2022 Legislative Session Summary
Kentucky Pharmacists Association
2022 KENTUCKY GENERAL ASSEMBLY
June 7, 2022
2022 KENTUCKY GENERAL ASSEMBLY
June 7, 2022
The 2022 legislative session of the Kentucky General Assembly concluded its 60-day session on April 14, crafting a budget, tax changes, and many other issues impacting pharmacies. This session was long – just like its informal name – the long session. One of the first notable differences in this session was returning to the Capitol in person for the first time in nearly two years. Next, the House changed the rules of the chamber allowing bills to stay in the committee on committees until Sine Die. This let House leadership have control over what issues would be heard by committees.
For pharmacies and pharmacists, the priority legislation was HB 203 which subsequently became HB 457, which would have reformed the practices and behaviors of Pharmacy Benefit Managers (PBMs). Sponsored by Rep. Steve Sheldon (R-Bowling Green) HB 203 and HB 457 would have prohibited PBMs from requiring patients to use pharmacies affiliated with the PBM, it would have prohibited PBMs from clawing back fees after the adjudication of the claims. House Bill 203 would have required that pharmacies be reimbursed at least NADAC plus a dispensing fee of $10.64 and it would have required that all rebates received by the PBM go to lowering the patients out of pocket cost. The Department of Insurance would have had additional authority to investigate PBM behaviors. Both bills would have required that the PBMs reimburse non-affiliated pharmacies the same as affiliated pharmacies. House Bill 457 passed the House with only three ‘no’ votes, but the Senate refused to take up the legislation arguing that there was a lot of concern from the business community that it would increase insurance costs, this sentiment is despite the fact that research shows states with PBM regulations have lower insurance premium increases. The other factor was that this was the first time that legislation regulating PBMs can impact self-insured health plans, after a U.S. Supreme Court ruling that allowed for such regulation. This led to a lot of businesses, including small businesses opposing the legislation. Rep. Sheldon worked until the last day to pass HB 457, but in the end, it did not advance in the Senate.
We can’t fully look at our session as a success without looking at the legislation KPhA’s government affairs worked to ensure didn’t negatively impact pharmacies and pharmacists. The government affairs team worked to amend HB 3, legislation related to abortion-inducing drugs, that would have left some patients without medications identified in the bill as abortion-inducing, but that can be prescribed for other illnesses without access to these medications. KPhA worked to amend the legislation to include language stating that if a pharmacist receives a prescription for these medications the pharmacist can assume it is not for the purposes of inducing an abortion. The legislation contained an emergency clause meaning that it took effect immediately, but the federal court has placed an injunction on the legislation meaning that it is not in effect at this moment. A more detailed discussion of HB 3 is included in the summary below.
Other legislation that will impact pharmacies includes HB 8 which made significant tax changes, including lowering the personal income tax by .5% and expanding the sales tax to services including services used by businesses, such as telemarketing, prewritten computer software, marketing services, website design and hosting services, and employee recruitment services. The bill also eliminates the sales tax on over-the-counter and prescription farm animal medications from being the state sales tax. The sales tax expansion takes effect on Jan. 1, 2023.
The following narrative summary is arranged alphabetically by issue area and highlights some of the key issues affecting KPhA that were debated during the 2022 Session. It includes links to the legislature’s website so you can easily access additional information on specific bills, including the full text of the legislation as it was introduced along with changes made or proposed.
After pharmacy, issues are listed alphabetically
Pharmacy Issues; Consumer Protection Issues; Credit and Collection Issues; Criminal Justice & Loss Prevention Issues; Development & Growth Issues; Energy & Environment Issues; General Business Issues; Health Insurance Issues; Labor & Workforce Issues;
Regulatory & Licensure Issues; and Revenue & Taxation Issues
ABORTION INDUCING DRUGS: House Bill 3, introduced by Rep. Nancy Tate (R-Brandenburg), addresses multiple issues about abortion, but for pharmacies and pharmacists, there were some critical sections that greatly impact a pharmacist’s ability to practice and dispense drugs that may have an abortion-inducing effect, but also have other FDA-approved uses. The bill as originally introduced would have prohibited a pharmacist from dispensing abortion-inducing drugs if they were not certified by the Kentucky Board of Pharmacy. The issue is that the drug list to induce abortions included drugs to treat other illnesses. Physicians would be certified under the program as well.
The government affairs team worked in the Senate to get the language amended to ensure that patients could still access medications that could induce an abortion but were not prescribed for that purpose. The Senate agreed to add language that would ensure that if a pharmacist received a prescription, they could dispense the medications without requesting a diagnosis code and assume it was not prescribed to induce an abortion. The amended bill moves the certification program for physicians, pharmacists, pharmacies, and manufacturers choosing to provide patients with abortion-inducing drugs to the Cabinet for Health & Family Services. It would track the prescriptions provided to patients. Confusingly, the bill states that only a qualified physician can ‘provide’ an abortion-inducing drug to a patient, and the bill defines ‘provide’ to include dispensing the product. Arguably a pharmacist can dispense these drugs if this legislation were to pass, so it is unclear why pharmacists and pharmacies are required to participate in the certification process. It appears that the legislation was trying to require the certification of pharmacies that supply clinics with these medications, but it remains unclear.
The biggest concern from a pharmacist’s perspective is there are drugs listed in the legislation, including methotrexate, when prescribed don’t include a diagnosis code, so a pharmacist would have no way of knowing whether a prescription received was meant to be abortion-inducing. If BOP receives a report of a pharmacist dispensing one of these drugs and they are not certified, the board would be immediately required to report them to law enforcement, and then fine them $5 million. If a pharmacist knowingly dispensed an abortion-inducing drug, they would be fined $1 million and be subject to losing their license.
Currently, there is a federal district court injunction on implementing the legislation. The issue will likely head to the U.S. Circuit Court for a decision and could ultimately end in the U.S. Supreme Court, or in light of the recently leaked U.S. Supreme Court brief in the Dobbs case, it could be allowed to go into law quickly.
Click here to read HB 3
IMMUNIZATIONS: Several measures were filed in both chambers to address concerns from some constituents and legislators about employers requiring vaccinations as a condition of employment, especially the COVID-19 vaccine. None of these measures made it across the finish line, meaning that the only restrictions on employer-mandated vaccines are those that exist in law today.
House Bill 28, sponsored by Rep. Savannah Maddox (R-Dry Ridge), would have prohibited employers from requiring employees to be vaccinated as a condition of employment if they have medical, religious or conscientiously held beliefs. Employees could take civil action and sue an employer for violations for statutory damages of $1,000 and civil punitive damages. The bill was amended in committee to remove private employers from the requirements, and it would have only applied to public employers. The legislation passed the House, but in the Senate Health & Welfare Committee, HB 28 died for failing to receive the adequate number of votes in the committee.
In the Senate, SB 93, sponsored by Sen. Rick Girdler (R-Somerset), was the measure that advanced. It stated that an employer would be prohibited from requiring as a condition of employment that an employee is vaccinated if they have a sincerely held religious or conscientiously held belief. The employee would sign a statement that they have these sincerely held beliefs. The bill passed the Senate Judiciary Committee, but after multiple floor amendments were filed to the legislation it was referred back to the Senate Judiciary Committee where it died.
Other measures in both chambers were introduced but did not advance in the legislature. House Bill 52 would have prohibited employers from requiring immunizations as a condition of employment and would have prohibited segregation of employees based on vaccination status. Also, HB 198 would have required employers with vaccination mandates to allow those with religious, conscientious held beliefs or medical reasons to be exempt, and prohibit retaliation against employees who refuse to meet exemptions or if they agree to testing and masking. House Bill 664 would have allowed employees experiencing adverse reactions to vaccines where their employer mandated the vaccine to have a right to civil action against the employer for the requirement. Sen. Adrienne Southworth (R-Lawrenceburg) filed two bills on vaccine mandates, one would require additional exemptions and the other would prohibit employers from requiring employees to obtain a vaccine passport (SB 246 and SB 358). None of these measures advanced, but it was a populist issue that many legislators heard from constituents about the need for action.
Click here to read HB 28
Click here to read SB 93
Click here to read HB 52
Click here to read HB 198
Click here to read HB 664
Click here to read SB 246
Click here to read SB 358
INSULIN: Sen. Phillip Wheeler (R-Pikeville) filed SB 126 that would create an Urgent Needs and Continuing Needs Insulin Program for uninsured patients and Medicare patients in the Medicare Part D doughnut hole. The Cabinet for Health & Family Services would be responsible for the creation and implementation of the program. Patients applying for the program will be approved by the cabinet. The patient will provide pharmacies with documentation of their eligibility, and the pharmacy would be required to dispense the insulin to the patient. The pharmacist could collect a copay from the patient of $25. Subsequently, the pharmacy would seek reimbursement from the manufacturer either through a direct payment or replacement of the insulin product that was dispensed. If the average wholesale acquisition cost of the product is $8 per millimeter or less, the pharmacist could not seek reimbursement for the product. Patients are eligible for free or discounted insulin if they aren’t eligible for state Medicaid or other federal health programs if their health benefit plan does not cover the insulin product for $25 or less. If the patient participates in Medicare Part D and is in the prescription drug doughnut hole, they could be eligible for urgent or continuing needs insulin. The legislation was assigned to the Health and Welfare Committee but never heard.
Rep. Danny Bentley (R-Russell) also introduced similar legislation (HB 42) that would create a process where patients unable to afford their medications would be allowed to apply to receive free insulin. The program would be administered by the Kentucky Board of Pharmacy (KBOP). A patient would go to the pharmacy and present documentation that they are eligible for free diabetes treatment. The pharmacist would dispense the medication and request replacement of the dispensed product from the manufacturer or bill the manufacturer for the cost of the product. If the patient demonstrated a continuing need for free insulin, they could participate in the program long-term. The bill was never assigned to a committee to be heard.
House Bill 90. Also sponsored by Bentley, would have extended the cap on cost-sharing of not more than $30 to diabetic supplies and other drugs used to help diabetics, but it did not advance.
Click here to read SB 126
Click here to read HB 42
Click here to read HB 90
NALOXONE AND SCHOOLS: Rep. Derek Lewis (R-London) filed both HB 94 and HB 616 that would have addressed having Naloxone on school grounds. Similar to the requirement to have school staff trained on other medication administration, such as emergency insulin or seizure medication, HB 94 would have required that schools have at least one staff on school grounds trained in Naloxone administration. Naloxone, an opioid antagonist used to reverse opioid overdoses, can be easily administered. The second bill Lewis introduced (HB 616) took a slightly different approach and instead of mandating that the schools have a person trained and onsite to administer Naloxone, each local school could choose whether to have a policy requiring a staff member to be trained and onsite at all times to administer the opioid antagonist. House Bill 94 was referred to the House Health and Family Services Committee, but it never received a hearing and died in the committee.
