Updates and Alerts
LEGISLATIVE UPDATE: WEEK TEN (Mar. 16-20)
The fluid situation around COVID-19 and its expected disruption of the legislative schedule significantly heightened the pace and tension last week as lawmakers scrambled both to address key issues such as the state budget and a new statewide infrastructure program as well as make contingency plans to continue programs that would otherwise sunset this year absent a legislative extension. It was also to be the last full week for committees to meet ahead of the session’s second legislative deadline on March 25th, but that was instead pared to only one or two days and committees worked quickly to take action on several additional bills. Lawmakers ultimately adjourned last Thursday for their spring break – two weeks ahead of their originally scheduled April 3 first adjournment – with tentative plans to return to Topeka to wrap up the session starting April 27.
See below for highlights of the most recent business-related bill action.
The preliminary state budget – passed by the House passed (99-16), passed by the Senate (28-10), and now forwarded to the Governor — includes a proviso extending the economic development STAR bonds program for one year until June 30, 2021. If the program were not extended it would sunset on June 30, 2020, and communities with approved STAR bond projects that have not yet issued bonds (like the American Royal project in KCK and the Bluhawk development in Overland Park) would no longer have authority to issue those bonds. Lawmakers are expected to revisit eligibility and administration of the program likely next year.
A House committee approved and forwarded to the full House for consideration a bill that as amended includes enhancing an existing utility-based economic development tool to help attract large non-retail businesses to Kansas. The change would bring our state in parity with what Missouri (and other states) are already successfully offering, important to our competitiveness in attracting heavy utility users like large-scale data centers, advanced manufacturing, and food processors. Opponents want to ensure the bill’s protections for ratepayers are fair and adequate. A bill containing these provisions previously passed the Senate (39-0). Read about the amended bill here.
A Senate committee approved and forwarded to the full Senate for consideration a bill that includes provisions extending the sunset on K-12 high-density at-risk weighting, an issue important to several of our area school districts. As amended by the Senate committee, the sunset would be extended 3 years. High density at-risk weighting targets additional resources where there are high concentrations of poverty at either the school district level or school building level. This weighting would expire on June 30 if not extended. It is estimated repeal of the weighting would cost impacted school districts statewide about $50 million in resources. School districts, however, had said the underlying bill dealing generally with the use of at-risk funds – to which the weighting extension was added – was too restrictive and overly cumbersome. The Senate committee amended the bill with changes negotiated among stakeholders to make it more practical and to pare back the sunset extension from the House proposed 5 years to 3 years. The bill previously passed the House (111-14). See how House members voted here. Read about the amended bill here.
The previous week a House committee approved and forwarded to the full House for consideration a bill amended to include significantly expanding student eligibility for the current low-income students scholarship program – whereby an eligible child may be granted a scholarship voucher to attend a private school (including both religious and non-religious options), with those vouchers being funded through individual/corporate contributions for which a public income tax credit is given – by expanding program eligibility to students from all schools (no longer just the 100 lowest-performing public schools), free AND reduced lunch students (no longer just free lunch, which is the statutory definition of “at-risk”), and all ages (no longer just elementary schools). Essentially, the program would no longer be tied just to low-performing schools and at-risk kids. The bill does NOT change the current $10 million program cap, the value of the scholarship given, or the value of the tax credit given for a scholarship contribution. Proponents of the concept support more school choice; opponents say it diverts public resources toward private schools who can pick and choose which students to accept and may not follow the same accountability, transparency, and student service mandates required of public schools. Read about the amended bill here
The House passed (119-0), the Senate concurred (31-3), and the Governor signed a bill changing the maximum number of weeks allowed to be claimed for unemployment insurance benefits to 26 weeks, regardless of the unemployment rate, retroactive to January 1, 2020, and waiving the “waiting week” requirement before receiving unemployment benefits. Both provisions would sunset on April 1, 2021. Under current law, the maximum number of weeks is tied to the Kansas unemployment rate and a claimant for unemployment benefits is eligible to receive benefits after the claimant has been unemployed for a waiting period of one week. The bill was originally aimed at helping Wichita aviation workers impacted by the Boeing Max grounding but is now also considered critical to workers impacted by the COVID-19 pandemic. Read about the bill here. See how House members voted here. See how Senators voted here.
A House committee held a hearing on a bill as amended requiring the annual report business entities are currently required to file with the Secretary of State to be filed biennially beginning in 2022. Annual report fees will still be proportional (the $40 annual fee will become an $80 biennial fee.) The change is intended to allow businesses to reduce their annual paperwork. As introduced the bill had proposed allowing business entities to elect to file the annual report either annually, biennially or triennially. The bill previously passed the Senate (39-0). Read about the bill here. See how Senators voted here.
