Updates and Alerts
LEGISLATIVE UPDATE: WEEK FOUR (Feb. 3-7)
A joint meeting of the House and Senate Commerce committees received an overview of the economic development STAR bonds program (as well as the Department of Commerce’s proposed changes to it), a program that temporarily foregoes sales tax revenues to enable qualifying development projects, as well as an update on the “Border War” agreement to limit incentives for businesses moving between certain Kansas and Missouri counties.
A Senate committee held a hearing on repealing the current sunset on K-12 high-density at-risk weighting, an issue important to several of our area school districts. Without action to remove or extend the sunset, this weighting – which provides additional funding where there are concentrations of at-risk students at either the district or the school building level, essentially a reflection of density of poverty – will end as of July 1, 2020. It is estimated repeal of the weighting would cost impacted school districts statewide about $50 million in resources. Read about the bill here.
House and Senate committees received consultant presentations on the study conducted to look at electricity rates in Kansas, with the goal of recommendations for how those rates (which appear higher than in surrounding states) might be reduced, followed by a response and input from electric utility stakeholders. Check out the consultant study, contracted for by lawmakers and conducted by London Economics, here.
A Senate committee held a hearing on allowing businesses to elect to file certain business reports with the secretary of state annually, biennially or triennially. The option is intended to allow businesses to reduce their annual paperwork; there is no fee reduction. Read about the bill here.
A Senate committee held hearings on a bill requiring local property tax rates to be reduced when property valuation increases and then establishing new notice, public hearing, and governing body vote requirements if a governing body proposes to increase property tax revenues (it does not repeal the current property tax lid – read more about the bill here) and on a bill prohibiting property tax valuation increases solely as the result of normal repair, replacement or maintenance of an existing structure (read more about the bill here.)
A House committee held a hearing on increasing the state income tax standard deduction from the current single filing $3,000, married filing $7,500, and head of household filing $5,500, up to for tax year 2020 and all years thereafter, single filing $4,000, married filing $8,000, and head of household filing $6,000, and adds a cost-of-living adjustment each year. The estimated cost of the proposal is about $50 million. Read about the bill here.
A House committee forwarded to the full House for consideration a bill known as the Taxpayer Protection Act, a consumer protection measure that institutes certain requirements on paid tax preparers. Read about the bill here.
Governor Laura Kelly’s appointed Council on Tax Reform released its report making initial tax policy recommendations to the 2020 Legislature, including recommendations related to enacting e-fairness legislation, taxing online digital assets such as e-books and streaming subscription services, and adding an exemption under the property tax lid for local transportation projects. Read the report here.
House and Senate Tax Committees received a report from The Tax Foundation, a Washington DC think tank, on its comprehensive study of Kansas taxes conducted last year and its recommendations for lawmakers to consider. Read the report here. You can find highlights from the report in the testimony they presented to Kansas lawmakers posted here.
A House committee held a hearing on creating the Kansas targeted employment act, providing income tax credits to employers who employ people on Medicaid and other public subsidy/entitlement programs. Read about the bill here.
A Senate committee spent two days receiving presentations on how Kansas higher education and community colleges are helping drive workforce development, commerce, and economic development in the state.
Notable Action Coming Up This Week (Feb. 10-14)
NOTE: Legislative schedules can change daily.
On Tuesday a House committee and on Thursday a Senate committee will receive a consultant presentation on the Department of Commerce’s effort to evaluate and update the state’s vision and strategic plan for economic development in Kansas. Learn more about this project here.
On Wednesday a Senate committee will hold a hearing on a bill enhancing a utility-based economic development tool to help attract large non-retail businesses to the state. Read about it here.
On Monday and Tuesday a Senate committee is scheduled to discuss and take possible action on a bill to expand income-based Medicaid eligibility, although it appears likely the House’s failure last week to approve an abortion-related state constitutional amendment may put action on hold. The bipartisan plan – lead by Gov. Laura Kelly and Senate Majority Leader Jim Denning – currently includes full expansion up to 138% of the federal poverty level income (for 2019, that’s roughly $17,000/yr for an individual or $35,000 for a family of four) starting Jan. 1, 2021; a work referral program; a plan for a reinsurance program that would help control costs in the individual health insurance marketplace; and fees assessed to the state’s managed care organizations and hospitals to help financially support the state’s funding portion. The expansion program would end if the federal government’s funding match ends or drops below its current 90%. The Governor’s proposed budget sets aside $17.5 million for FY2021 (which covers a half-year of implementation, Jan-Jun 2021) and then $35 million for FY2022 (Jul 2021-Jun 2022). Read more about the bill here.
On Tuesday a Senate committee is scheduled to take possible action on a bill authorizing sports wagering, which as proposed would be managed by Kansas non-tribal casinos and include onsite, online, and app wagering. Read more about the bill here.
On Wednesday a House committee is scheduled to take possible action on a bill amending the process by which administrative rules and regulations are adopted by state agencies, in particular as it relates to certain steps requiring the Kansas Budget Director’s review and approval. The Budget Director testified the current framework includes time-consuming bureaucracy that could be eliminated while still retaining the goals of the original legislation. Read about the bill here.
