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AN ACT relating to educational opportunities and making an appropriation 1
therefor. 2
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 3
Section 1. KRS 160.1590 is amended to read as follows: 4
As used in KRS 160.1590 to 160.1599: 5
(1) ["Achievement academy" has the same meaning as "public charter school"; 6
(2) ]"Achievement gap" means the difference between performance goals and actual 7
performance on state standardized examinations and other academic performance 8
measures for subgroups of students, especially groups defined by socioeconomic 9
status, race, and ethnicity; 10
(2)[(3)] "Applicant" means an eligible person or persons, organization, or entity that 11
seeks approval from a charter school authorizer to establish a public charter school; 12
(3)[(4)] "Charter application" means a proposal from an applicant to an authorizer to 13
enter into a charter contract whereby the proposed school obtains public charter 14
school status; 15
(4)[(5)] "Charter contract" or "contract" means a fixed-term, renewable contract 16
between a charter school and an authorizer that identifies the roles, powers, 17
responsibilities, and performance expectations for each party to the contract 18
pursuant to KRS 160.1596; 19
(5)[(6)] "Charter school board of directors" means the independent board of a public 20
charter school that is party to the charter contract with the authorizer and whose 21
members have been elected or selected pursuant to the school's application; 22
(6)[(7)] "Conversion public charter school" means a public charter school that existed 23
as a noncharter public school prior to becoming a public charter school; 24
(7) "District of location" means the public school district in which a public charter 25
school is physically located; 26
(8) "Education service provider" means an education management organization, school 27 UNOFFICIAL COPY 22 RS HB 9/GA
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design provider, or any other partner entity with which a public charter school 1
contracts for educational design, implementation, or comprehensive management; 2
(9) "Local school board" or "local board" means a school board exercising 3
management and control of a local school district; 4
(10) "Local school district" means a county or independent school district as identified in 5
KRS 160.010 and 160.020; 6
(11) "Parent" means a parent, guardian, or other person or entity having legal custody of 7
a child; 8
(12) "Proportionate per pupil basis" means multiplying an amount of funds by a 9
fraction, with the numerator being the average daily attendance of the public 10
charter school, and the denominator being the average daily attendance of the 11
school district of location; 12
(13) "Proportionate per pupil transported basis" means multiplying an amount of 13
funds by a fraction, with the numerator being the aggregate daily attendance of 14
students transported by a public charter school, and the denominator being the 15
aggregate daily attendance of students transported by the school district of 16
location; 17
(14)[(12)] "Public charter school" means a public school that: 18
(a) Is a public body corporate and politic, exercising public power, including the 19
power in name to contract and be contracted with, sue and be sued, and adopt 20
bylaws not inconsistent with this section; 21
(b) Has autonomy over decisions, including but not limited to matters concerning 22
finance, personnel, scheduling, curriculum, and instruction; 23
(c) Is governed by an independent board of directors; 24
(d) Is established and operating under the terms of a charter contract between the 25
public charter school's board of directors and its authorizer; 26
(e) Is a public school to which parents choose to send their children; 27 UNOFFICIAL COPY 22 RS HB 9/GA
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(f) Is a public school that admits students on the basis of a random and open 1
lottery if more students apply for admission than can be accommodated; 2
(g) Offers a comprehensive instructional program to enrolled students[within a 3
public school district]; 4
(h) Operates in pursuit of a specific set of educational objectives as defined in its 5
charter contract; and 6
(i) Operates under the oversight of its authorizer in accordance with its charter 7
contract; 8
(15)[(13)] "Public charter school authorizer" or "authorizer" means an entity or body that 9
reviews, approves, or denies charter applications, enters into charter contracts with 10
applicants, oversees public charter schools, and renews, does not renew, or revokes 11
charter contracts. Authorizers shall include: 12
(a) A local school board of a local school district, which shall only have 13
authority to approve charter applications within the boundaries of its 14
district[ in which a public charter school is located]; 15
(b) A collaborative among local school boards that forms to set up a regional 16
public charter school to be located within the area managed and controlled by 17
those local school boards; 18
(c) The mayor of a consolidated local government, who shall be considered an 19
authorizer governing board for the purposes of KRS 160.1590 to 160.1599 20
and who may only authorize public charter schools to be physically located 21
within the county in which the city is located and who has submitted a written 22
notice to the state board that he or she intends to serve as an authorizer; and 23
(d) The chief executive officer of an urban-county government, who shall be 24
considered an authorizer governing board for the purposes of KRS 25
160.1590 to 160.1599 and who may only authorize public charter schools to 26
be physically located within the county in which the city is located and who 27 UNOFFICIAL COPY 22 RS HB 9/GA
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has submitted a written notice to the state board that he or she intends to serve 1
as an authorizer; 2
(16)[(14)] "Qualified teacher" means a person certified by the Education Professional 3
Standards Board pursuant to KRS 161.028, 161.030, 161.046, or 161.048; 4
[(15) "Regional achievement academy" means a public charter school that has been 5
established to serve students across multiple school districts;] 6
(16) "Regional achievement zone" means one (1) county containing four (4) or more 7
local school districts or two (2) or more contiguous counties, each containing four 8
(4) or more local school districts; 9
(17) "Start-up public charter school" means a public charter school that did not exist as a 10
noncharter public school prior to becoming a public charter school;] 11
(17)[(18)] "State board" means the Kentucky Board of Education; 12
(18)[(19)] "Student" means any child who is eligible for attendance in a public school in 13
Kentucky;[ and] 14
(19)[(20)] "Urban academy" means a public charter school that includes an 15
enrollment preference for students who live in close proximity to the school as 16
defined in the charter contract; and 17
(20) "Virtual public charter school" means a public charter school that offers educational 18
services primarily or completely through an online program. 19
Section 2. KRS 160.1591 is amended to read as follows: 20
(1) The General Assembly hereby finds and declares that: 21
(a) Reducing achievement gaps in Kentucky is necessary for the state to realize its 22
workforce and economic development potential; 23
(b) Past and current measures have been insufficient for making progress toward 24
reducing the state's achievement gaps; 25
(c) Additional public school options are necessary to help reduce socioeconomic, 26
racial, and ethnic achievement gaps; and 27 UNOFFICIAL COPY 22 RS HB 9/GA
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(d) The demand exists for high-quality public charter schools in the 1
Commonwealth. 2
(2) The General Assembly hereby establishes a public charter school project to benefit 3
parents, teachers, and community members by creating new, innovative, and more 4
flexible ways of educating all children within the public school system and by 5
advancing a renewed commitment to the mission, goals, and diversity of public 6
education. The purposes of the public charter school initiative are to: 7
(a) Improve student learning outcomes by creating additional high-performing 8
schools with high standards for student performance; 9
(b) Encourage the use of different, high-quality models of teaching, governing, 10
scheduling, or other aspects of schooling that meet a variety of student needs; 11
(c) Close achievement gaps for low-performing groups of public school students; 12
(d) Allow schools freedom and flexibility in exchange for exceptional levels of 13
results-driven accountability; 14
(e) Increase high-quality educational opportunities within the public education 15
system for all students, especially those at risk of academic failure; and 16
(f) Provide students, parents, community members, and local entities with 17
expanded opportunities for involvement in the public education system. 18
(3) Beginning in academic year 2022-2023[2017-2018], any authorizer may authorize 19
an unlimited number of public charter schools[ within the boundary of the local 20
school district]. 21
(4) A public charter school shall not be a virtual public charter school. 22
(5) [(a) A public charter school authorized by a local school board or collaborative 23
may enroll students who reside within the boundaries of the district or districts 24
represented by the local school board or collaborative.] 25
(a)[(b)] Enrollment preference for a conversion public charter school shall be 26
given to students who attended the school the previous school year. If the 27 UNOFFICIAL COPY 22 RS HB 9/GA
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number of students enrolled does not exceed the capacity of the school, 1
secondary preference shall be given to students who reside within the district 2
boundary in which the public charter school is located. 3
(b)[(c)] Enrollment preference for public charter schools shall be given to 4
students enrolled in the public charter school the previous year and to siblings 5
of students already enrolled in the school. The[An] enrollment preference for 6
returning students shall exclude those students from entering into a lottery, as 7
identified in paragraph (f) of this subsection. 8
(c) Enrollment preference for public charter schools identified as an urban 9
academy in the charter contract shall be given to students who live in close 10
proximity to the school, as governed by the charter contract. 11
(d) Enrollment preference may be given to the children of the public charter 12
school's board of directors and full-time employees of the public charter 13
school provided they constitute no more than ten percent (10%) of the total 14
student population. 15
(e) A public charter school may allow an enrollment preference for students who 16
meet federal eligibility requirements for free or reduced-price meals and 17
students who attend persistently low-achieving noncharter public schools. 18
(f) If capacity is insufficient to enroll all students who wish to attend any specific 19
grade level or program at a public charter school, the school shall select 20
students through a randomized and transparent lottery. The lottery process 21
may allow for siblings in a lottery or different lotteries to be admitted 22
together. 23
[(6) (a) A public charter school established within the boundaries of a regional 24
achievement zone shall be a regional achievement academy. 25
(b) 1. A regional achievement academy may be authorized by a single local 26
school board within the regional achievement zone or by a collaborative 27 UNOFFICIAL COPY 22 RS HB 9/GA
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of local school boards within the regional achievement zone. 1
2. A regional achievement academy authorized by a single local school 2
board shall be located within the boundaries of the authorizing local 3
school district. 4
3. A regional achievement academy authorized by a collaborative of local 5
school boards shall be located within the regional achievement zone. 6
(c) A regional achievement academy may only enroll students who reside within 7
the boundaries of its regional achievement zone. 8
(d) Enrollment preference in a regional achievement academy may be given to 9
students who reside within the boundaries of the local school district where 10
the regional achievement academy is located.] 11
(6)[(7)] Consistent with the requirements of KRS 160.1590 to 160.1599 and 161.141, 12
the state board shall promulgate administrative regulations to guide student 13
application, lottery, and enrollment in public charter schools. 14
Section 3. KRS 160.1592 is amended to read as follows: 15
(1) A public charter school shall be part of the state's system of public education but 16
shall be exempt from all statutes and administrative regulations applicable to the 17
state board, a local school district, or a school, except the public charter school shall 18
adhere to the same health, safety, civil rights, and disability rights requirements as 19
are applied to all public schools and to all requirements otherwise identified in KRS 20
160.1590 to 160.1599 and 161.141. 21
(2) A public charter school may elect to comply with any one (1) or more provisions of 22
any state statute or administrative regulation. 23
(3) A public charter school shall: 24
(a) Be governed by a board of directors; 25
(b) Be established and operate in pursuit of a specific set of educational objectives 26
as defined in the charter contract between the school's board of directors and 27 UNOFFICIAL COPY 22 RS HB 9/GA
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its authorizer; 1
(c) Ensure students meet compulsory attendance requirements under KRS 2
158.030 and 158.100 and record student enrollment and attendance in a 3
manner necessary for participation in the fund to support education 4
excellence in Kentucky; 5
(d) Hire only qualified teachers to provide student instruction; 6
(e) Ensure high school course offerings meet or exceed the minimum required 7
under KRS 156.160 for high school graduation; 8
(f) Design its education programs to meet or exceed the student performance 9
standards adopted by the Kentucky Board of Education; 10
(g) Ensure students' participation in required state assessment of student 11
performance, as required under KRS 158.6453; 12
(h) Adhere to all generally accepted accounting principles and adhere to the same 13
financial audits, audit procedures, and audit requirements as are applied to 14
other public schools under KRS 156.265; 15
(i) Utilize the same system for reporting student information data and financial 16
data as is utilized by other school districts across the state; 17
(j) Require criminal background checks for staff and volunteers, including 18
members of its governing board, as required of all public school employees 19
and volunteers within the public schools specified in KRS 160.380 and 20
161.148; 21
(k) Comply with open records and open meeting requirements under KRS 22
Chapter 61; 23
(l) Comply with purchasing requirements and limitations under KRS Chapter 24
45A and KRS 156.074 and 156.480, or provide to the public charter school 25
board of directors a detailed monthly report of school purchases over ten 26
thousand dollars ($10,000), including but not limited to curriculum, furniture, 27 UNOFFICIAL COPY 22 RS HB 9/GA
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and technology; 1
(m) Provide instructional time that is at least equivalent to the student instructional 2
year specified in KRS 158.070; 3
(n) Provide data to the Kentucky Department of Education and the authorizer as 4
required by the Kentucky Department of Education or authorizer to generate a 5
school report card under KRS 158.6453; 6
(o) Operate under the oversight of its authorizer in accordance with its charter 7
contract and application; 8
(p) As a public body corporate, have all the powers necessary for carrying out the 9
terms of its charter contract, including the power to: 10
1. Receive and disburse funds for school purposes; 11
2. Secure appropriate insurance and enter into contracts and leases; 12
3. Contract with an education service provider, provided the board of 13
directors of the public charter school retains oversight and authority over 14
the school; 15
4. Incur debt in reasonable anticipation of the receipt of public or private 16
funds; 17
5. Pledge, assign, or encumber its assets to be used as collateral for loans 18
or extensions of credit; 19
6. Solicit and accept any gifts or grants for school purposes, subject to 20
applicable laws and the terms of its charter; 21
7. Acquire real property for use as its facility or facilities, from public or 22
private sources; and 23
8. Employ or contract with other entities for the provision of teaching, 24
professional, and support staff, as needed;[ and] 25
(q) Conduct an admissions lottery if capacity is insufficient to enroll all students 26
who wish to attend the school and ensure that every student has a fair 27 UNOFFICIAL COPY 22 RS HB 9/GA
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opportunity to be considered in the lottery and that the lottery is competently 1
conducted, equitable, randomized, transparent, impartial, and in accordance 2
with targeted student population and service community as identified in KRS 3
160.1593(3) so that students are accepted in a public charter school without 4
regard to ethnicity, national origin, religion, sex, income level, disabling 5
condition, proficiency in the English language, or academic or athletic ability; 6
and 7
(r) Establish a food program for students that, at a minimum, provides free and 8
reduced-price meals to students identified as qualifying for such meals 9
under federal guidelines for the National School Lunch Program. 10
(4) For purposes of this subsection, a member of the board of directors of a public 11
charter school shall be considered an officer under KRS 61.040 and shall be 12
removed from office under the statute's provisions. 13
(5) A local school district shall provide or publicize to parents and the general public 14
information about public charter schools authorized by the local school district as an 15
enrollment option within the district to the same extent and through the same means 16
that the school district provides and publicizes information about noncharter public 17
schools in the district. 18
(6) A local school district shall not assign or require any student enrolled in the local 19
school district to attend a public charter school. 20
(7) (a) For purposes of ensuring compliance with this section and the charter under 21
which it operates, a public charter school shall be administered by a public 22
charter school board of directors accountable to the authorizer in a manner 23
agreed to in the charter contract, as negotiated between the public charter 24
school applicant and the authorizer. 25
(b) The board of directors of a public charter school shall consist of a minimum 26
of two (2) parents of students attending any public charter school operating 27 UNOFFICIAL COPY 22 RS HB 9/GA
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under the direction of the board of directors. 1
(c) A member of the board of directors of a public charter school shall: 2
1. Not be an employee of that school or of an education service provider 3
that provides services to the school; and 4
2. File full disclosure reports and identify any potential conflicts of interest, 5
relationships with management organizations, and relationships with 6
family members who are applying to or are employed by the public 7
charter school or have other business dealings with the school, the 8
