Commerce Lexington Inc.

The U.S. Chamber of Commerce Foundation, along with lead sponsors University of Phoenix and Masco Contractor Services, will host “Hiring Our Heroes – Lexington,” a hiring fair for veterans and military spouses. More than 45 employers are expected to participate with jobs available for veterans and military spouses of all ranks and levels of experience. Companies range from America’s biggest employers to dozens of small companies from the region. The event will also include a free Hiring Our Heroes employment workshop focused on resume writing, interview skills, and job search techniques for all military members and their spouses. Immediately following the fair, employers are invited to attend a “Best Practices in Veteran Recruitment Lunch & Learn” to develop and refine strong military recruitment initiatives.

WHAT: Hiring Our Heroes – Lexington
WHEN: Thursday, June 26, 2014
10:00 a.m. to 1:00 p.m. EDT
Workshop begins at 8:30 a.m.
WHERE: National Guard Armory, 4301 Airport Road, Lexington, KY 40510
RSVP: Interested job seekers should register for free at www.hiringourheroes.org. Walk-in job seekers are allowed (veterans must provide proof of service).

During the 2014 Commerce Lexington Inc./Greater Louisville Inc. Leadership Expedition to Charlotte, North Carolina, former Bank of American Chairman and CEO Hugh McColl made a surprise visit on the final day of the trip and took questions from the delegation of nearly 300 people from Lexington and Louisville, Kentucky. #loulex Many more videos from the Charlotte trip are posted at http://leadershipvisit.commercelexington.com

For those who missed last Friday’s Public Policy Luncheon presented by Kentucky American Water, featuring a panel of media experts moderated by KET’s Bill Goodman, video of the event is posted in its entirety on the Commerce Lexington Inc. YouTube Channel.

Commerce Lexington Inc. hosted its first Public Policy Luncheon of 2014 with an analysis of the recently concluded Kentucky Legislative Session  by several members of the media, including (left to right) John Cheves (Lexington Herald-Leader), Ronnie Ellis (CNHI), Erik Carlson (Business Lexington), and Ryan Alessi (CN2), moderated by KET’s Bill Goodman. The crowd also got a special introduction by Herald-Leader Cartoonist Joel Pett.

Commerce Lexington Inc. hosted its first Public Policy Luncheon of 2014 with an analysis of the recently concluded Kentucky Legislative Session by several members of the media, including (left to right) John Cheves (Lexington Herald-Leader), Ronnie Ellis (CNHI), Erik Carlson (Business Lexington), and Ryan Alessi (CN2), moderated by KET’s Bill Goodman. The crowd also got a special introduction by Herald-Leader Cartoonist Joel Pett.

Creative Lodging Solutions to Add 120 Jobs in Lexington, KY

[April 29, 2014] – Kentucky Governor Steve Beshear announced Creative Lodging Solutions LLC (CLS), a national travel company based in Lexington, will expand to a new facility in Fayette County and add 120 new jobs.

“It’s always exciting to see a business grow its global presence in Kentucky,” said Gov. Beshear. “Creative Lodging Solutions’ innovative services are having a big impact on national business travel. I’m proud they’ve decided to expand their roots in the Commonwealth, providing more jobs to Kentuckians.”

CLS is moving from an 18,000-square-foot facility on Harrodsburg Road to 60,000 square feet of the former Kroger building in Beaumont. CLS currently employs 134 people and is expected to almost double its workforce in the next four years. The company also plans to invest nearly $5.5 million in the project.

“I am committed to growing our business in Kentucky and appreciate the assistance we have received from the state of Kentucky and economic development,” said Mike Tetterton, owner and president of Creative Lodging Solutions.

Founded in 2002, CLS provides customized lodging programs for corporate clients nationwide, specializing in long-term and project-based stays for business travel. The company was recognized as one of the top private job creators in America in 2012 by Inc. Magazine’s Hire Power Awards. It has been named to the Inc. 5000 list of the most entrepreneurial and fastest-growing companies in America the past four years. CLS was also crowned the 2011 Small Business of the Year by Commerce Lexington Inc. and was recently designated by the Kentucky Chamber of Commerce as one of the Best Places to Work the fifth year in a row.

