Kansas Legislature Update – Week Five

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With the official halfway point in the session nearing, Friday was the last day for bills to be introduced in non-exempt committees. All bills that have not passed their House of Origin by Turnaround on February 22 – or are not “blessed” to an exempt committee – are considered dead for the year. 

Groups Propose NAFTA Letter of Support to Governor Jeff Colyer

As previously reported, Kansas Grain and Feed Association is part of a coalition of agricultural and manufacturing entities that have been working toward a state resolution stating that Kansas supports the continuation and modernization of the NAFTA program. Several versions of language have been drafted, all met with pushback by some conservative lawmakers that don’t want to go on record as opposing President Donald Trump’s stance on trade policy. After more discussion with partners, it was determined that a letter of support from new Governor Jeff Colyer on behalf of the state of Kansas would be the better route, and even carry more weight than a state resolution. The proposed letter would express to Washington that Kansas supports continuing the North American Free Trade Agreement.

KARB Annual Report Presented to Legislature

Randy Stookey, Senior Vice President and administrator of the Kansas Agricultural Remediation Board (KARB), presented the 2017 annual report before the Senate Agriculture committee on Tuesday. The KARB program was created by the legislature in 2000 to provide financial assistance for expenses related to ag-chemical remediation projects required by the Kansas Department of Health and Environment. Under the program, commercial grain elevators and participants in the ag-chemical and fertilizer industry pay fees on licenses and registrations that are deposited into the Remediation Reimbursement Fund. The Board distributes money from the fund to eligible applicants up to $200,000 per site. In fiscal year 2017, the fund received $1,314,356.00 from industry fees and the Board approved 72 applications for nitrate and ag-chemical remediation projects, totaling $1,314,811.79. No State General Fund money goes into the program, and 100 percent of the fund is collected from the industry as a form of self-insurance and distributed back to the industry to help offset ag chemical cleanup costs.

KDA FY18 Budget Approved

The House Ag Budget committee voted to approve the Kansas Department of Agriculture’s fiscal year 2018 supplemental budget request to the full House Appropriations committee on Wednesday. Their proposed budget enhancement included an additional $250,000 for a traceability study for a national animal disease traceability program. 

Noxious Weed Advisory Committee Proposed

House Bill 2583 was heard in the House Agriculture committee on Thursday, which would amend the Kansas Noxious Weed Law to provide the Secretary of Agriculture authority to designate noxious weeds by rule and regulation rather than by the Legislature through statute. The bill would also create a State Noxious Weed Advisory Committee, which includes a position to be nominated by the Kansas Agribusiness Retailers Association (KARA). KGFA jointly testified with KARA in support of the bill with a proposed amendment to the unlawful act provisions, requiring a knowing violation of the act be committed before a person can be found guilty of a misdemeanor or assessed a civil penalty. The amendment also retains the maximum amount of civil penalties currently in the act. We anticipate the bill to be worked this week.

Removal of End Guns Fails

House Bill 2564 stalled in the House Water and Environment committee on Thursday. The bill would allow the Kansas Department of Agriculture’s Division of Water Resources to develop regulations authorizing the Chief Engineer to order the removal of end guns on a center pivot irrigation system and to prohibit any future use of an end gun in areas closed to new appropriation within the boundaries of a groundwater management district. The bill would also prohibit a reduction in the authorized allocation of any vested or perfected appropriation right or under any permit to appropriate water. The Chief Engineer currently maintains similar authority under the IGUCA and Local Enhanced Management Area (LEMA) programs. Several agricultural groups opposed the bill during its hearing on Thursday, including the Kansas Farm Bureau, Kansas Livestock Association, Kansas Corn Growers Association, and the Kansas Pork Producers Association. The bill is essentially dead for the year.

