This past week, bills related to the state pension systems, prevailing wage, and economic development moved through the legislative process. A federal judge in Western Kentucky also struck a local right-to-work ordinance in Hardin County, noting that federal law limited action on this issue only to states - not local governments. Legislation (SB 3) to make Kentucky a right-to-work has been filed in the Senate. This bill would give workers a choice regarding joining a union and prevent the requirement that employees pay union dues as a condition of employment. Kentucky is one of 25 states that do not have a right-to-work law.
Commerce Lexington Inc.-supported legislation (HB 309/SB 132) dealing with public-private partnerships (P3's) is expected to be heard in House and Senate committees this week. This legislation creates a transparent and explicit framework under Kentucky's procurement code through which the state and local governments may use a public-private partnership to provide services, facilities and transportation infrastructure to the public. The bill provides an alternative method for project financing to help local governments operating on limited budgets provide more efficient and effective services. The bill eliminates tolling as an option for the Brent Spence Bridge project in Northern Kentucky -- a point of contention among officials last session.
Commerce Lexington Inc.-supported legislation (HB 309/SB 132) dealing with public-private partnerships (P3's) is expected to be heard in House and Senate committees this week. This legislation creates a transparent and explicit framework under Kentucky's procurement code through which the state and local governments may use a public-private partnership to provide services, facilities and transportation infrastructure to the public. The bill provides an alternative method for project financing to help local governments operating on limited budgets provide more efficient and effective services. The bill eliminates tolling as an option for the Brent Spence Bridge project in Northern Kentucky -- a point of contention among officials last session.
Summary of Legislative Highlights
- SB 2, to increase transparency, accountability and oversight measures for the state retirement systems, passed out of the Senate with overwhelming support. The bill calls for disclosure of fees and contracts; and uniform method of reporting and investment experience for board trustees. It also requires Senate confirmation of contracts, gubernatorial-appointed trustees and systems' executive directors. The bill now heads to a House committee for consideration.
- SB 9, to exempt public school and university construction projects from prevailing wage laws, failed to advance in the House Labor and Industry Committee. After a lengthy debate, the bill was ultimately defeated along mainly partisan lines after previously passing out of the Republican-controlled Senate. The measure was aimed at helping lower the cost of facility construction and save taxpayer dollars by removing government-defined hourly rates, but it faced opposition from union groups.
- HB 202, which would allow the Kentucky coal industry to qualify for state tax incentives available to other industries, passed the House and heads to the Senate for consideration. The coal industry is now excluded from certain sales and use tax and income tax incentives that are available to other industries through the Kentucky Enterprise Initiative Act (KEIA) and Kentucky Business Investment Act (KBI). It would also require the state Cabinet for Economic Development to promote increased exports of Kentucky coal.
- HB 237 would add tier 3 and tier 4 data centers, which applies to larger tech companies like Google and Amazon, to the definition of manufacturing making them eligible for temporary property tax exemptions. The goal is to offer competitive incentives with surrounding states and to continue to attract and retain these companies to Kentucky. The bill passed out of a House committee and now goes to the full House for a vote.
- HCR 97, which calls for a study of the workforce development system, passed out of a House committee and awaits a vote by the full House. A similar proposal (SCR 75) has been filed in the Senate. Both set-up a Task Force to study and develop recommendations concerning programs and funding investments by Dec. 1, 2016.
Federal Court Strikes Down Local Right-to-Work Law in Kentucky
Commerce Lexington has a long-standing position of support for right-to-work legislation to increase Kentucky's competitiveness with surrounding states for jobs. Jay Ingle, an attorney with Jackson Kelly, is a member of Commerce Lexington's Public Policy Council and helps provide expertise on labor and employment issues. See below for a brief analysis from attorneys with Jackson Kelly in Lexington on the recent right-to-work ruling.
Last Wednesday, a federal judge in Western Kentucky addressed the issue of whether a right-to-work law may be enacted solely by a state or territorial government, or whether a local government may pass a law prohibiting union-security agreements. The Court ruled that the local regulation, in this case a Hardin County right-to-work ordinance, was invalid as preempted by the National Labor Relations Act (NLRA).
