Updates and Alerts
LEGISLATIVE WEEK IN REVIEW (FEB. 15-19)
Week 6 maintained the legislative session’s intense pace, which will continue this week – the final week for committees to meet and advance bills before lawmakers focus on floor action ahead of the first major deadline of the session.
Legislators last week continued to dig into one of the business community’s biggest issues of the year – the pandemic’s impact on the unemployment compensation system and fraud that added to the drain. House and Senate committees are both expected to have bill proposals addressing the issue ready this week. Bills related to tax, transportation, and economic development also saw forward movement.
Read highlights of notable bill action impacting the business community last week and in the coming week below.
WEEK IN REVIEW (FEB. 15-19)*
The House Commerce Committee began discussing possible action on HB 2196, legislation including comprehensive employer-suggested solutions to addressing COVID-related impacts and fraud on the unemployment system and the Employment Security Trust Fund (ESTF). The proposed legislation addresses a number of unemployment compensation issues, including recalibrating solvency and credit adjustment triggers and tax tables, providing economic relief to businesses related to claimant fraud, and modernizing KDOL’s aging computer system (blamed for contributing to delayed payments and fraudulent claim rates believed to be among the highest in the nation.) The committee is scheduled to continue its discussion of the bill on Tuesday, Feb. 23. Read details about the proposals from employers in HB 2196 here and here. Read comments about UI fraud in Kansas from a third-party UI claims administrator. Read the full text of the bill. Read the estimated fiscal impact.
The Senate Commerce Committee held hearings and began discussing on SB 177, the Senate’s mirror legislation to HB 2196 putting forth comprehensive employer-suggested solutions to addressing COVID-related impacts and fraud on the unemployment system and the Employment Security Trust Fund (ESTF). The committee is expected to continue its discussion and take possible action next week. Read the full text of the bill. Read the estimated fiscal impact.
The House Taxation Committee approved and forwarded to the full House HB 2105, legislation establishing tax filing and withholding tax requirements related to employees who temporarily work in multiple states. This issue primarily impacts workers who travel outside their home state on business trips for temporary periods who then may incur unforeseen tax liabilities and obligations in states where they travel. Kansas currently has a one-day threshold for non-residents working in the state before tax and withholding requirements are triggered — this bill would extend that “safe harbor” threshold to 30 days (but the bill requires there be reciprocity with the employee’s home state before the longer 30-day threshold would apply.) The committee made no amendments to the bill. Read the full text of the bill. Read the estimated fiscal impact.
The House Taxation Committee approved and forwarded to the full House SB 47, legislation enacting the Kansas Taxpayer Protection Act applicable to paid tax return preparers, a consumer protection measure prohibiting certain conduct and requiring a preparer’s signature and tax identification number on returns and claims. The intention is to help protect consumers from bad actors among paid tax return preparers. The committee made no amendments to the bill. The Senate previously passed the measure (39-0). Read the full text of the bill. Read a summary of the bill. See how senators voted.
The House Taxation Committee held a hearing on HB 2239, legislation extending the Kansas corporate income tax net operating loss carryforward from 10 years to 20 years. Kansas has one of the most restrictive state NOL carryforward standards in the nation at 10 years. The committee is scheduled to discuss and possibly take action on the bill on Wednesday, Feb. 24. Read the full text of the bill. Read the estimated fiscal impact.
The House Taxation Committee held a hearing on HB 2186, legislation providing for an election in the apportionment of business income for purposes of income taxation, authorizing the option of single sales factor apportionment for certain taxpayers. The taxpayer’s election would be binding for 10 years. Currently, apportionment is determined using the three-factor approach of calculating a company’s property, payroll, and sales in the state. Twenty-nine states have moved to the single sales factor approach to encourage capital investment in the state. To minimize fiscal impact, the bill is narrowly written such that only a limited number of NAICs code businesses related to agriculture, manufacturing, and production/storage of electricity would be eligible. Read the full text of the bill. Read the estimated fiscal impact.
