Advocacy in Action NKY Chamber Legislative Outcomes 2019
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LETTER FROM LEADERSHIP ADVOCACY IS ONE OF THE MAIN PILLARS OF THE WORK OF THE NKY CHAMBER AS it plays a critical role in promoting and supporting a vibrant economy for our region and the 175,000 hardworking chamber members and taxpayers which we represent. Every day, our staff and volunteers work diligently to improve the business climate of Northern Kentucky. Our priority continues to be developing and sustaining a growing workforce in Northern Kentucky. This overriding priority leads the NKY Chamber to focus on related actions including education, transportation and healthcare. Providing excellent education at all levels, efficient transportation, and reducing employer and employee healthcare costs all promote our workforce activities. This publication serves as a summary of the NKY Chamber Legislative Priorities that successfully passed during the 2019 Session of the Kentucky General Assembly. These priorities include: Cleanup measures from the 2018 tax modernization efforts for nonprofits and local community banks; clarifying employment arbitration statutes based on a recent KY Supreme Court ruling; addressing NKU’s public pension crisis; banning tobacco at our K-12 schools; and allowing KEES scholarships to be used at trade schools. The hard work and ingenuity of business leaders in NKY paved the way for our continued economic prosperity. By approving legislation which addresses these issues, our members of the General Assembly have continued to position NKY as an economic driver to the benefit our businesses, residents and the entire Commonwealth. However, there is still much more public policy work to advance in the 2020 legislative session. The NKY Chamber will continue to work with lawmakers to ensure NKY’s economy continues to thrive and prosper. Finally, we appreciate our members’ continuous support of the NKY Chamber and our advocacy efforts. We focus on our members’ priorities to ensure we are helping our region build healthy businesses, healthy communities and a healthy region.
Chamber Board Chair KMK Law
Vice Chair Chamber Advocacy Heritage Bank
President & CEO NKY Chamber
VP, Public Affairs & Communications NKY Chamber email@example.com c 502.370.5600 | @NKYCCAdvocacy
Courtney Neltner Cover Photo by Bruce Phillips, KY Legislative Research Commission
LEGISLATIVE OUTCOMES 2019
Public Affairs Coordinator NKY Chamber firstname.lastname@example.org o 859-578-6391 PAGE 3
NONPROFIT SALES TAX EXEMPTION
Jacob Brooks Group Vice President YMCA of Greater Cincinnati
Caroline K. Weltzer Partner / Vice President, Finance Viox & Viox, Inc.
“As one of the 17,000+ nonprofit organizations in the Commonwealth of Kentucky, we are very grateful for the passage of HB354 to exclude admissions charged by nonprofit educational, charitable, or religious institutions exempt from taxation under Internal Revenue Code Section 501(c)3. Nonprofits are important partners of the Commonwealth in delivering programs and services that would otherwise either not be provided or rest on the shoulders of the Commonwealth to provide. Protecting our nonprofit tax exemption is vital in order to ensure all of our resources are reinvested to provide vital services to individuals, who otherwise could not afford them, for free or at a reduced cost.”
“As a Board Member for a not-for-profit, I was surprised when the 2018 tax modernization bill was passed. Obviously an organization that has obtained not-for-profit status has undergone the rigors of testing that ensure their status is legitimately worthy. To saddle organizations such as these with a sales and use tax on admissions or other related fundraising activities adds another layer of paperwork to already highly regulated organizations. In addition, it ultimately takes away from the fundraising effectiveness that these organizations work so hard to achieve. I am thankful for the work of the NKY Chamber to have this tax repealed for not-for-profit organizations. The Chamber does an excellent job of lobbying for efforts that support our community.”
HB 354 - Nonprofit Tax Sales Exemption – Rep. Steven Rudy Provides relief for nonprofits collecting and remitting sales taxes for events and programming related to fundraising, including live and silent auctions. PAGE 4
NKY CHAMBER ADVOCACY
NONPROFIT SALES TAX EXEMPTION “After the passage of the 2018 tax modernization bill, we were flooded with many calls from our not-for-profit clients who were confused about how and why they were now required to collect sales and use tax on admissions and any other related fundraising activities, including items sold or auctioned for fundraising purposes. Thanks to the NKY Chamber for their constant updates and advocacy efforts to the legislature to have this repealed and have an exemption provided for all not-for-profit organizations.” Brian Todd Shareholder Clark Schaefer Hackett
RESALE CERTIFICATE “The KY sales tax law, effective July 1st, 2018, was a substantial undertaking for our company. This was especially the case for us, and many other companies like ours, who had never had an obligation to charge/pay sales tax prior. The most prevalent burden was the lack of an exception for subcontractor expenses, causing a double taxation. We experienced this as both the main contractor and the subcontractor. As the main contractor we had no choice but to take the loss on the second taxation. As the subcontractor we lost a major customer. This customer represented 20% of sales in our maintenance division. They cancelled our contract because they believed it was our responsibility to cover the tax as it was not a part of our contract. Our alliance with the NKY Chamber proved to be very beneficial in getting our voice heard in regards to this matter.”
