March 26, 2014
General Assembly Pace Rises
Only a few days remain in the 2014 Kentucky General Assembly. At this point, when no new bills can be introduced and time is short for procedural requirements, the focus shifts from specific bills to the language being included in amendments to others. As the two Chambers settle in for hours of negotiations on the state budget, the situation is very fluid. This is a normal part of the messiness at the end of a Session.
The changes happen hourly and it is important for KHLA members to keep their legislators informed on issues without relying completely on bill numbers.
Here is an update on some issues of importance and interest:
HB 544 - Lexington Transient Room Tax to benefit he Rupp Arena expansion and the Kentucky Horse Park - The bill had a rocky start getting out of the House on a 52-40 vote that was largely on party lines. It has been sitting in the Senate Appropriations & Revenue Committee and its fate is uncertain at this time. The bill is reliant upon project funding for the Rupp Expansion that was contained in the Governor’s Budget. The Senate has stripped the project from their version of the budget, which is now being negotiated between the two Chambers. Should the project funding not ultimately become part of the budget, the bill would be moot and would likely die in committee. Message - Expansion & Renovation of Rupp Arena is important to the hospitality community, however there are deep concerns about including language funding the Kentucky Horse Park.
HB 401 - Louisville Transient Room Tax to benefit the expansion and operation of the Kentucky International Convention Center in Louisville - the bill has passed both Chambers and has gone to the Governor. Message - Thank You to legislators that you have contact for their support of the hospitality community
HB 551 - Local Option Sales Tax Constitutional Amendment - The effort to place a question before voters on allowing local governments to seek up to a 1% local sales tax, on top of the state sales tax, has failed. As a constitutional amendment, the bill was required to receive 60 of the 100 votes available in the House. The bill reached a high water vote count of 58, but fell to 50 after the weekend. The bill was pronounced dead by the proponents who said they would bring it back in 2015.
HB 467 - Workers Compensation Notification System - For hoteliers that utilize subcontractors for renovation, construction or any other outside service, this bill is important. The current Kentucky workers’ compensation system is an "up the ladder” system. If you employ a subcontractor that cancels their workers compensation insurance, you can (and often are) held liable for the coverage of those workers. Many businesses have received bills of tens of thousands of dollars at the time of their year end policy audit. HB 467, which was drafted in concert with the Department of Workers Claims, would utilize existing data and create a system for notification of changes in workers compensation coverage of subcontractors. As the system is envisioned, those utilizing subcontractors would: receive a certificate of WC insurance from their subs, log onto the Department of Workers Claims website, register for email notification of any changes to that policy. The notification would allow you to contact your subcontractor to find out what is going on with their coverage and require their renewal or removal as a vendor. HB 467 is currently in the Senate Banking & Insurance Committee awaiting a hearing. Message - HB 467 is an important tool to ensure that all businesses are complying with the law on providing workers compensation coverage and not penalizing those that do.
March 18, 2014
Yesterday, Senate Bill 137 went down in a flaming defeat. The bill which would have doubled the fees of Workers Compensation Attorneys fell before a cascade of attacks by the business community.
Special thanks to the many members of KH&LA for their calls and emails urging the defeat of this terrible bill. SB 137 was scheduled to be heard tomorrow in the Senate Banking & Insurance Committee, but an avalanche of calls to members of the Senate doomed the bill. One of the leaders of the charge was Senator Sara Beth Gregory. A Senator, Sara Beth stood strong and rallied opposition to the bill. KH&LA members are urged to take a few minutes and call 800-372-7181 and leave a message thanking her for her efforts. Senator Gregory represents the 16th District which includes all or parts of Adair, Clinton, Cumberland, McCreary, Russell, Taylor and Wayne Counties. Learn more about Sara Beth Gregory at www.sarabethgregory.com
Over two weeks remain in the 2014 Legislative Session. The Kentucky State Budget is now in the hands of the Senate, after passing the House.
KH&LA members are urged to continue to call and ask that tourism dollars be restored to the state budget. Call 800-372-7181 and leave a message for your Senator. Click here for a link to a list of legislators who serve your area.
March 11, 2014
KH&LA Position on HB 544:
The Kentucky Hotel Lodging Association opposes passage of HB 544.
The bill authorizes urban county governments to increase Hotel Taxes by an additional 2.5% and then allocate the funds for economic revitalization efforts, including mixed-use economic development projects and to promote and support tourism efforts. KH&LA is strongly opposed to this change of precedent. The original Kentucky statute establishing a program of hotel taxes to be used for promoting local tourism gave the responsibility to tourism professionals through the local Convention and Visitors Bureau.
It is a documented fact that tax increases have a negative impact on hotels and tourism. The use of rooms taxes, historically, have been used to increase tourism and offset any negative effect. It is unfair to tax any single industry, to promote another interest.
This proposed Bill is Bad for Tourism, Bad for the Hotels, and Bad for Kentucky.
The KH&LA opposes this bill.
