Updates and Alerts
KEY TAKEAWAYS FROM WEEK SIX
Friday, February 23, will mark the legislative session’s “turnaround” deadline, the midway point of the session and a deadline by which non-exempt bills must be acted on by their chamber of origin in order to continue to advance (House bills out of the House, Senate bills out of the Senate.) Committee action picked up in Week Six as committees rushed to consider and advance bills ahead of the deadline – committees will only meet for the first two days of Week Seven before spending the rest of the week convened on the House and Senate floors debating legislation.
1. Tax Plan Veto Override Attempt Running Out of Time
Republican legislative leaders are running out of time for an attempt to override Governor Kelly’s veto of the Republican-proposed tax plan passed by lawmakers earlier this year. Because of a statutory 30-day window to take action on overriding a veto, at least one chamber must successfully take override action by Feb. 23 or the opportunity will expire. The House is projected to have the 2/3 votes necessary to override (84 votes), but the future has been less certain in the Senate where votes are believed to be at least one short of the required 27. The override attempt has been expected several times, but legislator absences have made scheduling a challenge because of the anticipated close vote.
As a reminder, the plan’s centerpiece policy change proposes moving the state to a single-rate state income tax system, but also includes additional provisions impacting income, sales, and property taxes. Read an overview here.
2. Unemployment Comp Reform Measure Approved By House Committee
A House committee amended and advanced to the full House for consideration House Bill (HB) 2570, a compromise unemployment compensation reform measure being supported by leading representatives for the state’s business community. The bill proposes several changes to the unemployment insurance system with provisions targeting such issues as tax rates, wage base, defining benefit year, length of temporary unemployment, and job seekers not complying with work search requirements.
Among its provisions, as amended the bill cuts positive-balance employers’ taxes by 50% in 2025 and increases the taxable wage base to 50% of the state average weekly wage in 2026 for all employers. The bill allows for eight weeks of temporary unemployment benefits for all employers (both positive- and negative-balance); because of forced weather closures beyond their control, highway contractors would be eligible for 16 weeks with approval from KDOL. KDOL would also be required to develop a voluntary process for employers to report unemployment claimants not complying with work search requirements, aimed at combatting interview “ghosting” by claimants.
One of the most contentious points of compromise was providing one-time 100% forgiveness of negative-balance employers’ balances in 2026. While there was initially concern about the impact on the UI Trust Fund, projections ultimately showed strong benefits to helping negative-balance employers get back on their feet, that such forgiveness would not jeopardize the Fund, and other reforms will substantially increase the pressure to effectively manage claims and remain positive-balance going forward.
The committee made a number of amendments to the legislation, but you can click here for an overview of the original bill. The measure is now eligible for consideration by the full House.
3. Reducing Administrative Burden By Increasing Rules & Reg Oversight
A House committee held a hearing and is expected to take action on business-backed House Bill (HB) 2648, strengthening legislative oversight of state administrative rules and regulations, with the goal of better managing the cost and effort necessary to comply with state administrative requirements.
Inspired by the proposed federal Regulations from the Executive in Need of Scrutiny (REINS) Act, the bill modifies current law to put stronger requirements on state agencies when promulgating rules and regulations, including requiring more robust economic impact research and requiring that proposed regulations exceeding a certain estimated economic impact must be authorized by the state legislature.
Currently there is a legislative Joint Committee on Administrative Rules and Regulations (JCARR) to which agencies must present proposed regulations before they are adopted, but JCARR has no authority or power to reject proposed rules & regulations – a situation some lawmakers have found frustrating, believing agencies are implementing what are de facto policy changes through rules & regs.
4. Renewed Debate Over Vaccination Status
A Senate committee held hearings on two bills that include provisions impacting employers as it relates to vaccination status, renewing a debate dating back to the pandemic. Senate Bill (SB) 390 and Senate Bill (SB) 391 create a civil cause of action against an entity, employer, healthcare facility, school, or person who discriminates based on an individual’s having refused a vaccine on the basis of conscience, and prohibits an employer from laying off an employee based on vaccination status. The authority of the secretary of health and environment to quarantine individuals for a communicable disease, including diseases like tuberculosis, is also repealed. Read an overview of SB 390 here and SB 391 here.
Proponents generally argue individual health freedom is paramount, while opponents say that shouldn’t supersede broader public health or safe workplaces. The business community has generally opposed such prescriptive mandates, arguing employers are in the best position to judge how best to manage their workforce and should not be mandated either to require or not require vaccinations. Businesses also strongly oppose the creation of new civil liabilities.
5. Issues Impacting Business Advanced
More bills impacting the business community advanced this week, including:
- Reducing Tax Penalties. A House committee amended and advanced to the full House for consideration Senate (SB) Bill 127, which includes:
- Reducing penalties for the late filing or the failure to file property tax statements listing property for assessment and reducing penalties for the discovery of escaped property and reporting changes after the initial statement. Under current law, a county appraiser adds 5% to the assessed value of the property as a penalty for the late payment of property taxes paid within the month they are due, with an additional 5% penalty for each additional month up to 25%. The bill would reduce penalties for the late payment of property taxes to 2% of the property’s assessed value, with an additional 2% for each additional month up to a maximum of 10%. The bill also reduces the penalty for escaped property taxes and for property taxpayers who fail to deliver a full and complete statement of assessment from 50% to 12.5%.
- Decreasing the penalties for failing to timely remit withholding income taxes of employees by employers. The bill would replace the 15% penalty for employers not timely remitting withholding taxes with a graduated penalty system from 2%-15% based on how late the taxes are remitted.
- Providing a sales tax exemption for sales of property and services used in the provision of telecommunications.
All of these provisions were part of legislation in the 2023 session that was vetoed for unrelated reasons. Click here for an overview of the bill.
