This week marked the final week of the 2011 legislative session and, as expected, required a long night to finalize a budget compromise. The legislature adjourned around just after 6am Friday morning after passing the 2012 fiscal year budget and approving a variety of other key public policy initiatives, which had lingered to the final days.

At the beginning of the session, it was clear that our primary focus would be balancing the state budget and working to get the Kansas economy back on track. This certainly proved accurate, and while no true compromise leaves anyone completely pleased with the final product, the painstaking work of our dedicated budget committees was on full display this week—making it clear how challenging the budget building process really was.

Upon our arrival in Topeka we were greeted with a $550 million budget deficit and a clear directive to take immediate action on key topics like voter identification requirements, tax reform, abortion law, KPERS funding, healthcare and school finance. Recognizing the volume of work needed to be accomplished in just 90 days, we rolled up our sleeves, went to work and:

• Strengthened Voter ID requirements;
• Approved fundamental tax reform allowing Kansas business to expense certain investments;
• Passed legislation providing reductions to individual and corporate income tax rates when state revenues increase;
• Modified existing law making late-term and partial birth abortions more difficult to obtain;
• Defined “fetal pain” to prohibit abortions from being performed after 22 weeks;
• Took a step in preventing further education funding lawsuits by defining the “suitability” of education funding in the Kansas Constitution;
• Approved greater flexibility provisions allowing schools districts to use unencumbered funds to support classroom and teacher funding;
• Once again, passed the Health Care Freedom Act codifying the individual right of Kansans to choose to purchase or refuse to purchase health insurance;
• Deleted the current smoking ban exemption for gaming floors of lottery or racetrack gaming facilities;
• Repealed current law that provides in-state tuition to illegal immigrants;
• Took a substantial first step in addressing the unfunded liability of the KPERS retirement system;
• Reformed workers compensation regulations; and
• Passed a budget that, for the first time since 1972, decreased all-funds state spending by nearly a billion dollars and turned a $500 million deficit into a $50 million surplus WITHOUT raising taxes.

KPERS Reform (S. Sub. for HB 2194)
One of the most critical issues we faced upon arrival in Topeka this year was our chronically underfunded Kansas Public Employee Retirement System (KPERS). Currently, KPERS has an unfunded liability of $8 billion dollars. In terms of actuarial solvency, recent studies have shown Kansas to have the second worst state pension system in the United States, falling only behind Illinois. Pension programs nationwide have been hit hard but the stuttering economy has compounded our structural deficiencies within the system and will continue to do so unless substantive reform measures are taken to improve the stability of the pension fund. The Governor made it clear in his State of the State address this was one of his priorities in his first year—a challenge we were eager to accept.

The House and Senate both passed legislation to begin the process of repairing the solvency of the KPERS retirement system. A conference committee met to negotiate the differences between the respective bills and came to an agreement that modifies the KPERS pension plan for current KPERS members and future public employees of the state, school and local groups. The agreement makes a variety of changes, contingent upon specific triggers including future action by the Legislature in 2012 and approval by the IRS for allowing tier I and II members the option of choosing alternative benefit and contribution options. The changes made to KPERS by this legislation will bring the state, school and local groups into balance by the 2019 fiscal year.

First, the bill establishes a 13 member KPERS study commission to review alternative retirement plans and to report its recommendation by January 6, 2012. Those recommendations would be introduced in the House and Senate during the 2012 session. Second, the bill requires the legislature during the 2012 session to vote on each of the bills. Third, upon the legislature voting on the respective KPERS bills, the statutory state, school and local employer contribution rate caps of 0.6 percent would be increased for local employers to: 0.9 percent in FY 2014, 1.0 percent in FY 2015, 1.1 percent in FY 2016 and 1.2 percent in FY 2017.

Also triggered by the legislature voting on KPERS legislation during the 2012 session would be employee contribution adjustments which include adding two options that apply to all active KPERS tier I members. Tier I members would have the default option of having an employee contribution increase from 4.0 percent to 6.0 percent and have the multiplier increased from 1.75 to 1.85 for future years of service, if approved by the IRS. Tier I members would have the option of electing to freeze their employee contribution rate at 4.0 percent and reducing their future multiplier from 1.75 percent to 1.4 percent.

Tier II KPERS members would also be impacted by legislative action during the 2012 session through two options that would apply to all active tier II members. Tier II members would have the default option of freezing their employee contribution rate at 6.0 percent and foregoing future cost-of-living adjustments (COLA), if permitted by the IRS. The alternative option is for tier II members to freeze their contribution rate at 6.0 percent and reducing their future multiplier from 1.75 percent to 1.4 percent.

Current KPERS plans are based on a worker’s salary and the years of service to the state. If revenues do not keep up with the payout of benefits, the state is required to make up the difference. This has been problematic for a number of years and is something the legislature has needed to address for quite some time. Our work on repairing the system is far from finished, but this is a productive first step. We will undoubtedly return to the issue next year with dedicated committees in both chambers picking up on work initiated here in 2011.

S. Sub. for HB 2194 passed the Senate on Monday, May 9, by a vote of 31 to 7 and the House by a vote of 89 to 30 on Tuesday, May 10. The bill now goes to Governor Brownback for his consideration.

DUI Reform (H. Sub. for SB 6)
H. Sub. for SB 6 amends various DUI statutes by prohibiting professional licensing bodies from suspending, denying, terminating or not renewing a license because of a licensees DUI conviction or diversion. The bill creates the Community Corrections Supervision Fund to provide grants for community correctional services and amends commercial DUI statues to ensure they are consistent with other DUI laws.

