Kentucky
General Assembly

02/15/18	introduced in Senate
02/16/18	to Natural Resources & Energy (S)
03/12/18	taken from Natural Resources & Energy (S) 1st reading returned to Natural Resources & Energy (S)
03/13/18	taken from Natural Resources & Energy (S) 2nd reading returned to Natural Resources & Energy (S)
03/14/18	reported favorably, to Rules with Committee Substitute (1)
03/15/18	posted for passage in the Regular Orders of the Day for Friday, March 16, 2018
03/16/18	3rd reading, passed 36-0 with Committee Substitute (1)
03/19/18	received in House
03/20/18	taken from Committee on Committees (H) 1st reading returned to Committee on Committees (H) to State Government (H) posted in committee
03/21/18	taken from State Government (H) 2nd reading returned to State Government (H)
03/29/18	reported favorably, to Rules with Committee Substitute & committee amendment (1-title) taken from Rules placed in the Consent Orders of the Day floor amendment (2) filed to Committee Substitute 3rd reading, passed 49-46 with Committee Substitute and committee amendment (1-title) received in Senate posted for passage for concurrence in House Committee Substitute & committee amendment (1-title) Senate concurred in House Committee Substitute & committee amendment (1-title) Bill passed 22-15 enrolled, signed by President of the Senate enrolled, signed by Speaker of the House delivered to Governor
04/10/18	signed by Governor (Acts, ch. 107)

Amendment	Senate Committee Substitute 1
Summary	Retain original provisions of the bill, except add exemption in each section for projects coming under the provisions of KRS Chapter 278 and add and amend KRS 76.232 to enable the cited entities to have the same authority granted as in the other sections of the bill.
Index Headings	Cities - Interlocal agreements, extraterritorial wastewater facilities, acquisition of by local agency Cities - Wastewater, extraterritorial facilities, acquisition of by local agency Consolidated Local Governments - Wastewater, extraterritorial facilities, acquisition of by local agency Contracts - Interlocal agreements, extraterritorial wastewater facilities, acquisition of by local agency Counties - Interlocal agreements, extraterritorial wastewater facilities, acquisition of by local agency Counties - Wastewater, extraterritorial facilities, acquisition of by local agency Environment and Conservation - Wastewater, extraterritorial facilities, acquisition of by local agency Local Government - Interlocal agreements, extraterritorial wastewater facilities, acquisition of by local agency Local Government - Wastewater, extraterritorial facilities, acquisition of by local agency Public Protection - Wastewater, extraterritorial facilities, acquisition of by local agency Sewer Systems - Extraterritorial facilities, acquisition of by local agency

Amendment	House Committee Substitute 1
Impact Statements	Actuarial Analysis
Summary	Amend KRS 6.505 to provide that the "inviolable contract" provisions shall not apply to legislative changes to Legislators' Retirement Plan (LRP) that become effective on or after July 1, 2018; make technical changes; amend KRS 6.520 to reduce the benefit factor of LRP members who began participating prior to January 1, 2014, to 1.97%; amend KRS 6.525 to provide that non-legislative compensation earned in another state-administered retirement system on or after January 1, 2019, shall not be used to calculate LRP retirement benefits; amend KRS 6.518 to conform; amend KRS 21.360 to provide that the "inviolable contract" provisions shall not apply to legislative changes to the Judicial Retirement Plan (JRP) that become effective on or after July 1, 2018; make technical changes; amend KRS 21.374 to remove provisions relative to the election to participate in the cash balance plan by existing members and amend to provide that LRP and JRP members may elect to cease participating in LRP or JRP and participate prospectively in KERS in the new optional 401(a) money purchase plan for any future service as a legislator, judge, or justice; amend KRS 21.402 to change the interest credit in the JRP/LRP cash balance plans to 85% of the five-year smoothed return above 0% if the member is contributing to a state-administered retirement system or plan and zero % if the person is not contributing to a state-administered retirement system or plan; amend KRS 21.460 to prohibit the purchase of recontributions of refunds to LRP/JRP by members who are participating in the 401(a) money purchase plan; amend KRS 21.480 to provide that the "inviolable contract" provisions shall not apply to legislative changes to JRP that become effective on or after July 1, 2018; make technical changes; amend KRS 21.372 and 21.385 to make technical/conforming amendments to JRP/LRP statutes; create a new section of KRS 61.510 to 61.705 to establish an optional 401(a) money purchase plan for new nonhazardous members who begin participating in the Kentucky Employees Retirement System (KERS) and County Employees Retirement System (CERS) on or after January 1, 2019, who elect to participate in the plan; provide that the optional money purchase plan shall be a mandatory defined contribution plan that will operate as another benefit tier in KERS/CERS and will include a 4% employer contribution; provide that the investment options for members of the money purchase plan shall be determined by the Kentucky Retirement Systems (KRS) board and may include options for investing in system assets, investment options provided by an external vendor selected by the KRS board, or investment options provided through an agreement with the Kentucky Public