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Kansas Legislature Update, February 12 – February 16
Today is the last day for committees to meet and work bills. Starting tomorrow, each Chamber will be on the floor until adjournment on Thursday, which is the halfway point in the legislative session. All bills not passed by their House of Origin by “Turnaround” are dead for the year. Legislators will then enjoy a five-day break before returning on February 28. The highlight of the second half will no doubt be the long-awaited school finance study due by March 15 and seeing how the Legislature responds – will they appropriate more money to schools or attempt a highly-controversial constitutional amendment?
Tracey Mann Named Lieutenant Governor
During a Kansas Livestock Association dinner, Governor Jeff Colyer announced Tracey Mann as his lieutenant governor for the remainder of this term and the campaign this fall. Mann, a real estate agent from Salina, lost to Tim Huelskamp in his 2010 run for Kansas 1st District Congress.
Federal Tax Reform Impact on Kansas
The Kansas Department of Revenue, with the help of the Kansas Society of CPAs, testified before a joint House and Senate Tax committee on Wednesday regarding the impact on Kansas revenues from the federal tax code changes. The report projected that Kansas will collect more than $505 million in additional revenues over the next three years, $138 million in FY19, $180 million in FY20, and $188 million in FY21. Many lawmakers are seeing this as good news as they wrestle with a potential $600 million boost in state aid to public schools.
Property Tax Mill Levy Increase Introduced
House Tax committee chairman Steve Johnson introduced House Bill 2740, which would raise the statewide mill levy from 20 mills to 38.43 by 2021. The bill is in response to the Kansas Supreme Court’s last decision in the Gannon vs. Kansas lawsuit over adequate and equitable school funding, which some believe calls for roughly $600 million in additional K-12 funding. Johnson has stated that property taxes are the last option that hasn’t yet been discussed by the Legislature in regard to school finance, as income taxes were raised last year and the sales tax in 2015.
Motor Fuels Definitions Clean-up
The full House passed by a voice vote House Bill 2488 on Thursday with no discussion or amendments. The bill was introduced by the Kansas Department of Revenue to clean-up definitions of a “special fuel” under the motor vehicle fuel tax statute. Since the definition of “special fuel” includes the word “alcohol,” fuel retailers can collect $0.26 per gallon for gasohol (ethanol blend fuel). HB 2488 would clarify that special fuels are essentially diesel fuels, and gasoline and gasohol are by definition “vehicle motor fuels” and should be taxed at $0.24 per gallon. Renew Kansas testified as neutral during the Tax committee hearing. The bill is up for final action in the House today.
Grain Elevator Property Valuation Hearings
The House and Senate Tax committees held informational hearings on property valuations of grain elevators in Kansas on Monday. KGFA, the Kansas Cooperative Council (KCC), Erik Lange with Mid Kansas Coop, Jason Murray with Alliance Ag and Grain, LLC and consultant Jim Hudson all testified to the drastic increases in property taxes on the grain industry seen in recent years.
Lawmakers were educated on the variability in the industry between taxing districts, issues with the Kansas Department of Revenue Property Valuation Division’s (PVD) Grain Elevator Property Guide Comparative Sales Analysis, and the impact the valuation increases have on the viability of the grain business. While positive changes were made to the industry guide for 2018, additional changes are necessary to fairly and equitably establish the fair market value of a grain storage facility.
Kansas Water Office Budget Approved
The House Agriculture Budget Subcommittee approved the FY19 budget of the Kansas Water Office (KWO) on Thursday. The budget includes $4 million for the State Water Plan Fund (SWPF), $3 million from the State General Fund and $1 million from the Economic Development Initiatives Fund. During the meeting, the Kansas Department of Agriculture and the KWO agreed that the funds were enough to hire a Water Conservation Area Coordinator and an additional KWO FTE by reducing streambank stabilization projects by $200k. The proposed budget awaits consideration will by the Appropriations committee.