Jessica Colley Director of Finance Cru Cutters, LLC
HB 354 – Creation of a Resale Certificate – Rep. Steven Rudy Creates a resale certificate for business to business transactions, thus eliminating double taxation for services which are required to pay a sales tax for services.
LEGISLATIVE OUTCOMES 2019
BANK FRANCHISE TAX “Kentucky community banks have been taxed at a rate more than double of other corporations. The result is reduced investments in branches, employees and in our communities. In fact, community banks have become acquisition targets in part due to the current tax code. As the president of a locally owned community bank, we appreciate the efforts of our legislative caucus and the NKY Chamber in advocating a solution which treats community banks like other Kentucky corporations.”
Lytle Thomas President & CEO Heritage Bank
“It’s great to see HB 458 get passed, creating a fair tax structure for Kentucky banks equal to other corporate tax structures across the Commonwealth. This fair legislative result will allow Kentucky banks, including Republic Bank, to reinvest into their communities, into their labor force, as well as investing into new technologies that help our clients. Creating a more competitive banking environment is ultimately good for the economic development of Northern Kentucky and of the Commonwealth of Kentucky.”
Jason Payne Managing Director of the NKY Market, SVP Republic Bank
HB 458 – Bank Franchise Tax – Rep. Steven Rudy Replaces the bank franchise tax with the corporate income tax to treat banks like all other corporations for the purpose of taxation.
NKY CHAMBER ADVOCACY
KEES SCHOLARSHIP FOR TRADE SCHOOLS “The expansion of the KEES scholarship program legislation will be a valuable tool to allow students who are looking for both a career and educational development path via skilled trades training and apprenticeship. By recognizing that the education needed to work in the skilled trades, or to complete an apprenticeship program, is in fact collegiate level gives guidance counselors, students and decision makers more flexibility when choosing a career path for high school graduates. It will also hopefully encourage more students to investigate the skilled trades and apprenticeships as career options and help address the crippling workforce shortage we are facing.”
Shawn Cox Director of External Relations KY Institute For Craft Training
HB 61 - KEES Scholarship for Trade Schools – Rep. Kim Moser Allows KEES scholarships to be used for qualified workforce training programs.
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ARBITRATION AGREEMENTS “Restoring Kentucky employers’ ability to enter into arbitration agreements at the outset of employment brings Kentucky law back in line with other states and makes for a more competitive business legal environment. This law allows Erigo and our clients to once again resolve potential conflicts cheaper, faster, and more efficiently outside of the court system with arbitration, as Kentucky employers could do prior to the 2018 Kentucky Supreme Court decision.”
Charlie Vance Chief Executive Officer Erigo Employer Solutions
“The passage of SB 7 proves what a united business community can accomplish. Without the efforts of Kentucky’s Chambers of Commerce, including the Northern Kentucky Chamber, we would have been the only state in the country which refused to permit employers to make arbitration a condition of employment. Without this new law, Kentucky would have been labeled by competitive states as antimanagement rights, which would have hurt our ability to grow better jobs for the benefit of all Kentuckians.” Rob Hudson Member Frost Brown Todd LLC and Past Chair of the NKY Chamber
SB 7 - ARBITRATION AGREEMENTS – Sen. Robert Stivers Restores Kentucky’s arbitration agreement law. PAGE 8
NKY CHAMBER ADVOCACY
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Charter is proud to be part of the Northern Kentucky Chamber of Commerce Legislator Appreciation Breakfast.
Missed Opportunities Several measures would have improved the economic climate of Kentucky. Unfortunately, many positive, pro-business measures below were not passed by the 2019 General Assembly.
Transportation Funding For another year, the Kentucky General Assembly was unsuccessful in the passage of legislation to address the Commonwealth’s failing transportation and infrastructure system. HB 517 would have increased funding to Kentucky’s Road Fund by increasing the gas tax by $0.10 per gallon and imposing some fees in an attempt to jump start the state’s stagnant Road Fund.
Sports Wagering The Kentucky General Assembly was unable to advance passage of HB 175 which would have brought sports wagering out of the shadows and allowed Kentuckians to benefit. This bill would have brought new revenue through our horse racing tracks and the Kentucky Motor Speedway and could have generated between $1548 million for the Commonwealth’s severely underfunded public pension system.
Removing Smokers as a Protected Class Despite the potential wins for productivity and reduced healthcare costs to Commonwealth businesses, the Kentucky General Assembly missed an opportunity to repeal smokers as a protected class of citizens in Kentucky. By neglecting to advance SB 18, legislators perpetuate the falsehood that there is a constitutional “right to smoke.”
Pension Reform Despite the Kentucky Supreme Court overturning the passage of SB 151, the General Assembly was unable to enact any reforms related to the Commonwealth’s pension system during the 2019 Session. The NKY Chamber supported previous legislation which addressed pension reforms to pay down the Commonwealth’s pension liabilities faster than taking no action.