Furthermore, the measure requires implied consent for supervision by a licensed doctor, physician or nurse for urine sample collections, the medical professional must also be the same gender as the individual being tested. The bill requires SRS to develop standardized substance abuse evaluations and amends a variety of administrative penalties for refusing to take a sobriety test or failing a sobriety test. To cover administrative costs, a $50 hearing fee is added for DUI administrative hearings regardless of whether the hearing was in person or by telephone. Finally, the bill increases the penalties for conviction of DUI – of particular interest is the new requirement requiring ignition interlock devices for second time or subsequent offenders.

This is legislation that substantially moves Kansas forward in addressing our reoccurring DUI problems. Law enforcement in Kansas is very concerned about the continued rate of DUI offenders killing and injuring innocent persons on roadways. Of particular concern are repeat offenders who often ignore the lessons from prior arrests. The bill helps law enforcement and prosecutors to better track DUI events, improve on addiction assessment and treatment and support offender supervision.

H. Sub. for SB 6 passed the Senate by a vote 39 to 0 on Thursday, May 12, and the House by a vote of 121 to 0. The bill now goes to Governor Brownback for his consideration.

Local Option Budget Calculations (HB 2015)
HB 2015 extends the sunset date for the current method of calculating the local option budget (LOB) of a school district to June 30, 2014. Under current law, when the BSAPP is $4,433 or less, school boards may calculate the LOB based on a BSAPP of $4,433 or an amount not exceeding 30 percent of its general fund budget, whichever is greater, plus the amount received in special education state aid in the 2008-2009 school year, or the current BSAPP appropriation, whichever is greater. Also, the bill reauthorizes the school district property tax mill levy for the 2011-2012 and 2012-2013 school years and repeals the $20,000 residential property tax exemption to the end of tax year 2012.

HB 2015 passed the Senate by a vote of 37 to 0 on Thursday, May 12, and the House by a vote of 122 to 0. The bill now goes to Governor Brownback for his consideration.

Engineering Initiative (H. Sub. for SB 127)
H. Sub. for SB 127 creates the University Engineering Initiative Act intended to increase the number of engineering graduates to 1,365 per year by 2021. The bill allows for the development of a plan that ensures engineering industry partners find new talent, designs and techniques needed to fuel economic growth and business success in Kansas. The acquisition, construction and equipping of engineering facilities on state-owned buildings at K-State, KU and Wichita State is authorized by the bill. Three new engineering funds are created under the bill for the three universities and the bill directs the first $10.5 million from gaming proceeds to be divided equally among the funds. Universities are requires to match funds on a $1 for $1 basis from private resources.

This is an important piece of legislation signaling our trained focus as a state to train and retain quality engineers. It will bolster our efforts to attract and create high paying jobs to keep Kansas students in Kansas. H. Sub. for SB 127 passed the Senate by a vote of 36 to 1 and the House by a vote of 86 to 36 on Thursday, May 12. The bill now heads to Governor Brownback for his signature.

Bill Signing Notices< This week Governor Brownback signed the following bills into law. As of Wednesday a total of 68 bills had been signed into law.

• SB 67 – allows future Gubernatorial inaugural committees to donate to non-profit organizations when the committee is required to allocate the remaining funds. The bill also allows funds to be donated to the Executive Mansion Gifts fund for expenditures related to Cedar Crest, the governor’s official residence and historic properties.
• H. Sub. for SB 23 – requires school districts to reward high school diplomas to anyone who is or has been a child in the custody of SRS or Juvenile Justice Authority after turning 14 years of age and has achieved the minimum high school graduation requirements adopted by the State Board of Education. The law also automatically makes a grandparent an interested party in a child in need of care proceedings.
• SB 136 – Often referred to as “No Pay, No Play” insurance, this new law provides that anyone operating an uninsured vehicle who, at the time of an auto accident, has not maintained personal injury protection benefits coverage as required by law from having a cause of action for the recovery of non-economic loss sustained as a result of the accident.
• SB 214 – Makes changes to the Groundwater Management District Act and the requirements to receive an exemption from having to obtain water obstruction permits.
• HB 2104 – Allows mental health treatment facilities to release information on whether a person is or has been a patient of any treatment facility within the last 6 months to law enforcement when they have reasonable suspicion that a person arrested suffers from mental illness and may benefit from treatment, rather than being placed in a correctional institution, jail, juvenile correctional facility, or juvenile detention facility.
• HB 2105 -- Prohibits courts from ordering that a child be removed from the parents' custody solely because the parent is homeless. It also requires court designated custodians to notify the court at least 10 days before planned placement with a parent and requires courts to give notice within 10 days of entering an order to the designated custodian.
• HB 2147 – Amends existing law regarding adult care homes that convert an area to a “home plus facility”, which is separate from and contiguous with the adult care home, would be allowed to have not less than a five-bed and not more than a twelve-bed home plus facility.
• HB 2151 – Modifies the definition of the crime of "breach of privacy" and increases the penalties for some of the acts constituting "breach of privacy." It also amends the definition for the crime of blackmail, by adding threats to disseminate materials obtained using electronic or other means to secretly videotape, film, photograph, or record an identifiable person who is nude or in a state of undress.
• HB 2172 – Designates the junction of U.S. 24 and K- 7 highways in Wyandotte County as the Representative Margaret Long Interchange, designates a portion of I-70 as the Truman/Eisenhower Presidential Highway and modifies the designation of the Blue Star Memorial Highway to exclude the portion of US-40 where it joins I-70 west of Topeka to the junction of I-70/US-40 and K-15. Both modifications are contingent on the State of Missouri designating the Truman/Eisenhower Presidential Highway.
• HB 2044 – Modifies the required action and notification procedures in a motor vehicle accident and provides conviction guidelines for leaving the scene of an accident.

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