management organization of the school, or any other public charter 9
school and shall make these documents available online through the 10
authorizer. 11
(8) Collectively, members of the board of directors shall possess expertise in 12
leadership, curriculum and instruction, law, and finance. 13
(9) (a) A board of directors may hold one (1) or more charter contracts. 14
(b) Each public charter school under contract with a board of directors shall be 15
separate and distinct from any other public charter school under contract with 16
the board of directors. 17
(10) The board of directors shall be responsible for the operation of its public charter 18
school, including but not limited to preparation of a budget, contracting for services, 19
school curriculum, and personnel matters. 20
(11) The board of directors shall: 21
(a) Ensure that all meetings of the board are publicized in advance according to 22
the rules governing the authorizer and are open to the public at times 23
convenient to parents; and 24
(b) Require any education service provider contracted with the board to provide a 25
monthly detailed budget to the board. 26
(12) (a) A public charter school may negotiate and contract with its authorizer or any 27 UNOFFICIAL COPY 22 RS HB 9/GA
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third party for the use, operation, and maintenance of a building and grounds, 1
liability insurance, and the provision of any service, activity, or undertaking 2
that the public charter school is required to perform in order to carry out the 3
educational program described in its charter. Any services for which a public 4
charter school contracts with a school district shall be provided by the district 5
at cost and shall be negotiated as a separate agreement after final charter 6
contract negotiations. The public charter school shall have standing to sue and 7
be sued in its own name for the enforcement of any contract under color of 8
authority granted by KRS 160.1590 to 160.1599. A public charter school may 9
own, rent, or lease its space. 10
(b) Any entity contracted to provide educational services or goods to a public 11
charter school in an amount exceeding ten thousand dollars ($10,000) shall be 12
subject to the Open Records Act under KRS Chapter 61 for all records 13
associated with the public charter school contract. 14
(13) A public charter school shall be exempt from administrative regulations governing 15
public schools for purposes of zoning and local land use regulation. The Finance 16
and Administration Cabinet shall annually publish a list of vacant and unused 17
buildings and vacant and unused portions of buildings that are owned by the state 18
and that may be suitable for the operation of a public charter school and shall 19
provide the list to applicants for public charter schools and to existing public charter 20
schools upon request. 21
(14) A public charter school shall be nonsectarian in its programs, admissions policies, 22
employment practices, partnerships, and all other operations and shall not have 23
entrance requirements or charge tuition or fees, except that a public charter school 24
may require the payment of fees on the same basis and to the same extent as other 25
public schools. 26
(15) A public charter school shall not discriminate against any student, employee, or any 27 UNOFFICIAL COPY 22 RS HB 9/GA
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other person on the basis of ethnicity, religion, national origin, sex, disability, 1
special needs, athletic ability, academic ability, or any other ground that would be 2
unlawful if done by a public school. 3
(16) A public charter school shall serve one (1) or more of grades kindergarten through 4
twelve (12) and shall limit admission to students within the grade levels served. 5
(17) A public charter school shall provide programs and services to a student with a 6
disability in accordance with the student's individualized education program and all 7
federal and state laws, rules, and regulations. A public charter school shall deliver 8
the services directly or contract with another provider to deliver the services. A 9
public charter school shall establish an admissions and release committee at the 10
school and the committee shall: 11
(a) Develop an individualized education program for each student with a 12
disability; or 13
(b) Review, revise, or utilize a student's individualized education program 14
completed by the admissions and release committee of the student's former 15
school. If needed, the committee shall work collaboratively with staff from the 16
student's former school to review and revise a student's existing individualized 17
education program. 18
(18) (a) A public charter school shall be eligible to participate in state-sponsored or 19
district-sponsored interscholastic athletics, academic programs, competitions, 20
awards, scholarships, and recognition programs for students, educators, 21
administrators, and schools to the same extent as noncharter public schools. 22
Participants shall comply with eligibility requirements of students enrolled in 23
noncharter public schools. 24
(b) A public charter school has no obligation to provide extracurricular activities 25
or access to facilities for students enrolled in the public charter school. 26
(c) If a public charter school sponsors interscholastic athletic activities, students 27 UNOFFICIAL COPY 22 RS HB 9/GA
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enrolled in the public charter school shall be considered eligible to participate 1
in interscholastic competitions by the Kentucky Board of Education or the 2
agency designated by the state board to manage interscholastic athletics, if 3
other eligibility requirements are met. A student enrolled in a public charter 4
school that sponsors an interscholastic athletic activity shall be ineligible to 5
participate in that activity at any other school. 6
(d) If a public charter school does not offer any interscholastic athletic activity 7
sanctioned by the Kentucky Board of Education or the agency designated by 8
the state board to manage interscholastic athletics, a student enrolled in the 9
public charter school shall be eligible to participate at the school the student 10
would attend based on the student's residence. 11
(e) If a public charter school offers any interscholastic athletic activity sanctioned 12
by the Kentucky Board of Education or the agency designated by the state 13
board to manage interscholastic athletics, a student enrolled in the public 14
charter school shall be ineligible to participate in any interscholastic athletic 15
activity at any other school. 16
(19) Nothing in this section shall be construed to prevent the establishment of a single-17
sex public charter school consistent with federal regulations or a public charter 18
school designed to provide expanded learning opportunities for students at risk of 19
academic failure or for students with special needs. 20
(20) The authorizer of a public charter school shall semiannually consider for approval a 21
public charter school's proposed amendments to a charter contract. The authorizer 22
may consider requests for amendments more frequently upon mutual agreement 23
between the authorizer and the public charter school. The denial of an amendment 24
request is appealable pursuant to KRS 160.1595. 25
(21) If a student who was previously enrolled in a public charter school enrolls in 26
another public school located within the state, the new school shall accept any 27 UNOFFICIAL COPY 22 RS HB 9/GA
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credits earned and grades received by the student in courses or instructional 1
programs while enrolled in the public charter school in a uniform and consistent 2
manner and according to the same criteria that are used to accept credits from other 3
public schools. 4
(22) A teacher employed by a local board of education under a continuing service 5
contract and offered employment with a public charter school shall be granted a two 6
(2) year leave of absence to teach in a public charter school. The leave of absence 7
shall commence on the first day of service to the public charter school. During the 8
first or second year of the leave of absence, the teacher may notify the local board of 9
education that the teacher intends to return to a teaching position in the local school 10
district. The teacher shall be allowed to return to a teaching position in the local 11
school district at the appropriate salary for the teacher's years of experience and 12
educational level. After two (2) years on leave, the relationship between the teacher 13
and the local board of education shall be determined by the local board and the local 14
board shall notify the teacher of the decision. 15
Section 4. KRS 160.1593 is amended to read as follows: 16
(1) An application to establish a public charter school may be submitted to a public 17
charter school authorizer by teachers, parents, school administrators, community 18
residents, public organizations, nonprofit organizations, or a combination thereof. 19
(2) An applicant shall submit an application for approval of a public charter school to 20
an authorizer and shall also submit a written notification of the application 21
simultaneously to the state board as a record of the filing. Charter authorizers shall 22
accept and document the date and time of receipt of all charter applications. 23
(3) The information provided in the application shall be consistent with this section and 24
shall include: 25
(a) A mission statement and a vision statement for the public charter school, 26
including the targeted student population and the community the school hopes 27 UNOFFICIAL COPY 22 RS HB 9/GA
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to serve, and shall outline how the public charter school will establish 1
resident and nonresident enrollment policies which shall be subject to the 2
same limitations as a school district; 3
(b) A description of the school's proposed academic program that is aligned with 4
state standards, and that implements one (1) or more of the purposes described 5
in KRS 160.1591, and the instructional methods that will support the 6
implementation and success of the program; 7
(c) 1. The student achievement goals for the public charter school's 8
educational program and the chosen methods of evaluating whether 9
students have attained the skills and knowledge specified for those 10
goals; and 11
2. An explanation of how the school's proposed educational program is 12
likely to improve the achievement of traditionally underperforming 13
students, serve the needs of students with individualized education 14
programs, or provide students with career readiness education 15
opportunities[ in the local school district]; 16
(d) The school's plan for using external, internal, and state-required assessments 17
to measure student progress on the performance framework as identified in 18
KRS 160.1596, and how the school will use data to drive instruction and 19
continued school improvement; 20
(e) The proposed governance structure of the school, including a list of members 21
of the initial board of directors, a draft of bylaws that include the description 22
of the qualifications, terms, and methods of appointment or election of 23
directors, and the organizational structure of the school that clearly presents 24
lines of authority and reporting between the board of directors, school 25
administrators, staff, any related bodies such as advisory bodies or parent and 26
teacher councils, and any external organizations that will play a role in 27 UNOFFICIAL COPY 22 RS HB 9/GA
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managing the school; 1
(f) 1. Plans and timelines for student recruitment and enrollment, including 2
policies and procedures for conducting transparent and random 3
admission lotteries that are open to the public, and that are consistent 4
with KRS 160.1591 and 160.1592;[.] 5
2. An application shall demonstrate a plan to recruit at least one hundred 6
(100) students, unless the application is focused on serving special needs 7
or at-risk students or students seeking career readiness education; and 8
3. If the application is for a public charter school located in a district 9
with total student enrollment of seven thousand five hundred (7,500) 10
or less, then the application shall include a memorandum of 11
understanding with the district of location endorsing the application. 12
However, if the application is for an urban academy located within a 13
county where the total enrollment of all independent school districts is 14
greater than seven thousand five hundred (7,500), then this 15
subparagraph shall not apply; 16
(g) A proposed five (5) year budget, including the start-up year and projections 17
for four (4) additional years with clearly stated assumptions; 18
(h) Draft fiscal and internal control policies for the public charter school; 19
(i) Requirements and procedures for programmatic audits and assessments at 20
least once annually, with audits and assessments being comparable in scope to 21
those required of noncharter public schools; 22
(j) A draft handbook that outlines the personnel policies of the public charter 23
school, including the criteria to be used in the hiring of qualified teachers, 24
school administrators, and other school employees, a description of staff 25
responsibilities, and the school's plan to evaluate personnel on an annual 26
basis; 27 UNOFFICIAL COPY 22 RS HB 9/GA
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(k) A draft of the policies and procedures by which students may be disciplined, 1
including students with disabilities, which shall be consistent with the 2
requirements of due process and with state and federal laws and regulations 3
governing the placement of students with disabilities; 4
(l) A description of the facilities to be used by the public charter school, 5
including the location of the school, if known, and how the facility supports 6
the implementation of the school's academic program. If the facilities to be 7
used by the proposed school are not known at the time the application is 8
submitted, the applicant shall notify the authorizer within ten (10) business 9
days of acquiring facilities for the school. The school shall obtain certification 10
of occupancy for the facilities at least thirty (30) days prior to the first student 11
instructional day; 12
(m) The proposed ages and grade levels to be served by the public charter school, 13
including the planned, minimum, and maximum enrollment per grade per 14
year; 15
(n) The school calendar and school day schedule, which shall total at least the 16
equivalent to the student instructional year specified in KRS 158.070; 17
(o) Types and amounts of insurance coverage to be obtained by the public charter 18
school, which shall include adequate insurance for liability, property loss, and 19
the personal injury of students comparable to other schools within the local 20
school district operated by the local school board; 21
(p) A description of the health and food services to be provided to students 22
attending the school; 23
(q) Procedures to be followed in the case of the closure or dissolution of the 24
public charter school, including provisions for the transfer of students and 25
student records to the district of location[local school district in which the 26
public charter school is located] or to another charter school located within the 27 UNOFFICIAL COPY 22 RS HB 9/GA
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local school district and an assurance and agreement to payment of net assets 1
or equity, after payment of debts as specified in KRS 160.1598; 2
(r) A code of ethics for the school setting forth the standards of conduct expected 3
of its board of directors, officers, and employees; 4
(s) Plans for recruiting and developing staff; 5
(t) A staffing chart for the school's first year and a staffing chart for the term of 6
the charter; 7
(u) A plan for parental and community involvement in the school, including the 8
role of parents in the administration and governance of the school; 9
(v) The public charter school's plan for identifying and successfully serving 10
students with disabilities, students who are English language learners, 11
bilingual students, and students who are academically behind and gifted, 12
including but not limited to the school's plan for compliance with all 13
applicable federal and state laws and regulations; 14
(w) A description of cocurricular and extracurricular programs and how they will 15
be funded and delivered; 16
(x) The process by which the school will resolve any disputes with the authorizer; 17
and 18
(y) A detailed start-up plan, including financing, tasks, timelines, and individuals 19
responsible for carrying out the plan. 20
(4) If the public charter school applicant intends to contract with an education service 21
provider for educational program implementation or comprehensive management, 22
the application shall additionally require the applicant to: 23
(a) Provide evidence of success in serving student populations similar to the 24
targeted population, including demonstrated academic achievement as well as 25
successful management of nonacademic school functions, if applicable; 26
(b) Provide student performance data and financial audit reports for all current 27 UNOFFICIAL COPY 22 RS HB 9/GA
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and past public charter schools; 1
(c) Provide documentation of and explanation for any actions taken against any of 2
its public charter schools for academic, financial, or ethical concerns; 3
(d) Provide evidence of current capacity for growth; 4
(e) Provide a term sheet setting forth: 5
1. The proposed duration of the service contract; 6
2. The annual proposed fees to be paid to the education service provider; 7
3. The roles and responsibilities of the board of directors, the school staff, 8
and the education service provider; 9
4. The scope of services and resources to be provided by the education 10
service provider; 11
5. Performance evaluation measures and timelines; 12
6. Compensation structure, including clear identification of all fees to be 13
paid to the education service provider; 14
7. Methods of contract oversight and enforcement; 15
8. Investment disclosure; and 16
9. Conditions for renewal and termination of the contract; and 17
(f) Disclose and explain any existing or potential conflicts of interest between the 18
board of directors and the proposed education service provider or any 19
affiliated business entities. 20
Section 5. KRS 160.1594 is amended to read as follows: 21
(1) A public charter school authorizer shall: 22
(a) Fulfill the expectations and intent of this section and KRS 160.1590 to 23
160.1599 and 161.141; 24
(b) Demonstrate public accountability and transparency in all matters concerning 25
its charter-authorizing practices, decisions, and expenditures; 26
(c) Establish an annual timeline consistent with statutory guidelines with 27 UNOFFICIAL COPY 22 RS HB 9/GA
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deadlines to solicit, invite, accept, and evaluate applications from applicants; 1
(d) Approve new and renewal charter applications that meet the requirements of 2
this section and KRS 160.1593; 3
(e) Decline to approve charter applications that: 4
1. Fail to meet the requirements of this section and KRS 160.1593; or 5
2. Are for a school that would be wholly or partly under the control or 6
direction of any religious denomination; 7
(f) Negotiate and execute in good faith a charter contract with each public charter 8
school it authorizes; 9
