Updates and Alerts

LAWMAKERS ADJOURN MAIN SESSION
Legislative Update – Week Eleven (Mar. 24-28)

The legislature has reached first adjournment of the 2025 session, returning in 10 days for a brief veto session. Lawmakers’ final week was focused on additional floor debate and special House-Senate negotiations – known as “conference committees” – where they try to iron out differences in House and Senate versions of bills to create a final proposed compromise for consideration by their legislative colleagues.

The week saw work on many bills, a number impacting the business community including bills related to tax policy, workforce development, legal reform, and transportation.

Lawmakers will take a brief recess before returning to the Capitol on April 10 for a short scheduled 3-day veto session, a period when lawmakers will wrap up any unfinished business and consider overriding any gubernatorial vetoes.

See below for highlights from Week Eleven at the Capitol:

State Budget
Proposing A State Budget For the Upcoming Fiscal Year. The full Senate approved (26-14) and the full House approved (89-36) the conference committee report on SB 125, putting forth a proposed state budget for the remainder of the current FY 2025 (which ends June 30) and upcoming FY 2026 (which begins July 1). This was the first year in decades the budget process was directed from beginning to end by lawmakers, who set aside the traditional gubernatorial-lead process. Despite a $210 million (1.9%) cut in State General Fund spending, including a 1.5% across-the-board reduction for state agencies (with a number of exceptions), current projections show the State year-end balance will be in the red by more than $460 million in FY 2028 (that does not take into account the state’s $1.8 billion Rainy Day Fund.) The proposed budget does include $10 million in additional special education funding (a spending flashpoint in recent years), a $1 million grant to KC BioHub, and other workforce development funding.  Read a summary. See how House members voted. See how senators voted. The measure now goes to the Governor for her consideration. Budget bills are the only type of bill that the Governor has the ability to veto individual provisions — a “pick and choose” veto power versus the typical “all or nothing” – and there are typically a number of spending allocations for which she will exercise this “line-item veto” authority.

Taxation
Eliminating Property Taxes Imposed By the State. The full Senate approved (40-0) and the full House approved (96-26) the conference committee report on SB 35, discontinuing, beginning TY2026, the state’s 1.5 mills of property taxation and backfilling the reduction in revenue from the State General Fund (primarily comprised of state sales and income tax revenues.) During debate, lawmakers said repealing the state’s 1.5 mills would save taxpayers $25.88 for a $150,000 home. This bill is among the options considered by lawmakers to help reduce property taxes. Read a summary. See how House members voted. See how senators voted. The measure now goes to the Governor for her consideration.
       The State currently levies 1 mill to support the State Educational Building Fund to support maintenance of state educational buildings and 0.5 mills for the State Institutions Building Fund to support maintenance of other state buildings. Under the bill, the transfer from the SGF to the SEBF would be $56 million in FY2027, adjusted in future years to reflect the average percentage change in appraised value of all residential real property in the state for the preceding 10 years. The transfer from the SGF to the SIBF would be $25 million in FY2027 and would increase by 2 percent in each future year.

Reducing Property Taxes By Limiting Valuation Increases. The full House rejected (37-88) a House-Senate negotiated conference committee report for HCR 5011, proposing a state constitutional amendment that would cap valuation increases for all classes of property at 4% as compared to TY2022, with exceptions for new construction and certain changes to the property. A subsequent motion in the House to reconsider also failed. A proposed constitutional amendment requires 2/3 approval by lawmakers, or 27 votes in the Senate and 84 votes in the House. Opponents in the House said the proposal would disrupt the fair market value system, creating a wide disparity in what taxpayers would pay, and would not meaningfully reduce property taxes because mill levies could still be raised. Read a summary. See how House members voted. Prior to the House’s action, the Senate approved the measure (27-13). See how senators voted.