Click here to read HB 94
Click here to read HB 616
MEDICAL MARIJUANA: The Senate once again stopped the legalization of medical marijuana, even after the chair of the committee where the bill was assigned announced that he would support HB 136. The House again passed legislation that legalizes medical marijuana by a vote of 59-34, with Democrats helping it across the finish line. Sponsored by Rep. Jason Nemes (R-Louisville), the bill would legalize medical marijuana in Kentucky by allowing a resident of the commonwealth with certain medical conditions to receive a recommendation from a healthcare provider for medical marijuana. It could not be combustible marijuana, but vapor products would be allowed. Once a patient receives such a recommendation, they would go to a medical cannabis dispensary where the product would be furnished to them. Prior to visiting the dispensary, the patient would need to visit a pharmacist certified by the Kentucky Board of Pharmacy to receive consultation on potential drug interactions with other medications they are taking, and they would be required to visit the pharmacist annually if the recommendation continued. A pharmacist fee for such a consultation could not exceed $40. Each medical dispensary would be required to have a relationship with a pharmacist for providing patients with these services. The Board of Pharmacy would be required to develop a certification program for pharmacists wanting to provide these consultation services.
Click here to read HB 136
Cannabis research: Gov. Beshear partially line-item vetoed the Cannabis research legislation (HB 604), deleting the board membership requirements and the word ‘research.’ This is likely as a result of the pronouncement that he was going to find a way through the Executive Order to legalize medical marijuana. The General Assembly did give passage to legislation that would provide funding for the University of Kentucky to conduct clinical trials of cannabis use and allow the newly funded center to seek federal research grants and permission to study the Schedule I controlled substance. The General Assembly did not pass legislation to legalize medical marijuana, with the Senate arguing there was a need for additional research for the program
Click here to read HB 604
REMOTE ACCESS TO PHARMACY DATABASES: Hospital pharmacies raised concerns about legislation passed in the 2021 session, arguing that it would prohibit hospital pharmacies from conducting remote order entry more than 100 miles from the pharmacy. In order to address this problem, Rep. Danny Bentley (R-Russell) introduced House Bill 240 which simply removed the 100-mile radius restriction. McKesson and Chewy wanted the legislation to continue remote pharmacy operations in Kentucky arguing that without the requirement, the state would lose 100s of jobs. The 100-mile radius requirement was put in the legislation in order to ensure that the jobs stayed close to Kentucky. That protection is now gone after the bill sailed through both chambers and the governor signed it into law.
Click here to read HB 240
ELECTRONIC PRESCRIPTION RECORDS: House Bill 328 sponsored by Rep. Daniel Elliott (R-Danville) would require the Cabinet for Health and Family Services to give patients and parents of minors, access to electronic prescription records. If the patient or patient representative can provide documentation that the electronic prescription record is incorrect the Cabinet would be required to make changes to the health records. The bill was never referred to the committee on committees and that is where it remained throughout the session.
Click here to read HB 328
PRIOR AUTHORIZATIONS: House Bill 343, sponsored by Rep. Kim Moser (R-Taylor Mill), would prohibit health insurers from requiring healthcare service providers to obtain a prior authorization when prior authorization requests over a 6-month period for a specified healthcare service are approved 90% of the time. The insurer or its review agent would be required to verify the eligibility of the healthcare provider. A pharmacist is included in the definition of a healthcare provider. Moser serves as the chair of the House Health & Family Services Committee, but the bill never received a vote in committee.
Click here to read HB 343
NON-FDA APPROVED COVID TREATMENT: Rep. Savannah Maddox (R-Dry Ridge) filed HB 352 that would prohibit action against the licenses of a physician, physician’s assistant, pharmacist, or APRN for recommending or filling a drug or treatment for COVID-19 not approved by the FDA. The bill would also prohibit pharmacists from blocking or attempting to block a patient’s access to a non-FDA-approved drug or treatment if prescribed by a doctor. It would also establish penalties against pharmacists violating the law. The bill was not considered in either chamber.
Click here to read HB 352
COMPREHENSIVE PBM REFORM: Rep. Steve Sheldon (R-Bowling Green) introduced two bills targeting comprehensive reform of Pharmacy Benefit Managers (PBMs) and the negative impacts they have on patients and pharmacies. Originally, PBM reform legislation was HB 203, but after the PBM industry spent money disparaging the legislation through television and social media advertisements, Sheldon re-introduced the legislation as HB 457. House Bill 457 would have made significant changes to the behaviors of pharmacy benefit managers. The bill would prohibit PBMs from requiring patients to use mandatory mail orders or pharmacies in which they have ownership. This legislation would give patients choice in which pharmacy to choose to provide care. The bill would also prevent PBMs from taking any post-adjudication fees, including effective rates. Removed from the legislation was language that would prohibit PBMs from paying pharmacies less than NADAC plus $10.64. Another provision included in HB 203 that was removed in HB 457 was the requirement that rebates be passed on to the patients from the PBM. For employers, HB 457 required the PBM to provide employers with information regarding rebates received by the PBM and the cost paid to the pharmacy. The intent is to provide employers with transparency into pharmacy benefits and claims.
House Bill 457 passed out of the House Health and Family Services Committee unanimously and passed out of the House 88-3. It hit major snags in the Senate where leadership stated that the legislation divided the caucus and therefore would not receive a vote. Sheldon continued to push the Senate to hear the legislation in committee, but it became clear that the Senate did not intend to hear the legislation, especially given that it was referred to the Senate Appropriations & Revenue Committee. Sheldon tried to revive the legislation by adding a floor amendment on SB 68 to make changes to the PBM behaviors, but the bill was never called for a vote in the House.
The PBMs spent money on paid advertisements and rallied employer groups to oppose the legislation arguing that it will increase the cost of medications and of health insurance.
Click here to read HB 457
Click here to read SB 68 FLA 2
COVID STATE OF EMERGENCY: Senate Joint Resolution 150 ended the Executive Orders originally issued in response to the COVID-19 that declared a state of emergency on March 8, 2020. In SB 25, the General Assembly originally extended the Executive Orders until April 14, but after the Omicron wave ended and cases dramatically dropped, the Senate decided it was time to move on. The resolution was sponsored by newly elected Sen. Donald Douglas (R-Nicholasville) and would end emergency dispensing, remote work for pharmacists, but COVID-19 testing and vaccinations would continue under the federal PREP Act. The current Board of Pharmacy regulations allow for the ordering and administering of vaccinations until July 9, 2022.
Click here to read SB 25
Click here to read SJR 150
MEDICAID MANAGED CARE: The Senate once again passed legislation (SB 45) which limits the number of Medicaid Managed Care Organizations (MCOs) by a 32-4 vote and sent it to the House. The bill, sponsored by Sen. Stephen Meredith (R-Leitchfield), cuts the number of MCOs from 6 to 3. The House never considered the legislation, and so it died there.
Click here to read SB 45
OPIOID ANTAGONISTS: Senate Bill 56 was signed by the governor and it will allow other opioid antagonists to be used within harm reduction programs. The bill allows pharmacists to provide not only Naloxone but other FDA-approved opioid antagonists provided to patients under provider protocol. An amendment was filed and adopted that would allow pharmacists to provide opioid antagonists to unlicensed professionals within harm reduction programs and those persons could provide the opioid antagonists to those in need.
Click here to read SB 56
PHARMACY BENEFIT CLAIMS VERIFICATIONS: The legislature adopted and the governor signed legislation requiring the Personnel Cabinet to contract with an outside party to audit all pharmacy claims and ensure pharmacies are being reimbursed according to the contract. Senate Bill 178 was amended to include this provision that was originally included in SB 68. In SB 68, originally, the auditor would have also been required to review claims from the Medicaid Managed Care Organizations (MCO), but the House would not agree to this requirement after pharmacists raised concerns. Senate Bill 68 was sponsored by Sen. Ralph Alvarado (R-Winchester) and it passed the House Health & Welfare Committee, but it did not pass the full House. Senate Bill 178 includes an emergency clause and it is in effect today.
Click here to read SB 178
Click here to read SB 68
STEP THERAPY: Senate Bill 140, sponsored by Sen. Max Wise (R-Campbellsville), modernizes Kentucky’s step therapy laws to better protect patients and give patients an easier process to follow if the health insurer requires steps to progress to certain medications. The bill would ensure that step-therapy protocols are based on medical and clinical guidelines, and update the circumstances for overriding step-therapy protocols to ensure that the protocols are aligned with what is best for the patient. The bill easily passed and was signed into law.
Click here to read SB 140
SALES TAX ON MEDICATIONS: House Bill 8 exempts prescription and over-the-counter farm animal medications from the sales tax. This includes most farm animals, but it does not include horses. Currently, the sales tax applies to animal and human over-the-counter medications, but for animal medications prescribed by a veterinarian, they are subject to the sales tax. With the passage of HB 8, farm animal medications are no longer subject to the sales tax.
Senate Bill 144, sponsored by Sen. Morgan McGarvey (D-Louisville), introduced legislation to remove the sales tax from over-the-counter medications, but it did not advance.
Click here to read HB 8
Click here to read SB 144
MEDICAID BENEFITS: House Speaker Pro Tem, David Meade (R-Stanford) introduced HB 7, touted as public benefits assistance reform legislation that as introduced would have made significant changes to public benefits including Medicaid. First, it would have prohibited ‘categorical eligibility or the automatic assumption that an individual was eligible for Medicaid if they met certain conditions. The bill harkens back to previous Gov. Matt Bevin, who tried to make changes to public assistance by requiring beneficiaries to work or participate in volunteer work in order to continue to receive benefits. Bevin tried Medicaid reforms multiple times, but the courts always threw out the community engagement requirement. The prohibition on categorical eligibility language was removed from the 2022 legislation. There were other significant changes made to the legislation in the Senate, where beneficiary advocates pressed hard for changes. A requirement that all benefits be included on one card was removed, as was a requirement for hospitals signing people up based on presumptive eligibility. What remained is Medicaid beneficiaries who have been on Medicaid for 12 months or longer are now required to participate in a community engagement program that includes work or volunteer work in order to be eligible to receive benefits. The Department for Medicaid Services will be required to conduct Medicaid eligibility redeterminations for those placed on Medicaid during the COVID-19 declared emergency or other reasons allowed under federal law if the beneficiary remains on the program under this provision for longer than three months. The bill also requires Medicaid to cover substance use disorder treatment, including peer support services, treatment, and patient navigation. Beshear vetoed the legislation arguing that the legislation would harm vulnerable Kentuckians and could jeopardize federal funding for SNAP, TANIF, and Medicaid. The legislature did override the veto.
Click here to read HB 7
Post-partum Coverage: Senate Bill 178 was amended to extend Medicaid coverage for new moms from 30 days post-partum to 12 months. Originally contained in legislation sponsored by Rep. McKenzie Cantrell (D-Louisville), the provisions of HB 174 were added to SB 178 on the last day of the session and Gov. Beshear did sign the measure into law. It will take effect on July 14, 2022.
Click here to read SB 178
Basic Health Benefit Plan: Under federal law, states are allowed to develop basic health benefit plans for those who are not eligible for Medicaid and CHIP and are below 200% of the federal poverty level. As introduced, HB 708 would have required the Cabinet for Health and Family Services to develop and implement a basic health benefit plan, but that language was removed, and instead it requires the Cabinet to develop a proposal surrounding a tool to calculate the public benefits cliff for those on public assistance who are trying to transition off of public assistance to understand the changes they may experience. Additionally, HB 1, the state budget, includes language that appropriates $4.5 million in each fiscal year to support enhancements to the Medicaid Management Information System for the purpose of implementing a basic health benefit program to provide a bridge health insurance plan for eligible recipients. Further, the budget states the Cabinet for Health and Family Services shall not exercise the state’s option to develop a basic health benefit plan without specific authorization to do so, but the General Assembly has recently announced plans to develop such a program based on the appropriation they received. This is after Gov. Beshear vetoed a clarification that the legislature included in HB 604 that again restated that nothing in the budget language requires the development of a basic health benefit plan until the legislature gives expressed authority to do so.