(g) Monitor the performance and compliance of public charter schools according 10
to the terms of the charter contract; 11
(h) Determine whether each charter contract it authorizes merits renewal or 12
revocation; and 13
(i) Establish and maintain policies and practices consistent with the principles 14
and professional standards for authorizers of public charter schools, including 15
standards relating to: 16
1. Organizational capacity and infrastructure; 17
2. Soliciting and evaluating applications; 18
3. Performance contracting; 19
4. Ongoing public charter school oversight and evaluation; and 20
5. Charter approval, renewal, and revocation decision making. 21
(2) In reviewing applications, the public charter school authorizer is encouraged to give 22
preference to applications that demonstrate the intent, capacity, and capability to 23
provide comprehensive learning experiences to: 24
(a) Students identified by the applicants as at risk of academic failure; [and] 25
(b) Students with special needs as identified in their individualized education 26
program as defined in KRS 158.281; and 27 UNOFFICIAL COPY 22 RS HB 9/GA
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(c) Students who seek career readiness education opportunities. 1
(3) After a charter applicant submits a written application to establish a public charter 2
school, the authorizer shall: 3
(a) Complete a thorough review process; 4
(b) Conduct an in-person interview with the applicant group; 5
(c) Provide an opportunity in a public forum for local residents to provide input 6
and learn about the charter application; 7
(d) Provide a detailed analysis of the application to the applicant or applicants 8
which shall include any identified deficiencies; 9
(e) Allow an applicant a reasonable time to provide additional materials and 10
amendments to its application to address any identified deficiencies, 11
including allowing an applicant to request a sixty (60) day extension to seek 12
technical assistance in curing deficiencies from the state board under 13
Section 6 of this Act; and 14
(f) Approve or deny a charter application based on established objective criteria 15
or request additional information. 16
(4) In deciding to approve a charter application, the authorizer shall: 17
(a) Grant charters only to applicants that possess competence in all elements of 18
the application requirements identified in this section and KRS 160.1593; 19
(b) Base decisions on documented evidence collected through the application 20
review process; and 21
(c) Follow charter-granting policies and practices that are transparent, based on 22
merit, and avoid conflicts of interest. 23
(5) Unless an extension is requested under subsection (3) of this section, no later than 24
sixty (60) days following the filing of the charter application, the authorizer shall 25
approve or deny the charter application. The authorizer shall adopt by resolution all 26
charter approval or denial decisions in an open meeting of the authorizer's board of 27 UNOFFICIAL COPY 22 RS HB 9/GA
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directors. 1
(6) Any failure to act on a charter application within sixty (60) days of the established 2
application submission deadline shall be deemed an approval[a denial] by the 3
authorizer. 4
(7) An application shall be approved if the public charter school authorizer finds that: 5
(a) The public charter school described in the application meets the requirements 6
established by this section and KRS 160.1590 and 160.1592; 7
(b) The applicant demonstrates the ability to operate the school in an 8
educationally and fiscally sound manner; and 9
(c) Approving the application is likely to improve student learning and 10
achievement and further the purposes established by KRS 160.1591. 11
(8) An authorizer shall provide a written explanation within five (5) days of adopting a 12
resolution, for the public record, stating its reasons for approval or denial of a 13
charter application, including a thorough explanation of how the charter application 14
either meets or fails to meet established objective criteria for making charter 15
application decisions, and the authorizing process which the authorizer used to 16
review, evaluate, and make its final decision. 17
(9) An authorizer's charter application approval shall be submitted to the Kentucky 18
Department of Education as written notice[for final approval by the commissioner 19
of education]. 20
(10) When an authorizer that is a local school board or a collaborative of local school 21
boards receives a charter school application, any member of the board or boards 22
who has not received charter authorization training within twelve (12) months 23
immediately preceding the date the application was received shall receive six (6) 24
hours of in-service training prior to evaluating the charter application. Except for 25
training provided prior to July 15, 2020, the training shall be in addition to the 26
annual in-service training required under KRS 160.180, and each board shall select 27 UNOFFICIAL COPY 22 RS HB 9/GA
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the trainer to deliver the training to its members. Charter authorizer training shall 1
not be required of any local school board member until a charter application is 2
submitted to the board or boards. 3
Section 6. KRS 160.1595 is amended to read as follows: 4
(1) Any applicant or board of directors of a public charter school may request 5
technical assistance from the Kentucky Department of Education to address 6
deficiencies identified by an authorizer. The department shall respond within 7
thirty (30) days of the request. 8
(2) (a) The state board, upon receipt of a notice of appeal[ or upon its own motion], 9
shall review decisions of any other authorizer concerning the approval or 10
denial of a public charter school application, the nonrenewal or revocation of 11
a public charter school's contract, the denial of a public charter school's 12
request to consider a charter amendment, or the unilateral imposition of 13
conditions in the charter contract, in accordance with the provisions of this 14
section. 15
(b)[(2)] A charter applicant or approved public charter school who wishes to 16
appeal a decision of an authorizer concerning a charter application, a charter 17
amendment, or the nonrenewal or revocation of a charter, or the unilateral 18
imposition of conditions, shall provide the state board and the authorizer with 19
a notice of appeal within thirty (30) days after the authorizer's decision. The 20
appellant[person bringing the appeal] shall limit the grounds of the appeal to 21
the grounds for the denial of or the nonrenewal or revocation of a charter, or 22
the unilateral imposition of conditions, whichever is being appealed, specified 23
by the authorizer. The notice shall include a brief statement of the reasons the 24
public charter school applicant or public charter school contends the 25
authorizer's denial of or nonrenewal or revocation of a charter, or imposition 26
of conditions was in error. 27 UNOFFICIAL COPY 22 RS HB 9/GA
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(c)[(3)] If the notice of appeal[, or the motion to review by the state board,] 1
relates to an authorizer's decision to deny, refuse to renew, or revoke a charter 2
or to an authorizer's unilateral imposition of conditions that are unacceptable 3
to the charter applicant or public charter school, the appeal and review process 4
shall be as follows: 5
1.[(a)] Within forty-five (45) days after receipt of the notice of appeal[ or 6
the making of a motion to review by the state board] and after 7
reasonable public notice, the state board, at a public hearing which may 8
be held in the school district in which the proposed public charter school 9
has applied for a charter or where the public charter school exists, shall 10
review the decision of the authorizer and make its findings;[.] 11
2. The state board shall determine: 12
a. If the final decision of the authorizer was contrary to the best 13
interest of the students or community; and 14
b. If the application failed to satisfy the requirements of 15
subsections (3) and (4) of Section 4 of this Act; 16
3. If the state board finds that the authorizer's decision was contrary to the 17
best interest of the students or community and the application satisfies 18
the statutory requirements, the state board shall[ remand such decision 19
to the authorizer with written instructions for reconsideration thereof. 20
The instructions shall include specific recommendations concerning the 21
matters requiring reconsideration; 22
(b) Within thirty (30) days following the remand of a decision to the 23
authorizer and after reasonable public notice, the authorizer, at a public 24
hearing, shall reconsider its decision and make a final decision; 25
(c) If the authorizer's final decision is still to deny, refuse to renew, or 26
revoke a charter or to unilaterally impose conditions unacceptable to the 27 UNOFFICIAL COPY 22 RS HB 9/GA
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charter applicant, a second notice of appeal may be filed with the State 1
Board of Education within thirty (30) days following such final decision; 2
(d) Within thirty (30) days following receipt of the second notice of appeal 3
or the making of a motion for a second review by the State Board of 4
Education and after reasonable public notice, the state board, at a public 5
hearing shall determine if the final decision of the authorizer was 6
contrary to the best interest of the students or community. If such a 7
finding is made, the state board shall] remand such final decision to the 8
authorizer with instructions to approve the charter application or 9
amendment, or to renew or reinstate the charter, or to approve or 10
disapprove conditions imposed. The decision of the state board shall be 11
a final action subject to judicial review in the Circuit Court 12
encompassing the school district in which the public charter school is 13
located; and 14
4.[(e)] Charters granted to applicants by authorizers after a successful 15
appeal to the state board, as outlined in subparagraph[paragraph] 3.[(d)] 16
of this paragraph[subsection], shall be provided joint oversight by the 17
authorizer and the state board for, at a minimum, the first five (5) years 18
of the school's operation, and until the authorizer, state board, and public 19
charter school agree that charter oversight may be provided solely by the 20
authorizer. The state board shall be a formal participant in all 21
authorizing decision making concerning the public charter school during 22
that period, and shall be included in all communication between the 23
public charter school and the authorizer. 24
[(4) (a) Within ten (10) days of taking action to approve or deny a charter 25
application that has been remanded back to the authorizer for 26
reconsideration, the authorizer shall notify the state board of the action 27 UNOFFICIAL COPY 22 RS HB 9/GA
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taken. 1
(b) The authorizer shall provide a report to the charter applicant, the state 2
board, and the Education and Workforce Development Cabinet 3
simultaneously and shall include a copy of the resolution adopted by the 4
authorizer's board of directors identifying any action taken, the reason 5
for the decision, and an assurance as to compliance with all of the 6
procedural requirements and application elements found in this section 7
and KRS 160.1591 and 160.1593.] 8
Section 7. KRS 160.1596 is amended to read as follows: 9
(1) (a) For purposes of this section, a member of the board of directors of a public 10
charter school shall be considered an officer under KRS 61.040 and shall, 11
within sixty (60) days of final approval of an application, take an oath of 12
office as required under KRS 62.010. 13
(b) Within seventy-five (75) days of the final approval of an application, the 14
board of directors and the authorizer shall enter into a binding charter contract 15
that establishes the academic and operational performance expectations and 16
measures by which the public charter school will be evaluated. 17
(c) The executed charter contract shall become the final authorization for the 18
public charter school. The charter contract shall include: 19
1. The term of the contract; 20
2. The agreements relating to each item required under KRS 160.1592(3) 21
and 160.1593(3), as modified or supplemented during the approval 22
process; 23
3. The rights and duties of each party; 24
4. The administrative relationship between the authorizer and the public 25
charter school; 26
5. The allocation of state, local, and federal funds, and the schedule to 27 UNOFFICIAL COPY 22 RS HB 9/GA
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disburse funds to the public charter school by the authorizer; 1
6. The process the authorizer will use to provide ongoing oversight, 2
including a process to conduct annual site visits; 3
7. The specific commitments of the public charter school authorizer 4
relating to its obligations to oversee, monitor the progress of, and 5
supervise the public charter school; 6
8. The process and criteria the authorizer will use to annually monitor and 7
evaluate the overall academic, operating, and fiscal conditions of the 8
public charter school, including the process the authorizer will use to 9
oversee the correction of any deficiencies found in the annual review; 10
9. The process for revision or amendment to the terms of the charter 11
contract agreed to by the authorizer and the board of directors of the 12
public charter school; 13
10. The process agreed to by the authorizer and the board of directors of the 14
public charter school that identifies how disputes between the authorizer 15
and the board will be handled; and 16
11. Any other terms and conditions agreed to by the authorizer and the board 17
of directors, including pre-opening conditions. Reasonable conditions 18
shall not include enrollment caps or operational requirements that place 19
undue constraints on a public charter school or are contradictory to the 20
provisions of KRS 160.1590 to 160.1599 and 161.141. Such conditions, 21
even when incorporated in a charter contract, shall be considered 22
unilaterally imposed conditions. 23
(d) 1. The performance provisions within a charter contract shall be based on a 24
performance framework that sets forth the academic and operational 25
performance indicators, measures, and metrics to be used by the 26
authorizer to evaluate each public charter school. The performance 27 UNOFFICIAL COPY 22 RS HB 9/GA
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framework shall include at a minimum indicators, measures, and metrics 1
for: 2
a. Student academic proficiency; 3
b. Student academic growth; 4
c. Achievement gaps in both student proficiency and student growth 5
for student subgroups, including race, sex, socioeconomic status, 6
and areas of exceptionality; 7
d. Student attendance; 8
e. Student suspensions; 9
f. Student withdrawals; 10
g. Student exits; 11
h. Recurrent enrollment from year to year; 12
i. College or career readiness at the end of grade twelve (12); 13
j. Financial performance and sustainability; and 14
k. Board of directors' performance and stewardship, including 15
compliance with all applicable statutes, administrative regulations, 16
and terms of the charter contract. 17
2. The performance framework shall allow the inclusion of additional 18
rigorous, valid, and reliable indicators proposed by a public charter 19
school to augment external evaluations of its performance. The proposed 20
indicators shall be consistent with the purposes of KRS 160.1590 to 21
160.1599 and 161.141 and shall be negotiated with the authorizer. 22
3. The performance framework shall require the disaggregation of student 23
performance data by subgroups, including race, sex, socioeconomic 24
status, and areas of exceptionality. 25
4. The authorizer shall be responsible for collecting, analyzing, and 26
reporting to the state board all state-required assessment and 27 UNOFFICIAL COPY 22 RS HB 9/GA
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achievement data for each public charter school it oversees. 1
(e) Annual student achievement performance targets shall be set, in accordance 2
with the state accountability system, by each public charter school in 3
conjunction with its authorizer, and those measures shall be designed to help 4
each school meet applicable federal, state, and authorizer goals. 5
(f) The charter contract shall be signed by the chair of the governing board of the 6
authorizer and the chair of the board of directors of the public charter school. 7
An approved charter application shall [not] serve as a charter contract for the 8
public charter school. 9
(g) No public charter school may commence operations without a charter contract 10
executed according to this section and approved in an open meeting of the 11
governing board of the authorizer. 12
(2) Within five (5) days after entering into a charter contract, a copy of the executed 13
contract shall be submitted by the authorizer to the commissioner of education. 14
(3) For the purposes of local and state funding, a public charter school shall serve as 15
a school of the district of location. 16
(4) For the purposes of federal funding, a public charter school shall serve as a local 17
education agency. 18
(5) All students enrolled in a public charter school shall be included in the average 19
daily attendance calculation under KRS 157.360 and the aggregate and average 20
daily attendance of transported pupils calculation under KRS 157.370 of the 21
district of location in the same manner as any other public schools in the district 22
and shall be reported by the public charter schools to the school district and state 23
Department of Education for purposes of calculating the state and local share of 24
funding for each public charter school. 25
(6) Notwithstanding the formula for allocating district funds under KRS 160.345(8) 26
and any other statute governing a district's funding of schools, unless an 27 UNOFFICIAL COPY 22 RS HB 9/GA
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authorizing district agrees to provide a larger sum of funding in the charter 1
contract, after local capital outlay funds that are restricted in use pursuant to 2
KRS 157.420(4) and funds under KRS 157.440(1)(b) and 157.621 necessary to 3
meet debt service obligations on bonds or other financing mechanisms for new 4
construction and renovation projects for school facilities are excluded, and before 5
any other funds are budgeted for district use, a district shall transfer to each of 6
the public charter schools located within the district: 7
(a) The amount that is proportional to the public charter school's enrollment or 8
average daily attendance in comparison with the overall district qualifying 9
numbers for: 10
1. Funds that are related to students' attendance and enrollment and 11
allocated to the district of location pursuant to KRS 157.360; 12
2. Any add-on or funding factors provided for in the state budget; 13
3. Any add-on or funding factors provided for by the Kentucky 14
Department of Education; and 15
4. Funds pursuant to KRS 157.360(2)(a) and (b) and (13)(a). 16
For each funding source identified in this paragraph, the transfer amount 17
shall be based on the public charter school's qualifying student enrollment 18
or average daily attendance, depending on the method used in the funding 19
source's calculation; 20
(b) On a proportionate per pupil basis: 21
1. Education funds allocated to the school district pursuant to KRS 22
157.440(1)(a) and (2)(a), or pursuant to any applicable federal statute; 23
and 24
2. All taxes and payments in lieu of taxes transferred to the district of 25