March 10, 2014
March 5, 2014
Slow Pace of Legislature Continues
The 2014 General Assembly is on track to be the slowest and least productive session in decades. While that is not necessarily a bad thing, it does create a certain level of paranoia. Inside information says that the House is likely to simply adopt a budget very close to the Governor’s original proposal and punt the issue to the Senate. The Senate will then put its fingerprints on the plan and it will all come down to a conference committee. Most of the action will take place in a variety of meetings that may be closed to the public and may go late into the night. In like a lamb and out like a lion is not only applicable to March. KHLA members should watch for action alert emails as the Session winds down. Often the action moves quickly and response opportunities are fleeting. Now is the time to contact your legislators. Explain to them the importance of lodging and tourism to our economy. Your personal relationship with your local State Representative and State Senator are the most important assets of the KHLA legislative effort.
Kentucky State Budget
Members and their employees are urged to contact their legislators this week. This program is funded by the 1% statewide transient room tax.
CALL TO ACTION – Members and their employees are urged to contact their legislators and ask them to support the restoration of the $9 Million to the Restricted Tourism, meeting and convention marketing fund, stripped from the fund by the Governor’s original budget proposal.
Transient Room Tax for Louisville/Jefferson County – HB 401 – This bill, sponsored by Rep. Darryl Owens of Louisville, would allow the Metro Louisville area to impose a transient room tax for financing the renovation and expansion of the Kentucky International Convention Center. The bill was introduced on February 18th and has been sent to the House Appropriations & Revenue Committee.
Worker’s Compensation – Three WC insurance bills, SB 136 , SB 137, and HB 507 have been filed that would be detrimental to KHLA members. Both bills would dramatically expand workers compensation benefits and DOUBLE attorneys’ fees for workers compensation cases. SB 136, introduced by Senator Tom Buford, has been sent to the Senate State & Local Government Committee and SB 137, introduced by Senator Julian Carroll, has been sent to the Senate Appropriations & Revenue Committee. HB 507, introduced by Rep. Kevin Sinnette has yet to be assigned to committee. The fate of these bills is seriously in doubt. We will keep you informed if there is any movement.
Minimum Wage for Tipped Employees – HB 191
– Increases the state minimum wage for tipped employees to $3/hour beginning July 1, 2015 and increasing it each year after until it reaches 70% of the state minimum wage. This bill passed the House 57-40 and is now in the Senate State & Local Government Committee. It’s future is in doubt, but members should contact their Senators today.
Cities Reclassification: HB 331
– Is the KLC’s is cities reclassification bill. As drafted bill neither expands nor restrict existing city powers, but merely clarify classes of cities and remove the General Assembly’s need to vote on city classification. The Kentucky League of Cities continues to keep its word that any effort to control or divert the Transient Room taxes would be pursued in separate legislation. No bill has yet been filed to that effect.
Let your legislators know how important those funds are to your community. Share with them the amount of money you get from Matching Funds and what kind of impact it would be if those funds were reduced. If you do not know your legislators or how to contact them, you can call the toll-free legislative message line at 1-800-372-7181.
February 24, 2014
Kentucky State Budget
February 17, 2014
Friday, February 14, was the 28th day of the 2014 Session with 32 days remaining and so far only one bill has passed both chambers.
HB 235 – The Governor’s State Budget is still being re-drafted by the House. The Governor’s version strips $9 million from the RESTRICTED tourism, meeting and convention marketing fund (HB235, p. 158) AND slashes the Kentucky Department of Travel & Tourism budget by another 5%. The tourism, meeting and convention marketing fund is the fund created in KRS 146.406 from the 1% state-wide transient room tax. Let your legislators know how important those funds are to your community. Share with them the amount of money you get from Matching Funds and what kind of impact it would be if those funds were reduced. If you do not know your legislators or how to contact them, you can call the toll-free legislative message line at 1-800-372-7181.
HB 329 – Governor Beshear’s proposal for Tax Reform:
This bill seeks to change 22 different taxes and one of those is to extend the transient room tax to online brokers (Travelocity, Expedia, etc.). Last week the KTLA’s goal was to determine who would collect this tax, the hotels or the online brokers. Last week, a hearing was held for HB 329. The KTLA lobbied several members of the committee and Rep. Bob DeWeese (R) received a clear answer from the Lt. Governor Abramson who said any enactment of this tax would require only the online broker to collect and remit the tax. We will continue to push for that interpretation throughout the Session.
Kentucky League of Cities:
•Cities Reclassification: HB 331 – Is the KLC’s is cities reclassification bill. As drafted bill neither expands nor restrict existing city powers, but merely clarify classes of cities and remove the General Assembly’s need to vote on city classification. This bill is sponsored by Rep. Steve Riggs, Chairman of the Local Government Committee and is being heard in his committee. Last week the bill was heard by the committee and members asked for an additional week to review the bill. It is likely a vote could be taken this week.
•Transient Room Tax – Any effort by the KLC to control or divert the Transient Room taxes would be pursued in separate legislation. No billed has been filed and this remains our highest priority to defeat.
•Restaurant Tax - Efforts by the KLC to pass a restaurant tax has drawn an online opposition (see below). No bill has been filed and we believe KLC will wait until next session to push this effort.