Click here to read HB 708
Click here to read HB 1
MORAL OBJECTIONS FOR HEALTHCARE PROVIDERS: House Bill 570 would have allowed healthcare providers, including pharmacists, to refuse to provide medical treatment based on the pharmacist’s moral or ethical objections to the treatment. The employer would not be allowed to ask about moral or ethical objections to medical treatment in job interviews and not be allowed to reassign them a job, terminate the employee, or make changes to their job based on the objection. If an employer did discriminate against an employee because of their personal beliefs, the employee would have a civil right of action. The bill was introduced, but it did not move in the process.
Click here to read HB 570
HEALTHCARE WORKER LOAN RELIEF PROGRAM: House Health and Family Services Committee Chair Kim Moser (R-Taylor Mill) championed HB 573 to create the healthcare worker loan relief program within the University of Kentucky Office of Rural Health. Pharmacists would be eligible for student loan forgiveness, based on the stipulations developed by the Office of Rural Health. The General Assembly did appropriate funding for the program, which was signed into law by the governor.
Click here to read HB 573
CONSTITUTIONAL RIGHT TO REFUSE MEDICAL TREATMENT: House Bill 697 sponsored by Rep. Savannah Maddox (R-Dry Ridge) proposed to amend the Constitution to give Kentuckians the right to refuse any medical treatment, procedure or injection, that could not be questioned or interfered with. The bill died in the House Committee on Committees.
Click here to read HB 697
HEALTHCARE WORKERS SHORTAGE TASK FORCE: A resolution (HCR 112) would have created a task force to study the healthcare worker shortage and make recommendations for strategies for recruitment and retention of healthcare workers. The bill passed the House but died in the Senate Health & Welfare Committee. A nursing shortage left hospitals in states across the country scrambling for ways to recruit and retain nurses during the COVID-19 pandemic.
Click here to read HCR 112
HEMP/CANNABIDIOL: In the Senate, there were two measures introduced to change hemp and cannabidiol (CBD) in Kentucky. First, SB 73 would have increased the allowable amount of Delta-9 THC concentration percentage from .3 to 1 %. It was referred to the Senate Agriculture Committee, but it did not receive a committee hearing. Senate Bill 170 sponsored by Senate Agriculture Committee Chair Paul Hornback (R-Shelbyville) was filed to prohibit the sale, distribution, and marketing of intoxicating hemp, this would include CBD containing Delta-8. The bill would also prohibit the sale of ingestible CBD, such as hemp tea, bud, flowers or leaf and hemp cigarettes. The bill passed the Senate but died after not advancing in the House.
Click here to read SB 73
Click here to read SB 170
MEDICAL NEGLIGENCE CLAIMS REPORTING: Doctor, long-time tort reform advocate and Chair of the Senate Health and Welfare Committee, Sen. Ralph Alvarado (R-Winchester), proposed SB 181 to require the Commissioner of Insurance to annually report to the General Assembly statistical data on medical malpractice claims, including the number of medical malpractice- claims and the number of medical negligence claims resulting in indemnity payments. It was referred to the Senate Banking and Insurance Committee, but it did not receive a vote.
PRESCRIPTION DRUG REBATES: Pharmaceutical manufacturers offer drug rebates to PBMs to ensure that health insurers will include the prescription drug on a health benefit plan formulary. Those rebates are intended to lower the cost of the drug for the patient, but there is no law requiring that the patient receive the benefit of the prescription drug rebate. Two bills introduced in the 2022 legislative session sought to require the rebate to be passed on to the patient in whole or in part. House Bill 203’s comprehensive pharmacy benefit manager reform legislation, as introduced, included language that would have required all prescription drug rebates received to go to lower the overall cost of the medication to the patient, after that it would go to lower the overall cost of the premiums. In the Senate, Sen. Stephen Meredith (R-Leitchfield) introduced SB 134, which would have required that 80 % of the rebate go to benefit the patient giving the PBM and the insurer the other 20%. Neither measure passed. In fact, HB 203 was withdrawn and the drug rebate provision removed from the legislation. SB 134 never received a committee hearing in the Senate Banking & Insurance Committee.
Click here to read SB 134
EMERGENCY USE AUTHORIZATION DRUGS: Sen. Adrienne Southworth (R-Lawrenceburg) introduced SBs 246 and 336 that would have required healthcare professionals administering medications that are only authorized under emergency use authorization (EUA) to disclose to the patient that the medication is only authorized under emergency use and disclose harmful effects, alternatives and potential health risks. Neither bill was considered for a committee hearing.
Click here to read SB 246
Click here to read SB 336
ALTERNATIVES TO COVID-19 VACCINATIONS: Senate Health & Welfare Committee Chair Ralph Alvarado (R-Winchester) introduced SJR 80 that would have required state agencies to accept serology tests that show positive COVID-19 antibodies equivalent to the 20th percentile of immunized people as being vaccinated. The measure passed the Senate, but it died in the House.
Click here to read SJR 80
BIOMETRIC DATA COLLECTION: A bill that would have prohibited the capture of a person’s biometric identifier failed to get a hearing this session. Rep. Josh Bray (R-Mount Vernon) filed HB 626, which would have banned a business from capturing a person’s identifier, including a retina or iris scan, fingerprint, or voice print unless the individual grants permission. It also prohibited the sale of identifiers for commercial purposes and set the fine for violations at not more than $25,000 per incident.
Click here to read HB 626
AUTO-RENEWAL OF SUBSCRIPTION SERVICES: Rep. Susan Westrom (D-Lexington), who announced her legislative retirement at the end of the session, attempted once more to tackle automatic subscription renewals. House Bill 106 would require businesses that offer autorenewal of subscription services for a subscription lasting one month or longer to obtain affirmative consent from the customer agreeing to the automatic renewal. Additionally, it would also contain a clear notice in offset type of the service that it would automatically renew. It would require the business to notify the customer at least one month, but no greater than two months, before an automatic subscription would be renewed. Any business that did not comply with the requirements could be assessed a fine of $5,000 per violation. The bill was surprisingly taken up by the House, and passed with relative ease before stalling in the Senate. Government affairs is concerned that it could impact mail-order prescriptions. The Senate decided not to pass the legislation and work on the issue over the interim session.
Click here to read HB 106
CONSUMER DATA PRIVACY: Bills in the House and Senate would have addressed consumer data and protecting individual’s privacy. Sen. Whitney Westerfield (R-Crofton) filed SB 15 that would implement guidelines on consumer data and privacy. During a “discussion only” hearing, Westerfield said Senate Bill 15 is modeled after Virginia’s law and allows consumers control over their data and the power to delete their data. However, unlike Virginia’s law, Westerfield’s bill has threshold controls that would kick in at 10,000 customers, much lower than Virginia’s 100,000. Westerfield said he wasn’t trying to stop the data economy, and understands small businesses want to know who is shopping with them, but the problem is consumers have no control over the data. Groups with concerns about the bill want to keep consumers from being overwhelmed by the actions the bill would implement and fear that it could make Kentucky less competitive due to the impact on small businesses that don’t have dedicated personnel to handle consumer data guidelines. Retailers were also concerned with the private right of action contained in SB 15 that would not have allowed for any monetary damages but would allow the consumer to seek injunctive relief, leading to increased litigation costs for retailers. The legislation would have required that businesses set up a process where a consumer could request what data the business is sharing and with whom it is being shared. The consumer could request to know the data that was shared and request that the business not share consumer data within any other businesses. After the discussion, no vote was taken on SB 15 in committee.
In the House, Small Business and Information Technology Committee Chair Phil Pratt (R-Georgetown) introduced HB 586 which would require additional data and privacy and security requirements, and it is modeled on Virginia legislation that the industry suggests be used as a model. Pratt’s legislation did set the threshold controls would take place at 100,000 customers or more to provide customers with opt-out options of having their data tracked. The legislation doesn’t include a private right of action for consumers and allows the consumer to be able to request the controller of the information to stop tracking or sharing their data. House Bill 586 did not get assigned to a committee.
Click here to read HB 586
Click here to read SB 15
CREDIT AND COLLECTION
DIGITAL ASSETS: As cryptocurrency and blockchain technology becomes more prevalent in today’s economy, legislators continue to look at ways to protect consumers. Sen. Brandon Smith (R-Hazard) filed SB 17 that would have established a uniform code for blockchain technology and cryptocurrency. The bill was assigned to the Banking and Insurance Committee but never had a hearing.
Click here to read SB 17
UCC – CONTROLLABLE ELECTRONIC RECORDS: Sen. Brandon Smith (R-Hazard)’s SB 67 would have established regulation of controllable electronic records and NFTs. The bill would have established control requirements for an electronic copy of records evidencing chattel paper, intangible money, controllable accounts, and payment intangibles. The bill was assigned to the Senate Judiciary Committee but never had a hearing.
Click here to read SB 67
CRIMINAL JUSTICE AND LOSS PREVENTION
PRETRIAL DISMISSAL: In an effort to get some people with criminal records back in the workforce and stop those stealing or committing crimes to feed a habit, SB 90 established a pretrial dismissal pilot program in participating counties, beginning on Jan. 1, 2023, for those charged with crimes linked to a substance use disorder or other behavioral health issues that the defendant can prove the crime was a result of those disorders. The bill was signed by Gov. Andy Beshear after a conference committee agreed to amendments, including not naming specific counties where the pilot project will take place.
In order for the charges to be dismissed, the offender must complete a treatment program and pay restitution. It would also require a workforce assessment and plan for offender along with workforce training. If re-offense occurs after completion of the program, dismissed charges could be reopened. The bill appropriates $10.5 million in Opioid settlement proceeds to fund the pilot project, which sunsets on Dec. 31, 2027
Click here to read SB 90
CRIMINAL OFFENSES DURING A DECLARED EMERGENCY: A Senate bill addressing criminal theft charges during a declared emergency became law, while a House bill on the same issue failed to get assigned to a committee.
House Bill 329 would have made the theft of property valued at $300 or more or receiving stolen property valued at $300 or more, during a declared emergency a Class D Felony. The bill, sponsored by Rep. Ed Massey (R-Hebron), was not assigned to a committee.
In the upper chamber, SB 179, sponsored by Sen. Danny Carroll (R-Paducah), would increase the criminal charge of theft during a declared emergency one level than if it was committed in an area, not under a declared emergency. The definition of a declared emergency is a natural or man-made disaster. A floor amendment was approved to state that a crime must be committed in the area impacted by a disaster to qualify for the enhanced penalty. Gov. Beshear signed SB 179 into law.
Click here to read SB 179
Click here to read HB 329
FELONY MEDIATION: A bill establishing a felony mediation program passed both chambers with amendments, but it failed to ultimately pass due to the House and Senate not reaching an agreement on the changes made. House Bill 311, sponsored by Rep. Ed Massey (R-Hebron), would have set up a felony mediation process if the defendant and commonwealth attorney agree and the victim has been consulted. The House amendment would have excluded cases of assault, stalking, domestic violence, abuse and dating violence abuse, and the Senate approved an amendment requiring victim’s approval. The bill was passed for passage for concurrence in the Senate on March 29, but it never came up for a vote.