To encourage the investment and job growth in Fayette County, the Kentucky Economic Development Finance Authority preliminarily approved the company for tax incentives up to $1.7 million through the Kentucky Business Investment program. The performance-based incentive allows a company to keep a portion of its investment over the term of the agreement through corporate income tax credits and wage assessments by meeting job and investment targets.

“Creating jobs is our top priority,” said Lexington Mayor Jim Gray. “When a local company grows, it’s always a sign that we’re doing our job – creating the environment that attracts new companies and encourages local companies to grow.”

“It’s great to see a company expanding in Lexington,” said Sen. Alice Forgy Kerr, of Lexington. “Doing this shows a commitment to our community and its people – and an investment in its future.”

“Commerce Lexington is excited to celebrate Creative Lodging Solutions’ expansion in Lexington,” said Bob Quick, Commerce Lexington Inc. president and CEO. “We have enjoyed working with this dynamic headquarters and appreciate the jobs they are creating in our community. Congratulations to Creative Lodging Solutions on their success.”

For more information on Creative Lodging Solutions, visit https://yourcls.com.

2014 Regular Session of the Kentucky General Assembly Comes to a Close

Throughout the 60-day Regular Session of the Kentucky General Assembly, which began in January and concluded on April 15, the legislature considered a variety of issues, but the primary focus was the passage of the next $20 billion biennial state budget for FY14-16. Commerce Lexington monitored and advocated for several issues on behalf of the Central Kentucky business community during the process. Listed below is a recap of the budget process and what happened with other noteworthy bills.

To review the status of any piece of legislation from the 2014 Regular Session, VISIT HERE.

STATE BUDGET OVERVIEW:
The budget process was especially challenging this year as funding requests outweighed available revenues. The Consensus Forecasting Group predicted growth around 2.6 percent annually for the next two fiscal years (approximately $125 million in new money each year). Further complicating matters in Frankfort, this is an election year, and both parties were reluctant to consider proposals to raise any revenue or address comprehensive tax reform.

P-12 EDUCATION:
Despite the limited revenues, lawmakers increased funding per pupil for K-12 education, guaranteed pay raises for teachers and increased Flexible Focus funding for technology, textbooks, professional development, school safety and extended school services. Each school district will be apportioned money from the flex funds based on a formula, and then districts be given the flexibility to determine the best use of funding based on local needs. The budget (HB 235) also provided additional funding to expand preschool services.

HIGHLIGHTS:

—> $189 million increase in base per-pupil funding for K-12
—> Guaranteed pay raises for teachers (1% first year, 2% second year)
—> Increases in technology funding by $9.9 million, textbook funding by $33.4 million, professional development by $10 million, safety by $9.4 million and extended school services by $20 million.
—> Increase of $18.7 million in FY 16 to expand preschool services to reach 5,125 more 4-year-olds from low income families
—> $100 million in bonds for K-12 school building projects.

PUBLIC EMPLOYEE PENSION SYSTEM:
The final budget also funded the actuarially required contribution (ARC) to the state’s troubled public employee pension system which amounts to $207 million over the next two years. This represents another positive step toward restoring solvency to the system. In future years the state’s actuarially required contribution to the system will increase, creating a more difficult budgetary challenge. This is an issue that we will continue to monitor as it directly impacts the state’s fiscal health and the overall business climate in Kentucky.

HIGHER EDUCATION:
To make up dollars, most state agencies were cut by 5 percent. Public universities and community and technical colleges received 1.5 percent cuts. This means a $4 million loss in base operating funds for the University of Kentucky this coming year.

It wasn’t all bad news for higher education as institutions received some bond funding for capital construction projects, such as $145 million in agency bonds to support the KCTCS Build Smart initiative. It will help fund projects in partnership with private fundraising at several campuses including the BCTC Phase II Newtown Campus Expansion. The budget also authorized $24 million in state bonds for the BCTC Scott County Manufacturing Technology Center to enhance workforce development in Central Kentucky.

