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This Week in Topeka

March 15-19, 2021

Business, Economic Development & Local Government News from the Legislative Session

The Kansas Legislature continues to work toward first adjournment that is now just a couple of weeks away. Committees continue to work through critical legislation, the budget is beginning to take shape and the House and Senate are taking more formal action on their respective floors.

While the building is still eerily quiet for this time of year, there seems to be a little sense of normalcy returning to the statehouse.  The House, after starting the year socially distanced, has returned all its members to the chamber floor. Up until this week, many House members were assigned seating areas in the visitor galleries for temporary workspaces to comply with social distancing provisions.

Despite early fears that COVID might once again disrupt the legislative session, it looks like the 2021 session will not feature a repeat of 2020’s rapid and early shutdown.


Emergency Management Powers – The legislature reached agreement on SB 40, their bill addressing governmental actions during declared emergencies. The bill is a response to the COVID-19 pandemic and what many saw as outdated or unchecked authority in current statute. Both chambers approved the conference committee report with very strong votes (31-8 in the Senate and 118-5 in the House) and sent the bill to Governor Kelly on Thursday.

The bill impacts a wide variety of entities from school boards to local boards of health and establishes procedures for parties who believe they have been harmed by actions in response to public health emergencies.

You can view a summary of the bill here.

Unemployment – The Senate Commerce Committee began its work on HB 2196, a bill revamping the current unemployment system in Kansas. Previously the bill was passed by the House 87-36 after several weeks of work. The Committee spent three days hearing testimony from stakeholders and will focus on amending and advancing the bill early next week.

The bill addresses a multitude of issues with the current unemployment system and includes revisions to rate tables impacting employer contributions to the system. Without changes employers will face skyrocketing increases in unemployment payments.

For a summary of the current version of the bill click here.

Economic Development Incentives – The House Commerce Committee held hearings on four bills updating and improving several economic development incentives currently used in Kansas. The bills, previously approved by the Senate, extend sunset provisions, provide for more oversight, and modify the programs to make them more effective and competitive with other states.

  • SB 65 -decouples the Kansas Industrial Training (KIT) and the Kansas Industrial Retraining (KIR) incentives from the High-Performance Incentive Program (HPIP).
  • SB 66 – extends and expands the Angel Investor Tax Credit.
  • SB 91 – allows for the transferability of HPIP tax credits.
  • SB 124 – extends, improves, and establishes more oversight for the STAR Bonds program.

The STAR Bonds program has been the subject of specific attention by the legislature and is probably the most controversial topic in this package of bills. Critics point to the varied success of previous STAR Bond projects. Supporters believe the proposed changes will bring more critical evaluation of proposed projects and ultimately a much stronger return on the investment.

Business Liability – SB 283 extends business COVID claim immunity provisions enacted by the 2020 legislature. The liability protection, currently scheduled to expire on March 31, 2021, would be extended to March 31, 2022. The extension is deemed necessary as the impact of COVID extended beyond what was anticipated last year.

Specifically, the bill currently reads:

“{Sec. 5.} K.S.A. 2020 Supp. 60-5504, as amended by section 10 of 2021 Senate Bill No. 14, is hereby amended to read as follows: 60-5504. (a) (a) Notwithstanding any other provision of law, a person, or an agent of such person, conducting business in this state shall be immune from liability in a civil action for a COVID-19 claim if such person was acting pursuant to and in substantial compliance with public health directives applicable to the activity giving rise to the cause of action when the cause of action accrued.”

The bill, already approved 31-8 by the Senate, also contains language supporting telemedicine by out-of-state physicians. It was the subject of a hearing on Thursday in the House Judiciary Committee.

Property Tax Reimbursement – On Friday the Senate Assessment and Taxation Committee began its hearing on SB 286, a bill that would establish a procedure for businesses to file claims related to government shutdown and operational restrictions due to COVID-19. The hearing is scheduled to resume next week.

As reported before, the bill is positioned as mechanism for staving off lawsuits like one filed by a Wichita gym owner claiming the COVID-19 restrictions were an illegal “taking” or use of his property.

The bill establishes a fund using federal COVID relief appropriations allocated to Kansas and establishes a process by which claims could be settled rather than litigated. Successful claimants could receive cash compensation or relief against future tax liabilities. Details of the bill can be found here.

Corporate Filing Dates – HB 2391 amends current statutes regulating how certain business filings are handled with the Kansas Secretary of State. The bill would change the annual report filing provision to a biennial filing and allow for electronic signatures. The bill also includes several technical clean ups with related statutes. The bill previously passed the House 121-3 and was the subject of a hearing on Wednesday in the Senate Transparency and Ethics Committee.

Tax Cut Ban – Several legislative committees are looking at how to best utilize federal stimulus money that is beginning to flow into Kansas.  Bills dealing with unemployment, education and property tax reimbursements are looking at using part of the projected $1.6 billion in federal money being allocated to Kansas to support COVID recovery efforts.

How that money can be used and whether it runs afoul of language restricting tax cuts is still being clarified. However, language in the federal legislation has some concerned it may trump the state’s ability to cut taxes.

Kansas Attorney General Derek Schmidt has joined some of his peers in expressing concern to the United States Treasury Department that the prohibition is clearly an affront to the separation of powers between the state and federal government. You can read more about the AG’s concerns here.

Child Care Tax Credit - HB 2414 is scheduled for a hearing next week in the House Taxation Committee. Currently, C-corps and certain other entities offering onsite childcare benefits to their employees are eligible for a 50% tax credit the first year and a 30% credit thereafter.

This bill would extend the 50% tax credit beyond the first year and provide more options for employers to qualify.

Advocates for the bill believe the increased benefit will encourage more employers to provide a childcare benefit to their employees. Proponents have shown how worksite childcare programs are a valuable recruitment and retention tool for top talent.

Budget – The Senate was first out of the gate with its version of the budget when debated and passed SB 267 on Tuesday.  The House version, HB 2397, will soon be finalized and debated.  This is still the first step in a long process that plays out in the closing days of the session after better revenue projections are produced in late April.

The lengthy debate included multiple amendment attempts. Of note was an amendment that successfully added E-Verify to the budget bill. The amendment only pertains to contractors who have more than $50,000 of business with state agencies and does not pertain to private businesses and their hiring practices.

Transgender Athletes bill - SB 208 is seen by some as an equity issue for women engaged in sports while to others it is viewed as attack on transgender Kansans. Like legislation pending in other states, it is expected the fate of the issue could wind up in court should the bill become law.

For business in Kansas who have contracts in other states, passage of the bill could have unintended consequences.  Some jurisdictions, like San Francisco, have laws prohibiting contracts with business hailing from states with what they deem to be discriminatory laws on the books.  Kansas was placed on its list in 2017 following passage of SB 175 in 2016 and has proven costly to some Kansas businesses due to lost contracts.

To read previous This Week in Topeka reports, CLICK HERE

Kevin Walker full version

written by

Kevin Walker, IOM

Senior Vice President of Public Policy

(913) 766-7602 | (913) 526-6855