This Week in Topeka
March 1-5, 2021
Business, Economic Development & Local Government News from the Legislative Session
The Kansas House and Senate spent time on their respective chamber floors working through lengthy lists of bills cued up for General Orders – the portion of the calendar where bills are set aside for debate, amendment and ultimate final action by the full chamber.
With a handful of exceptions, all bills must be out of their house of origin and sent across the Capitol to the other chamber or the bill will fall victim to the “turn around” deadline.
The Senate wrapped up its work on Wednesday with the House wrapping up on Thursday.
On occasion the stars align, and the legislature moves with uncharacteristic speed. Such was the case with emergency legislation creating a loan fund for municipally-owned utilities that are experiencing skyrocketing electric and gas rates due to the recent record-setting cold weather. The bill (H Sub for SB 88) was approved by the House and Senate on Wednesday with only one dissenting vote. Governor Kelly signed the bill into law later in the day.
Next week lawmakers return to the Capitol on Wednesday and committee work resumes with each chamber considering bills passed by the other chamber.
Unemployment – The House gave final 87-36 approval to HB 2196, its bill that addresses the state’s unemployment compensation system through comprehensive changes and updates. The lower chamber considered six amendments with three of them successfully being added. The Senate’s version of the bill, SB 177, was not taken up by the Senate prior to the house of origin deadline. For an official summary of the legislation, click here.
This bill has been the subject of several days of hearings and thorough vetting by the House Commerce, Labor and Economic Development Committee. It remains as a top priority for lawmakers and the business community.
Workforce – HB 2066 streamlines the process for new residents to transfer occupational licenses they’ve earned in other states into Kansas provided credentialing criteria is substantially similar. Applicants would have to satisfy additional requirements as required by regulators. The bill modifies current law pertaining to military personnel and military spouses and expands the provisions to non-military residents. The House approved an amended version of the bill 103-21. For a summary of the bill, click here.
The bill has been the subject of considerable negotiation this year to find language that is acceptable to all parties impacted by the legislation. Most stakeholders have found common ground on revised bill language and work continues to resolve remaining differences.
Kansas Emergency Management Act - Both chambers gave final action approval on their version of a bill to rework the state’s emergency management laws. The Senate bill, SB 273, is more wide-ranging than the House version, HB 2416. Opponents believe the proposed changes are too expansive – especially with the Senate bill - and will hinder the governor’s ability to act quickly in response to a disaster or public health crisis. Proponent argued the Kansas Emergency Management Act (KEMA) statutes haven’t been reviewed in many years and flaws in the COVID response over the past year necessitates the review and changes.
The House and Senate Judiciary Conference Committee met on Thursday to begin reconciling differences between SB 273 and HB 2416. The bills passed on final action 27-12 and 81-40 respectively. For a side-by-side comparison provided by legislative revisors, click here.
Economic Development Incentives – The Kansas Legislature continues to wrestle with economic development incentives. Proponents argue that economic development tools need regular review and improvement to help Kansas attract jobs in a very competitive environment. As such, the bills below are designed to fine tune the programs to make them more effective while maximizing the return on investment for taxpayers.
Angel Investors – HB 2045, a bill that extends and modifies the Angel Investor Tax Credit program was given approval on final action with a 112-11 vote. SB 66 making similar changes was approved by the Senate on final action two weeks ago on a 26-12 vote.
HPIP Decoupling – HB 2097 decouples the Kansas Industrial Training (KIT) and Kansas Industrial Retraining (KIR) training programs from the High-Performance Incentive Program (HPIP) to increase the efficiency of each program. The bill was approved on final action in the House with a unanimous 124-0 vote. The Senate version of the bill, SB 65, was approved earlier in the session on a 38-0 vote.
HPIP Credit Transferability – SB 91 modifies the High-Performance Incentive Program and allows unused tax credits to be transferred to other entities. Proponents have argued that this change is consistent with other states and allows Kansas to remain competitive with incentives. The bill was approved on final action 34-5.
STAR Bonds – SB 124 extends the sunset on the STAR Bonds program and makes programmatic changes providing specific guidance on the administration and oversight of the incentive program. After lengthy and somewhat contentious debate, the Senate passed the bill 24-11. Changes include the addition of “major business facility” and “rural development project” to the list of allowable projects. Additionally, the bill increases the minimum capital investment required for eligibility from the current $50 million to $75 million and requires third-party feasibility studies before approval can be granted. The bill sets a new sunset date of July 1, 2026.
Sports Wagering – SB 84 was passed by the Senate on Wednesday on a 26-12 vote. The Senate bill is much narrower in scope than HB 2199 with significant differences in how much Kansas collects from wagers and where wagers can be placed. The Senate bill limits wagers to casinos, the Kansas Speedway and Children’s Mercy Park and collects as much as 8% from wagers depending on the location where the wager was placed. The House has not passed its bill out of committee, but the bill is exempt from procedural deadlines. The two chambers will have a lot to reconcile in order to craft a bill they can send to Governor Kelly.
