The KBA Advocate is the weekly KBA legislative newsletter that contains up-to-date information on legislation that impacts your practice. It is only published when the legislature is in session and is sent to all KBA members electronically via the KBA Weekly.
On June 14th the Kansas Supreme Court released two monumental rulings. The first was Gannon v. State and the second was Hilburn v. Enerpipe LTD.
We are all familiar that the Gannon decision refers to the school finance lawsuit that stretches into a decade of legal arguments. This past session, the Kansas Legislature added nearly $360 million to K-12 school funding over the next four years. The legislature was hopeful that the Supremes would find this amount constitutional and end the lawsuit; the legislature got half of its wish. The Court found that SB 16’s financial adjustments to the safe harbor plan brings the State into substantial compliance with previous Gannon rulings. However, the court retains jurisdiction to ensure that the four-year plan is implemented. The court justified retaining jurisdiction by stating:
"[T]he judiciary clearly has the power to review a law and potentially declare it unconstitutional. But this power is not limited solely to review. It also includes the inherent power to enforce our holdings. [Citations omitted.] Without the inherent power to impose remedies and otherwise enforce our holdings, our power to review would be virtually meaningless. See Kjellander v. Kjellander, 90 Kan. 112, 114, 132 P. 1170 (1913) ('The appellate jurisdiction conferred carries with it, by implication, the power to protect that jurisdiction and to make the decisions of the court thereunder effective.')." Gannon II, 303 Kan. at 737-38.
Once the legislature appropriates the remainder of the funds outlined in SBS 16, the Gannon case should come to a close.
The second big case is Hilbrun v. Enerpipe Ltd. This case was widely discussed within the personal injury arena. This case deals with the constitutionality of the State’s cap on noneconomic damages in personal injury actions. In this case, the plaintiff, Diana Hilburn, was awarded a judgment for an auto accident when her truck was rear-ended by a semi owned by Enerpipe Ltd. The jury awarded Hilburn $301,509.14. The judge reduced the award to coincide with the noneconomic cap of $250,000. Under KSA 60-19a02, the cap will increase to $350,000 by 2022. Hilburn appealed on the ground that KSA 60-19a02 is unconstitutional because it violates her right to a jury trial. A plurality of the Kansas Supreme Court agreed with Hilburn and struck down the cap. The final tally was 3-1-2, with Justice Nuss not participating.
This ruling will have far-reaching implications and sets up a legislative fight in 2020. Several powerful special interest groups will attempt to reinstitute the caps with a statutory proposal. Others may attempt to alter the constitutional by proposing a cap be added to the founding document. Either way, this will draw significant attention and money to the 2020 session.
Besides the noneconomic cap battle, we can expect merit selection to be up for debate. We will also see Medicaid expansion grab headlines. The 2019 legislative session may have just ended, but battle lines are already being drawn for 2020.
This put pressure of leadership to break the expansion coalition by reworking the budget and removing key pieces which some of those expansion supporters wanted. That tactic failed with more that 80 no votes on that budget. However, after sitting around for most of Saturday, May 4th, the coalition finally broke and the floods gates opened. House Sub for SB 25 (state budget) passed 79-45. Many of the moderates in the expansion coalition flipped once it was obvious the budget would pass. See; http://www.kslegislature.org/li/b2019_20/measures/sb25/
With the budget out of the way, both chambers set their sights on a tax cut bill. Gov. Kelly vetoed an earlier version of the tax cut which the legislature could not override. The legislature used the same bill number for the latest tax cut bill. SB 22 would run about $240 million over three years. It would decouple the state from the feds on standard deductions starting in 2019, exempt foreign income starting in 2017, and ever so slightly reduce food sales tax burden. See; http://www.kslegislature.org/li/b2019_20/measures/sb22/
There is a good chance Gov. Kelly vetoes this bill as well. The message would be to look at a comprehensive tax policy change in 2020.
Should Gov. Kelly veto SB 22, the legislature may attempt an override on Sine Die. The override vote may not be the only vote taken by the Kansas Senate on May 29th. Sen. Ty Masterson (R-Andover) made a motion to pull SCR 1610 from Senate Judiciary. This will allow a vote to alter the merit selection process for the Kansas Supreme Court. See; http://www.kslegislature.org/li/b2019_20/measures/scr1610/
To appear on the ballot SCR 1610 would need 27 votes in the Senate and 84 votes in the House—a tall order for most legislative days—very difficult on Sine Die.
Finally, the Kansas Supreme Court will hear two other huge issues this Thursday, May 9th: the K12 lawsuit and the Court of Appeals hearing on selection of judges. The issues surrounding school finance are well document and many believe the new funding will end the lawsuit. The hearing on the Court of Appeals issue is also straightforward. It is a question of law. Who gets to pick? Gov. Kelly believes the pick remains with her (Kelly nominated KBA President Sarah E. Warner last week) while Senate President Susan Wagle believes the pick is now with Chief Justice Lawton Nuss. Chief Justice Nuss has recused himself from the proceeding and has no opinion on the matter.