The House Taxation Committee held a hearing on HB 2230, legislation imposing sales tax on digital property (like online books, music, games, apps, etc) and subscription streaming services (like Netflix) starting July 1, 2021. KDOR testified Kansas is among only 17 states that do not tax digital products. The proposal is expected to generate approximately $50 million in new revenue for the state but faces fairly strong opposition in the Legislature (a proposed amendment in the Senate to tax digital goods failed (5-27).) Read the full text of the bill. Read the estimated fiscal impact.
The House Taxation Committee held a hearing on HB 2197, legislation authorizing counties to provide a property tax abatement for buildings and improvements (including commercial property) destroyed or substantially destroyed by a natural disaster. The committee is scheduled to discuss and possibly take action on the bill on Wednesday, Feb. 24. Read the full text of the bill. Read the estimated fiscal impact.
The House Appropriations Committee approved and forwarded to the full House HB 2101, legislation extending the University Engineering Initiative Act for another 10 years through 2032. The Act will sunset on July 1, 2021 unless extended. Administered by the Kansas Department of Commerce and Board of the Regents, the program provides $10.5 million each year, funded through lottery revenues, split evenly among Kansas State University, the University of Kansas, and Wichita State University to invest in their engineering programs for the purpose of increasing the number of engineering graduates. In turn, the three schools must increase the number of engineering graduates each year to reach a specific target by the tenth year. All three schools have surpassed their original targets to provide more graduates, but the engineering industry indicates there are still not enough engineers to meet employer demand in the state. A summary of the approved bill with any committee amendments is not yet available online. Read the full text of the original bill. Read the estimated fiscal impact.
The Senate Education Committee approved and forwarded to the full Senate SB 43, legislation creating the Senate’s version of the Kansas Promise Scholarship Act providing post-secondary educational scholarships for certain two-year associate degree programs, career and technical education certificates, and other programs. Read the full text of the bill. Read the estimated fiscal impact.
The House Commerce Committee held a hearing on HB 2287, legislation enacting the House’s different version of the Kansas Promise Scholarship Act providing scholarships for students who attend postsecondary educational programs that correspond to high-need career fields. The program would make eligible for the scholarship any Kansas community college, technical college, or two-year associate degree program or career/technical education program offered by a qualifying private postsecondary educational institution. In addition to their studies, students would be required to complete 100 hours of community service annually or be verified by the postsecondary educational institution to be employed part-time. Within six months after graduation, the student would be required to commence work in the state for at least two years or enroll full-time in a Kansas postsecondary educational institution. The program has a $10 million cap. Last year this bill passed the House (110-3) and the Senate (37-2), but was vetoed by Governor Kelly based on its fiscal impact. Read the full text of the bill. Read the estimated fiscal impact.
The House Transportation Committee held a hearing, amended, and forwarded to the full House HB 2201, legislation proposed by KDOT making certain revisions to the Eisenhower Legacy Transportation Program commonly called IKE. The three revisions would lower the current $100 million threshold for any project to use alternative delivery to $10 million, authorize the immediate use of federal stimulus funds, and clarify KDOT’s 18% debt cap calculation. The House committee amended the bill to remove the debt cap calculation provision, recommending that piece be considered in a separate bill. Read the full text of the original bill (the amended version of the bill is not yet available online.) Read the estimated fiscal impact. On the same day the Senate Transportation Committee held a hearing on its mirror version of the same IKE bill, SB 116. The Senate committee is expected to take possible action on its version next week. Read the full text of the bill. Read the estimated fiscal impact.
The Senate approved (26-12) SB 66, legislation extending for five years the Angel Investor Tax Credit program set to expire on Jun. 30 and making other changes to eligibility, tax credit amounts and annual limits, transferability, program limits, and investor requirements. The Senate made no changes to the bill (nor did the Senate committee); the measure now moves to a House committee. Read the full text of the Senate bill. Read a summary of the Senate bill. Read the estimated fiscal impact. The House Commerce Committee previously amended and forwarded to the full House HB 2045, its version of the Angel Investor Tax Credit program measure. The House committee’s amendments were technical in nature and proposed by the Kansas Department of Commerce. Read the full text of the amended House bill. Read a summary of the amended House bill.
