KAM Lobby Team Plans Strategy at the Capitol

Members of KAM’s lobbying team discuss strategy on legislation impacting KAM members in a late afternoon meeting last week. From left: Jim LeMaster, Kelly Shasky, Rusty Cress, Bert May, Carl Breeding, Greg Higdon and Donna Brown. Not pictured: Jitter Allen and Mike Shea.

Editor’s Note: KAM’s nine-member lobbying team, the largest and most experienced of any team in Frankfort, is actively working on more than 120 pieces of legislation that could either help or hurt Kentucky manufacturers… Here’s a summary of some of the action:

KAM Member E-Mails Make Difference on “AMA Rules” Bill (SB 199); KAM Helps Broker Compromise

Background: Special interest lobbyists wanted to keep in place seven-year-old American Medical Association’s Fifth Edition Guides for evaluating certain workplace injuries instead of allowing new, Sixth Edition Guides to take effect. The new guides would effectively lower worker’s comp costs for manufacturers.
However, after KAM members responded to KAM’s Legislative Alerts, contacting their senators about this bill, and KAM’s Greg Higdon testified before a Senate committee last week, the bill was amended twice. Thanks to KAM member e-mails, KAM’s work and other business lobbies, the Committee Substitute will allow the new Sixth Edition guides to become effective no later than the summer of 2009. KAM will continue to follow this legislation and will alert you if more action is needed.

KAM Taking Action on Members’ Top Two Priorities…Workforce Development and Incentives for Existing Manufacturers

In a number of member polls and focus group meetings, KAM members have asked KAM to do two major things: One, help manufacturers find qualified workers and two, lower costs…including the creation of tax incentives for existing manufacturers to stay in Kentucky without adding jobs. Greenebaum Doll & McDonald, a major sponsor of KAM, helped draft the new incentives legislation. Here’s a summary of action that KAM is taking in Frankfort to address these two priorities:

More Qualified, Better-Prepared Employees Could Result from KAM-Supported Legislation

With Baby Boomers set to retire by the thousands in a few short years, resulting in a shortage of qualified applicants for advanced manufacturing jobs, KAM is on the move in Frankfort to address the problem. Here’s a rundown of bills that KAM is actively supporting:

• SB 32 (Career Pathways Act of 2008): KAM’s legislative team has now testified twice in support of this promising bill, which will establish advanced manufacturing and engineering career pathways in secondary schools and encourage students to enter post-secondary education to learn high-paying, high-tech skills that manufacturers desperately need. The bill has been amended and was sent to the House last week.
  
  
• SB 2 (Science, Technology, Engineering & Math “STEM”): KAM and other business lobbies supported this bill in 2006, but it failed to pass. The bill was reintroduced this year on Jan 10 and passed the Senate 36-0. It received its second reading in the House last Wednesday and is now in the House Rules Committee. KAM supports any initiative that would encourage more teachers to be certified in science and math and to better prepare students in the “STEM” disciplines (science, technology, engineering and math).

KAM also supports SB 75, which proposes to continue allowing KEES money support for college sophomores whose GPA has slipped, but are continuing to take the required courses to complete a four-year degree.

KAM is closely monitoring SB 1, which would change the “CATS” (Commonwealth Accountability Testing System) currently used in Kentucky’s public schools. KAM will continue to discuss this legislation with the Advanced Manufacturing Partnership (AMP) group, its new Kentucky School Boards Association partner, and other education leaders.

KAM has long opposed collective bargaining for teachers and other school employees and is strongly against this year’s similar legislation, HB 650.

KAM also supports any effort or legislation to eliminate Prevailing Wage laws. SB 193 would allow school construction projects to not have to pay artificially high “prevailing wage” rates, saving money for our school systems.

New Legislation (HB 730) Designed to Create Tax Incentives and Credits for Existing Manufacturers

Through the years, KAM member manufacturers have watched millions of dollars in tax incentives and credits go to out-of-state businesses to entice them to locate in Kentucky. Many incentives, such as those used to bring Toyota to Kentucky, have paid off for the state’s economy.

Recently, as existing Kentucky manufacturers find themselves increasingly under attack from low-wage global competitors, they must reinvest in infrastructure and other productivity enhancements to increase efficiency and keep high-paying jobs in Kentucky. That’s why KAM worked closely with legislators on drafting new legislation HB 730 to provide incentives for existing manufacturers to do just that. Last week KAM teamed up with state lawmakers to introduce HB 730 the “Kentucky Prosperity Act of 2008.” KAM has met with Economic Development Cabinet leaders and is actively working with them to make sure current law gets changed to help existing manufacturers.

Below are some of the highlights of the draft legislation.

• The incentives will apply to the construction of new facilities or expansion of existing ones.
  
• The incentives will be for the acquisition of property as well as capital investments in machinery, equipment and other real property.
  