location or levied and collected by the district of location; and 26
(c) On a proportionate per pupil transported basis, transportation funds 27 UNOFFICIAL COPY 22 RS HB 9/GA
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calculated pursuant to KRS 157.360(2)(c) and 157.370 and distributed to 1
the district of location, unless the school district provides transportation to 2
students attending the public charter school under written terms agreed 3
upon by the district and the public charter school in either the charter 4
contract or, if the district is not the public charter school's authorizer, a 5
separate agreement. 6
(7) (a) If transportation funds are transferred under this section to a public charter 7
school, then the public charter school receiving those funds shall provide 8
transportation services to the enrolled students residing within the district of 9
location. 10
(b) If funds designated for providing additional services to specific students are 11
transferred under this section, then the public charter school receiving 12
those funds shall provide those services in the same manner as the district 13
of location. 14
(c) If transportation services are not provided by the public charter school and 15
no written agreement to provide transportation services with the district of 16
location exists, then no transportation funds shall be transferred and the 17
district of location shall not be responsible for providing transportation to 18
the public charter school's students. 19
(8) Notwithstanding the identification of funds to be transferred in this section, a 20
collaborative among local school boards authorizing a public charter school may 21
negotiate among the local boards and a charter applicant to identify the amount 22
of funds to be transferred to the public charter school. The agreement shall be 23
detailed in the charter contract. 24
(9) (a) For the calculation of amounts under subsections (6) and (7) of this section 25
during the first school year of operation of a public charter school in a 26
school district, beginning with the start of instruction: 27 UNOFFICIAL COPY 22 RS HB 9/GA
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1. The public charter school's average daily attendance shall be 1
calculated based on a projection of the public charter school's 2
enrollment and the district's overall average daily attendance; 3
2. The public charter school's aggregate daily attendance of students 4
transported shall be calculated based on a projection of the public 5
charter school's enrollment and transportation plan and the district's 6
overall aggregate daily attendance of students transported; and 7
3. The amounts attributable to each individual student's attendance at 8
the public charter school shall be calculated based on a projection of 9
the public charter school's enrollment and demographics and the 10
district's overall enrollment and demographics. 11
(b) The calculations shall be adjusted in January of the first school year of 12
operation to reflect the first semester's actual data. Subsequent years of 13
operation shall be calculated using actual data from the prior school year. 14
(10) (a) Funds identified for transfer under this section shall be transferred by a 15
district of location to each of the public charter schools located within the 16
district. However, up to three percent (3%) of the funds identified under this 17
section for transfer to a public charter school may be retained by an 18
authorizer as an authorizer fee. 19
(b) If the authorizer of a public charter school does not include the local board 20
of education of the district of location, then the district of location shall 21
transfer the authorizer fee to the public charter school's authorizer. 22
(c) If the Kentucky Board of Education requires the authorization of a public 23
charter school on appeal from an authorizer, the board shall receive twenty-24
five percent (25%) of the authorizing fee for the duration of joint oversight 25
required by Section 6 of this Act. 26
(11) Funds identified for transfer by a district of location to a public charter school 27 UNOFFICIAL COPY 22 RS HB 9/GA
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under this section shall be transferred throughout the school year according to a 1
schedule determined by the state board. The scheduled dates shall be within thirty 2
(30) days of the dates of state disbursement of funds to school districts. Failure to 3
transfer required funds shall, for every five (5) days late, result in a fine to the 4
violator of not less than five percent (5%) of the total funds per funding period to 5
be transferred. Fines imposed shall be transferred to the public charter school 6
affected by the delay. 7
(12) A public charter school shall be eligible for federal and state competitive grants 8
and shall not be excluded from an opportunity to apply or participate so long as 9
the public charter school meets the criteria established for the respective grants. 10
Each public charter school that receives grant aid shall comply with all 11
requirements to receive such aid. 12
(13) A public charter school shall receive a proportionate per pupil share of any state 13
moneys not otherwise identified in this section that is received by the school 14
district of location. The public charter school shall also receive, according to 15
federal law, moneys generated under federal categorical aid programs for 16
students that are eligible for the aid and attending the public charter school. 17
Each public charter school that receives such aid shall comply with all 18
requirements to receive such aid. 19
(14) The commissioner of education shall apply for all federal funding that supports 20
charter school initiatives for which a state must be the applicant and shall 21
cooperate with any public charter school in its efforts to seek federal funding. 22
(15) If a public charter school closes for any reason, the assets of the school shall be 23
distributed first to satisfy outstanding payroll obligations for employees of the 24
school, then to the creditors of the school, then to the district of location or 25
authorizing districts if authorized by a collaborative of local boards of education. 26
If the assets are insufficient to satisfy outstanding obligations, the authorizer 27 UNOFFICIAL COPY 22 RS HB 9/GA
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shall petition to Circuit Court of the county in which the public charter school is 1
located to prioritize the distribution of assets. 2
(16) The state board shall promulgate administrative regulations to: 3
(a) Establish the process to be used to evaluate the performance of a charter 4
school authorizer, based upon the requirements of KRS 160.1590 to 160.1599 5
and 161.141, and the actions to be taken in response to failures in 6
performance; and 7
(b) Govern the calculation and distribution of funds due to public charter 8
schools from school districts, the schedule of distribution of funds, and the 9
imposition of fines for late distribution of funds. 10
[(4) The commissioner of education shall apply for financial assistance through the 11
federal government for the planning, program design, and initial implementation of 12
public charter schools in the state within sixty (60) days after June 29, 2017, or at 13
the first available grant application period. Federal grants include but are not limited 14
to the Charter Schools Program administered by the United States Department of 15
Education.] 16
(17) [(5)] By August 31, 2023[2019], and annually thereafter, each public charter school 17
authorizer shall submit to the commissioner of education, the secretary of the 18
Education and Workforce Development Cabinet, and the Interim Joint Committee 19
on Education a report to include: 20
(a) The names of each public charter school operating under contract with the 21
authorizer during the previous academic year that: 22
1. Closed during or after the academic year; or 23
2. Had the contract nonrenewed or revoked; 24
(b) The names of each public charter school operating under contract with the 25
authorizer during the previous academic year that have not yet begun to 26
operate; 27 UNOFFICIAL COPY 22 RS HB 9/GA
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(c) The number of applications received, the number reviewed, and the number 1
approved; 2
(d) A summary of the academic and financial performance of each public charter 3
school operated under contract with the authorizer during the previous 4
academic year; and 5
(e) The authorizing duties and functions performed by the authorizer during the 6
previous academic year. 7
Section 8. KRS 160.1597 is amended to read as follows: 8
(1) Upon the approval of a charter contract by a public charter school authorizer, the 9
applicant shall be permitted to operate a public charter school for a term of five (5) 10
years. 11
(2) The board of directors of the public charter school shall negotiate and execute a 12
charter contract with the governing body of the authorizer. 13
(3) A public charter school shall have all corporate powers necessary and desirable for 14
carrying out a public charter school program in accordance with this section and the 15
terms of the charter contract, including all of the powers of a local board of 16
education and of a local school district, except as otherwise provided in KRS 17
160.1590 to 160.1599. 18
(4) The powers granted to a public charter school under this section constitute the 19
performance of essential public purposes and governmental purposes of this state. A 20
public charter school shall be exempt to the same extent as other public schools 21
from all taxation, fees, assessments, and[or] special ad valorem levies on its 22
earnings and its property. Instruments of conveyance to or from a public charter 23
school and any bonds or notes issued by a public charter school, together with the 24
income received, shall at all times be exempt from taxation. 25
(5) A public charter school shall not have the power to levy taxes or to acquire property 26
by eminent domain, but shall have police powers to the same extent and under the 27 UNOFFICIAL COPY 22 RS HB 9/GA
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same requirements as a local school district. 1
(6) The board of directors of the public charter school shall have final authority over 2
policy and operational decisions of the public charter school, although the decision-3
making authority may be delegated to the administrators and staff of the school in 4
accordance with the provisions of the charter contract. 5
(7) Notwithstanding any other statute to the contrary, no civil liability shall attach to 6
any public charter school authorizer or to any of its members or employees, 7
individually or collectively, for any acts or omissions of the public charter school. 8
Neither the local school district nor the Commonwealth shall be liable for the debts 9
or financial obligations of a public charter school or any person or corporate entity 10
who operates a public charter school. 11
Section 9. KRS 160.1598 is amended to read as follows: 12
(1) A charter contract may be renewed by the authorizer for a term of duration of five 13
(5) years, although the authorizer may vary the term to as few as three (3) years. 14
Any variation in the public charter school's term must be solely based on the 15
performance, demonstrated capacities, and particular circumstances of a public 16
charter school. Authorizers may grant renewal with specific conditions for 17
necessary improvements to a public charter school, but may not impose conditions 18
inconsistent with KRS 160.1590 to 160.1599. 19
(2) (a) No later than one (1) calendar year prior to the expiration date of a charter 20
contract, an authorizer shall issue a public charter school performance report 21
and charter renewal application guidance to the public charter school it 22
authorized. The performance report shall summarize the school's performance 23
record to date, based on the performance framework required under KRS 24
160.1596 and the charter contract, and shall provide notice of any weaknesses 25
or concerns related to the school that may jeopardize its position in seeking 26
renewal if not timely rectified and of any strengths or achievements that 27 UNOFFICIAL COPY 22 RS HB 9/GA
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support its position in seeking renewal. 1
(b) The school shall have twenty (20) days to respond to the performance report 2
and submit any corrections or clarification for the report to the authorizer. 3
(c) Within ten (10) days of receiving a school's response, the authorizer shall 4
review the response and issue a final performance report to the school. 5
(3) (a) The renewal application guidance shall, at a minimum, provide an opportunity 6
for the public charter school to: 7
1. Present additional evidence beyond the data contained in the 8
performance report supporting its case for charter renewal; 9
2. Describe improvements undertaken or planned for the school; and 10
3. Detail the school's plan for the next charter term. 11
(b) The renewal application guidance shall include or refer explicitly to the 12
criteria that will guide the authorizer's renewal decisions, which shall be based 13
on the performance framework as identified in the charter contract. 14
(4) (a) No later than six (6) months prior to the expiration date of a charter contract, 15
the board of directors of a public charter school seeking charter contract 16
renewal shall submit a renewal application to the authorizer pursuant to the 17
renewal application guidance issued by the authorizer. 18
(b) The authorizer shall rule by resolution on the renewal application no later than 19
thirty (30) days after receipt of the application. 20
(5) In making charter application, renewal, or other appealable decisions, an authorizer 21
shall: 22
(a) Make its decision within established timeframes. Any failure of the authorizer 23
to act on a charter application, renewal, or other appealable decision shall be 24
deemed an approval[a denial] of the requested action[ and thereafter be 25
subject to appeal]; 26
(b) Base its decision on evidence of the public charter school's performance over 27 UNOFFICIAL COPY 22 RS HB 9/GA
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the term of the charter contract in accordance with the performance 1
framework required in the charter contract; 2
(c) Ensure that data used in making renewal decisions is available to the public 3
charter school and the public; and 4
(d) Provide a public report summarizing the evidence basis for each decision. 5
(6) A charter contract may not be renewed if the authorizer determines that the public 6
charter school has: 7
(a) Committed a material violation of any of the terms, conditions, standards, or 8
procedures required under KRS 160.1590 to 160.1599 and 161.141 or the 9
charter contract, and has persistently failed to correct the violation after fair 10
and specific notice from the authorizer; 11
(b) Failed to meet or make significant progress toward the performance 12
expectations identified in the charter contract; 13
(c) Failed to meet generally accepted standards of fiscal management, and has 14
failed to correct the violation after fair and specific notice from the authorizer; 15
or 16
(d) Substantially violated any material provision of law from which the public 17
charter school was not exempted and has failed to correct the violation after 18
fair and specific notice from the authorizer. 19
(7) An authorizer may take immediate action to revoke a charter contract if a violation 20
threatens the health and safety of the students of the public charter school. 21
(8) The State Board of Education shall promulgate administrative regulations 22
establishing a revocation and nonrenewal process for charter authorizers that: 23
(a) Provides the charter holder with a timely notification of the prospect of 24
revocation or nonrenewal and of the reasons for such possible closure; 25
(b) Allows a charter holder a reasonable time in which to prepare a response; 26
(c) Provides the charter holder with an opportunity to submit documentation and 27 UNOFFICIAL COPY 22 RS HB 9/GA
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provide testimony challenging the rationale behind the closure and in support 1
of the continuation of the school at a[an] public meeting[orderly proceeding] 2
held for that purpose; 3
(d) Allows the charter holder the right to representation by counsel and to call 4
witnesses on behalf of the charter holder; 5
(e) Permits the recording of such proceedings; and 6
(f) After a reasonable period of deliberation, requires a final determination be 7
made and conveyed in writing to the charter holder. 8
(9) If an authorizer revokes or does not renew a contract, the authorizer shall clearly 9
state, in a resolution of its governing board the reason for the revocation or 10
nonrenewal. 11
(10) Within ten (10) days of taking action to renew, not renew, or revoke a charter, the 12
authorizer shall report to the state board the action taken, and shall provide a report 13
to the public charter school at the same time the report is issued to the state board. 14
The report shall include a copy of the resolution adopted by the authorizer's 15
governing board describing the action taken and reasons for the decision and 16
assurance as to compliance with all of the procedural requirements and application 17
elements found in KRS 160.1593. 18
(11) An authorizer shall develop a public charter school closure protocol to ensure 19
timely notification to parents, orderly transition of students and student records to 20
new schools, and proper disposition of school funds, property, and assets. The 21
protocol shall specify tasks, timelines, and responsible parties, including delineating 22
the respective duties of the school and the authorizer. If a public charter school 23
closes for any reason, the authorizer shall oversee and work with the closing school 24
to ensure a smooth and orderly closure and transition for students and parents, as 25
guided by the closure protocol. If a public charter school is subject to closure, 26
following exhaustion of any appeal allowed under KRS 160.1595, an authorizer 27 UNOFFICIAL COPY 22 RS HB 9/GA
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may remove at will at any time any or all of the members of the board of directors 1
of the public charter school in connection with ensuring a smooth and orderly 2
closure. If the authorizer removes members of the board of directors such that the 3
board of directors can no longer function, the authorizer shall be empowered to take 4
any further necessary and proper acts connected with closure of the public charter 5
school in the name and interest of the public charter school. 6
Section 10. KRS 160.1599 is amended to read as follows: 7
(1) An existing public school not scheduled for closure may be converted into a public 8
charter school and be identified to become[as] a conversion public charter school if 9
an applicant indicates to a valid authorizer the intent to convert an existing public 10
school into a conversion public charter school. 11
(2) A conversion public charter school may only be established if: 12
(a) A school has been identified by the Kentucky Department of Education as 13
performing in the lowest five percent (5%) of its level and sixty percent (60%) 14
of the parents or guardians of students who attend the school have signed a 15
petition requesting the conversion, which shall be completed and submitted to 16
a valid authorizer no later than ninety (90) days after the date of the first 17
signature; 18
(b) A school has been identified by the Kentucky Department of Education as not 19