Reducing Income Tax Rates Contingent On Revenue Growth. The full Senate approved (30-10) and the full House approved (84-38) the conference committee report on SB 269, providing for future individual, corporate, and financial institution income tax rate decreases contingent on future revenues exceeding specified baseline tax revenues and the balance in the Budget Stabilization Fund. Income tax rates would gradually be reduced through a “growth trigger” down to 4%, starting with individual income tax rates first and then moving to corporate rates – over time moving Kansas to a single-rate income tax system. Each year growth in income tax revenues that exceed the FY 2024 revenue baseline as set in the bill, adjusted for inflation, would be required to be used to buy down income tax rates. The bill was requested by the Kansas Chamber of Commerce. Read a summary. See how House members voted. See how senators voted. The measure now goes to the Governor for her consideration.

Education/Workforce Development
Expanding Educational Opportunities in High-Need Career Fields. The full House approved (76-48) the conference committee report on SB 24, expanding the postsecondary institutions eligible to participate in the state’s PROMISE scholarship program and increasing the program cap from $10 million to $15 million. The PROMISE scholarship program is aimed at growing the state’s workforce in specific high-need career fields and requires scholarship recipients to stay and work in Kansas for a specified period after graduation. Read a summary. See how House members voted. The conference committee report is likely to be taken up by the Senate during the veto session.

Streamlining Occupational Licensing. The full House approved (86-38) the conference committee report on SB 30, requiring after July 1, 2025, adoption of new occupational licensing requirements or material changes to existing licensing requirements to be approved by the legislature. The Behavioral Sciences Regulatory Board, Board of Examiners in Optometry, Board of Nursing, Kansas Dental Board, State Board of Healing Arts, State Board of Pharmacy, and the State Board of Technical Professions would be exempt from the provisions of the bill. The legislation is part of an ongoing effort to address workforce development by streamlining occupational licensing to move workers into jobs faster. Read a summary. See how House members voted. The conference committee report is like to be taken up by the Senate during the veto session.

Supporting Technical Education. The full House concurred (122-0) in HB 2195, creating the Kansas Technical College Operating Grant Fund within the State Treasury to be administered by the State Board of Regents. Expenditures from the Fund would be for instruction and operations to meet target objectives established by the Postsecondary Technical Education Authority, but the bill does not establish a revenue source for the new Fund. Supporters highlight the positive impact previous funding has had on technical colleges and their ability to create new programs to meet state workforce needs, as well as the adverse impact of deferred maintenance on tech campus facilities. A Senate committee had made a minor amendment. Read a summary. See how House members voted. The measure previously passed the Senate (40-0). See how senators voted. The measure now goes to the Governor for her consideration.

Economic Development
Expanding Eco Devo Incentive Reporting. The full House concurred (88-37) in HB 2304, requiring local governments to report local economic development incentive program information to the Secretary of Commerce to post on the state’s publicly-available economic development incentive program database, created to enhance transparency. A House committee amended the bill to provide more specific requirements about who must report, what must be reported, and when, and to authorize the Commerce Secretary to impose an administrative fee of 1%  (up to $1,000) on incentive recipients for the costs of administering the database. A Senate committee made additional revisions to what must be reported and when. Read a summary. See how House members voted. The measure previously passed the Senate (28-12). See how senators voted. The measure now goes to the Governor for her consideration.

Fast-Tracking Housing Development. The full House concurred (83-40) in HB 2088, enacting the “fast-track permits act” requiring local governments to meet a specified deadline of 60 days for issuing building permits for single family residential development. The bill had originally applied to all market sectors and all types of approvals but was heavily amended by House and Senate committees after concerns were raised that a one-size-fits-all directive applicable equally to all types of development and all types of approvals would be problematic. Read a summary. See how House members voted. The measure previously passed the Senate (30-10).  See how senators voted. The measure now goes to the Governor for her consideration. 
       Proponents of the measure primarily cited the need to facilitate more rapid housing development to address the state’s housing shortage. Cities raised concerns that the measure as introduced did not factor in important statutory planning processes and public input opportunities, timelines dictated by state and federal testing requirements, and also noted it could cost developers more in the long run by removing the flexibility of initial plan reviews.

