Senate Bill 130 has been reported favorably out of the Senate’s State & Local Government Committee and is currently in the Senate Rules Committee.
The bill would create a new section of KRS Chapter 65 to establish procedures for local governments to enter into the retail or wholesale sale of a commercial product or service. The bill was introduced in the Senate February 6 by Senator Chris Girdler, R-Somerset.
Critics of the bill say its intent is to shut down Somerset’s retail gasoline station opened to the public in July. Somerset Mayor Eddie Girdler and Somerset City Council began selling regular-grade gasoline at City of Somerset Fuel Center on Chappell’s Dairy Road to stabilize what they contend were abnormally high gasoline prices in Somerset.
Senator Girdler says this was never his intent. “The legislation I have filed is intended to level the playing field, so if a government entity chooses to compete in the retail marketplace, they follow the same tax obligations, bookkeeping requirements and market pressures that taxpaying business owners encounter daily.”
SB 130 would require a local government, before entering retail or wholesale sale to do a study of the effects of the sale on the entire community, hold a public hearing on the proposed retail or wholesale of the commercial product, keep revenue from the sale separate from all other funds and revenues collected by the local government, not subsidize the retail or wholesale sale with funds from other governmental operations or revenue sources and evaluate licenses, taxes and fees as a separate independent corporation, among several other requirements.
Before reporting SB 130 favorably, the State & Local Government Committee added an amendment or clarification. It retained original provisions of the bill, but clarified that for provisions of the bill, if one unit or class of local government is granted statutory authority to engage in the sale of a commercial service or product, then that permission is extended to all units and classes of local governments, therefore exempting (other cities) from the main provisions of the bill.
Clarification or amendment to the bill also provides that in lieu of advertising the public hearing required in subsection (3) in a newspaper, the local government could advertise the public hearing on a website affiliated with the local government.
According to a Senate website, SB 130 has had one reading in the Rules Committee. After two more readings, the bill will be posted on the Senate’s Orders of the Day. The date of a vote by the full Senate will be determined by Senate leadership. If approved by the Senate, the bill would go to the House of Representatives for consideration.
Somerset apparently was the first city in the nation to sell gasoline at the pump to the public. The venture was publicized in several national news outlets.