Water Bills Killed, Tabled
Several bills were heard and tabled on Tuesday in the House Water and Environment committee. HB 2665 would have established a Kansas water law study commission, which the Kansas Department of Agriculture (KDA) testified in opposition due to the amount of staff time that would be taken from more vital water projects. House Bill 2726would have established the non-corn irrigation grant program and low-water use (15” or less per growing season) crop grant program. It would have also authorized the Kansas Water Office to issue $50 million in bonds for the purpose of funding such programs. Opponents included the KDA, Kansas Corn Growers Association, and the Kansas Farm Bureau. Last, House Bill 2732 would have authorized KDA’s Division of Conservation to create and administer water banks. Secretary McClaskey requested that legislation is held off until next year to allow the review committee time for further vetting and stakeholder agreement.
Property Tax Valuation Appeals
The House Tax committee held a hearing on House Bill 2367 on Monday, which would repeal current protections for commercial and residential property owners on the valuation and levy of property taxes. These protections adopted into law in 2016, prohibit county appraisers from requesting information related to an appraisal for obtaining mortgage financing, any fee appraisal with an effective date over 12 months prior to January 1 of the valuation year, or documents detailing individual lease agreements. The bill also proposes to eliminate protections for a taxpayer when they are successful in their appeal to the Board of Tax Appeals by requiring the county appraiser to utilize an independent, third party appraiser. Renew Kansas testified in opposition, along with the Kansas Chamber and Kansas Association of Realtors.
Small Business Expensing
The Senate Tax committee passed out favorably Senate Bill 303 on Thursday. Under current law, Kansas corporations, banks, trust companies, and savings and loans are allowed to claim the Kansas expensing deduction for investments in qualifying machinery and equipment that are placed into service for tax year 2014 and each future tax year. The bill would extend the provision to small businesses and all taxpayers beginning in tax year 2017. The bill awaits consideration by the full Senate.
HPIP Credits Extended
The Senate Commerce committee worked, amended and passed out Senate Bill 334 on Thursday. The original bill proposed allowing employers to carry forward any unused High-Performance Incentive Program (HPIP) tax credits indefinitely at 75% of their value. They currently expire after 16 years. The committee amended the bill by capping the extension at nine years, essentially making HPIP credits only available for 25 years. The bill now awaits consideration by the full Senate.
Boiler Inspection Fee Fund Abolishment
The Senate Ways and Means committee passed out Senate Bill 353 on Thursday, which would abolish the Kansas Boiler Inspection Fee Fund. The State Fire Marshall has jurisdiction over the fee-based inspection of all pressurized vessels. As money from this fee fund has historically been swept, the Fire Marshall intends to abolish the fee fund and then work to abolish the underlying fee for the inspection service. The bill awaits consideration by the full Senate.
What’s Coming This Week …
HB 2511 will be considered by the full House today. The bill extends the renewal for commercial driver’s licenses from four years to five. Renew Kansas testified in support during the hearing.
HB 2643 will receive a hearing in the House Higher Education Budget committee today. The bill repeals the in-state tuition benefit policy for undocumented students. Renew Kansas will testify in opposition as part of the Kansas Business Coalition for Immigration.
A Kansas letter advocating for the continuation of NAFTA will be submitted to Governor Colyer for his signature on Tuesday. Renew Kansas and several member companies have signed on in support.
What We’re Monitoring …
Work Comp Experience Ratings
House Bill 2487 was heard on February 1 in the House Insurance committee. The bill would prevent drastic increases in employers’ workers compensation experience ratings as the result of motor vehicle accidents that are not the fault of the employer or employees.
Statewide Broadband Task Force
House Bill 2701 was heard in the House Utilities committee on Wednesday. The bill establishes the Statewide Broadband Task Force, which would study and identify opportunities and potential funding sources to expand broadband infrastructure and services in Kansas. A report would be due to the Legislature in January 2019. The bill is awaiting committee action.
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 email@example.com.