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Pension Bill ruled unconstitutional

Christie Dutton
6/25/2018

Franklin Circuit Court ruled that the 2018 pension reform bill, Senate Bill 151, is unconstitutional for two reasons.


Franklin Circuit Court ruled that the 2018 pension reform bill, Senate Bill 151, is unconstitutional for two reasons.

  1. There were not three readings of the bill on three separate days.

The Kentucky Constitution requires each bill to be printed and "read at length on three different days in each House."

Senate Bill 151 was originally a wastewater bill that was read two times in the House and three times in the Senate. A committee substitute to the bill was introduced, which turned the 11-page wastewater bill into the 291-page pension reform bill.  The court ruled that this change rendered the previous readings "meaningless," according to the Opinion and Order of the Franklin Circuit Court.  After the change, the bill was read once on the House floor by its original title.

  1. It did not receive a constitutional majority in the House.

According the Kentucky Constitution, appropriation bills, "any act or resolution for the appropriation of money or the creation of debt," are required to receive the votes of a majority of the elected members in both houses.

Senate Bill 151 was not filed as an appropriations bill by the legislature; however, the court opinion stated that Senate Bill 151 is an appropriation bill. The bill received a constitutional majority in the Senate (38 members) with a vote of 22-15. However, the House (100 members) was two votes short of a constitutional majority with a vote of 49-46. 

 

Other issues considered

The court ruled that Speaker Pro Tempore David Osborne was the presiding officer of the House and his signature on Senate Bill 151 was the correct process and did not violate the Kentucky Constitution.

There was no ruling on whether the “inviolable contract” was violated.

There was no ruling on the interpretation of “at length” regarding the reading of bills.

 

What’s next?

Governor Matthew Bevin communicated on Twitter that “an appeal from our legal team is imminent.”  An appeal must be filed within 30 days of Wednesday’s ruling. The Kentucky Supreme Court has been asked to hear the appeal. Some components of the pension reform bill were intended to take effect July 1, 2018. As things currently stand, no changes to Kentucky Retirement System pensions will take effect unless a higher court reverses the decision.

 

Will this affect the phase-in?

The phase-in bill, House Bill 362, is separate from the pension reform bill, Senate Bill 151, and currently has not been challenged. Any ruling on the pension reform bill does not immediately impact the phase-in bill, which allows county governments to gradually increase their employee pension contribution over a period of up to 10 years.

If the higher court upholds the ruling that the legislature failed to abide by certain procedural requirements regarding the pension reform bill, other bills could be vulnerable to challenge subject to litigation being filed.

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