapons Public Works certain entities, prohibition - BR2 Fish and Wildlife R Agriculture G Racing Commissioner of, time of election, change to Gambling Railroads even-numbered years - BR41 General Assembly Reports Mandated Depredating black vultures, urge the issuance of Governor Retirement and Pensions more permits to allow the taking of - BR81 Guardians Retroactive Legislation Inherited property, agricultural valuation of - BR15 H S Health and Medical Services Safety Amusements and Recreation Highways, Streets, and Bridges Secretary of State Casino Historical Affairs Short Titles and Popular Names gaming, constitutional amendment for - Honorary Highway Designations State Agencies BR197 Horses and Horse Racing State Symbols and Emblems gaming, licensing for - BR149 Substance Abuse Sports wagering, authorization for - BR155 THE KENTUCKY GENERAL ASSEMBLY 69 Bus Driver Day, designating May 1 as - BR39 final approval or disapproval of - BR40 Animals, Livestock, and Poultry Unlawful storage of a firearm, prohibition of Amendment, appellate judges, appointed by Danger of death, dog or cat, removal from - BR165 Governor - BR28 vehicle, civil immunity - BR271 Amendments, contingent on ratification, effect Depredating black vultures, urge the issuance of Circuit Clerks of bill - BR67 more permits to allow the taking of - BR81 Ballots, retention elections, appellate judges Casino gaming, amendment permitting - Immunity from civil liability, expand to include - BR67 BR197 removal of domestic animal from a vehicle Felony expungement, reckless homicide - Drone surveillance or use of armed drones by - BR164 BR64 certain entities, prohibition - BR2 Election of statewide constitutional officers, Appropriations Civil Actions change to even-numbered years - BR41 Historic properties endowment trust fund, Immunity from civil liability, expand to include receipt of certain fines - BR174 removal of domestic animal from a vehicle Constitution, U.S. Hybrid and electric vehicles, highway usage fee - BR164 Amendments to, constitutional convention - BR57 Immunity, vehicle damage, removal of dog or restraining federal government, call for - Sports wagering tax - BR155 cat in danger of death - BR271 BR285 Personal jurisdiction over nonresidents, Area Development Districts expansion of - BR192 Consumer Affairs Cost of audits - BR37 Credit Civil Procedure freezes, method of requesting - BR228 Athletics Felony expungement, reckless homicide - freezes, removal of seven-year expiration - Sports wagering, authorization for - BR155 BR64 BR228 Immunity from civil liability, expand to include Attorney General removal of domestic animal from a vehicle County Clerks Abortion, fetal homicide, monitoring and - BR164 Election of statewide constitutional officers, enforcement of laws - BR143 Immunity, vehicle damage, removal of dog or change to even-numbered years - BR41 Time of election, change to even-numbered cat in danger of death - BR271 Hybrid and electric vehicles, highway usage fee years - BR41 Personal jurisdiction over nonresidents, - BR57 expansion of - BR192 Attorney, Commonwealth’s Court of Appeals Abortion, fetal homicide, enforcement of laws Civil Rights Judges, - BR143 Employment discrimination, requirement appointed by Governor - BR28 of criminal history on job applications, retention elections following appointment to Auditor of Public Accounts prohibition - BR97 office - BR67 Audits for area development districts, costs Public assistance, substance abuse screening term limits - BR28 - BR37 - BR173 Time of election, change to even-numbered Restoration, felony expungement, reckless Court, Supreme years - BR41 homicide - BR64 Justices, appointed by Governor - BR28 Barbers and Cosmetologists Claims retention elections following appointment to Estheticians, education required for - BR234 Immunity from civil liability, expand to include office - BR67 removal of domestic animal from a vehicle term limits - BR28 Boats and Boating - BR164 Federally documented vessels, reporting Courts requirements for property tax - BR15 Commendations and Recognitions Personal jurisdiction over nonresidents, School expansion of - BR192 Budget and Financial Administration Bus Driver Day, designatiing May 1 as - United States Constitution, Article V BR38 Courts, Circuit convention on restraining federal government, Bus Driver Day, designating May 1 as - BR39 Felony expungement, reckless homicide - call for - BR285 BR64 Commerce Sex crimes against a victim who is a person Children and Minors Credit freezes, removal of seven-year with an intellectual disability, increase in Abortion, criminalizing, fetal homicide - expiration - BR228 penalty - BR105 BR143 Child dependency, neglect, or abuse, Communications Crime Victims requirement to report - BR14 Internet service providers, personally Sex crimes against a victim who is a person Kinship care program, permanently establish identifiable information, restriction on with an intellectual disability, increase in - BR247 availability - BR18 penalty - BR105 School Bus Driver Day, designatiing May 1 as - Constitution, Ky. Crimes and Punishments BR38 Administrative regulations, General Assembly, Abortion, criminalizing, fetal homicide -

