When the 2022 session got underway on January 4th, the General Assembly’s constitutional duties were the redistricting of congressional and legislative districts and the passage of a biennial state budget. The legislature not only carried out these constitutional duties, but also passed a major tax reform initiative and several other significant pieces of legislation. The session concluded with sine die adjournment on April 14 after many veto overrides and last-minute movement of legislation. All of this took place with Republican supermajorities in the House (75-25) and in the Senate (30-8) that rendered Democratic Governor Andy Beshear largely unable to affect the outcome of legislation.
Redistricting
Bills to redraw district lines were introduced on the first day of the session and, by the close of legislative business four days later, were on their way to Governor. Lawsuits filed by the Democratic Party and several residents of Franklin County are pending but are unlikely to affect the 2022 primary or general elections.
Budget
The other constitutional duty of passing a budget was also jumpstarted when, in an unprecedented move, the House's versions of the executive and transportation budgets were introduced on the 4th day of the session. The introduction of House Bill 1 preempted Gov. Beshear’s budget address, setting the tone for the session. The HB 1 spending plan passed the House on the 12th legislative day of the session, but its movement slowed after that until the Senate version passed 31 legislative days later with significant changes, prompting the appointment of Budget Conference Committee.
The free conference committee report on HB 1 passed both Chambers on March 30 with bipartisan support and only 3 nay votes. HB 1 and House Bill 241, the transportation budget, were finally passed after the override of several line-item vetoes on April 13. Some highlights of the spending plan were:
- funding of all-day kindergarten,
- eight percent raises for state employees and additional compensation enhancement for state police and social workers,
- investments in water and sewer infrastructure,
- $150 million for state parks,
- funding for economic development through the Product Development Initiative,
- $1.5 billion in the Budget Reserve Trust Fund.
Tax Reform and Other Revenue Issues
The 2022 session made historic changes to Kentucky’s system of taxation. As enacted, House Bill 8, sponsored by Rep. Petrie, is landmark legislation that will lower the state’s personal income tax by half a percent beginning in January 2023 if certain financial conditions are met, and after that can be reduced by half of a percent each year if additional conditions are met. The ultimate goal is the total elimination of the income tax through incremental reductions over a period of years. Lost revenue is offset by broadening services subject to sales taxes, though sales taxes on marina usage, travel agencies, advertising, and personal financial services were dropped in the bill as enacted. HB 659, a cleanup of HB 8 to address some timelines including the timelines around Electric Vehicle fees, was passed on April 14.
Skyrocketing taxes on motor vehicles due to inflated used car values were also addressed. The legislature gave taxpayers relief from motor vehicle valuations and taxes by means of House Bill 6, Rep. Santoro, which requires the use of the average trade-in value for assessments, instead of a higher “clean” trade-in value.
Employment and Workforce
The pandemic strained the unemployment insurance system, led to tensions over public health measures, and laid bare serious healthcare workforce shortages. In addition, numerous bills related to employer rights and workforce issues were filed.
Problems with the unemployment insurance system led to a major reform of the system by a bill sponsored by Rep. Webber. House Bill 4 makes fundamental reforms with changes to Kentucky’s system by linking the number of weeks benefits can be received to economic conditions, incentivizing work skills training and education and setting up a “work-share” provision that gives employers an alternative to layoffs. Gov. Beshear’s veto of HB 4 was overridden.
Pandemic-related public health measures prompted bills related to employer rights, mask, and immunization requirements. While none of these bills passed, the most prominent were Rep. Maddox’s House Bill 28 and Sen. Girdler’s Senate Bill 93. These and other similar bills began with broad provisions but were narrowed before dying in the legislative process.
Existing workforce shortages, worsened by the pandemic, are straining the healthcare system. Lawmakers responded by passing several measures to address the problems: Senate Bill 10, sponsored by Sen. Mills, makes several changes to the training and licensing of nurses. Bills sponsored by Rep. Miles and Rep. Moser on a training collaborative and a loan forgiveness program pass were passed on one of the last days of the session along with a hodgepodge of other bills. Rep. Moser’s House Bill 525 to establish a certification process and reimbursement for community health workers passed.