Water Plan Spending Restrictions Bill Heard

House Bill 2528 was heard in the House Water and Environment committee on Thursday, which would require a transfer of $8 million to the State Water Plan from the Economic Development Initiatives Fund (EDIF), prior to making any other statutory distribution from the fund. The bill would also remove the current statutorily required transfer of $6 million to the State Water Plan fund from the State General Fund. The bill specifically allocates $4 million of the EDIF transfer to water-related research centers (75 percent) and to the Kansas Water Office (25 percent). KGFA appreciates the additional EDIF funds for the State Water Plan but is concerned about the required spending provisions that remove discretion currently granted to the Kansas Water Office. Chairman Tom Sloan was the only proponent. We will watch to see if the bill is worked this week.

What we testified on or monitored closely last week …

House Bill 2526 was heard in the House Commerce committee on Monday. The bill adds a ranking minority member to the Joint Committee on Administrative Rules and Regulations and requires agencies to report on the impact regulations will have on business. During the hearing, the Kansas Chamber proposed an amendment that would halt any proposed regulation with an economic impact of $3 million over two years on the regulated community. The Legislature would then be required to proactively pass a bill, should they want that regulation to continue. The language mirrors the federal legislation known as the REINS act. Committee response to the amendment was positive, as there seems to be bipartisan support to pass this type of legislation this year.

House Bill 2511 passed out of the House Transportation committee on Tuesday favorably and awaits consideration by the full House. The bill extends the renewal period for commercial driver’s licenses from four to five years. KGFA testified in support.

House Bill 2168 was heard in the Senate Commerce committee on Tuesday. The bill creates the Ad Astra Rural Jobs Act, which provides a tax incentive for capital investments in rural businesses. KGFA testified in support. It carries a roughly $1 million fiscal note to implement the program over fiscal years 2018 and 2019, and has a $20 million cap on tax credits beginning in FY2020.

Senate Bill 334 was heard in the Senate Commerce committee on Wednesday. The bill allows corporations to carry forward unused High Performance Incentive Program (HPIP) tax credits indefinitely at a 25 percent haircut. It carries a roughly $30 million fiscal note.

Senate Bill 303 was heard in the Senate Tax committee on Thursday. The bill allows small businesses immediate expensing instead of a depreciation schedule. A technical fix retroactive to January 1, 2017, the provision was left out of last year’s tax plan when small businesses were put back on the state tax rolls. It carries a roughly $9 million fiscal note.

House Bill 2489 was heard in the House Tax committee on Thursday. The bill was introduced by the Kansas Department of Revenue (KDOR) to clarify in statute that corporations must use three-factor apportionment of their income, rather than take advantage of the election allowed in the multistate tax compact. After concerns were raised around the retroactivity piece in the bill, the agency agreed to craft new language removing that provision and rather prohibiting any company from submitting an amended tax return from 2008 forward based on this issue. Association staff participated in a conference call on Friday afternoon with KDOR Secretary Williams, the Kansas Chamber and other stakeholders, and we await new bill language from the department.

Substitute for Senate Bill 285 passed the full Senate on Thursday by a vote of 33-5. The bill forms a task force of both legislators and transportation industry folks to begin the process to study and make recommendations for the next 10-year Kansas transportation plan. The bill now heads to the House Appropriations committee for consideration.

What we’re testifying on or monitoring closely this week…

House Bill 2367 is having a hearing in the House Tax committee today. The bill repeals two provisions from the property tax lid law passed in 2016. It changes property valuation procedures and gives county appraisers increased access to taxpayer information. KGFA is testifying in opposition.

Informational hearings on property valuation of grain elevators are being held tomorrow in the House and Senate Tax committees. Several members will be testifying on their property tax valuation increases last year. KGFA-hired commercial appraiser Jim Hudson will also speak about the changes that were made and still need to be made to the Property Valuation Division’s grain elevator guide.

There will be a joint meeting of the House and Senate Tax committees on Wednesday by the Kansas Department of Revenue and Kansas Society of CPA’s regarding the impact on Kansas from the federal tax reforms.

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