70 2017 Interim LEGISLATIVE RECORD BR143 Public assistance, substance abuse screening Constitutional Child dependency, neglect, or abuse, - BR173 amendment, election of statewide requirement to report - BR14 constitutional officers - BR41 Concealing identity during protest, prohibition Economic Development amendment, General Assembly, approval or - BR305 Tax credits, sunset of - BR15 disapproval of administrative regulations Deadly weapons, concealed carry without - BR40 license - BR172 Education, Elementary and Secondary Felony expungement, reckless homicide - Day of prayer for students, designation of - Emergency Medical Services BR64 BR195 Obstructing an emergency responder - BR2 Obstructing Drug abuse prevention, require instruction on an emergency responder - BR2 - BR312 Energy traffic during a protest, prohibited - BR305 Financial Internet service providers, personally Public literacy program, requiring high school identifiable information, restriction on postsecondary students, criminal background inclusion of - BR248; BR310 availability - BR18 checks on - BR170 literacy, requirement for high school Public Service Commission, reconsideration of servants and other persons, orders to stand graduation - BR248; BR310 orders, multistate transactions - BR114 down to peace officers prohibited - BR305 School Sex crimes against a victim who is a person Bus Driver Day, designatiing May 1 as - Federal Laws and Regulations with an intellectual disability, increase in BR38 Government Pension Offset, Social Security penalty - BR105 Bus Driver Day, designating May 1 as - BR39 Act - BR199 Unlawful storage of a firearm, prohibition of Suicide prevention training, requirement for Migratory Bird Treaty Act, depredating black - BR165 - BR91 vultures, issuance increase urged - BR81 Warrantless drone surveillance, prohibition - BR2 Education, Higher Fees Student criminal background checks, Casino gaming, licensing fees for - BR149 Criminal Procedure restrictions on - BR170 Hybrid and electric vehicles, highway usage fee Felony expungement, reckless homicide - - BR57 BR64 Education, Vocational Sports wagering, licensing fees for - BR155 Sex crimes against a victim who is a person Estheticians, education required for - BR234 with an intellectual disability, increase in Financial Responsibility penalty - BR105 Effective Dates, Delayed Credit freezes, removal of seven-year Unlawful storage of a firearm, prohibition of Constitutional amendment, passage of - BR149 expiration - BR228 - BR165 Hybrid and electric vehicles, highway usage Warrantless drone surveillance, prohibition fee, January 1, 2019 - BR57 Firearms and Weapons - BR2 Natural resources severance tax, August 1, 2018 Deadly weapons, concealed carry without - BR102 license - BR172 Deaths Outpatient pharmacy benefits, administration by Drone surveillance or use of armed drones by Estate tax, calculation of - BR15 Department for Medicaid Services, December certain entities, prohibition - BR2 31, 2018 - BR216 Unlawful storage of a firearm, prohibition of Disabilities and the Disabled Retention elections, appellate judges - BR67 - BR165 Sex crimes against a victim who is a person Sports wagering, contingent upon repeal or with an intellectual disability, increase in voiding of federal Sports Protection Act - Fish and Wildlife penalty - BR105 BR155 Depredating black vultures, permits to allow Sign language interpretation, House and Senate the taking of, issuance increase urged - BR81 chambers, Legislative Research Commission Effective Dates, Emergency to provide - BR113 Abortion, criminalizing, fetal homicide - Gambling BR143 Casino Dogs Audits for area development districts, costs, gaming, constitutional amendment for - Danger of death, removal from vehicle, civil July 1, 2018 - BR37 BR197 immunity - BR271 Credit freezes, removal of seven-year gaming, licensing for - BR149 expiration - BR228 Sports wagering, authorization for - BR155 Drugs and Medicines Legislators, election to discontinue or not Cannabidiol, permit recommendation - BR163 participate in retirement - BR235 General Assembly Controlled substances disposal compositions, Administrative regulations, final approval or sale or distribution of, requirement for - Elections and Voting disapproval of, constitutional amendment BR131 Appellate judges, after appointed term, - BR40 Drug abuse prevention, require school retention elections - BR28 Chambers, sign language interpretation in, instruction on - BR312 Ballots, retention elections, appellate judges Legislative Research Commission to provide Outpatient pharmacy benefits, direct - BR67 - BR113 administration by Department for Medicaid Casino gaming, local option elections for - Committee on Kentucky Monument Protection, Services - BR216 BR149 appointments to - BR174 THE KENTUCKY GENERAL ASSEMBLY 71 Kentucky Retirment Systems; hybrid cash identifiable information, restriction on - BR271 balance plan, benefit election by legislators availability - BR18 Hybrid and electric vehicles, highway usage fee - BR230 - BR57 Legislators’ Retirement Plan, hybrid cash Judges and Court Commissioners Operator’s licenses and instruction permits, balance plan, benefit election - BR230 Appellate notification of expiration - BR187 Retirement, judges, appointed by Governor - BR28 close the Legislators’ Retirement Plan - judges, term limits - BR28 Notices BR213 Retention elections following appointment, Operator’s licenses, instruction permits, election to discontinue or not participate appellate judges - BR67 personal ID cards, notification of expiration in LRP or KERS for legislative service - - BR187 BR235 Labor and Industry election to discontinue or not participate in Employment discrimination, requirement Occupations and Professions LRP or KERS for service to GA - BR204 of criminal history on job applications, Casino occupations, licensing for - BR149 prohibition - BR97 Estheticians, education required for - BR234 Governor Occupational licensing regulations, agency Appellate judges, appointment of - BR28 Legislative Research Commission review of - BR193 Committee on Kentucky Monument Protection, Agencies, reporting requirements for - BR193 School appointments to - BR174 House and Senate chambers, sign language Bus Driver Day, designatiing May 1 as - Day of prayer for students, proclamation of interpretation in, provision for - BR113 BR38 - BR195 Bus Driver Day, designating May 1 as - BR39 Election, change time to even-numbered years Licensing - BR41 Casino gaming, licensing for - BR149 Parental Rights Felony expungement, reckless homicide, partial Deadly weapons, concealed carry without Kinship care program, permanently establish pardons - BR64 license - BR172 - BR247 Estheticians, education required for - BR234 Guardians Occupational licensing regulations, agency Parks and Shrines Kinship care program, permanently establish review of - BR193 Committee on Kentucky Monument Protection, - BR247 Sports wagering, licensing for - BR155 creation of - BR174