Unemployment Insurance Reform The Kentucky General Assembly failed to take steps to modernizes Kentucky’s unemployment insurance system to encourage people to address Kentucky’s low workforce participation rate and return to work quicker.
Our Mission and Vision. Our mission is to promote and support the development of strong businesses and a vibrant economy in the Northern Kentucky region, through leadership and advocacy, resulting in a better quality of life for all. Our vision is to be the premier membership organization driving Northern Kentucky’s pursuit to be a world-class region in which to start, develop and grow thriving businesses.
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NET METERING “Senate Bill 100 is essential because it modernizes Kentucky’s net metering laws so that they’re fair to all customers, including those who embrace privately-owned solar and those who do not. The legislation also enables the Public Service Commission, which already regulates electric utilities, to study and determine the rates that utilities will credit net metering customers for their excess electricity.”
Chuck Session VP, Government Affairs Duke Energy Ohio and Kentucky
SB 100- Net Metering – Sen. Brandon Smith Refers the issue of setting the value of excess electricity from net metered systems such as rooftop solar to the Public Service Commission for ratemaking purposes.
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TOBACCO FREE SCHOOLS “A healthy workforce supports business success through productivity and lower health care costs. Since healthy behaviors start when we’re young, HB 11’s establishment of tobacco-free school campuses will help youth be tobacco-free now and for generations to come – our future workers of Northern Kentucky and the Commonwealth.”
Lynne Saddler, MD, MPH District Director of Health Northern Kentucky Health Department
“Our kids will be what they see. The silent teaching that we do as adults is so very important. Kentucky leads the nation in the number of new lung cancer cases diagnosed each year. The passing of HB 11 is a positive step towards making Kentucky one of the healthiest states in the nation. We, as adults, must act in a responsible way if we want children to do the same. Our actions speak louder than words. Our kids deserve smoke-free schools.” Jay Brewer Superintendent Dayton Independent Schools
HB 11 – Tobacco Free Schools – Rep. Kim Moser Prohibits tobacco use on school property, which reduces exposure to secondhand smoke.
LEGISLATIVE OUTCOMES 2019
“The NKY Entrepreneurship Council has won over $5M in state (RISE) and federal (EDA Regional Innovation Strategies) grants for the next three years. One of the primary goals of the grants is to establish industry clusters in logistics innovation, health innovation and informatics (data) innovation. Add in the manufacturing industry and you have major NKY industry sectors and each of these industries will be impacted and possibly disrupted by blockchain technology. Therefore, the partnership of our Council and the NKY Chamber on blockchain legislation is very important to Northern Kentucky’s long term economic development efforts.”
Board Chair of TiER1 Performance Solutions Chair of NKY Entrepreneurship Council
“My job is to lead the region in the creation of jobs in the early stage innovation space. Recently, the blockchain sector became one of the most in-demand and highest paying jobs in the U.S. So when the Brookings Institute declared Kentucky in a category of states that are “Unaware” of blockchain, it was time to take action. Working with the NKY Chamber, our strategy is to make Kentucky a “Blockchain Friendly” state and our first step was to begin building awareness with our legislative leaders. House Joint Resolution 171 was an awarenessbuilding first step to create and bring blockchain jobs to Kentucky.” Casey Barach Senior Vice President Entrepreneurship, Tri-ED
HJR 171 – Blockchain Technology – Rep. Chad McCoy Urges the KY Cabinet for Economic Development to work with state and federal officials and study the issue of blockchain technology.
NKY CHAMBER ADVOCACY
NKU PENSIONS “NKU’s success and impact on our community will be focused on three strategic pillars: student access, completion and career and community engagement. The unsustainable public pension system limited our capacity to invest in achieving these principles. Thanks to the efforts of our NKY Legislative Caucus and General Assembly, we now have financial predictability and have avoided the drastic pension contribution increases we were facing.” Dr. Ashish Vaidya President Northern Kentucky University
HB 358 – Regional University Public Pensions – Rep. James Tipton Allows regional universities to move new employees of their institutions into a new plan, more like a 401k, to ensure pension costs do not continue to hinder university budgets and freeze current contribution rates.
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GO THE DISTANCE FOR CHANGE. Proud to support the Northern Kentucky Chamber of Commerce.
NKY LEGISLATIVE CAUCUS
Kentucky State Senate
Senator Julian Carroll
Senator John Schickel
Senator Damon Thayer
Senator Paul Hornback
Senator Chris McDaniel
Senator Wil Schroder
NKY LEGISLATIVE CAUCUS
Kentucky House of Representatives
Representative Rick Rand
Representative Sal Santoro
Representative Savannah Maddox
Representative Philip Pratt
Representative Diane St. Onge
Representative Kim Moser
Representative Buddy Wheatley
Representative Ed Massey
Representative Dennis Keene
Representative Joe Fischer
Representative Adam Koenig
Representative Mark Hart
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NKY Chamber Legislative Outcomes 2019