The University of Kentucky received authority to move forward — using its own dollars and private fundraising efforts — with agency bonds for $160 million to renovate and expand the Student Center and $150 million to continue the fit-out of Chandler Hospital. The budget also included a $35 million investment in bonds from the state — to be matched by $30 million in private fundraising efforts — for the College of Law.

RUPP ARENA & LEXINGTON CONVENTION CENTER:
Advocates for the renovation of Rupp Arena and the Lexington Convention Center were disappointed the project did not receive the requested $65-80 million in state funding. However, the budget did include $1.5 million in state funds for this year to be matched by local funds for additional planning and design. The budget also included language setting aside future debt service for the project from the Budget Reserve Trust Fund if approved by the legislature.

Mayor Jim Gray has committed the City of Lexington to repaying the $2.5 million in state funds appropriated by the General Assembly in 2012 budget for planning and design of the project. The Governor retained this intent in HB 301 but vetoed specific language requiring a deadline for the repayment of funds by April 2015.

On June 23, the Lexington Urban County Council is hosting a special Budget and Finance Committee to discuss the financing plan and local funding for the Rupp Arena and Lexington Convention Center project. The meeting will be held in Council Chambers at the City Government Building at 6 pm. The meeting is open to the public.

STATE ROAD PLAN:
Lawmakers passed the state’s next two year road plan (HB 237) without increasing the state’s gas tax by 1.5 percent – despite concerns about decreasing state and federal transportation dollars. Click here for the Herald-Leader’s review of the more than $157 million in total transportation funds for Fayette County for FY14-16. Projects included major improvements to New Circle Road, Leestown Road, Clays Mill Road and the Newtown Pike Extension near downtown.

REVENUE BILL - TAX LAW CHANGES:
A revenue bill (HB 445) also passed with various changes in tax law beneficial to Kentucky’s race tracks, bourbon industry (bourbon barrel tax credit), investors in startup companies, investors in historic preservation projects and wholesalers of beer and wine (1 percent wholesale tax reduction). Senate President Robert Stivers has said the revenue bill will cost the state close between $9-10 million over the biennium.

The bill outlined additional taxes on instant racing (1.5 percent pari-mutuel tax) which will go back into the Kentucky Thoroughbred Development Fund, the University of Louisville Equine School and other equine research efforts. It also placed a .5 percent tax on advanced deposit wagering with some proceeds going to the general fund (15 percent) and the rest to purses and Kentucky race tracks.

The revenue bill did not contain provisions to freeze the state’s gas tax at previous levels, which would have resulted in a 1.5 cent per gallon tax increase at the pump. While the Governor and House leaders advocated for proposals to “raise the floor” on the gas tax, estimated to produce approximately $100 million over the next two years for the road fund, Senate leaders held firm in its opposition to a tax increase.

OTHER BUSINESS ISSUES: WHAT DID PASS

To review the status of any piece of legislation from the 2014 Regular Session, VISIT HERE.

Of the more than 800 bills filed, less than 17 percent made it through the process to become law. There were several bills that passed this session impacting the business community such as those creating workers compensation system efficiencies, lowering the statute of limitations for written contracts, improving cyber security and keeping energy prices low. Below is a complete review of these issues.

Workers’ Comp Online Contractor Notification – An amendment to HB 84 will allow businesses to enter the information of their subcontractors on the Division of Workers’ Claims website and receive notification when there has been a change or cancellation in their subcontractor’s workers’ compensation insurance coverage.

Workers’ Comp Reporting – HB 349 simplified the requirement for businesses that must file tax returns, partnership agreements and articles of organization with the Department of Workers’ Claims. The bill removes the requirement for an annual filing. HB 349 would only require employers to submit these at the request of the Commissioner.

Written Contracts Statute of Limitations - HB 369 lowered the statute of limitations for written contracts from 15 years to 10 years. At 15 years, Kentucky had the highest statute of limitations for written contracts in the nation.

Simplified Small Business Tax Credit Program – Sponsored by Rep. Ruth Ann Palumbo, a key provision of HB 301 was language that will simplify and streamline the provisions of the Small Business Tax Credit Program administered by the Kentucky Economic Development Finance Authority for businesses with 50 or fewer employees.

