This Week in Topeka
January 17-21, 2022
Business, Economic Development & Local Government News from the Legislative Session
After taking Monday off to honor the legacy of Martin Luther King, Jr. the Legislature returned to action on Tuesday. A few important measures were worked on the House and Senate floors, but the bulk of the action remained at the committee level.
One of the major tasks before the legislature is to draw new legislative boundaries based on the recently completed census. Population growth in our area is creating a particular challenge for lawmakers as they draw new congressional maps. Population shifts to the east within the state mean that Johnson and Wyandotte counties now have too many residents to remain entirely in one district. With so many common interests in the metro region, how the two counties will be dealt with has become a major focus of the ongoing discussions.
On Friday, the Senate went through several hours of debate on Substitute for SB 355 which speaks to the Ad Astra 2 congressional map. While the map proposes to keep Johnson County entirely in the third congressional district, it does cut Wyandotte in half largely along I-70. To the south, the newly constituted 3rd district would also include all of Miami, Franklin and Anderson counties.
The extended debate allowed for consideration of several alternative maps and a series of procedural moves before the body took final action and adopted the Ad Astra 2 map on a 26-9 vote. There are many steps to go but keep in mind much of what is said during debate is done to enter points into the official record should legal challenges be waged.
In addition to the changes for Johnson and Wyandotte counties, this map moves the City of Lawrence into the 1st Congressional District with the majority of central and western Kansas while surrounding Douglas County remains in the 2nd.
The House Redistricting Committee, moving a bit more methodically than their Senate counterparts, held hearings spread over a couple of days and clarified a lot of details on process and procedures along the way. Expect the House Redistricting Committee to take action on a congressional map sometime next week.
Once lawmakers address the new congressional boundaries, they will turn their attention to state house and senate district boundaries. To view the proposed maps and the data behind them, click here.
Medical Care Executive Order
On January 6, Governor Laura Kelly issued Executive Orders 22-01 and 22-02 dealing with regulations and licensure of health care providers in medical facilities and adult care homes respectively. The orders, sought by the healthcare community and like emergency procedures enacted during 2021, seek to ease regulatory requirements placed on these medical care providers that would ease staffing shortages as they deal with the crush of Covid patients they have been seeing for nearly two years.
Based on new laws enacted by the legislature during the 2021 session, it was necessary for the legislature to take action to extend the duration of these orders beyond 15-days. In a matter of days, both the House and Senate adopted HB 2477 and sent the bill to Governor Kelly for her signature. It is expected she will sign the bill.
The bill, HB 2477, extends the emergency provisions until January 20, 2023.
Kansas stands on the precipice of landing a major and transformative economic development project but one key to making this happen is quick adoption of SB 347/HB 2497 – a bill that creates a new economic development tool designed to meet the needs of a so-called “mega” project. Mega projects are described as extremely large and transformative projects that can shape a state’s economic landscape like few other projects can.
While details are not known due to non-disclosure agreements, the Kansas Department of Commerce has shared that the project would lead the creation of a 3 million-square-foot advanced manufacturing facility hosting 4,000 permanent jobs with an average pay of $50,000. The location of the prospective site is also confidential.
The new tool created in SB 347 and HB 2497 would also allow the incentives – at a reduced level – to be extended to a maximum of five suppliers supporting the new manufacturer at its facility. The benefit targeted to suppliers will give Kansas a competitive advantage in keeping the selected suppliers in state.
Combined, it is projected that this innovative manufacturing facility and its suppliers would account for $4 billion in capital investment in our state. Critics contend that too much is unknown, the rush to create this new tool is fraught with danger, and the use of an incentive tool to lure this potential project is not the best method to bring economic prosperity to the state. State officials say that in the past few years Kansas has competed for – and lost out on – 11 mega projects. This proposal is designed to change the outcome and help Kansas put a mega project in the win column.
It was stated during committee hearings that Kansas is one of two finalists for this project and a decision is imminent.
Credit Card Surcharges
This week, a schedule hearing on HB 2316 was expected in the Senate Assessment and Taxation Committee but health issues led to a cancellation of the hearings in the committee this week. Currently businesses are prohibited from imposing credit and debit card surcharges to consumers and this bill would end that prohibition. The bill passed the House 90-34 last session.