performing in the lowest five percent (5%) of its level and sixty percent (60%) 20
of the parents or guardians of students who attend the school have signed a 21
petition requesting the conversion, which is approved by a majority vote of the 22
local school board. If approved the completed petition shall be submitted to a 23
valid authorizer no later than ninety (90) days after the date of the first 24
signature; or 25
(c) The local school board votes to convert an existing public school over which 26
it has authority. 27 UNOFFICIAL COPY 22 RS HB 9/GA
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(3) For each conversion option identified in subsection (2) of this section, the Kentucky 1
Board of Education shall promulgate administrative regulations to govern the 2
processes and procedures for the petition, the conversion, and the operation of a 3
conversion public charter school. 4
(4) A conversion public charter school shall be governed by a board of directors 5
constituted and empowered as provided in KRS 160.1592. 6
(5) A conversion public charter school shall continue to comply with all federal and 7
state requirements concerning the treatment of children with special needs and 8
accept all students who attended the school prior to its conversion who wish to 9
attend. 10
(6) A conversion public charter school shall hire its own employees. 11
(7) An employee who works in a conversion public charter school shall be an employee 12
of the public charter school. 13
(8) (a) For any collective bargaining agreement entered into on or after June 29, 14
2017, a governing board shall not be bound by its collective bargaining 15
agreement for employees of a conversion public charter school. 16
(b) Employees of a conversion public charter school may organize and 17
collectively bargain only as a unit separate from other school employees. 18
(9) A conversion public charter school shall continue to be housed in the same public 19
school facility and shall have the option of using the existing assets of the school. 20
SECTION 11. A NEW SECTION OF KRS 160.1590 TO 160.1599 IS 21
CREATED TO READ AS FOLLOWS: 22
(1) The Kentucky Public Charter School Pilot Project is hereby established to study 23
the impact of public charter schools within the common school system. 24
(2) Authorizers for the pilot project shall include: 25
(a) A school board of a county school district located in a county with a 26
consolidated local government, which shall have authorizing jurisdiction 27 UNOFFICIAL COPY 22 RS HB 9/GA
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within the territory of the district's boundaries; and 1
(b) Notwithstanding Section 1 of this Act, the board of regents of Northern 2
Kentucky University, which shall have authorizing jurisdiction within any 3
county containing four (4) or more local school districts. The board of 4
regents shall only become a pilot project authorizer if the board adopts a 5
resolution confirming the status by January 1, 2023. The board of regents 6
shall send notice of the resolution to each local board within the 7
jurisdiction, the Kentucky Board of Education, and the Legislative 8
Research Commission. The board of regents may decline to be an 9
authorizer by July 1, 2023, in the same manner. 10
(3) By July 1, 2023, each pilot project authorizer shall solicit, review, and approve at 11
least one (1) charter application for a public charter school within the 12
authorizer's jurisdiction that serves as an urban academy. The charter contract 13
shall be for a five (5) year term, but otherwise subject to KRS 160.1590 to 14
160.1599. The pilot authorizers shall submit a copy of the approved charter 15
contracts to the Legislative Research Commission. 16
(4) (a) If on July 1, 2023, the Northern Kentucky University board of regents is not 17
a pilot project authorizer, then notwithstanding Section 1 of this Act, a 18
collective of metropolitan local school boards that is composed of two (2) 19
members from each local board of a district located in a county that 20
contains four (4) or more local school districts shall become a substitute 21
pilot project authorizer. Each local board shall select its members to serve 22
on the collective. 23
(b) The collective shall have authorizing authority within the collective 24
districts' boundaries. The collective shall adopt authorizer policies as if it 25
were a single local board and may allocate authorizer fees as necessary to 26
support authorizer functions. The collective may contract with other 27 UNOFFICIAL COPY 22 RS HB 9/GA
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governmental or nonprofit organizations to assist with public charter school 1
oversight. 2
(c) By July 1, 2024, the collective shall solicit, review, and approve at least one 3
(1) charter application for a public charter school within the authorizer's 4
jurisdiction that serves as an urban academy. The charter contract shall be 5
for a five (5) year term, but otherwise subject to KRS 160.1590 to 160.1599. 6
The pilot authorizers shall submit a copy of the approved charter contracts 7
to the Legislative Research Commission. 8
(5) By July 1 of each year the charter contract is in effect, the pilot project 9
authorizers shall submit an annual report to the Interim Joint Committee on 10
Education and the Interim Joint Committee on Appropriations and Revenue 11
detailing the authorizer's oversight activities over the previous year. The report 12
shall have content and be in a format approved by the Education Assessment and 13
Accountability Review Subcommittee with the assistance of the Office of 14
Education Accountability. 15
(6) Starting in 2024 and until the initial charter contract ends, the Office of 16
Education Accountability shall annually review the performance of the public 17
charter schools authorized under this section and submit the report to the Interim 18
Joint Committee on Education and the Interim Joint Committee on 19
Appropriations and Revenue. The Education Assessment and Accountability 20
Review Subcommittee may provide guidance to the Office of Education 21
Accountability on the content and format of the report. 22
(7) Upon the end of the initial term of the charter contract, the pilot authorizers shall 23
review the reports under subsection (5) of this section and determine if the 24
contract shall be renewed in the same manner as any other charter contract 25
under the provisions of Section 9 of this Act. The decision shall be appealable 26
under Section 6 of this Act. 27 UNOFFICIAL COPY 22 RS HB 9/GA
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Section 12. KRS 161.141 is amended to read as follows: 1
(1) As used in this section, "education service provider," "public charter school," 2
"local school board," and "local school district" have the same meanings as in KRS 3
160.1590. 4
(2) (a) Public charter school employees shall participate in the Teachers' Retirement 5
System or the County Employees Retirement System, as determined by their 6
eligibility for participation in the appropriate system and provided the public 7
charter school satisfies the criteria set by the Internal Revenue Service to 8
participate in a governmental retirement plan. 9
(b) Teachers and other certified personnel shall make any required employee 10
contributions to the Teachers' Retirement System under KRS 161.220 to 11
161.716. 12
(c) Classified employees shall make any required employee contributions to the 13
County Employees Retirement System under KRS 78.510 to 78.852. 14
(d) A public charter school shall participate in the state-sponsored health 15
insurance program on the same basis as a local school district pursuant to 16
Section 13 of this Act. 17
(e) Any state appropriation for retirement, health, or life insurance benefits 18
made on behalf of a local public employee or a school district employee 19
shall also be made on behalf of a public charter school employee. 20
(f) A public charter school shall make any required employer contributions to 21
the Teachers' Retirement System under KRS 161.220 to 161.716 and the 22
County Employees Retirement System under KRS 78.510 to 78.852 in the 23
same manner as local school districts. 24
(g) For the purposes of calculating sick leave credit under KRS 161.220 to 25
161.716, teachers and other certified personnel of a public charter school 26
shall not accumulate more days of sick leave during their employment with 27 UNOFFICIAL COPY 22 RS HB 9/GA
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the public charter school than they would have otherwise accumulated as a 1
certified employee of the school district of location. 2
(3) (a) A public charter school employee shall not be required to be a member of any 3
collective bargaining agreement. 4
(b) A public charter school employee who enters into any collective bargaining 5
unit must do so as a separate unit from the local school district. 6
(4) A local school board shall not require any employee of the local school district to be 7
employed in a public charter school or any student enrolled in the school district to 8
attend a public charter school. 9
(5) A local school board shall not harass, threaten, discipline, discharge, retaliate, or in 10
any manner discriminate against any district employee involved directly or 11
indirectly with an application to establish a public charter school. 12
(6) An employee of an education service provider shall not be considered a public 13
charter school employee, but shall meet the same certification and background 14
check requirements otherwise required of a public charter school employee. 15
Section 13. KRS 18A.225 is amended to read as follows: 16
(1) (a) The term "employee" for purposes of this section means: 17
1. Any person, including an elected public official, who is regularly 18
employed by any department, office, board, agency, or branch of state 19
government; or by a public postsecondary educational institution; or by 20
any city, urban-county, charter county, county, or consolidated local 21
government, whose legislative body has opted to participate in the state-22
sponsored health insurance program pursuant to KRS 79.080; and who 23
is either a contributing member to any one (1) of the retirement systems 24
administered by the state, including but not limited to the Kentucky 25
Retirement Systems, County Employees Retirement System, Kentucky 26
Teachers' Retirement System, the Legislators' Retirement Plan, or the 27 UNOFFICIAL COPY 22 RS HB 9/GA
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Judicial Retirement Plan; or is receiving a contractual contribution from 1
the state toward a retirement plan; or, in the case of a public 2
postsecondary education institution, is an individual participating in an 3
optional retirement plan authorized by KRS 161.567; or is eligible to 4
participate in a retirement plan established by an employer who ceases 5
participating in the Kentucky Employees Retirement System pursuant to 6
KRS 61.522 whose employees participated in the health insurance plans 7
administered by the Personnel Cabinet prior to the employer's effective 8
cessation date in the Kentucky Employees Retirement System; 9
2. Any certified or classified employee of a local board of education or a 10
public charter school as defined in Section 1 of this Act; 11
3. Any elected member of a local board of education; 12
4. Any person who is a present or future recipient of a retirement 13
allowance from the Kentucky Retirement Systems, County Employees 14
Retirement System, Kentucky Teachers' Retirement System, the 15
Legislators' Retirement Plan, the Judicial Retirement Plan, or the 16
Kentucky Community and Technical College System's optional 17
retirement plan authorized by KRS 161.567, except that a person who is 18
receiving a retirement allowance and who is age sixty-five (65) or older 19
shall not be included, with the exception of persons covered under KRS 20
61.702(4)(c), unless he or she is actively employed pursuant to 21
subparagraph 1. of this paragraph; and 22
5. Any eligible dependents and beneficiaries of participating employees 23
and retirees who are entitled to participate in the state-sponsored health 24
insurance program; 25
(b) The term "health benefit plan" for the purposes of this section means a health 26
benefit plan as defined in KRS 304.17A-005; 27 UNOFFICIAL COPY 22 RS HB 9/GA
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(c) The term "insurer" for the purposes of this section means an insurer as defined 1
in KRS 304.17A-005; and 2
(d) The term "managed care plan" for the purposes of this section means a 3
managed care plan as defined in KRS 304.17A-500. 4
(2) (a) The secretary of the Finance and Administration Cabinet, upon the 5
recommendation of the secretary of the Personnel Cabinet, shall procure, in 6
compliance with the provisions of KRS 45A.080, 45A.085, and 45A.090, 7
from one (1) or more insurers authorized to do business in this state, a group 8
health benefit plan that may include but not be limited to health maintenance 9
organization (HMO), preferred provider organization (PPO), point of service 10
(POS), and exclusive provider organization (EPO) benefit plans encompassing 11
all or any class or classes of employees. With the exception of employers 12
governed by the provisions of KRS Chapters 16, 18A, and 151B, all 13
employers of any class of employees or former employees shall enter into a 14
contract with the Personnel Cabinet prior to including that group in the state 15
health insurance group. The contracts shall include but not be limited to 16
designating the entity responsible for filing any federal forms, adoption of 17
policies required for proper plan administration, acceptance of the contractual 18
provisions with health insurance carriers or third-party administrators, and 19
adoption of the payment and reimbursement methods necessary for efficient 20
administration of the health insurance program. Health insurance coverage 21
provided to state employees under this section shall, at a minimum, contain 22
the same benefits as provided under Kentucky Kare Standard as of January 1, 23
1994, and shall include a mail-order drug option as provided in subsection 24
(13) of this section. All employees and other persons for whom the health care 25
coverage is provided or made available shall annually be given an option to 26
elect health care coverage through a self-funded plan offered by the 27 UNOFFICIAL COPY 22 RS HB 9/GA
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Commonwealth or, if a self-funded plan is not available, from a list of 1
coverage options determined by the competitive bid process under the 2
provisions of KRS 45A.080, 45A.085, and 45A.090 and made available 3
during annual open enrollment. 4
(b) The policy or policies shall be approved by the commissioner of insurance and 5
may contain the provisions the commissioner of insurance approves, whether 6
or not otherwise permitted by the insurance laws. 7
(c) Any carrier bidding to offer health care coverage to employees shall agree to 8
provide coverage to all members of the state group, including active 9
employees and retirees and their eligible covered dependents and 10
beneficiaries, within the county or counties specified in its bid. Except as 11
provided in subsection (20) of this section, any carrier bidding to offer health 12
care coverage to employees shall also agree to rate all employees as a single 13
entity, except for those retirees whose former employers insure their active 14
employees outside the state-sponsored health insurance program. 15
(d) Any carrier bidding to offer health care coverage to employees shall agree to 16
provide enrollment, claims, and utilization data to the Commonwealth in a 17
format specified by the Personnel Cabinet with the understanding that the data 18
shall be owned by the Commonwealth; to provide data in an electronic form 19
and within a time frame specified by the Personnel Cabinet; and to be subject 20
to penalties for noncompliance with data reporting requirements as specified 21
by the Personnel Cabinet. The Personnel Cabinet shall take strict precautions 22
to protect the confidentiality of each individual employee; however, 23
confidentiality assertions shall not relieve a carrier from the requirement of 24
providing stipulated data to the Commonwealth. 25
(e) The Personnel Cabinet shall develop the necessary techniques and capabilities 26
for timely analysis of data received from carriers and, to the extent possible, 27 UNOFFICIAL COPY 22 RS HB 9/GA
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provide in the request-for-proposal specifics relating to data requirements, 1
electronic reporting, and penalties for noncompliance. The Commonwealth 2
shall own the enrollment, claims, and utilization data provided by each carrier 3
and shall develop methods to protect the confidentiality of the individual. The 4
Personnel Cabinet shall include in the October annual report submitted 5
pursuant to the provisions of KRS 18A.226 to the Governor, the General 6
Assembly, and the Chief Justice of the Supreme Court, an analysis of the 7
financial stability of the program, which shall include but not be limited to 8
loss ratios, methods of risk adjustment, measurements of carrier quality of 9
service, prescription coverage and cost management, and statutorily required 10
mandates. If state self-insurance was available as a carrier option, the report 11
also shall provide a detailed financial analysis of the self-insurance fund 12
including but not limited to loss ratios, reserves, and reinsurance agreements. 13
(f) If any agency participating in the state-sponsored employee health insurance 14
program for its active employees terminates participation and there is a state 15
appropriation for the employer's contribution for active employees' health 16
insurance coverage, then neither the agency nor the employees shall receive 17
the state-funded contribution after termination from the state-sponsored 18
employee health insurance program. 19
(g) Any funds in flexible spending accounts that remain after all reimbursements 20
have been processed shall be transferred to the credit of the state-sponsored 21
health insurance plan's appropriation account. 22
(h) Each entity participating in the state-sponsored health insurance program shall 23
provide an amount at least equal to the state contribution rate for the employer 24
portion of the health insurance premium. For any participating entity that used 25
the state payroll system, the employer contribution amount shall be equal to 26
but not greater than the state contribution rate. 27 UNOFFICIAL COPY 22 RS HB 9/GA
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(3) The premiums may be paid by the policyholder: 1
(a) Wholly from funds contributed by the employee, by payroll deduction or 2
otherwise; 3
(b) Wholly from funds contributed by any department, board, agency, public 4
postsecondary education institution, or branch of state, city, urban-county, 5
charter county, county, or consolidated local government; or 6
(c) Partly from each, except that any premium due for health care coverage or 7
dental coverage, if any, in excess of the premium amount contributed by any 8
department, board, agency, postsecondary education institution, or branch of 9
state, city, urban-county, charter county, county, or consolidated local 10
government for any other health care coverage shall be paid by the employee. 11
(4) If an employee moves his or her place of residence or employment out of the service 12
area of an insurer offering a managed health care plan, under which he or she has 13
elected coverage, into either the service area of another managed health care plan or 14