• Each project will require a minimum investment of $100,000.
  
• State approval will include, but not be limited to, the economic viability of each project.
  
• The amount of the allowable tax credit will be 10 percent of the total project investment and will be applied over a 10-year period.

Let us know what you think about this proposed legislation! Click here to take a brief, one-question Zoomerang Survey: TAKE SURVEY.

KAM Fighting Other Legislation that Would Hurt Kentucky Manufacturers

In addition to proactively introducing and supporting legislation that would HELP Kentucky manufacturers, KAM’s lobbying team spends an enormous amount of time trying to stop or amend special-interest legislation that would damage KAM members’ ability to compete and make a fair profit. Here’s a summary:

HB 257: New Statewide Utility Gross Receipts for Schools Would Deal Major Blow to Manufacturers

A huge, 3 percent utility tax increase on manufacturers in 15 Kentucky school systems, including Louisville/Jefferson County, is on the move in Frankfort unless KAM and other business lobbies can stop it. The new tax would be especially hard on manufacturers who unlike most other businesses pay enormous utility bills to run their high-powered machinery and processes. The tax hike would further damage manufacturers’ ability to compete in the global economy and put more pressure on profit margins already squeezed by low-wage nations like China, India and Mexico. That’s why KAM is actively opposing HB 257.
Here is a list of the 15 school systems that would be affected by the new statewide utility tax if it becomes law: Counties - Allen, Floyd, Greenup, Hopkins, Jackson, Jefferson County/Louisville, Muhlenberg; Independent Districts – Anchorage, Bellevue, Fairview, Glasgow, Newport, Raceland, Silver Grove and Southgate. The bill is now in a House committee.

KAM Watching Other Tax, Tort and Healthcare Legislation

HB 297 / SB 247 (Wrongful Death – Loss of Consortium) continues to survive in the House, and just last week a different version was introduced in the Senate. This bill unnecessarily adds a new layer of tort law on top of Kentucky’s existing wrongful death statutes. A large business lobby (of which KAM is a part) is opposing these bills. The House version is retroactive while the Senate bill is not.

HB 566 (Estate Tax Bill) effectively raises Kentucky’s estate taxes, providing another reason for out-of-state manufacturers, retirees and business owners to “Say No to Kentucky.” The bill provides definitions and to apply the estate tax without regard to the federal phase-out of the state credit; and provides a state earned income tax credit. This bill was posted for passage in the House last Friday.

HB 568 (Tax Interest Bill) effectively allows the state to pay the least amount of interest possible to taxpayers who file for tax refunds, making Kentucky less tax-friendly. It clarifies that interest begins to accrue the latest of the due date of the return, the date the return was filed, the date the tax was paid, the last day prescribed by law for filing the return, or the date an amended return claiming a refund is filed; applies to refunds issued after the effective date of this Act. This bill, which KAM is actively opposing, passed the House and is now in the Senate.

HB 643 (Tort Bill) allows a plaintiff in a civil action in which comparative fault becomes an issue, the suit was initiated against the original defendant within the statute of limitations, the original defendant alleges that a third party caused or contributed to the plaintiff's injury, and the plaintiff would be barred by a statute of limitations from bringing a claim against that third party, to either amend the complaint or institute a separate action alleging the third party's fault; establish that the new cause of action is not barred by any statute of limitations. This bill is now in the House Judiciary Committee.

HB 739 (Employee Wellness Bill) provides a tax credit for manufacturers and other businesses who implement a wellness program. This is directly in line with KAM’s HealthyKentuckysm branded initiative to help members lower health care costs.

Health Care Mandates: KAM opposes health care legal mandates which force companies or insurance companies to provide certain types of coverage or reduces the ability to negotiate rates or fees charged by health care providers. That’s why KAM opposes HB 148 (Chiropractor’s Bill) and SB 59 / HB 433 (Dialysis Bill).

Other Bills Being Watched:

SB 36 (Economic Development/small business legislation) This bill still requires a business to add jobs in exchange for financial help, is better than current rules.

HB 382/LM (Gender-Based Wage Differentials) Kentucky already has strong laws against gender wage discrimination. This will would drive up litigation costs for manufacturers and harm KAM’s vision to make Kentucky one of the world’s best locations for manufacturing.

SB 155 (Sole Proprietorship Jobs) Affects sole proprietorships if 75 percent of business is out of state.

Editor’s Note: Legislative Update is an E-Newsletter for members and
stakeholders in the Kentucky Association of Manufacturers (KAM). It is
published periodically to communicate important information about how KAM is looking out for your interests in the Kentucky General Assembly, U.S. Congress, local governments, or through other groups and/or associations. Through KAM, you have the largest and most experienced team of lobbyists in Kentucky, led by Hank List, vice president of government affairs. If you do not want to receive KAM Legislative Update, please let us know by return e-mail.

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