Employees Deferred Compensation Authority (KDC); provide for a five-year vesting period for employer contributions in the 401(a) money purchase plan; provide that a member can retire and take a refund or his or her account or annuitize his or her account balance in the 401(a) money purchase plan into one of the payment options provided by the system upon reaching age 65 with five years' service or upon meeting a combined age and service requirement of 87 years with a minimum age of 57; amend KRS 16.505, 61.510, and 78.510 relative to State Police Retirement System (SPRS), KERS, and CERS to exclude uniform and equipment allowances from the definition of creditable compensation, require that a final compensation based upon the highest three (hazardous) or highest five (nonhazardous) years of creditable compensation must contain at least 36 or 60 months, as applicable, for those members retiring on or after January 1, 2019; for Tier I nonhazardous KERS and CERS members retiring on or after July 1, 2023, prohibit lump-sum payments for compensatory time at retirement from increasing retirement benefit calculations; define "nonhazardous position" and "accumulated employer contribution" and make technical and conforming changes; amend KRS 61.546 and 78.616 to provide that sick leave service credit shall not be used to determine retirement eligibility or to reduce applicable actuarial penalties for KERS, CERS, and SPRS members who began participating prior to January 1, 2014, and who retire on or after July 1, 2023; provide that no additional KERS/CERS agencies may elect to adopt a sick leave program on or after August 1, 2018; amend KRS 61.565 to define normal cost for purposes of funding for KERS, CERS, SPRS, LRP, and JRP; provide that costs for the optional 401(a) money purchase plan shall be included in the normal cost calculation; provide that, for the 2019 actuarial valuation, the unfunded liabilities shall be financed using a level dollar amortization method and that unfunded liability payments shall be prorated to each employer based upon the employer's average share of payroll over fiscal years 2015, 2016, and 2017, except for those employers who have ceased participation; provide that employer funding requirements shall be determined using the entry age normal cost method, a five-year asset smoothing method, and assumptions adopted by the KRS board; provide that KERS and SPRS rates shall be adjusted annually rather than on a biennial basis in the 2020-2022 budget biennium; amend KRS 61.597 to change the interest credit for KERS/CERS nonhazardous members in the cash balance plan to 85% of the 10-year smoothed return above zero % if the member is contributing to a state-administered retirement system or plan and zero % if the person is not contributing to a state-administered retirement system or plan; amend KRS 16.601 to provide that in the event of a line-of-duty death of a KERS, CERS, or SPRS hazardous member, the spouse shall supersede the beneficiary designation on file; amend KRS 61.552 to provide that members who begin participating in the optional 401(a) money purchase plan shall not be eligible to purchase service credit and to make conforming amendments; amend KRS 61.555 to provide that a member in the optional 401(a) money purchase plan shall be credited with employee and employer contributions if called to active duty military service while working; amend KRS 61.637 to specify required breaks in employment for KERS, CERS, SPRS, LRP, JRP, and Teachers' Retirement System (TRS) retirees who retire on or after January 1, 2019, and are reemployed on or after January 1, 2019, in a KRS eligible position and to provide that these reemployed retirees shall not earn a second retirement account upon reemployment; amend KRS 61.702 to require KRS employees who began participating on or after July 1, 2003, but prior to September 1, 2008, to contribute towards retiree health funding an amount equal to 1% of creditable compensation; amend KRS 61.705 to provide that members who begin participating on or after January 1, 2014, shall not be eligible for the $5,000 death benefit payable to KERS, CERS, and SPRS retired members with at least four years of service; amend KRS 16.652, 61.692, and 78.852 to provide that the KERS, CERS, and SPRS "inviolable contract" provisions shall not apply to legislative changes that become effective on or after July 1, 2018; make technical changes; amend KRS 61.5955 to remove provisions relative to election by pre-2014 KERS, CERS, and SPRS members to participate in a cash balance plan and amend to provide that KERS and CERS nonhazardous members may elect to cease participating in the pension plan and participate prospectively in the optional 401(a) money purchase plan for future service; amend KRS 61.655 to provide that no member of the General Assembly, public servant, or trustee or employee of the KRS board shall have any interest in the business of KRS while employed/serving and for a period of five years following employment/service (starting from July 1, 2017); amend KRS 16.583, 16.645, 61.575, 61.595, 78.640, 61.580, 61.559, 61.605, 61.640, 61.680, 78.545, and 78.650 to make technical/conforming amendments; create a new section of KRS 161.220 to 161.716 to establish a hybrid cash balance plan for new Teachers' Retirement System (TRS) members who begin participating on or after January 1, 2019; provide that the hybrid cash balance plan shall operate as another benefit tier in TRS, will have a benefit based on a 9.105% employee contribution for nonuniversity members and a 7.625% employee contribution for university