The 2014 legislative session reached First Adjournment on Friday, April 4 and continued working until Sunday, April 6 when a school finance plan was approved by the Kansas House. First Adjournment is the last official day of the regular session but legislators wanting to finalize the school finance issues it dragged on for the entire weekend. The importance of this date cannot be understated because bills not passed by both houses (exempt committees have some leeway) are dead for the session. This being an even numbered year also means they do not carry over and must be reintroduced as a new bill with a new bill number next year.
Once the dust settled, the Senate had the upper hand and passed their bill first. The House concurred to the Senate position that eliminated tenure for K-12 teachers. This is seen as a union busting measure and praised by a number of conservatives who championed teacher reform measures.
Provides an additional $109,265,000 for Supplemental General State Aid (Local Option Budget Equalization).
Transfer $25,200,786 to the Capital Outlay Fund from the state general fund.
Changes the definition of At-Risk Pupil to exclude those students in grades 1-12 who are not full time and those over 19 years of age. Provisions wouldn’t apply if a student had an individualized education program (IEP).
Establish the K-12 Student Performance and Efficiency Commission.
Alternative Teacher Licensure provisions.
Increase to 20 percent the number of Kansas schools that can participate as an Innovative School Districts.
Changes statutory Base State Aid Per Pupil to $3,838.
Eliminates due process rights for tenured public school teachers.
Corporate Education Tax Credit Scholarship Program, allowing companies to give $10,000 for scholarships for kids who come from families who make less than $43,000 a year or have a IEP.
In addition, both the House and Senate voted to approve the Conference Committee Report on HB 2338, which contains the judicial budget. The KBA was unsuccessful in removing the policy provisions that de-unified the court system.
Appropriates $2 million additional from the state general fund for FY 2015.
Increases existing docket fees and create statutory filing fees for appeals to the Court of Appeals or the Supreme Court.
Allows chief judge in a judicial district to elect to be responsible for submitting a budget for the judicial district to the chief justice of the Kansas Supreme Court.
District court judges in each judicial district would elect a district judge to serve as chief judge.
Requires the chief justice to provide notification of a vacancy in the office of district court judge or district magistrate court judge to the chairperson of the district judicial nominating commission not later than 120 days following the date of the vacancy.
Deletes requirement for the payment of longevity to Judicial Branch non-judicial staff.
The KBA was able to thwart an attempt by the Kansas Chamber of Commerce to alter the collateral source rule in Kansas. The bill, SB 311, increased the cap on non-economic damages to $350,000. The bill included two policy provisions; one adopted the Daubertexpert witness standard. The other allowed evidence of collateral source payments to be introduced to a jury. The KBA worked diligently with Kansas Association for Justice to remove the provision. The final agreed upon bill passed both chambers without collateral source.
The KBA received good news when both of its bills (HB 2398, dealing with LLCs, and HB 2444, dealing with spend thrift trusts) passed prior to First Adjournment and are now on their way to the governor for his signature. The KBA has requested a bill signing ceremony with the governor for HB 2398. This will be an excellent way to recognize the hard work of the LLC subcommittee (Bill Quick, Bill Matthew, Webb Hecker, and Joe Jarvis). I hope to have photos taken for the KBA Journal.
This past week there have been a number of
news articles surrounding the school finance case, Gannon v. State. This case deals with the appropriate amount of
money need to provide a suitable education to Kansas kids. It is anticipated
that the Kansas Supreme Court will be issuing its ruling in the next month or
so. This ruling could require the state of Kansas to appropriate more funds for
K-12 schools. The Kansas Supreme Court heard oral arguments on this case on
October 8, 2013.
In each case the main thrust is what happens
to the state budget if more money is needed to satisfy the Kansas
Constitutional requirement to deliver a "suitable” education. There appears to
be three distinct options. One is to simply appropriate the money and raise
taxes. This option faces a very tough road during the 2014 session as the
Kansas legislature recently passed a huge tax cut. To raise these funds by
increasing taxes would undo a lot of that hard work. The second option is to
ignore the ruling. This would place the three branches of government in a very
uncomfortable position. The third option would be to change the Kansas
Constitution so the legislature is in direct control of school appropriations. This
idea was discussed earlier in 2013 but the votes were not there to put it on
the statewide ballot.
