This Week in Topeka
March 14-18, 2022
Business, Economic Development & Local Government News from the Legislative Session
With just a few exceptions we’ve reached the time of year where committees are finished with their work. Most of the attention now returns to the House and Senate floors where the bodies will fine tune legislation before advancing it to the governor or sending bills to conference committees for additional work.
Conference committees are comprised of six members. Three from the House and three from the Senate. Of these members, four hail from the majority party and two from the minority party. It is in these conference committees where senators and representatives reconcile the difference that exist between their positions with the hope of finding common ground that can form final legislation garnering the approval of both chambers.
It’s the time of the session when the budget picture starts to come into clearer view. The Senate started things off by adopting its version of the budget, SB 444, on a 23-14 vote during floor action on Wednesday. The nearly $23 billion proposal includes leaving an ending balance in the state general fund of more than $350 million.
Senators added a provision requiring state contractors whose contracts exceed $50,000 in value to use the E-Verify system to verify that their workers are legally eligible to work in the United States. Among the rejected amendments was a proposal to disallow state IT contractors and subcontractors from utilizing overseas employees or employees working under the H1-B visa program to perform the duties under the terms of their state contract.
The House Appropriations Committee marked up its version of the state budget (HB 2588) on Thursday, and amended the contents of its bill into the former SB 267. The bill will be debated next week setting the stage for a budget conference committee between the two chambers.
The Senate Commerce Committee acted this week on HB 2703 and recommended the bill for passage by the full Senate. The bill consists of technical cleanup of HB 2196, last year’s comprehensive overhaul of the state’s unemployment system. Combined, the two pieces of legislation revamp the state’s beleaguered hardware and software that runs the unemployment system and makes significant changes to the employer rate tables, saving Kansas businesses millions of dollars.
The bills also enhance the relationship between the unemployment compensation program and the Kansas Works jobs program to assist unemployed Kansans in finding work. HB 2703 was previously passed by the House 121-0.
Despite concerns that rank-and-file lawmakers and the public have not had sufficient time to review details, the Kansas Senate voted 28-8 to approve new senate boundary maps. The approved map adds an additional Senate seat for Johnson County. The map, Liberty 3, can be viewed here. The legislation associated with the map is SB 563.
On Friday afternoon, the lone proposed House map, Freestate 3, got some company when Freestate 3C was introduced. Freestate 3, which is represented by HB 2737, was the subject of a hearing earlier in the week. As of yet, the House Redistricting Committee has not yet passed a bill out of committee.
Food Sales Tax
The House Assessment and Taxation Committee recommended HB 2711 for passage this week. The bill proposes to cut the food sales tax to 3.5% beginning on 1 July 2022. It also cuts the state’s overall sales tax rate to 6.3% from the current 6.5%.
The bill contains a mechanism to further reduce the food sales tax by 1.2% each subsequent year that the state’s Budget Stabilization Fund has at least a $100 million balance. It is estimated the bill would have a fiscal note of approximately $336 million the first year and would climb to more than $400 in subsequent years. The House version of the bill does not cut the food sales tax on food purchased at restaurants.
Previously this session the Senate adopted SB 339 which would eliminate the state sales tax on food entirely. No doubt the two bills will get reconciled in conference committee yet this session.
A portion of the state’s sales tax is set aside for transportation funding, so the business community and transportation advocates are working to ensure that the final proposal holds the transportation fund harmless.
Renewable energy has been a hot topic this session in the Senate Utilities Committee. Throughout the 2022 Session, the Committee has heard from industry experts, property owners and other stakeholders on multiple pieces of legislation focusing on health, safety, efficacy, regulation, and property rights associated with solar and wind energy production. Proponents of renewable energy have argued that the proposed legislation would be overly restrictive and shut down the burgeoning $14 billion industry in Kansas. Proponents of the legislation believe additional restrictions are necessary to protect people and property near the renewable energy facilities.
To date none of the legislation has advanced through the legislative process and on Thursday, the members of the Senate Tax Committee attempted to advance SB 374 and SB 325 by amending them into other pieces of legislation. Both efforts were rejected.
SB 374 would eliminate a property tax exemption for renewable energy production facilities while SB 325 establishes a procedure for landowners adjacent to a proposed solar or wind project to file a protest petition.
Advocates for the legalization of medical marijuana are making another push to secure passage of enabling legislation this session. They entered the 2022 session thinking this was the year to finally get their legislation across the finish line, but the issue has been largely quiet until this week when the Senate Federal and State Affairs Committee held several days of hearings on SB 560.
For the most part the broader business community has not weighed into the debate but did so this week after reviewing provisions in SB 560 that appear to conflict regarding medical marijuana in the workplace.
The legislation is clear that businesses retain the legal ability to regulate the “use, consumption, possession, transfer, display, distribution, transportation, sale or growing of marijuana” on their property.
However, the legislation also makes clear that in the case of worker’s compensation claims, “compensation shall not be denied” if the employee is registered as medical marijuana patient in accordance with the state law. The bill also amends the definition of misconduct and gross misconduct as it pertains to the state’s laws on unemployment compensation. Employers are concerned with these changes and will continue to work with lawmakers to assuage those concerns.
While enthusiasm has been high for sports wagering, difficulty in finding common ground has kept the issue from advancing. During the 2021 Session the Senate passed SB 84 on a 26-12 vote. The House saw three bills introduced with only one of them, HB 2199, getting a hearing.
The Senate bill authorizes sports wagering at the state’s four licensed casinos whereas the House was more focused on allowing sports wagering at retail lottery outlets. The Senate and House also differed greatly in how much tax would be added to bets that are placed with the Senate taxing the bets at a much lower rate.
The House is rumored to be working on a new proposal that might jumpstart the sports wagering conversation as the session moves to the closing weeks. Only time will tell if they can find common ground and put a bill on Governor Kelly’s desk.
Next week a handful of committee hearings will be held to finalize legislation but for the most part lawmaker’s time will be focused on floor action. Both chambers have a multitude of bills queued up for debate.
To get a look at the bills that may be taken up by the respective chambers next week, click here and look under two headings: “Bills Under Consideration to Concur or Nonconcur” and “General Orders.”
Kevin Walker, IOM
Senior Vice President of Public Policy
(913) 766-7602 | (913) 526-6855