members, and will include an 8% employer credit for non-university members and a four % employer credit for university members and an interest credit; provide for a five-year vesting period for employer credits in the TRS hybrid cash balance plan; provide that a member can retire and take a refund of his or her account or annuitize his or her account balance in the TRS hybrid cash balance plan into one of the payment options provided by the system upon reaching age 65 with five years' service or upon meeting a combined age and service requirement of 87 years with a minimum age of 57; allow a TRS member with less than five years of service to elect participation in the hybrid cash balance plan; amend KRS 161.155 to limit the amount of sick leave payments that can be applied to TRS retirement benefit calculations to the amount of sick days accumulated as of December 31, 2018; provide that part-time and substitute provisions for TRS coverage shall not apply to reemployed retirees who retire on or after January 1, 2019; amend KRS 161.220 to define "university member," "nonuniversity member," "accumulated account balance," and "accumulated employer credit"; amend KRS 161.460 to provide that no member of the General Assembly, public servant, or trustee or employee of the TRS board shall have any interest in the business of TRS while employed/serving and for a period of five years following employment/service (starting from July 1, 2017); amend KRS 161.470 to provide that new members of TRS cannot purchase recontributions of refunds and existing members cannot use recontributions of refunds for purposes of determining the date the individual became a member of TRS; amend KRS 161.480, 161.500, 161.507, 161.515, 161.545, 161.5465, 161.547, 161.548, 161.549, and 161.595 to remove certain service purchase provisions for new TRS members effective January 1, 2019; make technical/conforming amendments; amend KRS 161.550 to require TRS employers to pay the full actuarially required contribution rate; provide that for the employer rates payable on or after July 1, 2020, the unfunded liabilities shall be financed using a level dollar amortization method and to prorate unfunded liability payments to each employer based upon the employer's average share of payroll over fiscal years 2015, 2016, and 2017; provide that employer funding requirements shall be determined using the entry age normal cost method, a five-year asset smoothing method, and assumptions adopted by the TRS board; define "normal cost" and "actuarially accrued unfunded liability contribution," and provide that local school districts shall pay 2% of pay towards the costs of new TRS members retirement benefits; amend KRS 161.568 to prohibit new members, effective January 1, 2019, from transferring service into TRS from an optional defined contribution retirement plan administered by university employers; amend KRS 161.605 to provide that TRS members who retire on or after January 1, 2019, and return to work shall not earn second retirement accounts in TRS; require certain breaks in employment and salary limitations for TRS retirees returning to work in a TRS position; amend KRS 161.620 to provide that the TRS cost of living adjustment (COLA) provisions do not apply to new members, effective January 1, 2019; amend KRS 161.623 to limit sick leave service credit to the level of sick leave accumulated as of December 31, 2018, for TRS members receiving service credit for accumulated sick leave; provide that agencies who have not elected a TRS sick leave program may not do so on or after August 1, 2018; amend KRS 161.655 to provide that the life insurance benefit from TRS shall not be applicable to new members, effective January 1, 2019; amend KRS 161.661 to conform TRS disability provisions to the plans for new members; amend KRS 161.714 to provide that the TRS "inviolable contract" provisions shall not apply to legislative changes that become effective on or after July 1, 2018, or to new TRS members with the exception of the new member's accumulated account balance; amend KRS 161.400, 161.420, 161.480, 161.520, 161.522, 161.525, 161.540, 161.580, 161.585, 161.590, 161.600, 161.612, 161.615, 161.630, 161.650, and 161.700 to make technical/conforming TRS amendments; amend KRS 7A.250 to provide that the Public Pension Oversight Board's hiring of an actuary to perform a review of state-retirement system rates is voluntary; make conforming/technical amendments; create a new section of KRS Chapter 18A to establish conflict of interest provisions for Kentucky Public Employees Deferred Compensation Authority (KDC) employees and trustees; provide that no member of the General Assembly, public servant, or trustee or employee of the KDC board shall have any interest in the business of KDC while employed/serving and for a period of five years following employment/service (starting from July 1, 2017); amend KRS 11A.010 to make the KDC board subject to the Executive Branch Code of Ethics; amend KRS 18A.245 and 61.598 to make conforming/technical amendments; require the Public Pension Oversight Board (PPOB) to establish an advisory committee to evaluate CERS separation/restructuring of the KRS systems and report recommendations to the PPOB no later than December 1, 2019; require KRS and TRS to provide update on the development of the system, including the impact of state or federal law, to the PPOB no later than August 1, 2018; provide that line-of-duty death changes to KRS 16.601 are applicable to surviving spouses of hazardous members who died in the line of duty on or after January 1, 2017; provide severability clause.