into an area of the Commonwealth not within a managed health care plan service 15
area, the employee shall be given an option, at the time of the move or transfer, to 16
change his or her coverage to another health benefit plan. 17
(5) No payment of premium by any department, board, agency, public postsecondary 18
educational institution, or branch of state, city, urban-county, charter county, 19
county, or consolidated local government shall constitute compensation to an 20
insured employee for the purposes of any statute fixing or limiting the 21
compensation of such an employee. Any premium or other expense incurred by any 22
department, board, agency, public postsecondary educational institution, or branch 23
of state, city, urban-county, charter county, county, or consolidated local 24
government shall be considered a proper cost of administration. 25
(6) The policy or policies may contain the provisions with respect to the class or classes 26
of employees covered, amounts of insurance or coverage for designated classes or 27 UNOFFICIAL COPY 22 RS HB 9/GA
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groups of employees, policy options, terms of eligibility, and continuation of 1
insurance or coverage after retirement. 2
(7) Group rates under this section shall be made available to the disabled child of an 3
employee regardless of the child's age if the entire premium for the disabled child's 4
coverage is paid by the state employee. A child shall be considered disabled if he or 5
she has been determined to be eligible for federal Social Security disability benefits. 6
(8) The health care contract or contracts for employees shall be entered into for a period 7
of not less than one (1) year. 8
(9) The secretary shall appoint thirty-two (32) persons to an Advisory Committee of 9
State Health Insurance Subscribers to advise the secretary or the secretary's designee 10
regarding the state-sponsored health insurance program for employees. The 11
secretary shall appoint, from a list of names submitted by appointing authorities, 12
members representing school districts from each of the seven (7) Supreme Court 13
districts, members representing state government from each of the seven (7) 14
Supreme Court districts, two (2) members representing retirees under age sixty-five 15
(65), one (1) member representing local health departments, two (2) members 16
representing the Kentucky Teachers' Retirement System, and three (3) members at 17
large. The secretary shall also appoint two (2) members from a list of five (5) names 18
submitted by the Kentucky Education Association, two (2) members from a list of 19
five (5) names submitted by the largest state employee organization of nonschool 20
state employees, two (2) members from a list of five (5) names submitted by the 21
Kentucky Association of Counties, two (2) members from a list of five (5) names 22
submitted by the Kentucky League of Cities, and two (2) members from a list of 23
names consisting of five (5) names submitted by each state employee organization 24
that has two thousand (2,000) or more members on state payroll deduction. The 25
advisory committee shall be appointed in January of each year and shall meet 26
quarterly. 27 UNOFFICIAL COPY 22 RS HB 9/GA
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(10) Notwithstanding any other provision of law to the contrary, the policy or policies 1
provided to employees pursuant to this section shall not provide coverage for 2
obtaining or performing an abortion, nor shall any state funds be used for the 3
purpose of obtaining or performing an abortion on behalf of employees or their 4
dependents. 5
(11) Interruption of an established treatment regime with maintenance drugs shall be 6
grounds for an insured to appeal a formulary change through the established appeal 7
procedures approved by the Department of Insurance, if the physician supervising 8
the treatment certifies that the change is not in the best interests of the patient. 9
(12) Any employee who is eligible for and elects to participate in the state health 10
insurance program as a retiree, or the spouse or beneficiary of a retiree, under any 11
one (1) of the state-sponsored retirement systems shall not be eligible to receive the 12
state health insurance contribution toward health care coverage as a result of any 13
other employment for which there is a public employer contribution. This does not 14
preclude a retiree and an active employee spouse from using both contributions to 15
the extent needed for purchase of one (1) state sponsored health insurance policy for 16
that plan year. 17
(13) (a) The policies of health insurance coverage procured under subsection (2) of 18
this section shall include a mail-order drug option for maintenance drugs for 19
state employees. Maintenance drugs may be dispensed by mail order in 20
accordance with Kentucky law. 21
(b) A health insurer shall not discriminate against any retail pharmacy located 22
within the geographic coverage area of the health benefit plan and that meets 23
the terms and conditions for participation established by the insurer, including 24
price, dispensing fee, and copay requirements of a mail-order option. The 25
retail pharmacy shall not be required to dispense by mail. 26
(c) The mail-order option shall not permit the dispensing of a controlled 27 UNOFFICIAL COPY 22 RS HB 9/GA
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substance classified in Schedule II. 1
(14) The policy or policies provided to state employees or their dependents pursuant to 2
this section shall provide coverage for obtaining a hearing aid and acquiring hearing 3
aid-related services for insured individuals under eighteen (18) years of age, subject 4
to a cap of one thousand four hundred dollars ($1,400) every thirty-six (36) months 5
pursuant to KRS 304.17A-132. 6
(15) Any policy provided to state employees or their dependents pursuant to this section 7
shall provide coverage for the diagnosis and treatment of autism spectrum disorders 8
consistent with KRS 304.17A-142. 9
(16) Any policy provided to state employees or their dependents pursuant to this section 10
shall provide coverage for obtaining amino acid-based elemental formula pursuant 11
to KRS 304.17A-258. 12
(17) If a state employee's residence and place of employment are in the same county, and 13
if the hospital located within that county does not offer surgical services, intensive 14
care services, obstetrical services, level II neonatal services, diagnostic cardiac 15
catheterization services, and magnetic resonance imaging services, the employee 16
may select a plan available in a contiguous county that does provide those services, 17
and the state contribution for the plan shall be the amount available in the county 18
where the plan selected is located. 19
(18) If a state employee's residence and place of employment are each located in counties 20
in which the hospitals do not offer surgical services, intensive care services, 21
obstetrical services, level II neonatal services, diagnostic cardiac catheterization 22
services, and magnetic resonance imaging services, the employee may select a plan 23
available in a county contiguous to the county of residence that does provide those 24
services, and the state contribution for the plan shall be the amount available in the 25
county where the plan selected is located. 26
(19) The Personnel Cabinet is encouraged to study whether it is fair and reasonable and 27 UNOFFICIAL COPY 22 RS HB 9/GA
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in the best interests of the state group to allow any carrier bidding to offer health 1
care coverage under this section to submit bids that may vary county by county or 2
by larger geographic areas. 3
(20) Notwithstanding any other provision of this section, the bid for proposals for health 4
insurance coverage for calendar year 2004 shall include a bid scenario that reflects 5
the statewide rating structure provided in calendar year 2003 and a bid scenario that 6
allows for a regional rating structure that allows carriers to submit bids that may 7
vary by region for a given product offering as described in this subsection: 8
(a) The regional rating bid scenario shall not include a request for bid on a 9
statewide option; 10
(b) The Personnel Cabinet shall divide the state into geographical regions which 11
shall be the same as the partnership regions designated by the Department for 12
Medicaid Services for purposes of the Kentucky Health Care Partnership 13
Program established pursuant to 907 KAR 1:705; 14
(c) The request for proposal shall require a carrier's bid to include every county 15
within the region or regions for which the bid is submitted and include but not 16
be restricted to a preferred provider organization (PPO) option; 17
(d) If the Personnel Cabinet accepts a carrier's bid, the cabinet shall award the 18
carrier all of the counties included in its bid within the region. If the Personnel 19
Cabinet deems the bids submitted in accordance with this subsection to be in 20
the best interests of state employees in a region, the cabinet may award the 21
contract for that region to no more than two (2) carriers; and 22
(e) Nothing in this subsection shall prohibit the Personnel Cabinet from including 23
other requirements or criteria in the request for proposal. 24
(21) Any fully insured health benefit plan or self-insured plan issued or renewed on or 25
after July 12, 2006, to public employees pursuant to this section which provides 26
coverage for services rendered by a physician or osteopath duly licensed under KRS 27 UNOFFICIAL COPY 22 RS HB 9/GA
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Chapter 311 that are within the scope of practice of an optometrist duly licensed 1
under the provisions of KRS Chapter 320 shall provide the same payment of 2
coverage to optometrists as allowed for those services rendered by physicians or 3
osteopaths. 4
(22) Any fully insured health benefit plan or self-insured plan issued or renewed on or 5
after June 29, 2021, to public employees pursuant to this section shall comply with: 6
(a) KRS 304.12-237; 7
(b) KRS 304.17A-270 and 304.17A-525; 8
(c) KRS 304.17A-600 to 304.17A-633; 9
(d) KRS 205.593; 10
(e) KRS 304.17A-700 to 304.17A-730; 11
(f) KRS 304.14-135; 12
(g) KRS 304.17A-580 and 304.17A-641; 13
(h) KRS 304.99-123; 14
(i) KRS 304.17A-138; and 15
(j) Administrative regulations promulgated pursuant to statutes listed in this 16
subsection. 17
(23) Any fully insured health benefit plan or self-insured plan issued or renewed on or 18
after January 1, 2022, to public employees pursuant to this section shall comply 19
with KRS 304.17A-148. 20
Section 14. KRS 161.220 is amended to read as follows: 21
As used in KRS 161.220 to 161.716 and 161.990: 22
(1) "Retirement system" means the arrangement provided for in KRS 161.220 to 23
161.716 and 161.990 for payment of allowances to members; 24
(2) "Retirement allowance" means the amount annually payable during the course of his 25
or her natural life to a member who has been retired by reason of service; 26
(3) "Disability allowance" means the amount annually payable to a member retired by 27 UNOFFICIAL COPY 22 RS HB 9/GA
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reason of disability; 1
(4) "Member" means the commissioner of education, deputy commissioners, associate 2
commissioners, and all division directors in the State Department of Education, 3
employees participating in the system pursuant to KRS 196.167(3)(b)1., and any 4
full-time teacher or professional occupying a position requiring certification or 5
graduation from a four (4) year college or university, as a condition of employment, 6
and who is employed by public boards, institutions, or agencies as follows: 7
(a) Local boards of education and public charter schools if the public charter 8
school satisfies the criteria set by the Internal Revenue Service to participate 9
in a governmental retirement plan; 10
(b) Eastern Kentucky University, Kentucky State University, Morehead State 11
University, Murray State University, Western Kentucky University, and any 12
community colleges established under the control of these universities; 13
(c) State-operated secondary area vocational education or area technology centers, 14
Kentucky School for the Blind, and Kentucky School for the Deaf; 15
(d) Other public education agencies as created by the General Assembly and those 16
members of the administrative staff of the Teachers' Retirement System of the 17
State of Kentucky whom the board of trustees may designate by administrative 18
regulation; 19
(e) Regional cooperative organizations formed by local boards of education or 20
other public educational institutions listed in this subsection, for the purpose 21
of providing educational services to the participating organizations; 22
(f) All full-time members of the staffs of the Kentucky Association of School 23
Administrators, Kentucky Education Association, Kentucky Vocational 24
Association, Kentucky High School Athletic Association, Kentucky Academic 25
Association, and the Kentucky School Boards Association who were members 26
of the Kentucky Teachers' Retirement System or were qualified for a position 27 UNOFFICIAL COPY 22 RS HB 9/GA
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covered by the system at the time of employment by the association in the 1
event that the board of directors of the respective association petitions to be 2
included. The board of trustees of the Kentucky Teachers' Retirement System 3
may designate by resolution whether part-time employees of the petitioning 4
association are to be included. The state shall make no contributions on 5
account of these employees, either full-time or part-time. The association shall 6
make the employer's contributions, including any contribution that is specified 7
under KRS 161.550. The provisions of this paragraph shall be applicable to 8
persons in the employ of the associations on or subsequent to July 1, 1972; 9
(g) Employees of the Council on Postsecondary Education who were employees 10
of the Department for Adult Education and Literacy and who were members 11
of the Kentucky Teachers' Retirement System at the time the department was 12
transferred to the council pursuant to Executive Order 2003-600; 13
(h) The Office of Career and Technical Education; 14
(i) The Office of Vocational Rehabilitation; 15
(j) The Kentucky Educational Collaborative for State Agency Children; 16
(k) The Governor's Scholars Program; 17
(l) Any person who is retired for service from the retirement system and is 18
reemployed by an employer identified in this subsection in a position that the 19
board of trustees deems to be a member, except that any person who becomes 20
a member on or after January 1, 2022, and subsequently draws a monthly 21
lifetime retirement allowance, shall upon reemployment after retirement not 22
earn a second retirement account; 23
(m) Employees of the former Cabinet for Workforce Development who are 24
transferred to the Kentucky Community and Technical College System and 25
who occupy positions covered by the Kentucky Teachers' Retirement System 26
shall remain in the Teachers' Retirement System. New employees occupying 27 UNOFFICIAL COPY 22 RS HB 9/GA
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these positions, as well as newly created positions qualifying for Teachers' 1
Retirement System coverage that would have previously been included in the 2
former Cabinet for Workforce Development, shall be members of the 3
Teachers' Retirement System; 4
(n) Effective January 1, 1998, employees of state community colleges who are 5
transferred to the Kentucky Community and Technical College System shall 6
continue to participate in federal old age, survivors, disability, and hospital 7
insurance, and a retirement plan other than the Kentucky Teachers' Retirement 8
System offered by Kentucky Community and Technical College System. New 9
employees occupying positions in the Kentucky Community and Technical 10
College System as referenced in KRS 164.5807(5) that would not have 11
previously been included in the former Cabinet for Workforce Development, 12
shall participate in federal old age, survivors, disability, and hospital insurance 13
and have a choice at the time of employment of participating in a retirement 14
plan provided by the Kentucky Community and Technical College System, 15
including participation in the Kentucky Teachers' Retirement System, on the 16
same basis as faculty of the state universities as provided in KRS 161.540 and 17
161.620; 18
(o) Employees of the Office of General Counsel, the Office of Budget and 19
Administrative Services, and the Office of Quality and Human Resources 20
within the Office of the Secretary of the former Cabinet for Workforce 21
Development and the commissioners of the former Department for Adult 22
Education and Literacy and the former Department for Technical Education 23
who were contributing to the Kentucky Teachers' Retirement System as of 24
July 15, 2000; 25
(p) Employees of the Kentucky Department of Education only who are graduates 26
of a four (4) year college or university, notwithstanding a substitution clause 27 UNOFFICIAL COPY 22 RS HB 9/GA
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within a job classification, and who are serving in a professional job 1
classification as defined by the department; 2
(q) The Governor's School for Entrepreneurs Program; 3
(r) Employees of the Office of Adult Education within the Department of 4
Workforce Investment in the Education and Workforce Development Cabinet 5
who were employees of the Council on Postsecondary Education, Kentucky 6
Adult Education Program and who were members of the Kentucky Teachers' 7
Retirement System at the time the Program was transferred to the cabinet 8
pursuant to Executive Orders 2019-0026 and 2019-0027; and 9
(s) Employees of the Education Professional Standards Board who were members 10
of the Kentucky Teachers' Retirement System at the time the employees were 11
transferred to the Kentucky Department of Education pursuant to Executive 12
Order 2020-590; 13
(5) "Present teacher" means any teacher who was a teacher on or before July 1, 1940, 14
and became a member of the retirement system created by 1938 (1st Extra. Sess.) 15
Ky. Acts ch. 1, on the date of the inauguration of the system or within one (1) year 16
after that date, and any teacher who was a member of a local teacher retirement 17
system in the public elementary or secondary schools of the state on or before July 18
1, 1940, and continued to be a member of the system until he or she, with the 19
membership of the local retirement system, became a member of the state Teachers' 20
Retirement System or who becomes a member under the provisions of KRS 21
161.470(4); 22
(6) "New teacher" means any member not a present teacher; 23
(7) "Prior service" means the number of years during which the member was a teacher 24
in Kentucky prior to July 1, 1941, except that not more than thirty (30) years' prior 25
service shall be allowed or credited to any teacher; 26
(8) "Subsequent service" means the number of years during which the teacher is a 27 UNOFFICIAL COPY 22 RS HB 9/GA
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member of the Teachers' Retirement System after July 1, 1941; 1
(9) "Final average salary" means the average of the five (5) highest annual salaries 2
which the member has received for service in a covered position and on which the 3
member has made contributions, or on which the public board, institution, or 4
agency has picked-up member contributions pursuant to KRS 161.540(2), or the 5
average of the five (5) years of highest salaries as defined in KRS 61.680(2)(a), 6
which shall include picked-up member contributions. Additionally, the board of 7