Attracting Data Centers. After being rereferred back to committee by the full House, the House Taxation Committee again approved and forwarded for consideration SB 51, creating a new economic development sales tax incentive aimed at attracting data centers. The incentive would include providing a sales tax exemption for the construction or remodeling of a qualified data center in Kansas, the purchase of data center equipment, eligible data center costs, and certain labor costs, available to qualifying firms that commit to a minimum investment of $250,000,000 and meet new Kansas jobs and other requirements. The House committee previously amended the bill to reduce the duration of the periods for which the sales tax exemption would be valid for each level of investment, and did not make further changes during its second consideration of the bill. Proponents say Kansas is missing out on important project opportunities that would bring significant jobs, investment, and technological resources to the state because it lacks an incentive that 30 other states offer, while skeptics question the ROI the incentive would actually bring and the industry’s impact on the state’s power and water supplies. Read a summary. The measure previously passed the Senate (34-6). See how senators voted. 

Legal/Regulatory
Fighting Retail Crime. The full Senate approved (40-0) the conference committee report on HB 2347, which includes provisions extending crimes involving financial cards to include gift cards. Lawmakers are continuing to take steps to address retail crime that is driving up costs for all consumers. Read a summary. See how senators voted. The conference committee report is likely to be taken up by the House during the veto session.

Addressing What Constitutes Contractual Restraint of Trade. The full Senate concurred (38-0) in SB 241, amending the Kansas restraint of trade act to clarify the enforceability of certain restrictive covenants in business relationships, particularly focusing on non-solicitation agreements between businesses, owners, and employees. A House committee amended the bill to provide further clarifications and protections. Proponents say the bill will promote workforce stability and client relationships and protect employees and owners from overly broad restrictive covenants. Read a summary. See how senators voted. The measure previously passed the House (101-17). See how House members voted. The measure now goes to the Governor for her consideration.

Modernizing the LLC Act. The full Senate approved (40-0) and the full House approved (120-4) the conference committee report on HB 2371, revising and modernizing the Kansas revised limited liability company act, the business entity transactions act, and the business entity standard treatment act. Read a summary. See how House members voted. See how senators voted. The measure now goes to the Governor for her consideration.

Requiring Registration of Real Property Owned/Leased By Foreign Principals From Countries of Concern and Prohibiting Acquisition of Drone Technology From Countries of Concern. The full Senate approved (38-1) and the full House approved (98-24) the conference committee report on SB 9, which addresses commercial activities in the state tied to foreign countries of concern. “Countries of concern” are designated foreign adversaries to the U.S. and currently include China (including Hong Kong but excluding Taiwan), Cuba, Iran, North Korea, the Russian federation, and the Bolivarian republic of Venezuela. Read a summary. See how House members voted. See how senators voted. The measure now goes to the Governor for her consideration.
       Specifically, the bill prohibits a foreign principal from a country of concern from directly or indirectly acquiring an interest (ownership or leased) in non-residential real property located within 100 miles of a military installation in this state or adjacent state (originally HB 2290.) Because military installations include not only military bases but facilities like national guard armories, the ban essentially covers the entire state. If a foreign principal directly or indirectly owns or acquires such interest, they would be required to file registration of ownership with the Attorney General within 90 days after July 1, 2025, or the date that the interest is acquired, whichever is later. If the foreign principal fails to register the real property interest, they would be required to divest the property (the Secretary of State is required to notify all businesses and organizations that register with that office of the new reporting requirement and the AG must provide a 30-day warning and opportunity to cure for failure to report.) These provisions are narrowly tailored to reflect a negotiated agreement between proponents of the measure and stakeholders representing the agricultural, banking, and business communities who had expressed concerns about the practicality and impact of earlier versions. A similar bill in the 2024 session (SB 172) was vetoed by Governor Kelly. The bill also prospectively prohibits (after July 1, 2025) a state or local governmental entity from acquiring critical components of drone technology produced in countries of concern or by a foreign principal of a country of concern (originally HB 2293.)

Prohibiting Use of Genetic Analysis Tools Produced by Countries of Concern. The full House concurred (87-38) in HB 2313, as amended now including SB 234 prohibiting medical and research facilities from using genetic sequencers or operational software used for genetic analysis that is produced in or by a named foreign adversary to the U.S. Read a summary. See how House members voted. The measure previously passed the Senate (37-3). See how senators voted. The measure now goes to the Governor for her consideration.