Property Tax/Appraisers – SB 119 deals with laws related to appraisers, restrictions on appraisals, appeals, the Board of Tax Appeals (BOTA) and property valuation. The bill is an amalgam of bills previously discussed and voted on last year. It was approved by the Senate on final action 38-1.
Another bill addressing appraisers, SB 72, was approved by the Senate 28-11 during Wednesday’s floor action. The bill addresses professional certification and training required of appraisers and members of the Board of Tax Appeals. Specifically, the bill disallows specific certifications issued by the International Association of Assessing Officers with the argument that IAAO’s standards conflict with Kansas laws on how property should be appraised. Opponents argue that the IAAO standards are not in conflict with current law and the bill represents a step backwards in the property valuation system used in Kansas. At the core of this issue is the ominously named “dark store theory” which has been the subject of numerous recent property tax appeals before BOTA.
Transportation – HB 2201 allows the Kansas Department of Transportation (KDOT) to utilize federal stimulus funds, if received, for modernization and expansion projects even if T-Works projects have not been let per legislation enacted in 2020. The bill also reduces the minimum costs for projects that utilize alternative delivery from the current $100 million threshold to $10 million. There were no opponents to testify against these changes and the bill received final action approval of 118-6. A similar bill, SB 116, passed the Senate 39-0.
Business Liability – The COVID pandemic brought to light the need to provide for COVID-19 claim immunity for persons or agents of persons conducting business in Kansas. Immunity provisions to address the concern were enacted in 2020 with an expiration of March 31, 2021. The bill extends the expiration date to March 31, 2022. SB 283 was approved by the Senate, 31-8.
High Density At-risk Weighting – SB 173 reauthorizes the high-density at-risk weighting factor used in calculating state aid to schools. The current authorization was scheduled to expire on July 1, 2020 although last year’s appropriations bill granted a one-year extension to July 1, 2021. The bill does not include a new expiration date so the weighting factor will continue unless changed by future legislation. The bill does provide additional guidance to school districts on student eligibility and usage of the additional funding.
In-Person Schooling – On Wednesday the Senate gave 26-12 approval to SB 235 requiring school districts to provide full-time, in-person attendance as an option for all K-12 students by March 26 this year and all subsequent school years. Proponents argued that Kansas students have suffered because of COVID shutdowns and should have access to in-person instruction if they want it. Opponents raised concerns over usurping local control and lack of need considering most school districts have either already opened in-person options or have plans in place to do so.
Business Filings – HB 2391 was approved by the House on a final action vote of 121-3. The bill would allow required annual reports to the Kansas Secretary of State (KSSOS) to be filed biennially. Additionally, the bill would allow reports to be filed electronically; repeals statutes requiring the filing of music licenses with the KSSOS and allows for redaction of social security numbers on reports where filers erroneously included their SSN.
Corporate Tax Returns – HB 2106 extends the deadline for filing corporate income tax returns in Kansas. The bill would allow Kansas returns to be filed one month after the due date for federal returns – currently October 15 per changes in the Tax Cuts and Jobs Act of 2017. Corporate taxpayers would not incur penalties or be required to file for an extension if the return is filed within 30-days of the IRS imposed deadline. The bill was debated and passed by the House on Thursday 123-0.
Telemedicine – HB 2208 allows out-of-state physicians, with oversight from the Board of Healing Arts, to engage in telemedicine in Kansas. The bill also amends disciplinary authority of the Behavioral Sciences Regulatory Board for the providers they oversee. The bill passed unanimously on final action, 124-0. The Senate has addressed telemedicine in SB 238 with its bill receiving final action approval on Wednesday 38-1. More on SB 238 can be found in the next section.
Medicaid Expansion – a short-lived effort to amend Medicaid expansion into SB 238 failed on a 12-23 vote. The underlying bill creates a process and funding for certified community behavioral health clinics and establishes procedures for authorizing out-of-state physicians to engage in telemedicine in Kansas. The vote outcome once again signals that attempts to get Medicaid expansion language through the Senate will be a heavy lift.
Auto Show – Auto shows aren’t a normal topic for this report, but SB 33 has drawn attention to the fragile economic development truce that exists between Kansas and Missouri. The bill, approved in early February by the Senate on a 39-0 vote, allows the Auto Dealers Association of Greater Kansas City to hold its annual auto show at the Kansas Speedway. COVID gathering restrictions necessitated a move from the normal indoor location at Bartle Hall in Kansas City, MO. On Tuesday the House approved the bill on a unanimous 124-0 vote. The bill removes technical prohibitions on out-of-state car dealers and does not provide any economic development incentives. While not controversial in Kansas, Kansas City Mayor Quinton Lucas reacted negatively to the action.
Truth in Taxation – SB 13 eliminates the current property tax lid imposed on cities and counties and replaces it with a “revenue neutral rate” that proponents say brings more transparency to the annual city/county budgeting process. The Senate passed the bill, 34-1, in the early days of the 2021 Session. The House amended the bill and approved it 120-3. The bill will head to a conference committee to iron out differences before advancing to Governor Kelly.
Kevin Walker, IOM
Senior Vice President of Public Policy
(913) 766-7602 | (913) 526-6855