Index Headings	Cities - Interlocal agreements, extraterritorial wastewater facilities, acquisition of by local agency Cities - Wastewater, extraterritorial facilities, acquisition of by local agency Consolidated Local Governments - Wastewater, extraterritorial facilities, acquisition of by local agency Contracts - Interlocal agreements, extraterritorial wastewater facilities, acquisition of by local agency Counties - Interlocal agreements, extraterritorial wastewater facilities, acquisition of by local agency Counties - Wastewater, extraterritorial facilities, acquisition of by local agency Environment and Conservation - Wastewater, extraterritorial facilities, acquisition of by local agency Local Government - Interlocal agreements, extraterritorial wastewater facilities, acquisition of by local agency Local Government - Wastewater, extraterritorial facilities, acquisition of by local agency Public Protection - Wastewater, extraterritorial facilities, acquisition of by local agency Sewer Systems - Extraterritorial facilities, acquisition of by local agency

Amendment	House Committee Amendment 1
Sponsor	J. Carney
Summary	Make title amendment.
Index Headings	Cities - Interlocal agreements, extraterritorial wastewater facilities, acquisition of by local agency Cities - Wastewater, extraterritorial facilities, acquisition of by local agency Consolidated Local Governments - Wastewater, extraterritorial facilities, acquisition of by local agency Contracts - Interlocal agreements, extraterritorial wastewater facilities, acquisition of by local agency Counties - Interlocal agreements, extraterritorial wastewater facilities, acquisition of by local agency Counties - Wastewater, extraterritorial facilities, acquisition of by local agency Environment and Conservation - Wastewater, extraterritorial facilities, acquisition of by local agency Local Government - Interlocal agreements, extraterritorial wastewater facilities, acquisition of by local agency Local Government - Wastewater, extraterritorial facilities, acquisition of by local agency Public Protection - Wastewater, extraterritorial facilities, acquisition of by local agency Sewer Systems - Extraterritorial facilities, acquisition of by local agency

Amendment	House Floor Amendment 2
Sponsor	J. Kay
Summary	Retain original provisions, except amend KRS 61.645 to require the Kentucky Retirement Systems (KRS) to follow the state Model Procurement Code when contracting for investment management services; provide that KRS board members may also be removed for a violation of fiduciary duties or conflict of interest; provide that a KRS board member shall not be considered as acting in good faith if they fail to disclose a conflict of interest; specify investment fee and commission reporting to include underlying fund of fund fees; require investment managers failing to disclose investment holdings, fees, and commissions to forfeit any fees or commission paid by KRS; subject investment contracts made by the Kentucky Retirement System to full public disclosure; amend KRS 61.650 to require investment managers to formally adopt the CFA Institute's codes of conduct; require that failure to adhere to the codes result in the forfeiture of any fees or commissions paid by the Kentucky Retirement Systems; make conforming amendments; amend KRS 61.655 to amend conflict-of-interest provisions to prohibit a trustee and employees of the Kentucky Retirement Systems from having a contractual agreement with or interest in any entities providing services to the systems and from receiving, directly or indirectly, any interest, fees, or profit from entities that provide services to the Kentucky Retirement Systems; require trustees, members of the General Assembly, and public servants to adhere to relevant conflict-of-interest provisions during tenure and for five years following termination; require trustees and employees of the Kentucky Retirement Systems to file annual conflict-of-interest statements with the Kentucky Retirement Systems beginning on January 1, 2019.
Index Headings	Cities - Interlocal agreements, extraterritorial wastewater facilities, acquisition of by local agency Cities - Wastewater, extraterritorial facilities, acquisition of by local agency Consolidated Local Governments - Wastewater, extraterritorial facilities, acquisition of by local agency Contracts - Interlocal agreements, extraterritorial wastewater facilities, acquisition of by local agency Counties - Interlocal agreements, extraterritorial wastewater facilities, acquisition of by local agency Counties - Wastewater, extraterritorial facilities, acquisition of by local agency Environment and Conservation - Wastewater, extraterritorial facilities, acquisition of by local agency Local Government - Interlocal agreements, extraterritorial wastewater facilities, acquisition of by local agency Local Government - Wastewater, extraterritorial facilities, acquisition of by local agency Public Protection - Wastewater, extraterritorial facilities, acquisition of by local agency Sewer Systems - Extraterritorial facilities, acquisition of by local agency