Kansas Legislature Update – Week 10

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Last week, both the House Appropriations and Senate Ways and Means Committees began hearing and working on their respective budget rescission bills, which marks a turning point during any legislative session. House Bill 2468 and Senate Bill 269 make adjustments – based on actual revenues – to the already-approved FY18-19 biennial budget, ensuring the state closes its books in the black. Both committees plan to pass their rescission bills next week.

Also last week during a joint meeting of the Senate Select Committee on Education Finance and the House K-12 Budget Committee, lawmakers got their first look at the long-awaited school finance study prepared by Texas A&M professor Lori Taylor. The 157-page report predicts anywhere from $451 million to $2 billion needed over five years to reach varying degrees of K-12 student achievement expectations. It was not clear as of Friday whether those numbers were to all come from the State General Fund or took into account local property taxes and federal dollars. Regardless, it was less than good news for legislative leaders hoping for a significantly lower price tag – not a substantially higher one that would require passing another tax increase during an election year. The initial briefing, provided by state-hired attorneys, seemed to only cause more confusion and questions for Dr. Taylor who will be in Topeka on Monday for another joint hearing.

This Friday marks the final day for non-exempt committees to meet and consider legislation for the year. Legislators will be on the floor all next week debating bills, while conference committees are scheduled to meet the following week. First adjournment is currently set for April 6.

Noxious Weeds

The Senate Agriculture Committee heard from proponents on House Bill 2583 on Friday. The bill gives authority to the Secretary of Agriculture – with input from a 13-person advisory committee on which Kansas Agribusiness Retailers Association will have a seat – to designate a plant as noxious. Current authority lies with the Legislature, which can be a burdensome and time-consuming process. KGFA testified in support during the hearing. Opponents will testify on Monday, and the Committee plans to work the bill on Wednesday. It passed the House 101-16 before Turnaround.

Industrial Hemp

The House Agriculture Committee heard Senate Bill 263 on Wednesday. The bill establishes the Alternative Crop Research Act and allows the Kansas Department of Agriculture, alone or in conjunction with a state higher education institution, to research, grow and cultivate industrial hemp via a pilot program in Russell County. Research and development would target required soils, growing conditions, harvest methods, seeds most suitable for Kansas, and potential markets. KGFA is watching the issue closely. The Committee plans to work the bill on Tuesday. It passed the Senate 36-3 before Turnaround.

REINS Act

The House Commerce Committee heard and passed House Bill 2526 on Monday. The bill requires state agencies to perform a number of steps before proposing a rule or regulation to the Legislature. Modeled largely after Wisconsin’s REINS Act, agencies must research surrounding states’ approach, consult with the regulated community and obtain approval of their economic impact statement from the state budget director. Also, if the proposed regulation is estimated to cost more than $5 million over a two-year period on the regulated community to implement and comply, then a public hearing is required. KGFA is watching the issue closely and expects the bill to be debated on the House floor this week.

Scrap Metal Delay

The Senate Tax Committee heard Senate Bill 429 on Wednesday. The bill allows for a one-year extension to implement the Scrap Metal Theft Reduction Act passed in 2015 to fight scrap metal theft and strengthen the definition of “aggravated criminal damage to property” to include agribusiness. KGFA testified as neutral during the hearing, understanding the need for additional time to establish regulatory oversight yet restating support for the underlying law.

Rails-to-Trails

The House Agriculture Committee passed Senate Bill 331 on Tuesday. The bill designates two new state parks, including the Flint Hills Trail. It was amended to address stakeholder concerns regarding ownership and oversight of the trail and exempts it from separation distances for confined animal feeding operations. KGFA is watching the issue closely. The bill awaits consideration by the full House. The bill passed the Senate 26-14 before Turnaround.

Corporate Income

The House Tax Committee heard House Bill 2661 on Monday, which would create a new 10 percent tax rate on corporate income over $1 million. The current rate is 4 percent, plus a surtax of 3 percent for corporate income over $50,000. The bill is expected to raise $117 million in FY19, $119 million in FY20, and $121 million in FY21. KGFA testified in opposition during the hearing,stating that the increase would cause business to become less competitive, less profitable and hire fewer workers. There was little support for the bill, and it is not expected to be worked at this time.

Looking Ahead

With school finance and budget work on the horizon, things are finally starting to speed up. This week is already packed with a number of hearings and committee action on key bills. Here are a few we’re watching closely:

· HPIP Extension: The Senate Commerce Committee will work Senate Bill 430 on Tuesday, which will allow employers to carry forward any unused High-Performance Incentive Program (HPIP) tax credits at 75 percent of their value for an additional nine years. They currently expire after 16 years.

· Enterprise Zone Program: The House Appropriations Committee will hear on Wednesday and work on Thursday House Bill 2767. The bill would reinstate the Enterprise Zone Program, which provides income tax credits to businesses creating new jobs in Kansas through major capital investment projects. The program provides a sales tax exemption for construction materials and certain equipment.

Here is a link to all of the bills being tracked on your behalf. You can read a brief summary, history, upcoming actions, and the actual text of the bill. If you have any problems using the Bill Tracker, please contact Shahira Stafford at shahira@kansasag.org.