Revealing Third-Party Litigation Funding. The full Senate concurred (40-0) in SB 54, amending the Kansas Code of Civil Procedure to require the disclosure of third-party litigation funding agreements. Third-party funding agreements are where a third-party entity, other than an attorney representing a party, has agreed to pay a plaintiff’s legal expenses in return for a contractual right to receive compensation that is contingent on and sourced from any award proceeds. There’s been explosive growth in third-party funding agreements in recent years and it is now a multi-billion-dollar industry worldwide, as hedge funds and other investment groups “invest” in litigation – most often against larger businesses thought to have deep pockets. The bill would not prohibit third-party funding agreements. A House committee amended the bill to remove a provision requiring the reporting of such agreements to the Judicial Council for study. Read a summary. See how senators voted. The measure previously passed the House (87-31). See how House members voted. The measure now goes to the Governor for her consideration.

Transportation
Increasing Fees on E/V and Hybrid Vehicles to Support Road Maintenance. The full Senate approved (40-0) and the full House approved (102-22) the conference committee report on HB 2122, increasing the annual license fees of electric and plug-in hybrid vehicles, establishing license fees for electric motorcycles and electric trucks and truck tractors, and distributing the fees to the State Highway Fund, starting January 1, 2026. Read a summary. See how House members voted. See how senators voted. The measure now goes to the Governor for her consideration.

The rise in electric and hybrid vehicles has reduced statewide motor fuels tax collections, which play a significant role in funding maintenance of the state’s road system. Lawmakers have previously considered this proposal to ensure electric and hybrid vehicles still contribute toward maintenance of the roads they drive on. Opponents say it discourages the purchase of environmentally-friendly electric and hybrid vehicles that are already a more expensive investment. 

Banking
Revising Administration of Public Idle Funds. The full House concurred (117-5) in HB 2152, revising public funds administration with the aim of having more state and local government idle funds be invested in Kansas-based institutions. A Senate committee made only technical amendments to the bill. With some municipal governments raising concerns the bill as introduced could cause a potential reduction in investment returns, the Chair of the committee had encouraged the stakeholders to keep talking through the legislation to try to come to an agreement, which ultimately was reached. Read a summary. See how House members voted. The measure previously passed the Senate (40-0). See how senators voted. The measure now goes to the Governor for her consideration.

Water
Solving the State’s Growing Water Crisis. The full Senate approved (40-0) and the full House approved (116-8) the conference committee report on HB 2172, establishing a water program task force and water planning work group to study the state’s water programs and make recommendations to the legislature on water policy and funding. Concern has been escalating to more forcefully address depletion of the Ogallala Aquifer in western Kansas, with dwindling water supplies in a number of areas putting residents and important sectors of the state’s economy at risk. Read a summary. See how House members voted. See how senators voted. The measure now goes to the Governor for her consideration.           

COMING UP NEXT
Following adjournment of the main body of the session on March 28, lawmakers will take a recess before returning to the Capitol on April 10 for a short scheduled 3-day veto session, a period when lawmakers will wrap up any unfinished business and consider any gubernatorial vetoes.

LENEXA-AREA LEGISLATOR GUIDE
Kansas Senate

Kansas House of Representatives

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 asherard@lenexa.org or (913) 888-1414.

STATE LAWMAKERS VISIT THE CHAMBER

On Friday, January 17, several Lenexa-area lawmakers brought the State Capitol to the Chamber, joining a packed house of Legislative Affairs, Board of Directors, and Economic Development Council members to provide their insights on the new 2025 state legislative session and answer attendees’ questions about business issues and the legislative process.

Special thanks to House Minority Leader Brandon Woodard, D-Lenexa, Senate Minority Leader Dinah Sykes, D-Lenexa, Representative Laura Williams, R-Lenexa, and Representative Jo Ella Hoye, R-Lenexa, for sharing their time and experience, and to our 2025 Legislative Affairs Chair Dave Kepper of Security Bank of KC for keeping the meeting on track!

CHAMBER BOARD APPROVES 2025 STATE LEGISLATIVE AGENDA

The Lenexa Chamber Board of Directors has approved a legislative platform to guide our advocacy in the upcoming 2025 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 2025 State Legislative Agenda.

Questions or feedback?  Call Ashley Sherard, CEO, at 913-888-1414 or email asherard@lenexa.org.