Lawmakers continue to grapple with issues related to energy and utilities. In recent years concerns have been raised with utility costs, the integration of green technologies, reliability of current infrastructure and most recently the fallout from the February 2021 extended deep freeze. This week utility companies and their associations made several presentations to address these concerns to assist lawmakers in building their knowledge base as they ponder legislative action. Next week telecommunications providers will have their turn to talk about issues impacting their industry and how they serve Kansas customers.
Lastly, legislation will be considered by the Senate Utilities Committee dealing with wind and solar leases.
Lawmakers will look to address the technical cleanup of the unemployment bill that was passed during the 2021 session. Last year’s landmark legislation provided for changes in the state’s unemployment system that sought to overhaul virtually every aspect of a system that contributed to caseload backlogs and fraudulent payouts. The bill also provided for enhanced security to protect workers’ private information, reimbursing the unemployment trust fund for losses due to fraud and adjustments to the rate tables limiting increases in the contribution rates from employers. The changes being addressed this year are minimal and largely technical in nature.
Lawmakers will also receive updates from the Kansas Department of Labor regarding the status of the changes required by last year’s legislation revamping the unemployment system.
As expected, there have been a host of bills introduced related to schools and a handful related to vaccinations. Beyond those proposals here are few additional bills of interest that were filed this week:
SB 347 - Enacting the attracting powerful economic expansion act to provide for tax and other incentives for projects in specified industries, or for national corporate headquarters, that involve a significant capital investment, including a refundable tax credit for a portion of the investment, reimbursement of certain payroll costs and training costs, retention of certain payroll withholding taxes, a sales tax exemption for project construction and a property tax incentive for projects located in a foreign trade zone.
SB 354 - Excluding discounts and coupons from the sales or selling price for sales tax purposes.
SB 359 - Expanding the eligible uses for the 0% state rate for sales tax for certain utilities and the levying of sales tax on such sales by cities and counties and authorizing cities and counties to exempt such sales from such city or county taxes.
SB 361 - Concerning an employer's maximum liability for permanent total disability compensation and requiring an employer to pay such disabled employee during the continuance of such disability from the date of maximum medical improvement for the lifetime of the employee at the weekly rate of the compensation in effect on the date of injury for which compensation is being made.
HB 2487 - Providing a 0% state rate for sales and use taxes for sales of food and food ingredients and providing for the levying of taxes by cities and counties, providing for an exemption from sales and use taxes for sales of farm products sold at farmers' markets, and discontinuing the nonrefundable food sales tax credit.
HB 2488 - Establishing the EV energy equity road repair tax act and providing for a road repair tax on electricity distributed from a public charging station for electric vehicles.
HB 2493 - Establishing certain requirements for property classified for residential purposes and land devoted to agricultural use.
HB 2497 - Enacting the attracting powerful economic expansion act to provide for tax and other incentives for projects in specified industries, or for national corporate headquarters, that involve a significant capital investment, including a refundable tax credit for a portion of the investment, reimbursement of certain payroll costs and training costs, retention of certain payroll withholding taxes, a sales tax exemption for project construction and a property tax incentive for projects located and active in a foreign trade zone program.
HB 2499 - Providing for a refund of sales and compensating use taxes paid on sales of property used in video, internet access and telecommunications services.
HB 2502 - Authorizing retail liquor stores to sell and deliver alcoholic liquor and cereal malt beverages to a caterer, public venue, club or drinking establishment located in any county.
HB 2518 - Amending the city general improvement and assessment law dealing with the creation of improvement districts; requiring mailed notice by first class mail to all property owners proposed to be included in an improvement district; eliminating the ability of resident property owners of more than one-half the area proposed to be included in an improvement district to petition to form a district; and requiring disclosure in real estate contracts that the property is subject to special assessments and making such contracts voidable by the buyer if such notice is not included in the contract.
HB 2526 - Enacting the Kansas home inspectors professional competence and financial responsibility act and providing for registration for home inspectors with oversight by the attorney general.
Kevin Walker, IOM
Senior Vice President of Public Policy
(913) 766-7602 | (913) 526-6855