- Facebook Link
KY Bill Tracker
February 12, 2014
Friday, February 7, was the 23rd day of the 2014 Session with 37 days remaining and so far only one bill has passed both chambers. The Senate has passed SB 1 addressing legislative oversight of administrative regulations by a partisan vote of 24-14.
Likewise, the House has passed HB 1 addressing an increase in the state minimum wage, mainly along partisan lines by a vote of 54-44 with two Republican legislators crossing over to vote with the Democrat majority. It is unlikely that either of these bills will pass the other chamber.
HB 329 – Governor Beshear’s proposal for Tax Reform:
Representative Rick Rand, Chair, of the House Appropriations and Revenue Committee has filed HB 329, which currently is the vehicle for the Governor’s tax reform legislation. At this point, all that has been released by the Governor’s office are talking points and estimates of revenue gains or losses from 22 proposed changes to the existing tax code. One of those changes is extending the transient room tax to online brokers (Travelocity, Expedia, etc.)
HB 329 will be heard Tuesday February 11 at 10 a.m. in the House Appropriations and Revenue Lt. Governor, Jerry Abramson will speak to the committee to discuss Governor Beshear’s tax proposal based on the work of the 2012 Blue Ribbon Commission chaired by the Lt. Governor. This meeting will likely be for discussion only, and no vote will be held. Below is the section relating to online bookings:
HB 329 would apply sales tax and transient room taxes to the entire hotel accommodation price. Many people now purchase hotel rooms via online websites. The change in available technology has resulted in reduced revenues for both state and local governments. This modernization proposal makes clear that all amounts paid for staying in a Kentucky hotel or similar accommodation, including any amounts charged or retained by online travel companies for their services, are included in the tax base for the sales tax and state and local transient room taxes. Fiscal impact upon full implementation: $4.7 million – Governor Beshear’s office.
February 3, 2014
ACTION ALERT: CONTACT YOUR LEGISLATOR AND ASK THEM TO KEEP OUR TOURISM AND CONVENTION MARKETING FUNDS COMMITTED TO MARKETING TOURISM.
Click here for details.
January 30, 2014
Last week marked the conclusion of the third week of the General Assembly. The highlight was the Governor's Budget Address to the Kentucky General Assembly.
Gov. Steve Beshear proposed Tuesday night that the General Assembly restore years of funding cuts to public schools but slash spending in many other parts of state government, including universities. The fiscal 2014-16 budget presented to legislature would add $300 million to K-12 funding, including pay raises for teachers and money for textbooks and after-school classes that were eliminated during the recent recession.
The budget uses an accounting tactic of raiding 51 existing restricted government funds specified for certain programs to move $370 million to the General Fund, to pay for K-12 education and the teacher pay raises. One of those funds is money from the Transient Room Tax, per KRS 142.406. This fund is used to promote tourism.
Budget officials say fund transfers are a normal and accepted practice in the state budgeting process, and have been routine in past years. This year’s transfers show the gravity of this session’s fiscal challenge. Though revenues are indeed trending up, the proposed new commitment to education, which is $474.4 million in new money has to be found as the state pension and Medicaid obligation have priority.
Kentucky League of Cities:
• Cities Reclassification: The KLC is working on a cities reclassification bill. We have met with them and this bill should have no impact on our members. This bill will neither expand or restrict existing city powers, but merely clarify classes of cities and remove the General Assembly’s need to vote on city classification.
• Transient Room Tax - Any effort by the KLC to control or divert the Transient Room taxes would be pursued in separate legislation. No billed has been filed and this remains our highest priority to defeat
• Restaurant Tax - Efforts by the KLC to pass a restaurant tax has drawn an online opposition. Facebook Link
Candidate Filing Deadline: Tuesday, January 28, 2014
• The filing dead line for all House and half of the Senate is Tuesday, January 28. This is the unofficial start of the session. After this date, more controversial bills will begin being introduced.
January 21, 2014
We are in the very early stages of the Session. 2014 is an election year for the entire House and half of the Senate. Typically, legislators are unlikely to introduce any bills of importance until after the filing deadlines for candidates. They don’t want to encourage someone to run against them by introducing something controversial. The deadline for filing is January 29th. The real issues will begin to show up after that.
The Kentucky League of Cities representatives are quietly talking up their position on diverting the tourism development money to other uses. I overheard, "Tourists don’t want to see holes in sidewalks.”
We will be representing KH&LA this week at the first meeting of the Tourism Coalition. We will be formulating a strategy to combat their plans.
No bill has yet been introduced.
KHLA members may want to look at HB 1 that will increase the minimum wage to $10.10 per hour over three years. This bill was introduced by Speaker Greg Stumbo and will likely having a difficult time passing.
Also, HB 191 was introduced to raise the minimum wage of tipped employees to $3.00 per hour and then in 2016 again raised by .95 per hour or whatever amount is needed to reach 70% of the standard minimum wage. This bill is sponsored by Rep. Will Coursey from Benton, Kentucky. He is an Associate Vice President with Community Financial Services Bank. His district includes parts of Lyon, Marshall and McCracken Counties. Cities he represents are Benton, Calvert City, Eddyville, Hardin, Kuttawa and Reidland. KHLA members in those areas may wish to contact Representative Coursey and express any concerns they may have.