Veto Overrides
The 2022 session undoubtedly set the record for gubernatorial vetoes and for veto overrides. Over the course of the session, Governor Beshear issued line-item vetoes on four bills and vetoed twenty-nine bills and resolutions in whole. Needing only a simple majority for an override, the GOP supermajorities had no difficulty in overriding these vetoes and ended the session with overrides of 28 of the 29 bills vetoed in full and the line item vetoes they chose to reverse. Except for the veto overrides done earlier in the session, all of the veto overrides took place on April 13.
Big Issues – Final Passage and Failures
Heading into the session, little was known of the General Assembly’s priorities for the 2022 Session outside of redistricting, the budgets, and tax reform. Here is a list of those high-profile bills that dominated the politics and time of the legislature this session:
Senate Bill 1: Reforms to local school governance and changes to teaching of current events in a historical context, sponsored by Sen. Schickel;
Senate Bill 9: Read to Succeed Act, sponsored by Sen. West;
Senate Bill 90: Incarceration diversion pilot projects, sponsored by Sen. Westerfield
Senate Bill 150: Western KY Tornado Relief Funding, sponsored by Sen. Mills;
House Bill 7: Public Assistance Reforms, sponsored by Rep. Meade;
House Bill 9: Charter schools, sponsored by Rep. McCoy;
House Bill 315: Broadband deployment, sponsored by Rep. Reed;
Some high-profile bills that failed to pass are:
House Bill 28: Prohibit required disclosure of COVID vaccination status, sponsored by Rep. Maddox;
House Bill 136: Medical marijuana, sponsored by Rep. Nemes;
House Bill 318: Juvenile justice reform, sponsored by Rep. Bratcher;
House Bill 457 – Pharmacy Benefit Management and changes impacting employer health insurance plans; Rep Sheldon
House Bill 475: Constitutional amendment for local government tax reform, sponsored by Rep. Meredith;
House Bill 606: Sports betting, sponsored by Rep. Koenig;
House Bill 608: Banning of Illegal gambling machines, sponsored by Rep. Timoney.
The General Assembly is now adjourned until January 3, 2023, unless sooner called into extraordinary session by the Governor. The Interim Session will begin in June, at which point the General Assembly will begin to plan for the 2023 Session.
KCFA Specific Update
The 2022 Session has come to a close and it was an active one for issues of interest to KCFA, though very few bills passed. We had a very minimal proactive legislative agenda for this session, so the focus was on defense which is borne out by the few bills of interest that passed.
It is important for me to say here that what we are able to accomplish in the General Assembly is due to the Legislative Leaders and the legislators. In addition, our members and the relationships they have with legislators make a huge impact. So THANKS to those that talked to your legislators about bills, and for those that are working to build legislative relationships Thank You as well.
In all, about a dozen bills of interest have become law so far, as legislative actions from the last two legislative days await consideration of a veto by Governor Beshear. A few bills that became law that we would highlight from this session, include:
- HB 284 - Establishes an electronic titling and registration system.
- SB 135 - Deals with electronic land record filings at the county clerk’s office.
- HB 494 - A DFI agency bill creating a regulatory scheme for student loan servicers.
- HB 643 - A DFI bill changing the regulatory scheme for mortgage brokers
- SB 298 - A DFI bill related to data security for securities brokers.
It would be telling half the story to only talk about the bills that passed as we spend a significant amount of our time each session on defense. Here are a few of the notable bills that failed to achieve passage this session:
- SB 165 Blended Rate Tier Bill *KCFA opposed as filed*
- HB 106 - Deals with automatic renewal of subscription-based products
You can CLICK HERE to access your bill list. We have also created a second bill list, CLICK HERE to access, which is dedicated solely to bills that have become law to aid in your compliance efforts.
It has been our pleasure to work with you this session and we appreciate your partnership! Don’t hesitate to reach out if you have questions.