- Attracting Large Data Centers. A House committee advanced to the full House for consideration House Bill (HB) 2450, creating a new economic development incentive program for large-scale data centers with a minimum investment of $600 million and meeting minimum job requirements. Data centers house computing equipment that processes and distributes very large volumes of data, meeting growing technology demands and enabling the computing “cloud.” Approved projects would receive a number of state and local sales tax exemptions including on equipment (data centers replace servers frequently), remodeling materials and labor, and electricity (data centers are large consumers of electricity). Supporters noted the expanding use of technology makes data centers critical and about half of states already have incentives in place to attract them, putting Kansas at a competitive disadvantage. Click here for an overview of the bill.
Looking ahead, we expect committees next Monday and Tuesday to consider and possibly take action on legislation impacting the business community including:
- Supporting Child Care Resources to Remove a Workforce Barrier. House committees will hold a hearing on House Bill (HB) 2664, aimed at supporting affordability and availability of child care.
- Expanding Scholarship Support for High-Need Career Fields. A House committee will take final action on bills expanding scholarship support for students studying in our state’s high-need career fields, such as nursing, information technology and security, mental health, advanced manufacturing and building trades, and early childhood education. Another bill would expand a program providing scholarships to a spouse or dependent of a military servicemember who died in service. The bills include House Bill (HB) 2539 (expanding the PROMISE Act), House Bill (HB) 2645 (expanding nursing service scholarships), and House Bill (HB) 2646 (expanding the hero’s scholarship program).
- Limiting Local Regulation of Home-Based Businesses. A House committee will hold a hearing on House Bill (HB) 2704, limiting the ability of municipalities to regulate “no impact” home-based businesses.
- Clarifying the SALT Parity Act. A Senate committee will hold a hearing on House Bill (HB) 2465, clarifying the State and Local Tax (SALT) Parity Act’s determination of taxable income of an electing pass-through entity and providing for the passing through of tax credits to electing pass-through entity owners. These provisions were part of 2023 legislation that was vetoed for unrelated reasons.
- Authorizing K-12 Education Savings Accounts. A Senate committee will hold a hearing on Senate Bill (SB) 469, establishing K-12 “education savings accounts” (ESA) for eligible students (qualifies for free or reduced-priced meals, has an annual family income that is less than or equal to 250% of the federal poverty guidelines, or has a disability) to divert their public school funding to an ESA to be spent on qualifying expenses, including tuition at nonpublic schools not subject to the same requirements, reporting or testing as public schools.
- Expanding the Low Income Students Scholarship Program. A Senate committee will hold a hearing on Senate Bill (SB) 485, further expanding the tax credit for Low Income Students Scholarship Program by authorizing students attending public schools with low proficiency scores and certain private elementary and secondary students to participate in the program. The LISSP provides state income tax credits for financial contributions used for scholarships for eligible students to attend eligible non-public schools. The program has been expanded several times since its inception.
- Expanding Local Initiative and Referendum. A Senate committee will hold a hearing on Senate Bill (SB) 474, extending city-level initiative and referendum – whereby voters may force a public vote to enact a proposed ordinance – to include administrative ordinances. Administrative ordinances can address issues like zoning, Special Use Permits, appropriations, and much more.
LENEXA-AREA LEGISLATOR GUIDE
- Dist 21 – Senate Minority Leader Dinah Sykes, D-Lenexa (entire City of Lenexa) – Dinah.Sykes@senate.ks.gov
Kansas House of Representatives
- Dist 17 – Rep. Jo Ella Hoye, D-Lenexa (portion of north-central Lenexa) – JoElla.Hoye@house.ks.gov
- Dist 23 – Rep. Susan Ruiz, D-Shawnee (portion of northeast Lenexa) – Susan.Ruiz@house.ks.gov
- Dist 117 – Rep. Adam Turk, R-Shawnee (portion of western Lenexa) – Adam.Turk@house.ks.gov
- Dist 30 – Rep. Laura Williams, R-Lenexa (portion of south-central Lenexa) – Laura.Williams@house.ks.gov
- Dist 108 – Rep. Brandon Woodard, D-Lenexa (portion of central and eastern Lenexa) – Brandon.Woodard@house.ks.gov
Interested in a bill and want to learn more?
- Explore the legislature’s website kslegislature.org to find House and Senate calendars, links to proposed bills, and committee information including live meeting audio links and posted testimony.
- Watch House and Senate sessions and many committee meetings via the Kansas Legislature’s YouTube channel.
- Access archived committee meeting audio recordings here.
- Follow legislative action simultaneously detailed on Twitter using the hashtag #ksleg.
- Call the State Library’s toll-free legislative hotline at (800) 432-3924. Calls and questions are confidential.
- Ask questions such as how to read the calendar, what’s existing law and what would change in a proposed bill, etc, by contacting Ashley Sherard at firstname.lastname@example.org or (913) 888-1414.
AREA LEGISLATORS MEET WITH CHAMBER
The Kansas Capitol came to the Chamber on Friday, January 12, when Lenexa-area state legislators were guests of the Chamber’s Legislative Affairs Committee, Board, and Economic Development Council to talk about issues in Topeka and connect with our members!
The Chamber looks forward to working this year with Kansas Senate Minority Leader Dinah Sykes and Kansas Reps. Jo Ella Hoye, Susan Ruiz, Adam Turk, Laura Williams, and Brandon Woodard.
CHAMBER BOARD APPROVES 2024 STATE LEGISLATIVE AGENDA
The Lenexa Chamber Board of Directors has approved a legislative platform to guide our advocacy in the upcoming 2024 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.
Click here to view the Chamber’s 2024 State Legislative Agenda.
Questions or feedback? Call Ashley Sherard, CEO, at 913-888-1414 or email email@example.com.