In the meantime the Kansas
Supreme Court has taken center stage for some very pointed criticism by
Republican legislators. For instance, last week Senate President Susan Wagle
(R-Wichita) stated that if the court rules later this year the same way it did in Montoy v. Kansas it would be "a killer
decision.” "It would kill all potential funding increases for all government
entities,” she said. "If the court does that, it is unaffordable and it is
unrealistic. "So defying them is a possibility.” (Read more at http://www.kansas.com/2013/11/09/3106367/top-kansas-legislators-weigh-in.html#storylink=cpy)
the same article, Rep. Gene Sullentrop (R-Wichita) also said that if the
legislature is ordered to pay $400-$500 million, there would be a serious
dilemma. He also believes that there is a "strong feeling that the court
doesn’t have jurisdiction to
appropriate money, and if there is a strong feeling that they are not looking
at all sides fairly, then we are not apt to go along with them.” (Read more at http://www.kansas.com/2013/11/09/3106367/top-kansas-legislators-weigh-in.html#storylink=cpy)
This sentiment was reiterated by Sen. Wagle when she commented to
the Wichita Business Journal that "If we do get that ruling down, what we’re
going to do is focus on what is the role of the Supreme Court.” "Should they be
interpreting law, should they be appropriating money?” Wagle said. "They aren’t
elected, and we’re real concerned that when they do analyze how much money is
appropriate for K-12 funding, they don’t get to hear all the other testimony
that we hear from the other needs of the state, whether it be transportation,
corrections, higher ed and all the other entities we fund. So it’ll be a very
tough year if we’re at odds.” See
John Stearns, Brownback: K-12 court
ruling will color next legislative session, Wichita Business Journal (Nov.
7, 2013), http://www.bizjournals.com/wichita/blog/2013/11/brownback-k-12-court-ruling-will.html?page=all.
The Kansas Bar Association
would like to thank all those involved in making the 7th Annual Fall
Legislative Conference a success. Attendees were treated to a fabulous CLE on
concealed carry, which was hosted by the KBA Bench & Bar Committee. Our
speakers included KBA Bench and Bar Chair Teresa Watson, Chief Judge Dan
Creitz, Assistant Kansas Attorney General C.W. Klebe, and Leavenworth County
Attorney Todd Thompson.
I would also like to thank our
conference panelists: Rep. Steven Becker (R-Buhler), Rep. Blaine Finch
(R-Ottawa), Rep. Jan Pauls (D-Hutchinson), Rep. John Rubin (R-Shawnee), and
Rep. Jim Ward (D-Wichita). I greatly appreciate them taking time out to
discuss the 2014 legislative session with us.
Finally, the Fall Legislative Conference
would not be possible without our wonderful and generous sponsors. They
R.E. "Tuck" Duncan/Kansas
Wine & Spirits Wholesalers Association
At this point it is important to
remember that two bills were introduced that would have a serious effect on the
operation, composition, and jurisdiction of the Kansas Supreme Court during the
waning days of the 2013 legislative session. Those bills:
HB 2415 which would reduce the mandatory retirement age from 75 years old
to 65 years old for members of the Kansas Supreme Court and the Kansas Court of
HB 2416 would split the Court of Appeals into two divisions. One devoted
to only criminal appeals (five judges) and the other devoted to civil appeals (nine
judges). In addition, this bill would limit the jurisdiction of the Kansas
Supreme Court to those areas outlined by the Kansas Constitution.
The KBA Board of Governors has
voted to oppose both of these bills.
It would not be a surprise if the
criticisms of the Kansas Supreme Court continue throughout the winter and into
the legislative session. Calls to alter the way Kansas Supreme Court justices
are selected will most likely pick up steam, as will proposals to stifle the
independence of the courts. Even now Kansas legislators are asking higher-education
officials to lobby the Supreme Court in an effort to save higher education
dollars. See Editorial: Court influence,
Lawrence Journal-World (Nov. 7, 2013), http://www2.ljworld.com/news/2013/nov/07/editorial-court-influence/.
What other tactics are used to change
public perception remains to be seen, but rest assured, we can expect a lot
Kansas legislators returned to work this week, and they were greeted
with a school finance ruling, hearings on merit selection of appellate
judges, and 18 other prefilled bills. The most discussed issue is the
school finance ruling that ordered the legislature to fund school base
aid at a much higher level. See http://www.shawneecourt.org/CivicAlerts.aspx?AID=21.
school finance ruling will have a definite impact on the state budget
but the ripple effects are sure influences other issues, i.e., merit
selection. The Senate and House judiciary committees have already
scheduled hearings to discuss changes to the current merit selection
method. The Senate has even pre-filled a concurrent resolution to amend
the Kansas Constitution (SCR 1601) and another bill (SB 8)
to create the Judicial Qualification Commission as an alternative to
the Supreme Court Nominating Commission. Hearings are scheduled as
Senate Judiciary Committee Wednesday, January 16 – Thursday, January 17 State Capitol, Rm. 346-S (Old Supreme Court Room) 10:30 a.m. – Noon
House Judiciary Committee Wednesday, January 16 – Thursday, January 17 State Capitol, Rm. 112-N 3:30 p.m.
Attorneys practicing in the business entity field should pay attention the following:
SB 5 and HB 2010,
dealing with business entities restricting use of acquired entity’s
name. Both of these bills contain the same language. The KBA is
monitoring this issue.
Criminal attorneys may wish to review the following bill:
SB 4 and HB 2008
both concern the statute of limitations for certain sexually violent
offenses. These bills would expand the time limit for sexually violent
offenses committed against a person under the age of 18.