Click here to read HB 311
PERSISTENT FELONY OFFENDERS: Sen Adrienne Southworth (R-Lawrenceburg) attempted to pass SB 333 that would declare that persistent felony offender sentences could only apply to offenders who has committed a second crime with the same KRS chapter as the one they have been convicted on previously. Senate Bill 333 was assigned to the Judiciary Committee but never had a hearing.
Click here to read SB 333
PRETRIAL RELEASE: Legislation that would have prohibited any defendant from being detained on money bail and require the use of pretrial services was filed by Sen. David Yates (D-Louisville) but was not heard by the Judiciary Committee. Senate Bill 369 would have set out the criteria for when money bail was to be used in holding a defendant, including those charged with violent or sexual offenses.
Click here to read SB 369
DEVELOPMENT AND GROWTH
AG LAND CONVERSION: Retiring Sen. Paul Hornback (R-Shelbyville) filed SB 52 establishing an agriculture enhancement fund. The legislation, which never received a hearing in the Appropriations and Revenue Committee, would have assessed a conversion charge on land converted from agriculture or horticulture purpose to another purpose. The charge would be $100 per acre on the annual property tax assessment to be deposited in an agricultural enhancement fund.
Click here to read SB 52
HEALTHY SOILS: House Bill 235 would have established and fund a Healthy Soils Program in the Department for Natural Resources. The bill, filed by Rep. Nima Kulkarni (D-Louisville), would also have required the Agriculture Water Quality Authority to promote soil restoration and include an organic agriculture organization among its appointments to join a committee to promote healthy soil practices by Kentucky farmers. The bill did not get assigned to a committee.
Click here to read HB 235
COUNTY CLERKS ELECTRONIC DATABASE: County clerks will now be required to develop electronic databases for storing and retrieving legal documents after Gov. Beshear signed SB 135 into law. Sen. Jason Howell (R-Murray) outlined fees the clerk’s office could collect for various functions, such as recording deeds, to cover the cost of setting up the data portal and allocated general fund dollars to establish a grant program for smaller counties to set up the data portal. The legislation also lists which documents can be obtained via the database, such as deeds, liens, plats, and easements.
Click here to read SB 135
PLANNING AND ZONING: Sen. David Yates (D-Louisville) proposed increasing penalties for violating planning and zoning laws. If a person or entity violated the laws the fine would be not less than $10 but not more than $2,000 per day in violation, an increase from $500 maximum per day. If convicted, the fine would be not less than $100 but no more than $2,000 for each lot or parcel in violation. Finally, an intentional violation would be a fine of not less than $100 but no more than $5,000. Senate Bill 154 was referred to the State and Local Government Committee but never received a hearing.
Click here to read SB 154
STREAM AND WETLAND MITIGATION: A pair of House and Senate bills regarding stream and wetland mitigation both fell short of passing this session.
House Bill 513 would have allowed the Department of Fish and Wildlife to establish a stream and wetland compensatory mitigation program and require the purchase price of the property to be greater than the appraised value. In the Senate, SB 218 would have created a restoration and preservation program of U.S. waterways and allowed for compensatory mitigation credits for entities providing restoration.
Click here to read HB 513
Click here to read SB 218
MECHANICS AND MATERIALS LIENS: Rep. Myron Dossett (R-Pembroke) filed HB 719 that would have protected owners of leased property from facing liens arising from work performed through a contract with the lessee when the lessee is prohibited from entering into such an agreement. The bill, which passed the House before dying in the Senate Judiciary Committee, did describe the criteria that had to be met for the lessee to avoid the lien placed on him.
Click here to read HB 719
ADULT SIZE CHANGING TABLES: Senate Bill 117, filed by Sen. Julie Raque-Adams (R-Louisville), would require a building with a capacity of at least 1,500 people or larger than 40,000 square feet built on or after Jan. 1, 2024, or have renovations of at least $10,000 on or after Jan. 1, 2026, provide access to at least one powered, height-adjustable, adult-size changing table in a single-occupancy restroom that is universal to gender and available to the public. Although it was quickly assigned to the Senate Licensing and Occupations Committee, SB 117 never received a hearing.
Click here to read SB 117
ENERGY AND ENVIRONMENT ISSUES
PLASTIC WASTE: Once again this year there was legislation filed that would prohibit retailers from providing customers with single-use plastic bags starting July 1, 2027, and prohibit providing plastic straws and Styrofoam beverage containers starting July 1, 2025. (HB 189, SB 41). Any retailer violating these provisions would be subject to a fine of $100 per day. Neither of these measures were heard in a committee or advanced.
Another measure introduced also sought to address plastic waste, but it took a different approach. House Bill 108 would have required plastic producers to pay fees for waste disposal that would be used to reduce plastic waste through grants funded by the fees. The legislation did not advance the bill this session.
Click here to reads HB 189
Click here to read SB 41
Click here to read HB 108
PFAS CHEMICALS: House Bill 338, sponsored by Rep. Nima Kulkarni (D-Louisville), would have required the Energy and Environment Cabinet to develop limits on acceptable PFAS contained in drinking water. The measure did not advance this legislative session, but a resolution recognizing PFAs Awareness Day did pass.
House Resolution 85, also sponsored by Kulkarni, recognized March 4, 2022, as PFAs Awareness Day. The resolution was adopted on that day, and Kulkarni gave a floor speech encouraging members of the chamber to recognize the harms of PFAs and encourage more education on the subject. The simple resolution has no negative legal impact on pharmacies, but it was co-sponsored by a Republican. We will need to monitor and pay attention to the issue.
Click here to read HB 338
Click here to read HR 85
ELECTRIC UTILITY RATE AFFORDABILITY: The issue of electric utilities rates and their impact on customers was the topic of multiple pieces of legislation, especially for eastern Kentucky legislators, where automatic rate increases due to fuel adjustment clauses seem to be causing some residents to pay stiff legislative rate increases. To that end, three bills were introduced that would have required the Kentucky Public Service Commission to open administrative cases evaluating the automatic increases allowed under fuel adjustment clauses and the impact on customers (SB 329, HB 755 and SJR 170). Only one of these measures took any steps towards passage and that was HB 755 sponsored by House Natural Resources & Energy Committee Chair Jim Gooch (R-Providence). As introduced, HB 755 would have required the PSC to open an administrative case evaluating the volatility of fuel adjustment clause increases and require the agency to implement any changes necessary based on their findings to reduce volatility. It was amended in the House committee to remove the PSC administrative case and instead create a Ratepayer Task Force within the General Assembly to study three issues—fuels adjustment clauses, utilities deferring securitized debt, and the impact on customers of prematurely retiring electric generating facilities. The bill as amended passed the House, but it did not receive a hearing in the Senate Natural Resources Committee where it was referred. Both Senate measures that would have required the PSC to open administrative cases to review fuel adjustment clauses and rate volatility, were both sponsored by Sen. Phillip Wheeler (R-Pikeville).
Another measure filed in the House would have required the PSC to consider the affordability of electric utility rates when determining fair, just, and reasonable rates. House Bill 342 died in the House Committee on Committees.
Click here to read SB 329
Click here to read HB 755
Click here to read SJR 170
Click here to read HB 342
UTILITY RATES PROCEEDINGS: House Natural Resources and Energy Chair Jim Gooch (R-Providence) also introduced HB 341 which raised a lot of concern from utility customer advocates and those organizations and companies who typically intervene in utility rate cases. In essence, the legislation reformed the intervening process for those persons directly impacted by utility rate increases, including companies and associations. It would have reduced the number of days to request intervening status, allow utilities to increase rates in between full rate cases based on add-on costs, and eliminate evidentiary hearings in rates cases. It would have also restricted information requests by intervening parties to utilities. Ultimately, the measure was withdrawn by the sponsor after op-eds and newspaper articles were written criticizing the bill.
Click here to read HB 341
ALTERNATIVE RATE MAKING MECHANISM STUDY: House Majority Caucus Chair Suzanne Miles (R-Owensboro) proposed HCR 138 that would have required the General Assembly to study an alternative utility rate-setting mechanism where a utility could increase utility rates annually based on projected instead of actual costs. The legislation passed both chambers, but it was vetoed by the governor who argued that ARMs allow utilities to increase rates more rapidly with less oversight from utility regulators. The General Assembly had time to override the veto, but they did not take up HCR 138 during the final two days of the legislative session meaning that it died.
Click here to read HCR 138
CLEAN ENVIRONMENT CONSTITUTIONAL AMENDMENT: House Bill 471, introduced by Rep. Josie Raymond (D-Louisville), would have proposed amending the Constitution to guarantee the citizens of Kentucky the right to a clean and healthy environment. Its meaning would likely be interpreted broadly and give residents powerful arguments against development or manufacturing and suing over the use of certain chemicals. The proposed amendment was not considered by the legislature and therefore did not make it on the ballot.
Click here to read HB 471
STREAM & WETLAND MITIGATION COMPENSATORY PROGRAM: House Bill 513, sponsored by Rep. Jerry Miller (R-Louisville), would have created the Stream and Wetland Mitigation Compensatory Program where the Kentucky Department of Fish and Wildlife could purchase land for stream and wetland conservation, including using eminent domain in situations for lands where surface mining occurred. The fund would be used to restore wetlands and waterways. It would have also created a conservation easement that could be purchased with this fund or mitigation credits. The bill passed out of the House Tourism & Outdoor Recreation Committee, but it died when it was recommitted to the Appropriations & Revenue Committee where it remained until Sine Die. A similar measure filed in the Senate did not advance either (SB 218).
Click here to read SB 218
RENEWABLE ENERGY PORTFOLIO STANDARDS: Legislation filed in the Senate (SB 225) would have required that electric utility suppliers develop an integrated resources plan explaining how they will incorporate renewable energy sources, such as wind and solar into their energy mix. The legislation would have required that by fiscal year 2023-2024, at least 2.25% of the electric generated and supplied to customers would be renewable and of that mix .25% had to be solar energy. This increase would scale up each year until 2030-2031 when 12.5% of the utility’s energy mix would be required to be from renewable energies with a requirement that 2% of it be produced from solar energy. Additionally, the bill requires a feasibility study be completed to determine if electricity suppliers could contract with commercial and industrial properties for the use of their roofs to generate solar energy. The measure did not pass, but it is legislation that returns every year, so expect it will likely be filed next year.
Click here to read SB 225
EXECUTIVE BRANCH BUDGET: For the first time in a long time, legislators involved in crafting the state budget (HB 1) were talking about making investments and not making cuts. Buoyed by federal funding and strong state receipts, the General Assembly was able to make tax changes and spend significant resources in places. This includes appropriating $15 million for childcare assistance grants, funding for state infrastructure needs, and increasing salaries of state workers. The governor did issue several vetoes of the legislation, but many of those vetoes were overridden; only those that were technical changes remained.
Click here to read HB 1
SMOKING BAN: Rep. Susan Westrom (D-Lexington) filed HB 199 that would have enacted a statewide smoking ban for all public places and places of employment. Smoking would include cigarettes, cigars and vapor products. Local governments would still be able to enact more stringent smoking bans. As introduced, it would have exempted cigar bars, but Westrom filed a floor amendment to remove the cigar bars exemption. Local health departments would be responsible for enforcing the measure. The bill failed to move in the 2022 legislative session.