Health and Medical Services Lieutenant Governor Peace Officers and Law Enforcement Abortion, criminalizing, fetal homicide - Election, change time to even-numbered years Child dependency, neglect, or abuse, BR143 - BR41 requirement to report - BR14 Cannabidiol, permit recommendation - BR163 Public servants and other persons, orders to Outpatient pharmacy benefits, direct Loans and Credit stand down to police officers prohibited - administration by Department for Medicaid Credit BR305 Services - BR216 freezes, method of requesting - BR228 Warrantless drone surveillance or use of armed Public assistance, substance abuse screening freezes, removal of seven-year expiration - drones by certain entities, prohibition - BR2 - BR173 BR228 Personnel and Employment Highways, Streets, and Bridges Lottery Employment discrimination, requirement Bicycles overtaken on roadway, distance to Casino gaming, oversight of - BR149 of criminal history on job applications, maintain - BR1 prohibition - BR97 Hybrid and electric vehicles, highway usage fee Medicaid - BR57 Outpatient pharmacy benefits, direct Pharmacists administration by Department for Medicaid Controlled substances disposal compositions, Historical Affairs Services - BR216 sale or distribution of, requirement for - Committee on Kentucky Monument Protection, Public assistance, substance abuse screening BR131 creation of - BR174 - BR173 Outpatient pharmacy benefits, direct administration by Department for Medicaid Honorary Highway Designations Military Affairs and Civil Defense Services - BR216 Mullins, Julius, honorary bridge designation, Drone surveillance by certain entities, military Floyd County - BR214 training exemption - BR2 Physicians and Practitioners Abortion, criminalizing, fetal homicide - Horses and Horse Racing Minerals and Mining BR143 Limited casino gaming, tracks authorized for Natural resources severance tax, definition of Cannabidiol, permit recommendation - BR163 - BR149 “processing” - BR102 Controlled substances disposal compositions, Sports wagering, racing commission oversight sale or distribution of, requirement for - of - BR155 Motor Vehicles BR131 Bicycles overtaken on roadway, distance to Outpatient pharmacy benefits, direct Information Technology maintain - BR1 administration by Department for Medicaid Internet service providers, personally Damage, civil immunity, removal of dog or cat Services - BR216