trustees may approve a final average salary based upon the average of the three (3) 8
highest salaries for individuals who become members prior to January 1, 2022, who 9
are at least fifty-five (55) years of age and have a minimum of twenty-seven (27) 10
years of Kentucky service credit. However, if any of the five (5) or three (3) highest 11
annual salaries used to calculate the final average salary was paid within the three 12
(3) years immediately prior to the date of the member's retirement for individuals 13
who become members prior to January 1, 2022, or within the five (5) years 14
immediately prior to the date of the member's retirement for individuals who 15
become members on or after January 1, 2022, the amount of salary to be included 16
for each of those three (3) years or five (5) years, as applicable, for the purpose of 17
calculating the final average salary shall be limited to the lesser of: 18
(a) The member's actual salary; or 19
(b) The member's annual salary that was used for retirement purposes during each 20
of the prior three (3) years or five (5) years, as applicable, plus a percentage 21
increase equal to the percentage increase received by all other members 22
employed by the public board, institution, or agency, or for members of school 23
districts, the highest percentage increase received by members on any one (1) 24
rank and step of the salary schedule of the school district. The increase shall 25
be computed on the salary that was used for retirement purposes. The board of 26
trustees may promulgate an administrative regulation in accordance with KRS 27 UNOFFICIAL COPY 22 RS HB 9/GA
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Chapter 13A to establish a methodology for measuring the limitation so that 1
the combined increases in salary for each of the last three (3) full years of 2
salary prior to retirement shall not exceed the total permissible percentage 3
increase received by other members of the employer for the same three (3) 4
year period. 5
For individuals who became members of the retirement system prior to July 1, 6
2021, this limitation shall not apply if the member receives an increase in salary in a 7
percentage exceeding that received by the other members, and this increase was 8
accompanied by a corresponding change in position or in length of employment. 9
The board of trustees may promulgate an administrative regulation in accordance 10
with KRS Chapter 13A to provide definitions for a corresponding change in 11
position or in length of employment. This limitation shall also not apply to the 12
payment to a member for accrued annual leave if the individual becomes a member 13
before July 1, 2008, or accrued sick leave which is authorized by statute and which 14
shall, for individuals subject to KRS 161.155(10) who became nonuniversity 15
members of the system prior to January 1, 2022, be included as part of a retiring 16
member's annual compensation for the member's last year of active service; 17
(10) "Annual compensation" means the total salary received by a member as 18
compensation for all services performed in employment covered by the retirement 19
system during a fiscal year. Annual compensation shall not include payment for any 20
benefit or salary adjustments made by the public board, institution, or agency to the 21
member or on behalf of the member which is not available as a benefit or salary 22
adjustment to other members employed by that public board, institution, or agency. 23
Annual compensation shall not include the salary supplement received by a member 24
under KRS 157.197(2)(c), 158.6455, or 158.782 on or after July 1, 1996. Under no 25
circumstances shall annual compensation include compensation that is earned by a 26
member while on assignment to an organization or agency that is not a public board, 27 UNOFFICIAL COPY 22 RS HB 9/GA
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institution, or agency listed in subsection (4) of this section. In the event that federal 1
law requires that a member continue membership in the retirement system even 2
though the member is on assignment to an organization or agency that is not a 3
public board, institution, or agency listed in subsection (4) of this section, the 4
member's annual compensation for retirement purposes shall be deemed to be the 5
annual compensation, as limited by subsection (9) of this section, last earned by the 6
member while still employed solely by and providing services directly to a public 7
board, institution, or agency listed in subsection (4) of this section. The board of 8
trustees shall determine if any benefit or salary adjustment qualifies as annual 9
compensation. For an individual who becomes a member on or after July 1, 2008, 10
annual compensation shall not include lump-sum payments upon termination of 11
employment for accumulated annual or compensatory leave; 12
(11) "Age of member" means the age attained on the first day of the month immediately 13
following the birthdate of the member. This definition is limited to retirement 14
eligibility and does not apply to tenure of members; 15
(12) "Employ," and derivatives thereof, means relationships under which an individual 16
provides services to an employer as an employee, as an independent contractor, as 17
an employee of a third party, or under any other arrangement as long as the services 18
provided to the employer are provided in a position that would otherwise be covered 19
by the Kentucky Teachers' Retirement System and as long as the services are being 20
provided to a public board, institution, or agency listed in subsection (4) of this 21
section; 22
(13) "Regular interest" means: 23
(a) For an individual who becomes a member prior to July 1, 2008, interest at 24
three percent (3%) per annum;: 25
(b) For an individual who becomes a member on or after July 1, 2008, but prior to 26
January 1, 2022, interest at two and one-half percent (2.5%) per annum for 27 UNOFFICIAL COPY 22 RS HB 9/GA
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purposes of crediting interest to the teacher savings account or any other 1
contributions made by the employee that are refundable to the employee upon 2
termination of employment; and 3
(c) For an individual who becomes a member on or after January 1, 2022, the 4
rolling five (5) year yield on a thirty (30) year United States Treasury bond as 5
of the end of May prior to the most recently completed fiscal year, except that: 6
1. Once the member has at least sixty (60) months of service in the system 7
it shall mean interest at two and one-half percent (2.5%) per annum for 8
purposes of crediting interest to employee contributions in the 9
foundational benefit component or any other contributions made by the 10
employee to the foundational benefit component that are refundable to 11
the employee upon termination of employment; and 12
2. The board shall have the authority to adjust the regular interest rate for 13
individuals who become members on or after January 1, 2022, in 14
accordance with KRS 161.633 and 161.634; 15
(14) "Accumulated contributions" means the contributions of a member to the teachers' 16
savings fund, including picked-up member contributions as described in KRS 17
161.540(2), plus accrued regular interest; 18
(15) "Annuitant" means a person who receives a retirement allowance or a disability 19
allowance; 20
(16) "Local retirement system" means any teacher retirement or annuity system created 21
in any public school district in Kentucky in accordance with the laws of Kentucky; 22
(17) "Fiscal year" means the twelve (12) month period from July 1 to June 30. The 23
retirement plan year is concurrent with this fiscal year. A contract for a member 24
employed by a local board of education may not exceed two hundred sixty-one 25
(261) days in the fiscal year; 26
(18) "Public schools" means the schools and other institutions mentioned in subsection 27 UNOFFICIAL COPY 22 RS HB 9/GA
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(4) of this section; 1
(19) "Dependent" as used in KRS 161.520 and 161.525 means a person who was 2
receiving, at the time of death of the member, at least one-half (1/2) of the support 3
from the member for maintenance, including board, lodging, medical care, and 4
related costs; 5
(20) "Active contributing member" means a member currently making contributions to 6
the Teachers' Retirement System, who made contributions in the next preceding 7
fiscal year, for whom picked-up member contributions are currently being made, or 8
for whom these contributions were made in the next preceding fiscal year; 9
(21) "Full-time" means employment in a position that requires services on a continuing 10
basis equal to at least seven-tenths (7/10) of normal full-time service on a fiscal year 11
basis; 12
(22) "Full actuarial cost," when used to determine the payment that a member must pay 13
for service credit means the actuarial value of all costs associated with the 14
enhancement of a member's benefits or eligibility for benefit enhancements, 15
including health insurance supplement payments made by the retirement system. 16
The actuary for the retirement system shall determine the full actuarial value costs 17
and actuarial cost factor tables as provided in KRS 161.400; 18
(23) "Last annual compensation" means the annual compensation, as defined by 19
subsection (10) of this section and as limited by subsection (9) of this section, 20
earned by the member during the most recent period of contributing service, either 21
consecutive or nonconsecutive, that is sufficient to provide the member with one (1) 22
full year of service credit in the Kentucky Teachers' Retirement System, and which 23
compensation is used in calculating the member's initial retirement allowance, 24
excluding bonuses, retirement incentives, payments for accumulated sick leave, 25
annual, personal, and compensatory leave, and any other lump-sum payment. For an 26
individual who becomes a member on or after July 1, 2008, payments for annual or 27 UNOFFICIAL COPY 22 RS HB 9/GA
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compensatory leave shall not be included in determining the member's last annual 1
compensation; 2
(24) "Participant" means a member, as defined by subsection (4) of this section, or an 3
annuitant, as defined by subsection (15) of this section; 4
(25) "Qualified domestic relations order" means any judgment, decree, or order, 5
including approval of a property settlement agreement, that: 6
(a) Is issued by a court or administrative agency; and 7
(b) Relates to the provision of child support, alimony payments, or marital 8
property rights to an alternate payee; 9
(26) "Alternate payee" means a spouse, former spouse, child, or other dependent of a 10
participant, who is designated to be paid retirement benefits in a qualified domestic 11
relations order; 12
(27) "University member" means an individual who becomes a member through 13
employment with an employer specified in subsection (4)(b) and (n) of this section; 14
(28) "Nonuniversity member" means an individual who becomes a member through 15
employment with an employer specified under subsection (4) of this section, except 16
for those members employed by an employer specified in subsection (4)(b) and (n) 17
of this section; 18
(29) "Accumulated employer contribution" means the employer contribution deposited 19
to a member's account through the supplemental benefit component and regular 20
interest credited on such amounts as provided by KRS 161.635 for nonuniversity 21
members and KRS 161.636 for university members; 22
(30) "Accumulated account balance" means: 23
(a) For members who began participating in the system prior to January 1, 2022, 24
the member's accumulated contributions; or 25
(b) For members who began participating in the system on or after January 1, 26
2022, the combined sum of the member's accumulated contributions and the 27 UNOFFICIAL COPY 22 RS HB 9/GA
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member's accumulated employer contributions; 1
(31) "Foundational benefit component" means the benefits provided by KRS 161.220 to 2
161.716 to individuals who become members on or after January 1, 2022, except for 3
the supplemental benefit component and retiree health benefits set forth in KRS 4
161.675; and 5
(32) "Supplemental benefit component" means: 6
(a) The benefit established pursuant to KRS 161.635 for individuals who become 7
nonuniversity members on or after January 1, 2022; or 8
(b) The benefit established pursuant to KRS 161.636 for individuals who become 9
university members on or after January 1, 2022. 10
Section 15. KRS 78.510 is amended to read as follows: 11
As used in KRS 78.510 to 78.852, unless the context otherwise requires: 12
(1) "System" means the County Employees Retirement System; 13
(2) "Board" means the board of trustees of the system as provided in KRS 78.782; 14
(3) "County" means any county, or nonprofit organization created and governed by a 15
county, counties, or elected county officers, sheriff and his or her employees, county 16
clerk and his or her employees, circuit clerk and his or her deputies, former circuit 17
clerks or former circuit clerk deputies, or political subdivision or instrumentality, 18
including school boards, cities, charter county governments, urban-county 19
governments, consolidated local governments, or unified local governments 20
participating in the system by order appropriate to its governmental structure, as 21
provided in KRS 78.530, and if the board is willing to accept the agency, 22
organization, or corporation, the board being hereby granted the authority to 23
determine the eligibility of the agency to participate; 24
(4) "School board" means: 25
(a) Any board of education participating in the system by order appropriate to its 26
governmental structure, as provided in KRS 78.530, and if the board is willing 27 UNOFFICIAL COPY 22 RS HB 9/GA
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to accept the agency or corporation, the board being hereby granted the 1
authority to determine the eligibility of the agency to participate; or 2
(b) A public charter school as defined in Section 1 of this Act if the public 3
charter school satisfies the criteria set by the Internal Revenue Service to 4
participate in a governmental retirement plan; 5
(5) "Examiner" means the medical examiners as provided in KRS 61.665; 6
(6) "Employee" means every regular full-time appointed or elective officer or employee 7
of a participating county and the coroner of a participating county, whether or not he 8
or she qualifies as a regular full-time officer. The term shall not include persons 9
engaged as independent contractors, seasonal, emergency, temporary, and part-time 10
workers. In case of any doubt, the board shall determine if a person is an employee 11
within the meaning of KRS 78.510 to 78.852; 12
(7) "Employer" means a county, as defined in subsection (3) of this section, the elected 13
officials of a county, or any authority of the county having the power to appoint or 14
elect an employee to office or employment in the county; 15
(8) "Member" means any employee who is included in the membership of the system or 16
any former employee whose membership has not ceased under KRS 78.535; 17
(9) "Service" means the total of current service and prior service as defined in this 18
section; 19
(10) "Current service" means the number of years and months of employment as an 20
employee, on and after July 1, 1958, for which creditable compensation is paid and 21
employee contributions deducted, except as otherwise provided; 22
(11) "Prior service" means the number of years and completed months, expressed as a 23
fraction of a year, of employment as an employee, prior to July 1, 1958, for which 24
creditable compensation was paid. An employee shall be credited with one (1) 25
month of prior service only in those months he received compensation for at least 26
one hundred (100) hours of work. Twelve (12) months of current service in the 27 UNOFFICIAL COPY 22 RS HB 9/GA
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system shall be required to validate prior service; 1
(12) "Accumulated contributions" means the sum of all amounts deducted from the 2
compensation of a member and credited to his individual account in the members' 3
account, including employee contributions picked up after August 1, 1982, pursuant 4
to KRS 78.610(4), together with interest credited, on the amounts, and any other 5
amounts the member shall have contributed thereto, including interest credited 6
thereon. "Accumulated contributions" shall not include employee contributions that 7
are deposited into accounts established pursuant to 26 U.S.C. sec. 401(h) within the 8
fund established in KRS 78.520, as prescribed by KRS 78.5536(3)(b); 9
(13) "Creditable compensation": 10
(a) Except as limited by paragraph (c) of this subsection, means all salary, wages, 11
and fees, including payments for compensatory time, paid to the employee as 12
a result of services performed for the employer or for time during which the 13
member is on paid leave, which are includable on the member's federal form 14
W-2 wage and tax statement under the heading "wages, tips, other 15
compensation", including employee contributions picked up after August 1, 16
1982, pursuant to KRS 78.610(4). The creditable compensation of fee officers 17
who receive salary, fees, maintenance, or other perquisites as a result of their 18
official duties is the gross amount received decreased by the cost of salary 19
paid deputies and clerks and the cost of office supplies and other official 20
expenses; 21
(b) Includes: 22
1. Lump-sum bonuses, severance pay, or employer-provided payments for 23
purchase of service credit, which shall be averaged over the employee's 24
service with the system in which it is recorded if it is equal to or greater 25
than one thousand dollars ($1,000); 26
2. Cases where compensation includes maintenance and other perquisites, 27 UNOFFICIAL COPY 22 RS HB 9/GA
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but the board shall fix the value of that part of the compensation not paid 1
in money; 2
3. Lump-sum payments for creditable compensation paid as a result of an 3
order of a court of competent jurisdiction, the Personnel Board, or the 4
Commission on Human Rights, or for any creditable compensation paid 5
in anticipation of settlement of an action before a court of competent 6
jurisdiction, the Personnel Board, or the Commission on Human Rights, 7
including notices of violations of state or federal wage and hour statutes 8
or violations of state or federal discrimination statutes, which shall be 9
credited to the fiscal year during which the wages were earned or should 10
have been paid by the employer. This subparagraph shall also include 11
lump-sum payments for reinstated wages pursuant to KRS 61.569, 12
which shall be credited to the period during which the wages were 13
earned or should have been paid by the employer; 14
4. Amounts which are not includable in the member's gross income by 15
virtue of the member having taken a voluntary salary reduction provided 16
for under applicable provisions of the Internal Revenue Code; and 17
5. Elective amounts for qualified transportation fringes paid or made 18
available on or after January 1, 2001, for calendar years on or after 19
January 1, 2001, that are not includable in the gross income of the 20
employee by reason of 26 U.S.C. sec. 132(f)(4); and 21
(c) Excludes: 22
1. Living allowances, expense reimbursements, lump-sum payments for 23
accrued vacation leave, sick leave except as provided in KRS 78.616(5), 24
and other items determined by the board; 25