Click here to read HB 199
MARIJUANA: Kentucky remains one of a handful of states that has not adopted legislation legalizing marijuana for medical or recreational use or decriminalizing the possession of marijuana. That doesn’t mean legislators didn’t try to legalize recreational or medical use of marijuana or decriminalize the possession of marijuana. Legislation filed in the House by Rep. Nima Kulkarni (D-Louisville) would have decriminalized the possession of marijuana (HB 224), and she also introduced HB 225 proposing to amend the Constitution to legalize recreational and medical marijuana, but neither bill received a committee hearing. House Bill 136 that would legalize medical marijuana passed the House, but it once again died in the Senate, where leadership raised concerns about the legislation, even after it was made more restrictive in the House. It would have allowed patients with certain medical conditions to receive a recommendation from a healthcare provider for medical marijuana. The patient would be required to have an annual prescription check with a pharmacist before they could visit the dispensary. House Bill 136 would not prohibit an employer from enacting drug-free workplace laws.
Click here to read HB 224
Click here to read HB 225
Click here to read HB 136
TORT REFORM: Last session, pharmacies fought hard for COVID-19 limited liability protections given the unknowns of the global pandemic, but those ended March 8, 2022, when the declared emergency related to the global pandemic was ended by SJR 150. Some legislators tried to make tort reform permanent by proposing to amend the Constitution by asking the voters to allow the General Assembly to restrict punitive damages in civil actions. House Bill 455 was introduced by Rep. Josh Bray (R-Mount Vernon) and a companion bill was introduced in the Senate, SB 142, by Sen. Ralph Alvarado (R-Winchester), but neither bill advanced in either chamber.
Click here to read SJR 150
Click here to read HB 455
Click here to read SB 142
DECLARATION OF EMERGENCY--COVID-19: In January, the Omicron variant of COVID-19 was raging across the Commonwealth and schools were still requiring students to wear masks. It appeared that the Coronavirus would never loosen its grip on the state. With the Declaration of Emergency approved by the legislature last summer set to expire, the General Assembly did extend it until April 14, 2022, when the General Assembly would conclude the session (SB 25). The bill extended provisions related to price gouging, COVID-19 limited liability protections, enhanced federal public assistance benefits and continue to allow pharmacies to order and administer COVID-19 tests and vaccinations, and other vaccinations down to age 3.
Suddenly, in late February, Senate Republicans, seeing the decline in case numbers, decided that it was time to end the declared emergency related to COVID-19 and passed SJR 150. The resolution was sponsored by Sen. Donald Douglas (R-Nicholasville), who was locked in a primary battle with a Republican restaurant owner critical of government shutdowns, mask requirements and vaccination requirements. Douglas argued that the pandemic itself was over, and it was time for Kentuckians to get back to normal life. To that end, SJR 150 ended the declared emergency related to COVID-19 and the some of the protections contained in it, including limited liability protections. The legislation took a lot of criticism from the press because it meant that Kentucky would give up tens of millions of dollars in federal assistance for the SNAP program.
Beshear called the decision reckless as did some House Democrats. House Minority Floor Leader Joni Jenkins (D-Louisville) proposed HB 460 that would have returned to the executive branch some of its authority to declare states of emergency, but the bill was never discussed.
Click here to read SB 25
Click here to read SJR 150
Click here to read HB 460
ENERGY COMPANY BOYCOTTS: One measure that was signed into law by the governor would prohibit state agencies from contracting with businesses who refuse to provide goods or services to fossil fuel energy companies. It would require the state treasurer to maintain a list of corporations that engage in energy boycotts. Sen. Robby Mills (R-Henderson) sponsored SB 205, and it passed mostly along partisan lines.
Click here to read SB 205
SPORTS WAGERING: Even as other southern and surrounding states cash-in on sports wagering, another year passes where it will not be a reality in Kentucky. While HB 606 passed the House, the Senate would not take up the legislation, arguing that there was not agreement within the caucus. The bill would have legalized sports wagering at horse racing facilities and through parimutuel wagering mobile applications. It would have also legalized fantasy sports contests and online poker. The measure passed the House by a vote of 58-30, but it failed to go before the Senate Economic Development Committee where it was referred. Other bills introduced to address sports wagering included SB 213 that was a companion to HB 606. House Bill 610 introduced would have legalized sports wagering, but also prohibited skills-based games.
Click here to read HB 606
Click here to read SB 213
Click here to read HB 610
MANDATED BENEFIT: There were several bills that would have required insurance companies to cover various health care items, including annual mental health exams, chronic pain treatments, testing and treatment of Hep C in pregnant women and post-partum depression treatment. None of these bills were assigned to a committee.
Click here to read HB 55
Click here to read HB 58
Click here to read HB 98
Click here to read HB 412
Click here to read HB 413
Click here to read HB 416
Click here to read HB 431
Click here to read HB 90
ALL-PAYER CLAIMS DATABASE: Rep. Cherlynn Stevenson (D-Lexington) filed HB 60 that would have established a database of healthcare claims and prices, so patients may shop for lowest cost services. The bill also would have created an advisory committee to create the website. House Bill 60 was not assigned to a committee.
Click here to read HB 60
PRIOR AUTHORIZATION REFORM: Rep. Kim Moser filed a bill to address prior authorization requirements for healthcare services. House Bill 343 would have removed those requirements for services where 90% of prior authorizations are approved. The bill was assigned to the Health and Family Services Committee.
Click here to read HB 434
MEDICAID COVERAGE: Senate Bill 178 extends Medicaid coverage to new mothers for up to 12 months postpartum. The bill, which was signed into law by Gov. Beshear, also included a section that requires the Personnel Cabinet to contract with an entity to monitor all pharmacy claims and correct errors in reimbursement. A floor amendment was attempted in the House that would have established a Medicaid fee schedule for compounded medications and medications used in the treatment for substance use disorder, but it failed.
Click here to read SB 178
INSURED NEGOTIATED PAYMENTS: Sen. David Yates (D-Louisville) filed SB 286 that would have allowed insured patients to negotiate payments with healthcare providers in excess of copays and outside of the provided health insurance. Insured patients could negotiate with the provider for noncovered benefits or services or for covered benefits and services if they didn’t file a claim. The bill was assigned to the Banking and Insurance Committee but was never heard.
Click here to read SB 286
LABOR AND WORKFORCE
UNEMPLOYMENT INSURANCE: Policy issues surrounding unemployment insurance benefits and funding have been at the forefront of legislators’ minds since the start of the global pandemic when the UI system became flooded with claims from those who lost jobs due to the COVID-19 pandemic. It exposed a system that was not ready for the flood of claims, leaving some waiting months to receive benefits. At the same time, the state UI fund was quickly depleted, requiring the state to take a federal loan to ensure they could continue to pay benefits. When the state takes a federal loan, it sets in motion automatic increases in the unemployment insurance tax rates for businesses. In the 2021 legislative session, legislators put a freeze in place on businesses’ unemployment insurance tax rates, ensuring that it would remain at the lowest possible rate.
As lockdowns subsided and businesses began to ask employees to return to work, a new problem cropped up – lack of employees returning to work. It led to additional questions from policymakers about the need to reform the unemployment insurance benefits. Additionally, the General Assembly was looking for ways to pay back part of the UI federal loan and ensure that employers don’t see UI tax increases. There was also an attempt by a bipartisan group of legislators to expand unemployment insurance benefits to domestic violence victims. Below are subsections that provide additional details on these issues.
Unemployment Insurance Reform: House Economic Development Committee Chair Russell Webber (R-Shepherdsville) discussed the need to reform the unemployment insurance program in the interim. He argued that systemic changes to UI needed to occur, especially given that Kentucky’s UI benefit is significantly more generous than other states. Coupled with Republican’s long-held desire to reform UI benefits and the cracks in the system that grew through the pandemic made 2022 ripe for reform. The last time changes took place was after the great recession of 2008.
To address Republican concerns and get Kentuckians back to work, Webber introduced HB 4 that is a comprehensive reform of Kentucky’s UI program. The bill ties the length of benefits to the state’s average unemployment rate over the previous six months. If the state’s average unemployment rate is 4.5% or less, the maximum length of benefits will be 12 weeks. It increases by a week if unemployment is 5-5.5 % and goes up to a maximum of 24 weeks as the rate increases. It also increases the number of work search requirements of beneficiaries to five per week and at least three of these weekly activities shall consist of applying and interviewing for positions. Employers raised concerns that currently there was no accountability for those continuing to receive benefits even though they were offered employment or didn’t show for an interview. Employers will now be allowed to notify the Labor Cabinet if a beneficiary declined to accept suitable work or attend an interview, and the cabinet shall take this into consideration when determining if the beneficiary should continue to receive benefits. If a beneficiary is enrolled and making progress in a job training or certification program, they shall be eligible for an additional five weeks of benefits. The legislation also creates a shared work program, where an employer can apply to the state for approval to have employees with reduced number of hours continue to be paid and receive partial UI benefits. This allows an employer to reduce hours, as opposed to implementing mass layoffs, especially if they plan to return to the previous full employment. The Cabinet has 30 days to approve the plan and an employer may only apply for one work share program in a 12-month period. The House did make a small change before passing the legislation out of committee, ensuring that west Kentucky tornado victims receiving Disaster UI benefits will not be impacted by the program changes. In the Senate, a clarification was made to state that if a beneficiary is in a job training or on recall within 16 weeks, they are not subject to the work search requirements. The bill passed both chambers, but not without some controversy, as Eastern Kentucky legislators raised concerns about the high unemployment rates in their region that will likely never be in sync with the state unemployment rate. Gov. Beshear vetoed the legislation, but both chambers quickly moved to override the veto and the law takes effect Jan. 1, 2023.
Click here to read HB 4
Domestic violence: The House Economic Development Committee did advance HB 83 that would have provided unemployment insurance benefits to women who were victims of domestic violence, if the reason they were filing for benefits meant that they needed to leave their employment to remove themselves from the situation. The benefits would be paid out of the state UI pool account, and not impact the employer’s reserve accounts, but the Unemployment Insurance Program would require a state appropriation to provide this benefit. This would make it more in line with other states that require a police report or other court record or affidavit documenting the situation, but those changes were not accommodated. The bill did pass the House 96-6, but it died in the Senate which took no action on the measure.
Click here to read HB 83
Unemployment Insurance Tax Rate: House Bill 144 is legislation that once again suspends any increase in the taxable wage base for employers, keeping the lower UI tax rate in place for Jan. 1, 2022-Dec. 31, 2022. Additionally, the General Assembly appropriated $243 million in federal funds to pay back part of the federal unemployment insurance fund loan. Both chambers adopted the measure, and the governor signed the legislation. It is in effect now retroactive to January 2022.
Click here to read HB 144
WORKER PROTECTIONS: Democrats in both the House and Senate introduced an array of bills that would add additional provisions to workers’ legal protections including legislation that would prohibit discrimination against employees based on their weight (HB 426). Another series of bills would make it discriminatory for an employer to ask previous salary and wage history (HB 382), and in the Senate, similar legislation was filed, but it also prohibited employers from disciplining employees who discuss salaries and wages with other employees (SB 273 and SB 360). Another measure would have prohibited employers from requiring employees to sign a non-disclosure agreement as a condition of employment (HB 750). Three measures would have prohibited discrimination against employees based on gender identification and sexual orientation (SB 171, HB 11, HB 15). Senate Bill 381 would have prohibited employers from discriminating or punishing employees unable to attend work due to inclement weather and require a policy be put in place. None of these measures passed the Republican-controlled House and Senate.