72 2017 Interim LEGISLATIVE RECORD Public Safety Sports wagering, revenue generated by - Police, City and County Unlawful storage of a firearm, prohibition of BR155 Warrantless drone surveillance or use of armed - BR165 drones by certain entities, prohibition - BR2 Warrantless drone surveillance or use of armed Retroactive Legislation drones by certain entities, prohibition - BR2 Felony expungement, reckless homicide - Police, State BR64 Warrantless drone surveillance or use of armed Public Utilities Public Service Commission, reconsideration of drones by certain entities, prohibition - BR2 Electric orders, retroactive to July 1, 2013 - BR114 rates, reexamination of rate proceedings - Poverty BR115 Safety Public assistance, substance abuse screening utilities, limit basic service charge - BR182 Bicycles overtaken on roadway, distance to - BR173 Historical monuments, preservation of without maintain - BR1 interruption of services - BR174 Dog or cat in vehicle, removal, civil immunity Property Public Service Commission, multistate - BR271 Kentucky Memorial Preservation Act of 2018, transactions - BR114 creation of - BR174 Secretary of State Public Works Appellate judges, retention elections, Prosecutors Kentucky Memorial Preservation Act of 2018, certification of - BR67 Felony expungement, reckless homicide - creation of - BR174 Application for an Article V convention, BR64 transmission of certified copies - BR285 Racing Election, change time to even-numbered years Public Assistance Sports wagering, racing commission oversight - BR41 Public assistance, substance abuse screening of - BR155 - BR173 Short Titles and Popular Names Railroads Ban the Box-The Criminal Record Employment Public Buildings and Grounds Civil penalties, violation of two-person train Discrimination Act - BR97 Kentucky Memorial Preservation Act of 2018, crew requirement - BR54 Citizens’ Freedom from Unwarranted creation of - BR174 Train crews, two-person requirement - BR54 Surveillance Act - BR2 Kentucky Memorial Preservation Act of 2018 Public Health Reports Mandated - BR174 Abortion, criminalizing, fetal homicide - Occupational licensing regulations, agency BR143 review of - BR193 State Agencies Controlled substances disposal compositions, Cabinet for Health and Family Services, child sale or distribution of, requirement for - Retirement and Pensions dependency, neglect, or abuse, requirement to BR131 Casino report - BR14 Drug abuse prevention, require school gaming, allocation in support of - BR197 Department of Education, financial literacy instruction on - BR312 gaming, revenue generated by - BR149 standards, requiring development of - BR248; Government Pension Offset, Social Security BR310 Public Medical Assistance Act - BR199 Health and Family Services, kinship care Outpatient pharmacy benefits, direct Kentucky program, permanently establish - BR247 administration by Department for Medicaid Retirement Systems, election to discontinue or Kentucky Retirement Systems, adjustment of Services - BR216 not participate for General Assembly service line-of-duty death benefits - BR25 Public assistance, substance abuse screening - BR235 Public - BR173 Retirement Systems, election to discontinue or Service Commission, reconsideration of not participate for service to GA - BR204 orders, multistate transactions - BR114 Public Officers and Employees Retirement Systems, hybrid cash balance plan, Service Commission, reexamination of - Election of statewide constitutional officers, benefit election for legislators - BR230 BR115 change time to even-numbered years - BR41 Legislators’ Legislators, Retirement Plan, close to future members and State Symbols and Emblems election to discontinue or not participate in future service accruals - BR213 Kentucky Memorial Preservation Act of 2018, LRP or KERS for service - BR235 Retirement Plan, election to discontinue or not creation of - BR174 election to discontinue or not participate in participate for service - BR235 LRP or KERS for service to GA - BR204 Retirement Plan, election to discontinue or not Substance Abuse Legislators’ Retirement Plan, close to future participate for service to GA - BR204 Public assistance, substance abuse screening members and future service accruals - BR213 Retirement Plan, hybrid cash balance plan, - BR173 Public servants and other persons, orders to benefit election - BR230 stand down to police officers prohibited - Line-of-duty Taxation BR305 death benefits, adjustment of - BR25 Casinos, Retirement, adjustment of line-of-duty death death benefits, surviving spouse as default admissions tax on - BR149 benefits - BR25 beneficiary - BR25 gaming tax on - BR149