On Thursday a House committee will hold a hearing on a bill increasing the minimum age to purchase or possess cigarettes and tobacco products from 18 to 21 and prohibiting flavored vaping products. This initiative is commonly referred to as “Tobacco 21.” Read about the bill here.
A House committee will hold hearings on Monday on bills extending for corporations the net operating loss carryforward period for purposes of income taxes from the current 10 years to 20 years (Kansas has one of the most restrictive NOL carryforward standards in the nation, while the federal standard is indefinite – here), a bill requiring online marketplace facilitators (like Etsy, AirBnB, etc) with sales in Kansas greater than $100,000 to collect and remit sales and transient guest taxes for transactions in the state made on their online platforms (here), and a bill requiring out-of-state online sellers with sales greater than $100,000 in Kansas to collect and remit sales tax on transactions within the state — it does not specifically address marketplace facilitators (here). The last bill may possibly be retroactively applied back to January 2019, and if so would likely bring legal challenges because the U.S. Supreme Court decision authorizing states to require out-of-state retailers without a physical presence in the state to collect and remit sales tax was clear that no retroactive collection of sales tax is allowed.
On Tuesday the same House committee will hold a hearing on a bill held over from 2019 that includes provisions restoring the expensing deduction to individual income taxpayers, back in parity with corporate income taxpayers, after being repealed in 2012 (here). Expensing allows certain business expenditures to be treated as an operating cost – providing for an immediate deduction – rather than as a capital asset, which instead depreciates over time. On Wednesday the committee is scheduled to take possible action on a bill allowing taxpayers to elect to claim itemized deductions vs. the standard deduction for state income tax purposes regardless of the taxpayer’s election for federal income tax purposes. Currently taxpayers must use the same deduction for state purposes as they do for federal tax purposes, leading some taxpayers to pay more in state income taxes than they otherwise would if this election was decoupled – estimated in the aggregate at around $60 million/year. This issue impacts the business community because non-corporate businesses pay their income taxes through the individual income tax system. Read more about the bill here.
On Wednesday at 11am Governor Kelly and KDOT Secretary Julie Lorenz will hold a press conference to share details of proposed legislation putting forth a new statewide transportation program to be known as FORWARD. Watch the press conference on Facebook Live on the Department of Transportation’s Facebook page. Read a news release about the proposed legislation here and read about the bill here.
On Monday a House committee is scheduled to take possible action on a bill clarifying liability related to K-12 students participating in school-sponsored internships, on-the-job training, and other work-based learning programs defined as a school activity, providing liability protection for businesses that participate in such programs and helping address a barrier cited by employers in offering this important workforce experience (changes to the bill are expected to address concerns but read about the bill as proposed here) and on a bill providing scholarships for any Kansas high school graduate who completes a two-year program at a Kansas trade or technical school or community college in one of Kansas’s ten high-need labor areas, intended to help ensure Kansas has the skilled workforce it needs, direct young people into programs that are valuable as they enter the workforce, and help head off student loan debt (read about it here).
On Thursday a House committee will hold a hearing on a bill amending reciprocity guidelines for out-of-state occupational licenses. The bill aims to remove barriers to employment for individuals moving into Kansas for professions where occupational licenses are required — Kansas already has a similar law in place for military spouses, and this bill amends those statutes to apply more broadly to new residents as defined in the bill. In circumstances where Kansas standards exceed that of another state, a qualifying individual may be granted a temporary permit while completing the necessary educational requirements of the Kansas license. Read about the bill here.
AREA LEGISLATORS MEET WITH CHAMBER COMMITTEE
On Friday, January 24, all seven Lenexa-area state legislators were guests of the Chamber’s Legislative Affairs Committee to talk issues in Topeka, resulting in good dialogue and good fun! Thanks to Kansas Sen. Dinah Sykes and Kansas Reps. Tom Cox, Charlotte Esau, Cindy Holscher, John Resman, Susan Ruiz and Brandon Woodard for taking time to engage with your business constituents.
If you would like to join other Chamber members in learning more about the issues and help lead the way on advocating for our community, contact Ashley Sherard at firstname.lastname@example.org.
2020 LEGISLATIVE UPDATE SERIES
The Lenexa Chamber is partnering with other area local chambers on a series of events throughout the state legislative session to enhance communication and interaction between the business community and our state legislative delegation.
These events feature area legislators on hand to discuss issues, answer questions, and provide the latest updates (it’s also a great opportunity to network with members from other chambers!) A list of legislators scheduled to appear at each event, subject to change, will be announced.
ALL EVENTS WILL BE HELD AT:
DoubleTree by Hilton Kansas City-Overland Park
10100 College Blvd.
CHAMBER BOARD APPROVES 2020 STATE LEGISLATIVE AGENDA
The Lenexa Chamber Board of Directors has approved a legislative platform to guide our advocacy in the upcoming 2020 state legislative session. The platform addresses a spectrum of issues important to the business community including tax policy, key business costs and regulations, K-12 and higher education, health care, transportation, economic development, and others.
For a summary of the platform, please click here.
Questions or feedback? Call Ashley Sherard, Vice President and Director of Legislative Affairs, at 913-888-1414 or email email@example.com.