House Bill 414, a KLC initiative that will make it easier for cities to recruit and retain public safety employees, became law on Monday without the governor’s signature. However, Governor Andy Beshear vetoed House Bill 297, a KLC initiative addressing the Kentucky Public Pensions Authority (KPPA) and County Employees Retirement System (CERS) separation costs.

Representative John Blanton (R-Salyersville) sponsored House Bill 414. The measure includes several critical provisions for cities. The bill:

• Adjusts the number of retired officers a police department can rehire without paying required pension benefits;
• Removes the maximum age for newly hired police officers and firefighters;
• Allows police departments to use an 80-hour, 14-day work period instead of a 40-hour, seven-day period;
• Clarifies that the police and fire chief, clerical employees, and maintenance staff are not covered by the same disciplinary process as firefighters and police officers in former second or third class cities;
• Clarifies that clerical and maintenance staff are not guaranteed the same work schedule or vacation leave as police officers in former second or third class cities; and
• Extends the time a city must hold a disciplinary hearing from three to 10 days and the time for the legislative body to serve a copy of charges from two to five days.

Representative Jerry Miller (R-Louisville) sponsored House Bill 297. The measure included a floor amendment by Representative Russell Webber (R-Shepherdsville) that created a sunset provision for CERS to pay Kentucky Retirement Systems (KRS) expenses attributed to separation. Interpretation of House Bill 484, the separation measure legislators passed in the 2020 session, resulted in KRS expenses being billed indefinitely to CERS, including salaries of KRS leadership, legal counsel, and even laptops. Webber’s language sunsets that practice on July 1, 2024 — which provides ample time for separation costs to have occurred.

House Bill 297 also requires the Kentucky Public Pensions Authority (KPPA) Board of Trustees to approve a budget before KPPA submits it to the legislature or governor, mandates an annual performance review for the KPPA executive director, and allows KPPA to hire additional investment staff outside of KRS Chapter 18A.

Governor Beshear’s veto message claimed the ability to hire six additional unclassified investment employees without KRS Chapter 18A salary limitations created oversight and transparency concerns. However, the measure includes language requested by KLC that ensures a pay range for the positions.

“The bill allows the hiring of additional unclassified investment staff upon approval of the KPPA, which consists of both the CERS and KRS boards of trustees,” noted KLC Director of Public Affairs Bryanna L. Carroll. “That, in and of itself, provides oversight.”

Additionally, Carroll highlighted language in Section 2(8)(d)2, which was added in a House committee substitute. “We worked with Representative Miller to create the very guardrails the governor is seeking,” she stated. “The separation measure legislators passed in 2020 provided independence and put us on the path to responsible governance. The language added to Section 2 of House Bill 297 ensures we stay on that path.”

The section states: “The Kentucky Public Pensions Authority shall adopt a written salary and classification plan fixing a range of compensation and written terms of employment for any of the unclassified employees of the Office of Investments it authorizes under this paragraph. The Authority shall authorize the executive director to appoint up to six (6) unclassified employees of the Office of Investments subject to the compensation ranges and terms of employment the Authority has established.“

Carroll urged the legislature to override the governor’s House Bill 297 veto.

The governor also vetoed a section of House Bill 1, the executive branch budget, that funded the Drinking Water and Wastewater Grant Program. The General Assembly allocated $250 million in State Fiscal Recovery Funds from the American Rescue Plan Act (ARPA) for the grant program that the Kentucky Infrastructure Authority (KIA) oversees.

Beshear’s veto message said, “I am vetoing this part because it does not accommodate projects that include cooperative allocations from multiple counties. There are needs for regional projects and for larger projects like wastewater treatment plants that are located in one county but serve citizens from other counties. This veto…allows funds from multiple counties to be used on a project.”

Legislators will return April 13 – 14 to consider veto overrides and pass any additional legislation.