THE KENTUCKY GENERAL ASSEMBLY 73 Comprehensive tax reform - BR15 maintain - BR1 Film industry credit, nonrefundable tax credit Historical monuments, preservation of with no - BR15 interference with public system - BR174 Motor fuels tax, minimum rate, changing of Hybrid and electric vehicles, highway usage fee - BR15 - BR57 Natural resources severance tax, definition of Mullins, Julius, honorary bridge designation, “processing” - BR102 Floyd County - BR214 Sports wagering, excise tax on - BR155 School Tobacco taxes, rates, increase of - BR15 Bus Driver Day, designatiing May 1 as - BR38 Taxation, Income--Corporate Bus Driver Day, designating May 1 as - BR39 Domestic production activities deduction, Train crews, two-person requirement, penalties disallowing - BR15 for violation - BR54 Tax haven, taxation of any transfer of income to Transportation Cabinet, operator’s licenses and - BR15 permits, ID cards, notification of expiration Unitary method, use for determining taxable - BR187 income - BR15 Treasurer Taxation, Income--Individual Election, change time to even-numbered years Earned income credit, creating - BR15 - BR41 Itemized deductions, establishing maximum Historic properties endowment trust fund, amount of - BR15 receipt of certain fines - BR174 Rates imposed, changes to - BR15 Surtax on retirement benefits, members of the United States Legislators’ Retirement Plan - BR230 Abortion, federal actions challenging criminalization of, nonintervention in - Taxation, Inheritance and Estate BR143 Estate tax, seperation from the federal tax - Constitutional convention restraining federal BR15 government, call for - BR285

Taxation, Property Universities and Colleges Real Student criminal background checks, property, fixed tax rate, establishing - BR15 restrictions on - BR170 property tax rate, recall provision, removal of - BR15 Wills and Estates Estate tax, seperation from the federal tax - Taxation, Sales and Use BR15 Services, imposition of tax on selected - BR15 Withdrawn Legislation Taxation, Severance WITHDRAWN - BR175; BR275 Natural resources severance tax, credit for taxes paid Women to another state - BR102 Abortion, criminalizing, fetal homicide - resources severance tax, definition of BR143 “processing” - BR102