One measure that did pass the House Judiciary Committee was HB 31 clarifying that a person’s hairstyle is protected in so far as it identifies with their race. The C.R.O.W.N. Act would prohibit discrimination based on hairstyle. The legislation did pass the House Judiciary Committee but was not considered by the full House.
A Republican-supported bill, HB 400, would have eliminated a worker protection smokers have in current Kentucky law. Currently, employers may not ask an employee their smoking status or make it a condition of employment. With increased healthcare costs due to tobacco use, many employers would like to eliminate this protection, but it was never considered for a committee vote and died.
Click here to read HB 426
Click here to read HB 382
Click here to read SB 273
Click here to read SB 360
Click here to read HB 750
Click here to read SB 171
Click here to read HB 11
Click here to read HB 15
Click here to read SB 381
Click here to read HB 31
Click here to read HB 400
MEDICAL MARIJUANA: Once again legislation to legalize medical marijuana failed to be called for a vote in the Senate. The legislation would have allowed a patient to receive a medical card to be eligible for medical marijuana. House Bill 136 would still allow employers to have policies about medical marijuana use on the job. It is likely to come back up, and Gov. Andy Beshear has proposed finding a path through the executive branch to make the legalization of medical marijuana a reality in Kentucky.
Click here to read HB 136
EMPLOYER-MANDATED VACCINATIONS: Several measures were filed in the both chambers to address concerns from some constituents and legislators about employers requiring vaccinations as a condition of employment, especially the COVID-19 vaccine. None of these measures made it across the finish line, meaning that the only restrictions on employer mandated vaccines are those that exist in law today, which are religious and medical exemptions.
House Bill 28 sponsored by Rep. Savannah Maddox (R-Dry Ridge) would have prohibited employers from requiring employees to be vaccinated as a condition of employment if they had medical, religious or conscientiously held beliefs reasons. Employees would have a right to a civil action to sue an employer for violations. The penalties include statutory damages of $1,000 and civil punitive damages. The bill was amended in committee to remove private employers from the requirements, and it would have only applied to public employers. The legislation passed the House, but in the Senate Health & Welfare Committee, HB 28 died for failing to receive the adequate number of votes in the committee.
In the Senate, SB 93, sponsored by Sen. Rick Girdler (R-Somerset), was the measure that advanced. It stated that an employer would be prohibited from requiring as a condition of employment that an employee be vaccinated if they have a sincerely held religious or conscientiously held belief. The employee would sign a statement that they have these sincerely held beliefs as documentation of their exemption. The bill passed the Senate Judiciary Committee, but after multiple floor amendments were filed to the legislation, it was referred back to the Senate Judiciary Committee where it died.
Other measures in both chambers were introduced but did not advance. House Bill 52 would have prohibited employers from requiring immunizations as a condition of employment and would have prohibited segregation of employees based on vaccination status. Also, HB 198 would have required employers with vaccination mandates to allow those with religious, conscientious held beliefs or medical reasons to be exempt, and prohibit retaliation against employees who refuse meet exemptions or if they agree to testing and masking. House Bill 664 would have allowed employees experiencing adverse reactions to vaccines where the employer mandated the vaccine to have a right to civil action against the employer for the requirement. Sen. Adrienne Southworth (R-Lawrenceburg) filed two bills on vaccine mandates; one would require additional exemptions and the other would prohibit employers from requiring employees to obtain a vaccine passport (SB 246 and SB 358). None of these measures advanced, but it was a populist issue that many legislators heard from constituents about the need for action.
Click here to read HB 28
Click here to read SB 93
Click here to read HB 52
Click here to read HB 198
Click here to read HB 664
Click here to read SB 246
Click here to read SB 358
WORKERS’ COMPENSATION: Workers’ compensation is always an issue that receives attention, and this session was no different. Some of the proposals included legislation that would provide workers’ compensation benefits to employees who experience an adverse reaction to vaccines where the employer required immunization as a condition of employment (HB 54 and HB 62). Neither of these bills were considered by the House. One measure that did advance in the House was HB 69 sponsored by Rep. John Blanton (R-Salyersville) that would have reinstituted COVID-19 presumptive eligibility for workers’ compensation when an employee of an essential employer, including grocery store workers, are diagnosed with COVID-19. Originally an Executive Order, the General Assembly did not renew it, and the bill would have made it retroactive to July 2021. The bill passed the House, but it died in the Senate.
Other workers’ compensation changes introduced in 2022 would have repealed or amended some of the workers’ compensation reforms adopted in 2018 that benefited employers and lowered workers’ compensation insurance rates. This includes HB 162 that would have reinstated lifetime medical benefits for a partial and permanent injury. Also, SB 304, sponsored by Sen. Johnnie L. Turner (R-Harlan), increased benefits for permanent partial disabilities. Senate Bill 261 would have required that the Department of Workers Claims hire a physician to inform and resolve disputes on benefits based on medical issues. The Beshear administration adopted a regulation to do this, but the General Assembly overturned this regulation, and it is not in effect.
Finally, there were two measures proposed to address workers’ compensation benefits in relation to cannabis use and prescription drug use. House Bill 598, if adopted, would have eliminated the presumption that the presence of THC was responsible for the workplace injury, if an employee was injured and there was less than 5 nanograms of delta-9 THC. Instead, the employer would be required to provide proof that the presence of THC caused the accident. Another bill, SB 303, filed by Turner would have made the same change for prescription drugs not prescribed by a healthcare provider or used in excess of the prescription. Neither of these measures were considered by the General Assembly.
Click here to read HB 62
Click here to read HB 54
Click here to read HB 69
Click here to read HB 162
Click here to read SB 304
Click here to read SB 261
Click here to read HB 598
Click here to read SB 303
PAID LEAVE: Democrats in the House filed a series of bills that would have required various types of paid leave. This paid leave would have required employers to provide bereavement leave for loss of an infant (HB 78), crimes victims leave (HB 205), and parental leave (HB 427), but none of these measures were adopted. House Bill 59 would have required employers to provide unpaid family leave, but it did not advance either.
Two measures introduced by Republicans did not get adopted either. House Bill 47 would have provided employers with a tax credit if they provided employees with paid leave for organ or tissue donation. Rep. Jim Gooch (R-Providence) filed HB 178 that would have required employers offering paid leave to vaccinated employees who contract COVID-19 to provide the same paid leave to unvaccinated employees, but neither of these measures were considered for a vote and died at the end of session.
Click here to read HB 78
Click here to read HB 205
Click here to read HB 427
Click here to read HB 59
Click here to read HB 47
Click here to read HB 178
MINIMUM WAGE AND TIP CREDIT: A proposed minimum wage increase to $15 per hour by July 1, 2029, died in the House. The bill would have increased the minimum wage for tipped employees to $4 per hour by July 1, 2025 (HB 357). And in the Senate, SB 13 would have increased the minimum wage to $12 per hour by July 1, 2026, for employers with 25 or fewer employees. For employers with more than 25 employees, minimum wage would $15 per hour by July 1, 2026, and the minimum wage starting on July 1, 2022, would have been $10. House Bill 424 would have allowed local governments to increase the minimum wage in excess of the state minimum wage, but it died as well.
Click here to read HB 357
Click here to read SB 13
Click here to read HB 424
OCCUPATIONAL HEALTH AND SAFETY REGULATIONS AND VIOLATIONS: House Bill 208 filed by Rep. John Blanton (R-Salyersville) would have allowed the Kentucky Occupational Health and Safety Administration to reintroduce occupational health and safety regulations previously in effect before July 1, 2021, but because they were more stringent than the federal requirements, they expired because of a state law that passed in 2021 prohibiting the Department of Labor from requiring more stringent occupational standards that the federal government. The bill died in the House. House Bill 749 would have increased the fines for violations of Kentucky’s occupational standards – doubling the current fines for serious and minor violations. It died as well.
Click here to read HB 208
Click here to read HB 749
BAN THE BOX: For several years in row, Rep. George Brown (D-Lexington) has introduced legislation that would have prohibited employers from asking about criminal history on the initial application. House Bill 293 did not pass this session, but it is expected to return next legislative session.
Click here to read HB 293
AT-WILL EMPLOYMENT: Rep. Pamela Stevenson (D-Louisville) filed HB 368 that would have removed language in existing Kentucky law recognizing that Kentucky is an employment at-will state, instead requiring any termination of an employee be for cause. It would have allowed wrongfully terminated employees to seek civil damages. It did not get referred to a committee, so it died in the House Committee on Committees.
Click here to read HB 368
SEIZURE FIRST AID: Rep. Mark Hart (R-Falmouth) filed HB 404 that would have required to post information on how to give seizure first aid. The Department of Labor would have been required to provide the information to the employer. It passed the House, but it died in the Senate Economic Development Committee.
Click here to read HB 404
HERO PAY: Two bills were introduced on ‘hero pay.’ House Bill 425 would require employers, during a declared emergency, to pay employees deemed essential, including healthcare and grocery store workers, hazard pay of at least $15 per hour for a 40-hour week and time and a half after a 40-hour work week, but it died. Gov. Andy Beshear proposed paying essential employees a bonus and use a portion of the state’s American Rescue Plan Act funding to pay for them, but the General Assembly did not include this in their budget. A resolution urged the General Assembly to take such action, but even the resolution was not considered for a vote (HCR 101).
Click here to read HB 425
Click here to read HCR 101
CHILDCARE ASSISTANCE FUND: Rep. Samara Heavrin (R-Leitchfield) successfully passed HB 499 that establishes a private-public partnership for employers choosing to pay all or a portion of an employee’s childcare obligations. The state can match up to 100% of the employer’s contribution for employees whose incomes are equal to or below the state median income level. For employees whose wages are above the median income, the matching funds would be in the amount of 80% of the employer’s contribution. The legislation originally appropriated $15 million for the establishment of childcare assistance fund, but this appropriation was removed from the bill and put into the state budget (HB 1). The new entity would pay the matching funds directly to the childcare provider. An employee would be required to be employed for a minimum of 20 weeks before they would be eligible for the benefit. Additionally, 25% of the matching funds must go to businesses with fewer than 50 employees who work 35 hours per week.
Click here to read HB 499
Click here to read HB 1
WAGE ADVERTISEMENT: House Bill 650 would have required employers to include the actual wage or wage range for job advertisements soliciting applicants. The bill did not get referred to a committee and died at the end of the session.
Click here to read HB 650
TIP POOLING: Businesses where employees rely on tips got a big win with the passage of SB 180 as it was amended in the House. Retiring Rep. Bart Rowland (R-Tompkinsville) filed a floor amendment to remove the prohibition on employer mandated tip pooling. Current Kentucky law prohibits tip pooling requirements unless all employees agree to participate. There are federal requirements for tip pooling and some potential restaurateurs have argued that the tip pooling prohibition stymies opportunities for growth and hiring more staff to assist service staff. Senate Bill 180 passed on the last day and was signed into law by the governor, meaning that restaurants can require employees to participate in a tip pooling program as a condition of employment. Again, all federal laws would need to be complied with, which include restrictions on the types of employees who could be tipped out. The legislation takes effect July 14, 2022.