In January 2015, Hardin County passed a county ordinance stating that no employee is required to join or pay dues to a union, otherwise known as a "right-to-work" ordinance. The United Automobile Aerospace and Agricultural Implement Workers of America (the "Union") challenged the ordinance as unconstitutional. According to the Union, the NLRA pre-empts the right-to-work ordinance.
As a brief background, the NLRA allows for union-shop agreements, which require employees to join the union soon after they are hired, and agency-shop agreements, which require employees to pay union dues whether or not they are members of the union. An exception to the NLRA allows for states to exempt out of such policy, i.e. a state may adopt laws that make all forms of compulsory unionism in the state illegal. 29 U.S.C §164(b). Kentucky is one of 25 states that do not have a right-to-work law.
Thus, Hardin County argued that its local ordinance fell into this exception. In yesterday's opinion, the Court rejected the idea that a county ordinance fit the exception noting it was only limited to state action. So, a state can have a right-to-work law prohibiting compulsory union dues, but counties cannot issue such localized ordinances.
The Court also ruled that the section of the Hardin County ordinance that stated no employee shall be required to be recommended, approved, referred or cleared by or through a labor organization -- prohibiting hiring hall agreements -- was also pre-empted by the NLRA, which prohibits regulation of hiring-hall agreements.
Along with Hardin County, 11 other counties have issued similar right-to-work ordinances. Proponents of right-to-work laws argue Kentucky is losing jobs to other states like Tennessee, Indiana and Alabama, which have such laws. Opponents argue that such rules are unfair to unions who they say must represent all workers in a bargaining unit to maintain their right to enter into collective bargaining with businesses.
If you have questions about a bill or issue, contact Andi Johnson, Commerce Lexington's vice president of public policy, at 859-226-1614.
Commerce Lexington has a long-standing position of support for right-to-work legislation to increase Kentucky's competitiveness with surrounding states for jobs. Jay Ingle, an attorney with Jackson Kelly, is a member of Commerce Lexington's Public Policy Council and helps provide expertise on labor and employment issues. See below for a brief analysis from attorneys with Jackson Kelly in Lexington on the recent right-to-work ruling.
Last Wednesday, a federal judge in Western Kentucky addressed the issue of whether a right-to-work law may be enacted solely by a state or territorial government, or whether a local government may pass a law prohibiting union-security agreements. The Court ruled that the local regulation, in this case a Hardin County right-to-work ordinance, was invalid as preempted by the National Labor Relations Act (NLRA).
In January 2015, Hardin County passed a county ordinance stating that no employee is required to join or pay dues to a union, otherwise known as a "right-to-work" ordinance. The United Automobile Aerospace and Agricultural Implement Workers of America (the "Union") challenged the ordinance as unconstitutional. According to the Union, the NLRA pre-empts the right-to-work ordinance.
As a brief background, the NLRA allows for union-shop agreements, which require employees to join the union soon after they are hired, and agency-shop agreements, which require employees to pay union dues whether or not they are members of the union. An exception to the NLRA allows for states to exempt out of such policy, i.e. a state may adopt laws that make all forms of compulsory unionism in the state illegal. 29 U.S.C §164(b). Kentucky is one of 25 states that do not have a right-to-work law.
Thus, Hardin County argued that its local ordinance fell into this exception. In yesterday's opinion, the Court rejected the idea that a county ordinance fit the exception noting it was only limited to state action. So, a state can have a right-to-work law prohibiting compulsory union dues, but counties cannot issue such localized ordinances.
The Court also ruled that the section of the Hardin County ordinance that stated no employee shall be required to be recommended, approved, referred or cleared by or through a labor organization -- prohibiting hiring hall agreements -- was also pre-empted by the NLRA, which prohibits regulation of hiring-hall agreements.
Along with Hardin County, 11 other counties have issued similar right-to-work ordinances. Proponents of right-to-work laws argue Kentucky is losing jobs to other states like Tennessee, Indiana and Alabama, which have such laws. Opponents argue that such rules are unfair to unions who they say must represent all workers in a bargaining unit to maintain their right to enter into collective bargaining with businesses.
If you have questions about a bill or issue, contact Andi Johnson, Commerce Lexington's vice president of public policy, at 859-226-1614.
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