Teachers Day of prayer for students, designation of - BR195 Government Pension Offset, Social Security Act - BR199 Suicide prevention training, requirement for - BR91

Telecommunications Internet service providers, personally identifiable information, restriction on availability - BR18

Transportation Bicycles overtaken on roadway, distance to

74 2017 Interim LEGISLATIVE RECORD LRC Publications Research Reports 451_U Office of Education Accountability High School Indicators Of Postsecondary Success (2017) 450_U Office of Education Accountability Preschool Program Review And Full-Day Kindergarten 449_U Office of Education Accountability School Attendance in Kentucky (2017) 446 Program Review and Investigations Motor Fuel Taxes And Reformulated Gasoline In Kentucky 2016 437 Program Review and Investigations Medically Fragile Foster Children 434 Office of Education Accountability Kentucky District Data Profiles School Year 2016 433 Program Review and Investigations Number, Cost, And Policies Related To Non-Merit Employees 432 Program Review and Investigations Assessment Of Farmland For Property Taxation In Kentucky (2016) 431 Program Review and Investigations Cost And Policy Considerations For State-Mandated Local Public Notices 430 Program Review and Investigations State Inmates Housed In County Jails In Kentucky (Revised 5/24/17) 429 Office of Education Accountability Overview Of Achievement Gaps Inentucky K Schools 428 Program Review and Investigations State Funding Of The Bluegrass Water Supply Commission 427 Office of Education Accountability A Review Of The Safe Schools Program 426 Program Review and Investigations Medical Care for Kentucky Inmates In Community Medical Facilities: Feasibility And Savings Are Uncertain 425 Office of Education Accountability Special Education Update 2016 424 Office of Education Accountability Kentucky District Data Profiles School Year 2015 423 Program Review and Investigations Kentucky’s Community Mental Health System Is Expanding And Would Benefit From Better Planning And Reporting: An Update 422 Program Review and Investigations Kentucky Child Fatality And Near Fatality External Review Panel 421 Program Review and Investigations Kentucky Law Enforcement Foundation Program And Firefighter Foundation Program Funds

THE KENTUCKY GENERAL ASSEMBLY 75 Scott Oldham 17 Bourbon 26 27

Shelby 23 36 28 33 19 Woodford 11 13 Campbell 7 22 35 20 Boone Kenton

37 12 Clark 24 14 17 38 34 10 Spencer Jessamine 7

Bullitt Gallatin Hardin Madison Grant Pendleton

Jefferson Co. Detail Fayette Co. Detail Northern KY Detail

23 Boone KentonCampbell 11

Gallatin 24 17 Pendleton Bracken Kentucky Senate Districts Carroll Grant Trimble Mason Greenup Lewis Senate Plan (SH001A02) became law (KRS 5.101 - 5.138) August 23, 2013, with enactment of House Bill 1. Owen Robertson 27 20 18 Henry Harrison Oldham 7 Fleming Boyd 26 Nicholas Carter Scott Franklin Shelby Bourbon Rowan Jefferson Bath Elliott Woodford Lawrence Spencer Fayette Montgomery Anderson 31 Bullitt Clark Meade Menifee 38 28 Morgan Hancock Jessamine Johnson Powell Martin Mercer Henderson Breckinridge Nelson Washington Wolfe Daviess 22 Madison Magoffin Hardin Estill Union Garrard 8 Boyle 34 4 10 14 Lee Floyd McLean Larue Marion Breathitt Pike Webster 21 Ohio Grayson Lincoln 30 5 Jackson Owsley Knott Crittenden 6 Ta yl or Rockcastle Perry Hopkins Casey 29 Livingston Hart Green 25 Muhlenberg Butler Edmonson 15 Clay Caldwell Laurel Leslie Letcher Ballard Pulaski McCracken Adair 2 Lyon Warren Russell Barren Metcalfe Marshall Christian 32 Knox Carlisle 16 Harlan To dd Logan 9 Trigg Wayne Graves 3 Cumberland Allen Whitley Simpson Clinton McCreary Bell Hickman 1 Monroe Calloway Fulton