Click here to read SB 180
CERTIFICATION OF BOUNCERS: Legislation filed in the House and in the Senate would have required anyone verifying age to validate the person is of legal drinking age would need to be licensed with the Department of Alcoholic Beverage Control (ABC), in order to work as a bouncer. The definition of “bouncer” is so broad that it could consider any employee verifying the legal drinking age of the customer, including servers, hostesses, managers, or anyone from any business. All bouncers employed on the premises serving alcohol would be required to undergo an ABC-approved training program through certified schools. The department would also be allowed to establish training requirements for businesses employing bouncers. Anyone wishing to be employed as a bouncer would need to provide a history on previous work experience and any incidents. The ABC would be required to develop a bouncer reporting incident log. If a bouncer engaged in serious physical harm or in inappropriate physical contact with a customer, the employer would be required to report these incidents to the log within 30 days and relieve the employee of services within 14 days. Any violation would result in license revocation. Neither measure was considered in their respective chambers. (HB 207) (SB 367)
Click here to read HB 207
Click here to read SB 367
COMMERCIAL DRIVER’S LICENSING: Senate Bill 124, sponsored by Sen. Phillip Wheeler (R-Pikeville), allows a person whose commercial driver’s license (CDL) has been expired for less than five years to get their licensed renewed without having to retake examinations, so long as their license was not revoked and they submit the appropriate medical certifications. For hazard chemicals endorsement, the driver would be required to retake the hazardous chemical endorsements. The legislation also exempts entry-level CDL training programs from undergoing separate state licensing for the training program so long as the program complies with the federal program standards. Senate Bill 124 was signed into law by Gov. Beshear.
Click here to read SB 124
REGULATORY AND LICENSURE
VACCINE PASSPORTS: There were no shortage of bills related to vaccine passports or employer-mandated vaccination policies. This included HB 21 and HB 28 which prohibited businesses from requiring proof of vaccination in order to enter a business. The bills would have allowed a state agency to enforce the requirement on businesses and if the business refused to comply, they would be prohibited from receiving state contracts in the future (HB 28), and HB 21 would have subjected a non-compliant business to a $5,000 per violation fine. House Bill 28 did advance in the legislature, but the vaccine passport restriction was removed from the legislation. Senate Bill 358 would have prohibited employers from requiring employees to obtain a vaccine passport as a condition of employment, but it did not advance.
Click here to read HB 21
Click here to read HB 28
Click here to read SB 358
BALLOT INITIATIVES: House Bill 150, sponsored by Rep. Josie Raymond (D-Louisville), would have proposed a constitutional amendment to allow citizens to propose new laws or amend existing ones by ballot initiative. This proposed constitutional amendment did not advance in the legislature.
Click here to read HB 150
MEDICAL SPAS: Legislation to require non-medical cosmetic spas to be regulated by the Board of Cosmetology became very controversial after physicians raised concerns about laypersons doing medical procedures without the proper credentials and that it was not appropriate to allow the cosmetology board to regulate these entities. The bill did exempt retail make-up counters from being considered medical spas and regulated by the Board of Cosmetology. House Bill 340, sponsored by Rep. Jonathan Dixon (R-Corydon), would have allowed other healthcare professionals to supervise these facilities including optometrists. The bill passed the House, but it died in the Senate Health & Welfare Committee.
Click here to read HB 340
ASSISTANCE ANIMALS: House Bill 403 would have expanded the types of healthcare providers who can determine a person’s disability status for the purpose of using an assistance dog. It would have allowed retailers to request documentation from customers bringing assistance animals on the premises and established penalties for misrepresentation of assistance dogs. The bill was introduced, but it did not advance any further.
Click here to read HB 403
LOCAL GOVERNMENT REGULATION OF GUNS: Legislation that would have allowed local governments to have more restrictive gun control laws than the state was introduced, but it did not advance. (HB 428).
Click here to read HB 428
INNOVATIVE REGULATORY FRAMEWORK OF CRYPTOCURRENCY: House Bill 724 would establish a new regulatory test of new products, services, and emerging technologies, including cryptocurrency pools and the risk associated with these new products. The new regulatory program would have been housed within the Department of Insurance, but it did not move forward this year.
Click here to read HB 724
ADULT SIZED CHANGING TABLE: Sen. Julie Raque Adams (R-Louisville) introduced SB 117 that would have amended the state building code to require stores with 40,000 square feet or more and malls to include adult-size changing tables within the constriction of the restroom for entities constructed on or after Jan. 1, 2024. The bill was referred to Senate Licensing & Occupations Committee, but it never received a committee hearing.
Click here to read SB 117
DEFICIENT REGULATIONS: House Bill 337, introduced by Administrative Regulatory Review Subcommittee Co-chair Rep. David Hale (R-Wellington), passed the House, but was not considered by the Senate. The legislation would have changed what happens to administrative regulations once they are found deficient. Currently it is up to the governor whether or not to implement a deficient regulation, and the General Assembly can act on it when they return to a regular session. HB 337 stated that if a regulation is found deficient, it is automatically withdrawn. It would have also granted the attorney general the authority to determine if deficient regulations should take effect or be withdrawn. It was referred to the Senate Local Government Committee, but it never received a hearing.
Click here to read HB 337
KRATOM: Kratom is a plant native to southeast Asia and is unregulated in the U.S. This year there were three bills that would have regulated the sale of Kratom. House Bill 142, introduced by Rep. Josh Calloway (R-Irvington) would have prohibited the sale of Kratom, making it a controlled substance. The legislation received a committee hearing in the House Health and Family Services Committee where concerns were raised about the negative health impacts of Kratom. The legislation did not receive a committee vote, but Calloway instead introduced HB 569 that would regulate the sale of Kratom. It passed the House Health and Family Services Committee with an amendment. It would require retailers to be licensed to sell the product, require the product to be labeled, and establish fines and penalties for selling adulterated Kratom. It would also restrict the sale of Kratom products to those 21 years of age or older. The legislation did pass out of the House, after a floor amendment that would narrow the legislation to only include licensing of retailers and restricting the sale of Kratom to those 21 years of age or older. A companion bill was introduced in the Senate – SB 210.
Click here to read HB 142
Click here to read HB 569
Click here to read SB 210
REINS ACT: House Tourism, Small Business and Information Technology Committee Chair Phillip Pratt (R-Georgetown) proposed HB 594 called the REINS Act to ensure that executive branch agencies were taking into consideration the cost of proposed regulations on the private businesses they are regulating. The bill was vetoed by Beshear, but the legislature did vote to override the veto and it is now law. It requires any executive branch agency proposing an administrative regulation to conduct a fiscal analysis of the financial impact the regulations will have on the impacted businesses. It allows the Administrative Regulatory Review Committee to find any regulation deficient if the regulation doses include the cost analysis.
Click here to read HB 594
INTOXICATING HEMP: The Senate proposed two measures to change hemp and cannabidiol (CBD) in Kentucky. First, SB 73 would have increased the allowable amount of Delta-9 THC concentration percentage from .3 to 1 %. It was referred to the Senate Agriculture Committee, but it did not receive a committee hearing. Senate Bill 170, sponsored by Senate Agriculture Committee Chair Paul Hornback (R-Shelbyville), prohibited the sale, distribution, and marketing of intoxicating hemp, this would include CBD containing Delta-8. The bill would also prohibit the sale of ingestible CBD, such as hemp tea, buds flower or leaf and hemp cigarettes. The bill passed the Senate but died because it did not advance in the House.
Click here to read SB 73
Click here to read SB 170
REVENUE AND TAXATION
EXECUTIVE BRANCH BUDGET: The General Assembly passed the state executive branch budget that for the first time in many years was not considered an austere budget. The Kentucky coffers are full of revenues from increased tax collections and federal money provided to assist states with overcoming the economic effects of the COVID-19 global pandemic. House Bill 1 as passed by the House appropriated no funding for childcare assistance, but when the bill passed out of the Senate, it did include $15 million in funding for a childcare assistance program where an employee receiving childcare assistance support from their employer is eligible for matching funds to apply towards their childcare cost. A portion of the funds must be set aside for small employers. One of the greatest challenges to workforce shortage issues has been the cost of childcare as well as access to childcare.
The legislature also included an appropriation for the technology development of a basic health benefit plan managed under the Medicaid Managed Care Organizations (MCOs), but later in the budget the General Assembly states that the state shall not develop a basic health benefit plan without the express authority of the General Assembly. But after the session concluded, the administration stated they would develop a basic health benefit plan, but have subsequently put it on hold until Jan. 1, 2024.
The House passed its version of the budget early, giving the Senate something they have long desired – time to craft their version of the budget without the end of the legislative session looming. It was surprising how quickly the Senate and House came to agreements on their budget differences and for the most part both chambers got what they wanted. The legislature funded a broadband initiative for rural Kentucky to the tune of $185 million, salary increases for state employees, but no salary increases for teachers, which brought some criticism, especially because the General Assembly approved a pay increase for legislators. Beshear vetoed portions of the executive branch budget and many items were overridden by the legislature. The only vetoes left standing were those technical in nature or those that created a conflict.
Click here to read HB 1
WEST KENTUCKY TORNADO DISASTER RELIEF: The far western Kentucky region was devastated by a tornado that ripped through several western Kentucky communities in early December, 2021 decimating entire towns. It was no surprise when the General Assembly quickly and very early in the session passed HB 5 sponsored by Rep. Richard Heath (R-Mayfield) to appropriate $45 million into a tornado relief fund managed by the Division of Emergency Services. It will help these communities build back and cover tornado recovery costs.
Click here to read HB 5
Dark Store Theory: After the House passed HB 260, legislation that would prescribe the assessment of commercial properties to include the value of the tenant in the building and not just the value of the land and the building, the Senate assigned HB 260 to the Senate Transportation Committee where it died.
House Bill 260 passed the House 66-24. Rep. Patrick Flannery (R-Olive Hill) stood and opposed the legislation, requesting the House adopt two floor amendments to the legislation that would have removed the provisions that would require commercial property to be assessed with the restrictions. One floor amendment was ruled out of order and the other floor amendment would have eliminated all the provisions of HB 260, except for the requirement of the representation by Kentucky licensed real agents, lawyers and certified public accounts for appeal hearings. One floor amendment did pass, changing the requirement regarding appraisals to reference assessments and require them to be based on the assessors standards or the USPAP, which is the Appraisal Standard. It was adopted by the chamber before it was sent to the Senate.
Proposed changes to the income approach requiring that the value of the lease include the characteristics of long-term leases attached to the property were removed. What remained was still confusing language on when a PVA uses the sales comparison approach for sales or rentals and require that like properties be assessed only to like properties and exclude the leased properties. Regardless of the positive changes, the legislation would still be harmful to retailers—including pharmacies-- because it would require the PVA to consider the economic characteristics of the tenant in the building, requiring a shift of the property tax burden to commercial businesses.