2. For employees who begin participating on or after September 1, 2008, 26
lump-sum payments for compensatory time; 27 UNOFFICIAL COPY 22 RS HB 9/GA
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3. Training incentive payments for city officers paid as set out in KRS 1
64.5277 to 64.5279; 2
4. For employees who begin participating on or after August 1, 2016, 3
nominal fees paid for services as a volunteer; and 4
5. Any salary or wages paid to an employee for services as a Kentucky 5
State Police school resource officer as defined by KRS 158.441; 6
(14) "Final compensation" means: 7
(a) For a member who begins participating before September 1, 2008, who is 8
employed in a nonhazardous position, the creditable compensation of the 9
member during the five (5) fiscal years he or she was paid at the highest 10
average monthly rate divided by the number of months of service credit during 11
that five (5) year period multiplied by twelve (12). The five (5) years may be 12
fractional and need not be consecutive. If the number of months of service 13
credit during the five (5) year period is less than forty-eight (48), one (1) or 14
more additional fiscal years shall be used; 15
(b) For a member who is employed in a nonhazardous position, whose effective 16
retirement date is between August 1, 2001, and January 1, 2009, and whose 17
total service credit is at least twenty-seven (27) years and whose age and years 18
of service total at least seventy-five (75), final compensation means the 19
creditable compensation of the member during the three (3) fiscal years the 20
member was paid at the highest average monthly rate divided by the number 21
of months of service credit during that three (3) year period multiplied by 22
twelve (12). The three (3) years may be fractional and need not be 23
consecutive. If the number of months of service credit during the three (3) 24
year period is less than twenty-four (24), one (1) or more additional fiscal 25
years shall be used; 26
(c) For a member who begins participating before September 1, 2008, who is 27 UNOFFICIAL COPY 22 RS HB 9/GA
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employed in a hazardous position, as provided in KRS 61.592, the creditable 1
compensation of the member during the three (3) fiscal years he or she was 2
paid at the highest average monthly rate divided by the number of months of 3
service credit during that three (3) year period multiplied by twelve (12). The 4
three (3) years may be fractional and need not be consecutive. If the number of 5
months of service credit during the three (3) year period is less than twenty-6
four (24), one (1) or more additional fiscal years, which may contain less than 7
twelve (12) months of service credit, shall be used; 8
(d) For a member who begins participating on or after September 1, 2008, but 9
prior to January 1, 2014, who is employed in a nonhazardous position, the 10
creditable compensation of the member during the five (5) complete fiscal 11
years immediately preceding retirement divided by five (5). Each fiscal year 12
used to determine final compensation must contain twelve (12) months of 13
service credit. If the member does not have five (5) complete fiscal years that 14
each contain twelve (12) months of service credit, then one (1) or more 15
additional fiscal years, which may contain less than twelve (12) months of 16
service credit, shall be added until the number of months in the final 17
compensation calculation is at least sixty (60) months; or 18
(e) For a member who begins participating on or after September 1, 2008, but 19
prior to January 1, 2014, who is employed in a hazardous position as provided 20
in KRS 61.592, the creditable compensation of the member during the three 21
(3) complete fiscal years he or she was paid at the highest average monthly 22
rate divided by three (3). Each fiscal year used to determine final 23
compensation must contain twelve (12) months of service credit. If the 24
member does not have three (3) complete fiscal years that each contain twelve 25
(12) months of service credit, then one (1) or more additional fiscal years, 26
which may contain less than twelve (12) months of service credit, shall be 27 UNOFFICIAL COPY 22 RS HB 9/GA
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added until the number of months in the final compensation calculation is at 1
least thirty-six (36) months; 2
(15) "Final rate of pay" means the actual rate upon which earnings of an employee were 3
calculated during the twelve (12) month period immediately preceding the 4
member's effective retirement date, and shall include employee contributions picked 5
up after August 1, 1982, pursuant to KRS 78.610(4). The rate shall be certified to 6
the system by the employer and the following equivalents shall be used to convert 7
the rate to an annual rate: two thousand eighty (2,080) hours for eight (8) hour 8
workdays, one thousand nine hundred fifty (1,950) hours for seven and one-half 9
(7.5) hour workdays, two hundred sixty (260) days, fifty-two (52) weeks, twelve 10
(12) months, one (1) year; 11
(16) "Retirement allowance" means the retirement payments to which a member is 12
entitled; 13
(17) "Actuarial equivalent" means a benefit of equal value when computed upon the 14
basis of the actuarial tables adopted by the board. In cases of disability retirement, 15
the options authorized by KRS 61.635 shall be computed by adding ten (10) years 16
to the age of the member, unless the member has chosen the Social Security 17
adjustment option as provided for in KRS 61.635(8), in which case the member's 18
actual age shall be used. For members who begin participating in the system prior to 19
January 1, 2014, no disability retirement option shall be less than the same option 20
computed under early retirement; 21
(18) "Normal retirement date", unless otherwise provided in KRS 78.510 to 78.852, 22
means: 23
(a) For a member with service in a nonhazardous position, the sixty-fifth birthday 24
of a member; 25
(b) For a member with service in a hazardous position who begins participating 26
before September 1, 2008, the first day of the month following a member's 27 UNOFFICIAL COPY 22 RS HB 9/GA
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fifty-fifth birthday; or 1
(c) For a member with service in a hazardous position who begins participating 2
on or after September 1, 2008, the first day of the month following a member's 3
sixtieth birthday; 4
(19) "Fiscal year" of the system means the twelve (12) months from July 1 through the 5
following June 30, which shall also be the plan year. The "fiscal year" shall be the 6
limitation year used to determine contribution and benefits limits as set out in 26 7
U.S.C. sec. 415; 8
(20) "Agency reporting official" means the person designated by the participating 9
employer who shall be responsible for forwarding all employer and employee 10
contributions and a record of the contributions to the system and for performing 11
other administrative duties pursuant to the provisions of KRS 78.510 to 78.852; 12
(21) "Regular full-time positions," as used in subsection (6) of this section, shall mean 13
all positions that average one hundred (100) or more hours per month, determined 14
by using the number of hours actually worked in a calendar or fiscal year, or eighty 15
(80) or more hours per month in the case of noncertified employees of school 16
boards, determined by using the number of hours actually worked in a calendar or 17
school year, unless otherwise specified, except: 18
(a) Seasonal positions, which although temporary in duration, are positions which 19
coincide in duration with a particular season or seasons of the year and that 20
may recur regularly from year to year, in which case the period of time shall 21
not exceed nine (9) months, except for employees of school boards, in which 22
case the period of time shall not exceed six (6) months; 23
(b) Emergency positions that are positions that do not exceed thirty (30) working 24
days and are nonrenewable; 25
(c) Temporary positions that are positions of employment with a participating 26
agency for a period of time not to exceed twelve (12) months and not 27 UNOFFICIAL COPY 22 RS HB 9/GA
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renewable; 1
(d) Probationary positions which are positions of employment with a participating 2
employer that do not exceed twelve (12) months and that are used uniformly 3
by the participating agency on new employees who would otherwise be 4
eligible for participation in the system. Probationary positions shall not be 5
renewable by the participating employer for the same employee, unless the 6
employee has not been employed with the participating employer for a period 7
of at least twelve (12) months; or 8
(e) Part-time positions that are positions that may be permanent in duration, but 9
that require less than a calendar or fiscal year average of one hundred (100) 10
hours of work per month, determined by using the number of months actually 11
worked within a calendar or fiscal year, in the performance of duty, except in 12
case of noncertified employees of school boards, the school term average shall 13
be eighty (80) hours of work per month, determined by using the number of 14
months actually worked in a calendar or school year, in the performance of 15
duty; 16
(22) "Alternate participation plan" means a method of participation in the system as 17
provided for by KRS 78.530(3); 18
(23) "Retired member" means any former member receiving a retirement allowance or 19
any former member who has on file at the retirement office the necessary 20
documents for retirement benefits and is no longer contributing to the system; 21
(24) "Current rate of pay" means the member's actual hourly, daily, weekly, biweekly, 22
monthly, or yearly rate of pay converted to an annual rate as defined in final rate of 23
pay. The rate shall be certified by the employer; 24
(25) "Beneficiary" means the person, persons, estate, trust, or trustee designated by the 25
member in accordance with KRS 61.542 or 61.705 to receive any available benefits 26
in the event of the member's death. As used in KRS 78.5536, beneficiary shall not 27 UNOFFICIAL COPY 22 RS HB 9/GA
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mean an estate, trust, or trustee; 1
(26) "Recipient" means the retired member, the person or persons designated as 2
beneficiary by the member and drawing a retirement allowance as a result of the 3
member's death, or a dependent child drawing a retirement allowance. An alternate 4
payee of a qualified domestic relations order shall not be considered a recipient, 5
except for purposes of KRS 61.623; 6
(27) "Person" means a natural person; 7
(28) "School term or year" means the twelve (12) months from July 1 through the 8
following June 30; 9
(29) "Retirement office" means the Kentucky Public Pensions Authority office building 10
in Frankfort, unless otherwise designated by the Kentucky Public Pensions 11
Authority; 12
(30) "Vested" for purposes of determining eligibility for purchasing service credit under 13
KRS 61.552 means the employee has at least forty-eight (48) months of service if 14
age sixty-five (65) or older or at least sixty (60) months of service if under the age 15
of sixty-five (65). For purposes of this subsection, "service" means service in the 16
systems administered by the Kentucky Retirement Systems and County Employees 17
Retirement System; 18
(31) "Participating" means an employee is currently earning service credit in the system 19
as provided in KRS 78.615; 20
(32) "Month" means a calendar month; 21
(33) "Membership date" means the date upon which the member began participating in 22
the system as provided in KRS 78.615; 23
(34) "Participant" means a member, as defined by subsection (8) of this section, or a 24
retired member, as defined by subsection (23) of this section; 25
(35) "Qualified domestic relations order" means any judgment, decree, or order, 26
including approval of a property settlement agreement, that: 27 UNOFFICIAL COPY 22 RS HB 9/GA
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(a) Is issued by a court or administrative agency; and 1
(b) Relates to the provision of child support, alimony payments, or marital 2
property rights to an alternate payee; 3
(36) "Alternate payee" means a spouse, former spouse, child, or other dependent of a 4
participant, who is designated to be paid retirement benefits in a qualified domestic 5
relations order; 6
(37) "Accumulated employer credit" means the employer pay credit deposited to the 7
member's account and interest credited on such amounts as provided by KRS 8
78.5512 and 78.5516; 9
(38) "Accumulated account balance" means: 10
(a) For members who began participating in the system prior to January 1, 2014, 11
the member's accumulated contributions; or 12
(b) For members who began participating in the system on or after January 1, 13
2014, in the hybrid cash balance plan as provided by KRS 78.5512 and 14
78.5516, the combined sum of the member's accumulated contributions and 15
the member's accumulated employer credit; 16
(39) "Volunteer" means an individual who: 17
(a) Freely and without pressure or coercion performs hours of service for an 18
employer participating in one (1) of the systems administered by Kentucky 19
Retirement Systems or the County Employees Retirement System without 20
receipt of compensation for services rendered, except for reimbursement of 21
actual expenses, payment of a nominal fee to offset the costs of performing 22
the voluntary services, or both; and 23
(b) If a retired member, does not become an employee, leased employee, or 24
independent contractor of the employer for which he or she is performing 25
volunteer services for a period of at least twelve (12) months following the 26
retired member's most recent retirement date; 27 UNOFFICIAL COPY 22 RS HB 9/GA
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(40) "Nominal fee" means compensation earned for services as a volunteer that does not 1
exceed five hundred dollars ($500) per month. Compensation earned for services as 2
a volunteer from more than one (1) participating employer during a month shall be 3
aggregated to determine whether the compensation exceeds the five hundred dollars 4
($500) per month maximum provided by this subsection; 5
(41) "Nonhazardous position" means a position that does not meet the requirements of 6
KRS 78.5520 or has not been approved by the board as a hazardous position; 7
(42) "Hazardous position" means a position that meets the requirements of KRS 78.5520 8
and has been approved by the board as hazardous; 9
(43) "Level-percentage-of-payroll amortization method" means a method of determining 10
the annual amortization payment on the unfunded actuarial accrued liability as 11
expressed as a percentage of payroll over a set period of years. Under this method, 12
the percentage of payroll shall be projected to remain constant for all years 13
remaining in the set period and the unfunded actuarially accrued liability shall be 14
projected to be fully amortized at the conclusion of the set period; 15
(44) "Increment" means twelve (12) months of service credit which are purchased. The 16
twelve (12) months need not be consecutive. The final increment may be less than 17
twelve (12) months; 18
(45) "Last day of paid employment" means the last date employer and employee 19
contributions are required to be reported in accordance with KRS 16.543, 61.543, or 20
78.615 to the retirement office in order for the employee to receive current service 21
credit for the month. Last day of paid employment does not mean a date the 22
employee receives payment for accrued leave, whether by lump sum or otherwise, if 23
that date occurs twenty-four (24) or more months after previous contributions; 24
(46) "Objective medical evidence" means reports of examinations or treatments; medical 25
signs which are anatomical, physiological, or psychological abnormalities that can 26
be observed; psychiatric signs which are medically demonstrable phenomena 27 UNOFFICIAL COPY 22 RS HB 9/GA
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indicating specific abnormalities of behavior, affect, thought, memory, orientation, 1
or contact with reality; or laboratory findings which are anatomical, physiological, 2
or psychological phenomena that can be shown by medically acceptable laboratory 3
diagnostic techniques, including but not limited to chemical tests, 4
electrocardiograms, electroencephalograms, X-rays, and psychological tests; 5
(47) "Hazardous disability" as used in KRS 78.510 to 78.852 means a disability which 6
results in an employee's total incapacity to continue as an employee in a hazardous 7
position, but the employee is not necessarily deemed to be totally and permanently 8
disabled to engage in other occupations for remuneration or profit; 9
(48) "Act in line of duty" means, for purposes of members serving in a hazardous 10
position, an act occurring which was required in the performance of the principal 11
duties of the hazardous position as defined by the job description; 12
(49) "Dependent child" means a child in the womb and a natural or legally adopted child 13
of the member who has neither attained age eighteen (18) nor married or who is an 14
unmarried full-time student who has not attained age twenty-two (22). Solely in the 15
case of a member who dies as a direct result of an act in line of duty as defined in 16
this section or who dies as a result of a duty-related injury as defined in KRS 17
61.621, "dependent child" also means a naturally or legally adopted disabled child 18
of the member, regardless of the child's age, if the child has been determined to be 19
eligible for federal Social Security disability benefits or is being claimed as a 20
qualifying child for tax purposes due to the child's total and permanent disability; 21
(50) "Normal retirement age" means the age at which the member meets the 22
requirements for his or her normal retirement date as provided by subsection (18) of 23
this section; 24
(51) "Disability retirement date" means the first day of the month following the last day 25
of paid employment; 26
(52) "Monthly average pay" means: 27 UNOFFICIAL COPY 22 RS HB 9/GA
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(a) In the case of a member who dies as a direct result of an act in line of duty as 1
defined in KRS 16.505 or who dies as a result of a duty-related injury as 2
defined in KRS 61.621, the higher of the member's monthly final rate of pay 3
or the average monthly creditable compensation earned by the deceased 4
member during his or her last twelve (12) months of employment; or 5
(b) In the case where a member becomes totally and permanently disabled as a 6
direct result of an act in line of duty as defined in KRS 16.505 or becomes 7
disabled as a result of a duty-related injury as defined in KRS 61.621 and is 8
eligible for the benefits provided by KRS 61.621(5)(a), the higher of the 9
member's monthly final rate of pay or the average monthly creditable 10
compensation earned by the disabled member during his or her last twelve 11
(12) months of employment prior to the date the act in line of duty or duty-12
related injury occurred; 13
(53) "Authority" means the Kentucky Public Pensions Authority as provided by KRS 14
61.505; and 15
(54) "Executive director" means the executive director of the Kentucky Public Pensions 16
Authority. 17
Section 16. If any provision of this Act or its application to any person or 18
circumstance is held invalid by a court of competent jurisdiction, the invalidity does not 19
affect other provisions or applications of this section that can be given effect without the 20
invalid provision or application, and to this end the provisions of this Act are severable. 21