Produced by the Legislative Research Commission Geographic Information Systems Office, Room 26 Capitol Annex, Frankfort, KY, 40601, 502-564-8100, [email protected]

76 2017 Interim LEGISLATIVE RECORD Scott 59 Oldham

Bourbon 48 72 66 63 65 Shelby 62 43 33 67 41 32 77 34 58 76 69 42 56 40 35 36 64 31 Woodford Campbell 30 75 Boone Kenton 44 45 79 68 46 Clark 29 60 28 37 88 73 38 55 61 49 53 39 Jessamine 47 Spencer 78 26 71 Bullitt Gallatin 70 Pendleton Hardin Madison Grant

Jefferson Co. Detail Fayette Co. Detail Northern KY Detail

Boone KentonCampbell

Gallatin 61 Pendleton Bracken Kentucky House Districts Carroll Grant 98 Trimble 78 Mason Greenup Lewis House Plan (HH001M01) became law (KRS 5.201 - 5.300) August 23, 2013, with enactment of House Bill 1. 47 Owen Robertson 70 Henry Harrison 99 59 Boyd Oldham 62 Fleming Nicholas Carter 100 Scott 72 Franklin 96 Shelby Bourbon Rowan Jefferson 57 Bath Elliott 58 Lawrence Woodford Spencer Fayette Montgomery Anderson 56 Clark Meade Bullitt 53 74 Menifee 97 13 Morgan Hancock 27 26 49 Jessamine Johnson 11 55 Powell Martin Henderson Breckinridge Nelson Mercer 39 73 Washington Wolfe 7 Hardin 81 Magoffin 10 50 Estill Union Daviess 18 Madison 95 25 Boyle Garrard 93 Lee Floyd Marion Webster McLean 14 Larue 71 Breathitt Pike 89 Ohio Grayson Lincoln 91 92 Crittenden 12 Jackson Owsley 54 80 Knott 4 Ta yl or Rockcastle Hopkins 24 Casey Perry Hart Livingston Green 90 Muhlenberg Butler Edmonson 94 Clay 3 Caldwell 51 Laurel 84 15 17 19 Leslie Letcher Ballard Adair Pulaski McCracken 9 21 85 1 Lyon Warren Metcalfe Russell Marshall 16 Barren 86 Christian 83 Knox Carlisle Harlan 6 Logan 23 52 Trigg To dd 8 Wayne 87 Graves Cumberland 82 Simpson Allen McCreary Bell Hickman 2 5 22 Monroe Clinton Whitley Calloway Fulton 20

Produced by the Legislative Research Commission Geographic Information Systems Office, Room 26 Capitol Annex, Frankfort, KY, 40601, 502-564-8100, [email protected]

THE KENTUCKY GENERAL ASSEMBLY 77 LRC Publications Informational Bulletins 252 General Assembly Action 2017 Regular Session 251 Final Reports of the Interim Joint, Special, and Statutory Committees 2016 250 General Assembly Action 2016 Regular Session 249 Final Reports of the Interim Joint, Special, and Statutory Committees 2015 248 Topics Before The Kentucky General Assembly November 2015 247 General Assembly Action 2015 Regular Session 246 Final Reports of the Interim Joint, Special, and Statutory Committees 2014 245 Topics Before The Kentucky General Assembly November 2014 244 General Assembly Action 2014 Regular Session 243 Final Reports of the Interim Joint, Special, and Statutory Committees 2013 242 Issues Confronting the 2014 Kentucky General Assembly 241 General Assembly Action 2013 Regular Session 240 Final Reports of the Interim Joint, Special, and Statutory Committees 2012 239 Issues Confronting the 2013 Kentucky General Assembly 238 General Assembly Action 2012 Regular Session 237 Final Reports of the Interim, Joint, Special, and Statutory Committees 2011 236 Issues Confronting the 2012 Kentucky General Assembly 235 General Assembly Action 2011 Regular Session 234 Final Reports of the Interim, Joint, Special, and Statutory Committees 2010 233 Issues Confronting the 2011 Kentucky General Assembly 232 General Assembly Action 2010 Regular Session 231 Final Committee Reports of the Interim, Joint, Special, and Statutory Committees 230 Issues Confronting the 2010 Kentucky General Assembly 229 General Assembly Action 2009 Regular Session 228 Final Reports of the Interim Joint, Special, and Statutory Committees 2008