Click here to read HB 260
MOTOR VEHICLES: The issue of increased values for motor vehicles went viral as a result of a legislator’s social media post which stated that in the 2021 legislative Session he foresaw that the property taxes people pay on their vehicles would increase significantly based on the value of used cars increasing in the current marketplace. There were several measures filed in both chambers to try and address this issue. Gov. Andy Beshear said that he would address the issue at the Executive Branch level after arguing that he did not have the authority to take steps to fix the issue. In the end, the legislature passed HB 6 that states for 2022 and 2023 tax years, the taxpayer shall not pay county and city taxes on the increased value of their car. Beshear quickly signed the legislation and for those who have already paid their licensing and registration for 2022, they are entitled to apply for a refund.
Click here to read HB 6
COMPREHENSIVE TAX REFORM: Each chamber came up with its version of tax reform. The Senate proposed a $500 per individual taxpayer rebate directly to Kentucky voters. This passed the Senate, but was never considered by the House. Instead, the House proposed lowering the personal income tax by 1% immediately and, in exchange, added sales taxes to certain services used by businesses, such as marketing, prewritten computer software, telemarketing services, and others. House Bill 8 ended up including more tax changes than just lowering the personal income tax; it also became the vehicle for the traditional revenue measure clean up. The personal income tax rate will decrease .5% for the upcoming tax year, if the budget reserve trust fund reaches 10% of the revenues collected and the general fund revenues include enough money to cover the tax reduction and deposit revenues of 10% into the budget reserve trust fund. In order to make-up for the loss of revenues from the personal income tax, sales taxes are added to certain services. Those services include prewritten computer software, marketing, telemarketing, photography services, lobbying services, executive employee recruitment services, website design and hosting, private mailroom services, and security system monitoring services. The new services will not be subject to the sales tax until Jan. 1, 2023.
Other changes include creation of a tax amnesty program, the requirement for electric vehicles to pay a 3 cent per kilowatt hour assessed by the vehicle power dealer. The EV tax would increase annually by the National Construction Cost Index (NCCI). The tax change is not supposed to take effect until Jan. 1, 2024, but the legislation requires that the tax changes will go into effect Jan. 1, 2023.
The revenue measure adopts the IRS conformity language, except for restaurant revitalization funds meaning that these expenses would not be deductible.
Finally, the legislation would exempt prescription and over-the-counter animal medications from the sales tax. Currently, the sales tax applies to animal and human over-the-counter medications, but for animal medications prescribed by a veterinarian, they are subject to the sales tax. This would remove the requirement that sales tax be collected on both animal over-the-counter and prescription medications. Included in HB 8 was a tax amnesty program that was originally proposed in HB 176 that creates a tax amnesty program for taxes and penalties issued prior to December 1, 2021.
Click here to read HB 8
Click here to read HB 176
SALES TAX EXEMPTIONS: There were several bills introduced to exempt certain goods from the sales tax, but only one became a reality. The so called ‘pink tax’ would be eliminated under a proposal introduced by House Democrat Attica Scott of Louisville. House Bill 27 would eliminate the sales tax on feminine hygiene products. The legislation was not considered. House Bill 36 sought to exempt guns and ammunition from the state sales tax, but it did not get considered by the legislature. Another measure would have exempted retail sales of coins and bullion from the sales tax, but after moving to the Appropriations & Revenue Committee it was not adopted (HB 272). A bill introduced by a House Democrat would have exempted breast pumps and other breast-feeding supplies from the state sales tax, but HB 432 did not advance to a committee for a hearing.
Contained in HB 8 was a provision that exempts farm animal medications—not pet medications—from the state sales tax. The medications include prescription and over-the-counter medications. It did pass and is now law and will take effect July 14. In regard to medications for humans, prescription medications in Kentucky are not subject to the sales tax, but over-the- counter medications are subject to the sales tax. Senate Bill 144 sponsored by Sen. Max Wise (R-Campbellsville) would have exempted over the counter medications for human consumption, but it was not given a committee hearing or vote in the Senate Appropriations & Revenue Committee.
Click here to read HB 27
Click here to read HB 36
Click here to read HB 272
Click here to read HB 432
Click here to read HB 8
Click here to read SB 144
TAX CREDITS: Every year tax credits are a part of the conversation.
Decontamination and Remediation of Brown Fields: Two bills were introduced to increase the tax credit amount or add a new tax credit to cleaning up brownfield sites. House Bill 555 is the decontamination tax credit, and it would establish a refundable decontamination income tax credit for qualifying properties including brownfields, capped at $30,000,000 annually for 100% of the eligible expenses, but not more than $50,000 annually. The property is required to be located within or a half mile of a TIF or within a Kentucky New Markets Development Program. It does prohibit taxpayers taking the decontamination tax credit and the voluntary remediation tax credit. In contrast, HB 556 would expand the voluntary remediation tax credit and make it a refundable income tax credit and increase the tax credit amount to $30 million. Ultimately, this tax credit was included in HB 8.
Click here to read HB 555
Click here to read HB 556
Click here to read HB 8
Employer Tax Credits:
Organ Tissue Donation: House Bill 47 sought to increase participation in organ and tissue donation by establishing a non-refundable organ and bone marrow tissue donation employer tax credit when paid leave is provided to the donor. The tax credit is equal to the amount paid in salary and benefits during the leave period. The bill did not move beyond the House Committee on Committees.
Click here to read HB 47
Educational Expenses: House Bill 103 would have established a nonrefundable tax credit for employers making contributions to educational savings accounts on behalf of employees. The bill was referred to the House Appropriations & Revenue Committee, but it did not receive a hearing.
Click here to read HB 103
Student Loans: House Bill 255 would have created a tax credit for employers who make student loan payments on behalf of employees. The tax credit would be nonrefundable of up to 50% of the employers’ contributions towards employees’ student loans. The bill was introduced, but it never moved.
Click here to read HB 255
TAX EXPENDITURES: House Bill 143, introduced by Rep. Ken Fleming (R-Louisville), would have created the Tax Expenditure Review Panel within the General Assembly to regularly review sales tax exemptions and tax credits. The bill would require the panel to review the purpose and success of the tax expenditure and determine whether or not the tax expenditure should continue. It would also look at the impact of tax expenditures on state revenues. The legislation was introduced, but not considered.
Click here to read HB 143
CRISIS SERVICES HOTLINE 911 FEES: The federal government is looking to require adding a new type of 911 emergency service, except instead of physical medical emergencies the line would be dedicated to crisis services and the number would be 988. House Bill 373 would establish a crisis service hotline in Kentucky. It would have required retailers to collect and remit the 988 service on prepaid wireless phones to the state. This is similar to how 911-service fees work now. The bill appeared to be moving in the House, but it never received a committee hearing in the Appropriations & Revenue Committee.
Click here to read HB 373
OCCUPATIONAL LICENSE TAXES: House Bill 438 sponsored by Rep. Tom O’Dell Smith (R-Corbin) would have allowed a city or county of any size to levy an occupational tax of any amount separately or without the taxes offsetting each other. Today, there is a cap of 1% on occupational license taxes between and the city and county, but this would allow unlimited occupational license taxes without any offset or cap. The bill did not pass.
Click here to HB 438
LIMITED LIABILITY ENTITIES TAX: House Bill 445 sponsored by Rep. David Hale (R-Wellington) would have changed the definition of the cost of goods sold to align with the federal definition of cost of goods sold and in turn lowering the overall LLET tax companies would have to pay, but it died in the House Committee on Committees. Another bill impacting the LLET did not see action as well. House Bill 715, sponsored by Rep. Patrick Flannery (R-Olive Hill), would have increased the threshold for assessing the LLET tax to businesses making $100,000 or more, but it failed to get assigned to a committee.
Click here to read HB 445
Click here to read HB 715
CONSTITUTIONAL AMENDMENT – LOCAL OPTION SALES TAX: Rep. Michael Meredith (R-Oakgrove) introduced HB 475 and HB 476 to take the steps necessary to make the local option sales tax a reality in Kentucky. A constitutional amendment that would ask the voters to amend the constitution to give the General Assembly the authority to allow local governments to levy any taxes not in conflict with the constitution and then if it was amended nothing would be in conflict with the constitution. Essentially, HB 475 would open the door to allow the General Assembly the authority to levy any local tax; the only restriction would be that any local sales tax would have to match the state base. It could not exclude certain goods or services that the state taxes, and local governments could not pass sales taxes on goods and services that were not included in the state sales tax base. House Bill 476 states that if the constitutional amendment is adopted, no local government could implement a sales tax immediately upon approval of the constitutional amendment. Local government groups argued this was necessary because there are existing state statutes that would allow local governments to levy any local tax not in conflict with the constitution, but others argued that the General Assembly was trying to have their cake and eat it too, arguing that they didn’t pass legislation authorizing a local sales tax. The politics of taxes can make it tricky to adopt these constitutional amendments. House Bill 475 passed the House, and it looked like the Senate might give final passage to HB 475 as the legislation kept getting readings, keeping the legislation on life support.
Click here to read HB 475
Click here to read HB 476
PROPERTY TAX REFUND SPECIAL PURPOSE GOVERNMENT ENTITIEs: House Bill 504, sponsored by Rep. Matt Lockett (R-Nicholasville), would have established a taxpayer refund process in situations where a special purpose government entity did not follow the appropriate procedure for establishing a tax rate. The bill was referred to the House Local Government Committee where it easily passed and subsequently to the House floor where it passed 90-0, but after being referred to the Senate State and Local Government Committee, the bill died in the committee.
Click here to read HB 504
TRANSPORTATION INFRASTRUCTURE DISTRICTS: House Bill 274 passed allowing local governments with a population of 20,000 or more to establish transportation improvement districts that would be considered a special purpose government entity and therefore would be authorized to levy property taxes that could be created for a specified area for the construction of roads, parking or other transportation needs. The Transportation Improvement District could receive funds as well. The legislation did not have any opposition and passed easily through both chambers. The General Assembly sees the legislation as something that can assist with the underfunded road fund at a time when increasing the gas tax is not politically palatable.
Click here to read HB 274
LOWER SALES TAX RATE: Gov. Andy Beshear was pressed by Senate Republicans that his Department of Revenue was not taking the appropriate steps to ensure that motor vehicle owners required to pay property taxes on vehicles weren’t getting hit with higher than necessary property bills because of the increased value of used cars inflating the value of motor vehicles. The Senate argued that the legislature did not to take action on this issue and that Beshear could do it on his own. Inspired by this edict, Behsear agreed with the Senate that it was time to return some money to the people to help manage the costs experienced by consumers because of inflation. To that end, he proposed a temporary one-time drop in the state sales tax rate from 5% to 4%. House Bill 508 sponsored by Rep. Angie Hatton (D-Whitesburg) would have made this proposal a reality, but it was never considered by the Republican legislature. Instead, the General Assembly opted to lower the personal income tax and add additional services to the sales tax base.
Click here to read HB 508
PERSONAL INCOME TAX REBATE: The Senate’s refrain about the increased revenue receipts the state continued to see over the last few years is that it was time to return tax revenue to the people, and they demonstrated that refrain by introducing SB 194 that would have for the tax year starting Jan. 1, 2022-Dec. 31, 2022, establish an individual income tax economic recovery tax rebate of $500 per individual. The Senate quickly passed this legislation, which was also a response to Beshear’s proposed lowering of the sales tax rate, but the House did not go along with such a change. Instead, both chambers agreed to lower the personal income tax rate .5% and expand the state sales tax to additional services.
Click here to read SB 194