The Senate passed (36-3) and forwarded to the House a bill shifting the burden of proof to the county appraiser on matters of valuation or classification in appeals by a taxpayer before the district court. Under current law, a taxpayer has the option to appeal a decision by the Board of Tax Appeals (BOTA) that would allow for a new trial with the district court (de novo review). This bill would change the burden of proof from the taxpayer to the county appraiser to demonstrate the correctness of the property valuation or classification of residential or commercial property before the district court. Concerns have been raised about the bill’s potential to prompt taxpayers to pursue cases even when the evidence is not in their favor, as they no longer have the burden of proof to demonstrate why the BOTA ruling was wrong in a new trial before the district court. Read about the bill here. See how Senators voted here.
A Senate committee approved and forwarded to the full Senate for consideration a bill restoring the expensing deduction to individual income taxpayers, back in parity with corporate income taxpayers, after being repealed in 2012. 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. Read about the bill here.
A Senate committee held hearings on bills:
- Enacting the Kansas business financial protection act, prohibiting disclosure by the secretary of revenue of certain sales and use tax information, including tax reports, renditions or returns, any audit thereof, or the report of any investigation made with respect thereto, to taxing officials of other states. The purpose of the bill is to prevent the financial information of Kansas businesses engaged in online transactions from being shared with other states, with the intention of thwarting other states from imposing on Kansas businesses the burden of collecting and remitting sales tax for online sales under the U.S. Supreme Court’s Wayfair The proponent of the bill, Sen. Mike Thompson, testified he hoped it would become model legislation in other states such that Kansas would also be unable to impose the same requirement on out-of-state retailers doing business in Kansas. Read about the bill here.
- Requiring third-party online marketplace facilitators (such as Etsy or Airbnb) with more than $100,000 in sales in Kansas to collect and remit sales and transient guest taxes for transactions made through their online platforms. Kansas is one of only a handful of states that has not yet addressed the sales tax responsibilities of online marketplace facilitators. Read about the bill here.
A House committee held a hearing on a bill requiring local property tax rates to be reduced when property valuations increase and then establishing new notice, public hearing, and governing body vote requirements if a governing body proposes to increase property tax revenues, the so-called “Truth in Taxation” bill. It does not provide an exemption either for inflation or for new growth (i.e. new construction, property changing uses, property coming off of abatement/TIF). As amended the bill would also repeal the current property tax lid, exempt schools, and move the effective date to Jan. 1, 2021. The bill previously passed the Senate (39-0-1). See how Senators voted here. Read about the bill here.
The House passed (112-3), the Senate passed (37-2), and referred to the Governor for consideration a bill putting forth a new 10-year $10 billion statewide transportation and infrastructure program, now to be known as the Eisenhower Legacy Transportation Program. Key components of the plan include a more flexible “rolling” program approach using 2-year project selection process rather than a set 10-year program, prioritizing preservation, continuing multi-modal investment (roads, rail, air, bicycle, pedestrian) that would now include broadband access, and more partnerships with local communities to generate more local match dollars enabling more improvements across the state. The plan authorizes 5% of the program to be used for alternative delivery (a positive for our area). It creates minimum dollar commitments to building new modernization and/or expansion projects in each KDOT district through metrics developed by KDOT. State funding sources and amounts would remain about the same as under the T-WORKS program but with new protections against diverting those funds to general government purposes. Read a summary of the approved plan here. See how House members voted here. See how Senators voted here.
The Senate passed (39-0) a bill decoupling the Kansas Industrial Training (KIT) and Kansas Industrial Retraining (KIR) workforce training programs from the High Performance Incentive Program (HPIP) and enhancing the workforce training tax credit. The changes are intended to allow both the Department of Commerce and companies to better target and access state workforce training resources. Because the Senate committee added a very minor amendment tweaking the effective date, the bill will now go back to the House to decide whether to concur or not concur with the Senate’s change. The bill previously passed the House (125-0). Read about the bill here. See how House members voted here. See how Senators voted here.
A Senate committee approved and forwarded to the full Senate for consideration a bill as amended providing scholarships to eligible students for up to two years to attend a public or private eligible postsecondary educational institution in an associate degree program, career and technical education program, or baccalaureate degree completion program. Senators removed the bill’s House-passed provisions known as the PROMISE Act, providing scholarships for Kansas high school graduates who complete a two-year program at primarily a Kansas trade or technical school or community college in one of Kansas’s ten high-need labor areas, and instead substituted this Senate-proposed scholarship program called the Reinvestment in Postsecondary Education (RISE) Act. Read about the newly-amended bill here.
Lawmakers are now currently on break with tentative plans to return to Topeka to wrap up the session starting April 27. We’ll have more updates when they return!
Questions or feedback about an issue or the Chamber’s legislative advocacy? Contact email@example.com.
OUTGOING COMMITTEE CHAIR RECOGNIZED
At a recent Legislative Affairs meeting we recognized outgoing Committee Chair Lisa Tomlinson of Bank of Blue Valley-Lenexa Branch. As a token of our appreciation for her Chamber service, we presented her with a piece of the Kansas Capitol’s old copper dome!
The committee’s incoming Chair, who assumed leadership at our January meeting, is Andy Huckaba of Huckaba & Associates.
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.