78 2017 Interim LEGISLATIVE RECORD THE KENTUCKY GENERAL ASSEMBLY 79 2017 Interim LEGISLATIVE David A. Byerman, Robert Stivers David W. Osborne Director SENATE PRESIDENT SPEAKER PRO TEM RECORD Legislative Research Jimmy Higdon Jonathan Shell Commission PRESIDENT PRO TEM DESIGNATE MAJORITY FLOOR LEADER Published monthly by Damon Thayer Rocky Adkins the Legislative Research Robert Jenkins MAJORITY FLOOR LEADER MINORITY FLOOR LEADER Commission, the Interim Deputy Director for Committee and Staff Ray S. Jones II David R. Meade RECORD is designed to in- MINORITY FLOOR LEADER MAJORITY CAUCUS CHAIRMAN form the citizens of Kentucky Coordination Dan “Malano” Seum of the between-sessions work Dennis Keene Rob Weber MAJORITY CAUCUS CHAIRMAN MINORITY CAUCUS CHAIRMAN of the General Assembly. Public Information Dorsey Ridley Kevin Bratcher Officer Paper subscriptions are MINORITY CAUCUS CHAIRMAN MAJORITY WHIP free upon request. Contact the Joe Cox Mike Wilson Wilson Stone LRC Public Information Office, Publications and Printing MAJORITY WHIP MINORITY WHIP Capitol Annex, Frankfort KY, Officer Dennis Parrett 40601 at 502-564-8100, ext. Rebecca Mullins MINORITY WHIP 307 to subscribe. Hanchett The Kentucky Legislative Research Commission is a 16-member committee of the majority and minority leadership of The Interim RECORD can Editor, Typography and Design the Kentucky Senate and House of Representatives. Under Chapter 7 of the Kentucky Revised Statutes, the LRC constitutes also be read online at www. the administrative office for the General Assembly. Its director serves as chief administrative officer of the Legislature when lrc.ky.gov/legislation.htm. If Public Information Staff: it isn’t in session. you have a paper subscription Stephanie Newberg The Commission and its staff, by law and by practice, perform numerous fact-finding and service functions for members and would like to end your Jeff Fossett of the Legislature, employing professional, clerical and other employees required when the General Assembly is in session Steve Gatewood subscription and read the and during the interim period between sessions. These employees, in turn, assist committees and individual legislators Bruce Phillips Interim RECORD online only, in preparing legislation. Other services include conducting studies and investigations, organizing and staffing committee Bud Kraft please contact the LRC Public meetings and public hearings, maintaining official legislative records and other reference materials, providing information Keith Krey Information Office at 502-564- about the Legislature to the public, compiling and publishing administrative regulations, administering a legislative intern Jim Hannah 8100, ext. 307. Stories and program, conducting orientation programs for new legislators, and publishing a daily index and summary of legislative Susan Kennedy photographs may be reprinted actions during sessions. without permission, although The LRC is also responsible for statute revision, publishing and distributing the Acts and Journals following sessions, credit is appreciated. and for maintaining furnishings, equipment and supplies for the Legislature. It also functions as Kentucky’s Commission on Interstate Cooperation in carrying out the program of the Council of State Governments as it relates to Kentucky. Printed with state funds

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80 2017 Interim LEGISLATIVE RECORD