Cyber security & Data Breach Notification - HB 5, championed by State Auditor Adam Edelen, improves cyber security by encouraging better protection of sensitive data by state/local governments and requires notification of citizens when their personal information is lost or stolen within 35 days. The bill also creates incentives for public agencies to beef up security against hackers and data breaches. HB 232 will set forth requirements for private businesses to notify customers in the event of a data breach that could expose individuals to identity theft that are not overly burdensome to business.

Energy Efficiency Incentives for Manufacturers - SB 153, pushed by the Kentucky Association of Manufacturers, would authorize pollution prevention fund dollars to match federal funds for the purpose of providing energy efficiency technical assistance. The bill also allows manufacturers access to industrial revenue bonds for energy efficiency projects.

Greenhouse Gas Emissions - HB 388 establishes a legislative framework for Kentucky to establish its own standards for greenhouse gas emissions by electricity-generated utilities. This measure is aimed at pushing back on U.S. EPA’s attempts to mandate unreasonable regulations of greenhouse gas emissions which would unfairly drive up Kentucky’s electricity. The EPA is expected to issue new standards and guidelines for existing power plants this summer. In 2015, states will be expected to issue their plans for meeting the new guidelines. The bill was signed into law by the Governor.

OTHER BUSINESS ISSUES: WHAT DID NOT PASS

To review the status of any piece of legislation from the 2014 Regular Session, VISIT HERE.

Several high profile issues that did not become law included proposals to: help address the heroin epidemic (SB 5), raise the state’s minimum wage (HB 1), increase workers compensation costs (SB 137), expand gaming, enable a local option sales tax, modernize telecommunications laws (SB 99) and establish medical review panels (SB 119) to lower health care costs by weeding out meritless lawsuits. Many of these issues are expected to be addressed during the interim and when the General Assembly convenes in January 2015.

Public Private Partnerships - The Chamber supported the public-private partnership bill (HB 407), which passed both the House and the Senate but was vetoed by the Governor because of an amendment that prohibited tolling on the Brent Spence Bridge. The bill would established a process for use of public-private partnerships - so called P3s - by state and local governments, creating a system in Kentucky that already exists in many states. A public-private partnership is a contract between a public entity, such as a state or local government, and a private business under which the private business builds a project or provides a service for the public. Any financial risk during the construction and/or operation of the project is assumed by the private business.

Local Sales Tax - HB 399 (Thompson) and SB 135 (Hornback) would have amended the Kentucky constitution to allow local governments to enact a temporary sales tax up to 1 percent to fund specific capital projects if the projects are approved by local voters. HB 399 passed out of a House committee and but was not called up for a vote on the House floor.

Telecommunication Laws - SB 99 (Hornback) was aimed at modernizing Kentucky’s telecommunications law and attracting much-needed investment in new technologies while keeping in the place protections for reliable voice services to all residents whether in rural or urban areas. Providers such as Windstream Communications, Time Warner Cable and AT&T are all important regional partners in the delivery of valuable telecommunication services in Central Kentucky. Commerce Lexington supported this compromise legislation because of its potential to spur critical investments in new broadband technologies, enhance economic development, attract more jobs, and improve communication services for residents and business. This bill passed the Senate but did not receive a vote by the full House.

Expanded Gaming – HB 67 (Clark) and SB 33 (Seum) and HB 584 (Stumbo) would have amended the Kentucky Constitution to allow the General Assembly to submit to Kentucky voters whether or not to expanding gaming. Commerce Lexington supports alternative gaming at Kentucky’s racetracks to help protect our horse industry. None of these bills moved out committee.

Workers Comp Special Fund - SB 63 (McDaniel) attempted to save employers costs on their workers’ compensation assessments by encouraging one-time settlements on special fund claims. It also called for the “phasing out” of the siphoning of special funds to pay for operations of by state Labor Cabinet. Many in the business community expressed concerns that funding for day-to-day operations was going beyond the original intent of the law. SB 63 passed the Senate but was not acted upon in the House.

LLET Clarify Cost of Goods Sold Definition - HB 136 (Yonts), a top issue for the Kentucky Society of CPAs, would have clearly defined the “cost of goods sold” under Kentucky’s Limited Liability Entity Tax (LLET) to make it easier for small businesses to operate in Kentucky. The proposal to clarify Kentucky’s cost of goods sold definition ultimately fell short because of the bill’s projected fiscal impact in a tight budget session.

Prevailing Wage & Right to Work – Bills to reform prevailing wage and consider right-to-work legislation in Kentucky did not make it out of the House Labor committee.

BLOG ENTRY BY ANDI JOHNSON | COMMERCE LEXINGTON INC.’S VICE PRESIDENT OF PUBLIC POLICY | ajohnson@commercelexington.com

In central Kentucky, it’s not unusual for large corporations, like Lexmark, to accept college interns for a summer, semester or school year. However, small businesses haven’t gotten as much into internships. But that’s about to change.

With seven possible legislative days remaining in the session, several important bills are still in play including the passage of the state budget and road plan.

Late Monday afternoon, the Senate passed its version of the state’s next two year, $20 billion executive branch budget. The significant differences between the Senate version and the House approved budget bill include the restoration of general fund appropriations to universities, lower debt levels, and cuts to authorized bonding for capital construction projects (such as Rupp Arena and the Lexington Convention Center). The next step in the process is the appointment of a conference committee of House and Senate members to work out differences in the two bills.

Not too long ago, the Kentucky House of Representatives passed the State Budget bill, which now moves on to the Senate. Read more legislative session news here.

KY Legislative Alert: Oppose SB 137 – Negative Impact on Manufacturers

This bill will increase workers comp premiums for employers!

Senate Bill 137 is legislation before the Kentucky State Senate which will directly increase workers’ compensation costs for all employers in the Commonwealth. This is essentially a direct tax on all employers to benefit attorneys who profit from our workers’ compensation system.

The total fiscal impact of this bill is UNKNOWN at this time. However, it is clear there will be additional workers compensation system costs (i.e. increased litigation and benefits) that would then be passed to employers in the form of higher premiums.

Please take a moment to contact Senator Alice Forgy Kerr and Senator Reginald Thomas and urge them to oppose Senate Bill 137 because of its negative impact on business. To contact Senator Kerr and Senator Thomas, please call (502) 564-8100 or send an email to alice.kerr@lrc.ky.gov and reginald.thomas@lrc.ky.gov.

WHAT DOES SENATE BILL 137 DO?

SB 137 will DOUBLE attorney fees:
—> SB 137 increases attorney fee percentage to 25 percent of total award up to $50,000 
—> SB 137 doubles the maximum attorney fees from $12,000 to $25,000
—> Attorney fees are paid out of the injured worker’s settlements – not by employers.

SB 137 will encourage trial attorneys to reopen litigation against employers:
—> SB 137 incentivizes attorneys to reopen workers’ compensation cases by allowing a $12,000 fee to attorneys.
—> These fees will be taken from the injured worker’s settlement.

SB 137 will drive up workers’ compensation insurance premium costs (Section 2, subsection 4):
—> SB 137 will drive up costs for Kentucky employers’ workers’ compensation insurance premiums by extending the eligibility age for workers’ compensation coverage to 70 years of age or 5 years of date of last exposure.
—> Current Kentucky law requires employers to cover workers’ compensation costs for
employees up to the date of employees eligibility for Social Security (65) or two years.
—> There is nothing in the bill to offset the increased medical liability cost to the employer.

SB 137 is an unfunded mandate on Kentucky’s local governments and school districts:
—> Kentucky’s city and county governments and local school districts must pay workers’ compensation insurance premiums for their employees just like the private sector.
—> SB 137 places an unfunded mandate on ALL of Kentucky’s city and county governments and local school districts by requiring them to pay the increased workers’ compensation premiums.

BLOG POST SUBMITTED BY ANDI JOHNSON, VICE PRESIDENT - PUBLIC POLICY, ajohnson@commercelexington.com