The Senate approved (38-0) SB 65, legislation decoupling the Kansas Industrial Training and Kansas Industrial Retraining (KIT/KIR) programs from the High Performance Incentive Program (HPIP). Currently companies seeking to qualify for HPIP tax credits are statutorily required to utilize the KIT/KIR training programs as part of HPIP eligibility, regardless of their need to do so. Companies say the requirement is also cumbersome. Proposed by the Kansas Department of Commerce (KDOC), the bill would allow for more efficient use of resources by both employers and the State by removing training requirements and permitting KDOC to allocate more KIT/KIR dollars to companies in need of training assistance rather than companies primarily focused on qualifying for HPIP. The Senate made no changes to the bill (nor did the Senate committee); the measure now moves to a House committee. Read the full text of the bill. Read a summary of the bill. Read the estimated fiscal impact.
The House Judiciary Committee approved and forwarded to the full House HB 2229, legislation increasing criminal penalties for multiple mail thefts to address the growing retail issue of stolen home delivery packages – an anti-“porch pirate” measure. A summary of the approved bill with any committee amendments is not yet available online. Read the full text of the original bill. Read the estimated fiscal impact.
The Senate Judiciary Committee held a hearing on SB 150, legislation defining and prohibiting certain deceptive lawsuit advertising practices and restricting the use or disclosure of protected health information to solicit individuals for legal services. Practically, the bill attempts to curb misleading legal advertisements that imply a product is proven harmful or that there has been a recall on that product (guidelines such as prohibiting use of a state agency logo or using “recall” if a drug/device has not been recalled) and to prohibit consumer data collection agencies whose advertisements appear like a legal ad from gathering and selling the information of potential clients to law firms. The Kansas Bar Association and Kansas Trial Lawyers Association oppose the measure, saying the Kansas Supreme Court should be the sole arbiter of attorney ethical conduct as ruled by the Code of Judicial Conduct. But proponents say the measure falls under consumer protection laws from which attorneys are not exempt. Read the full text of the bill. Read the estimated fiscal impact.
The Senate Education Committee held a hearing on SB 173, legislation revising at-risk funding and eligibility including extending K-12 high-density at-risk weighting until July 1, 2023 (important to our Johnson County area school districts.) The committee is expected to take action on the bill next week. Read the full text of the bill. The committee also held a hearing on SB 144, legislation making the K-12 high-density at-risk student weighting permanent. Read the full text of the bill. Read the estimated fiscal impact.
The Senate Financial Institutions & Insurance Committee amended and forwarded to the full Senate SB 78, legislation that originally included granting the Commissioner of Insurance certain investigative powers to assist in the execution of the Department’s statutory duties, including administrative subpoena powers (the Insurance Department would not have subpoena enforcement power; if need be, enforcement would be handled by the AG’s Office), but the Senate committee amended the bill to remove the provisions pertaining to the investigative powers and authority of the Commissioner. Read the full text of the amended Senate committee bill. Read a summary of the amended Senate committee bill. The House Insurance Committee also amended and forwarded to the full House HB 2136, its mirror version of original SB 78, and the House committee also removed the provisions granting the Commissioner investigative powers. Read the full text of the original House bill (the amended House bill is not yet available online.) A number of organizations had been watching these bills to ensure any new investigative powers were narrowly tailored and not open to abuse, but those provisions have now been removed from both House and Senate versions of the bill.
The House Federal & State Affairs Committee held hearings on HB 2199, legislation authorizing in-person and mobile sports wagering in the state. Under this bill Lottery retailers (primarily 1,200 convenience stores) would be eligible to join the four State-owned casinos (KCK, Pittsburg, Mulvane, and Dodge City) in offering sports wagering, different from the Senate’s bill (SB 84) which restricts that authority to just the casinos. The Kansas Lottery estimates the state’s share of revenues under this bill would be approximately $4.5 million, with substantial growth in the sports wagering industry in future years. Read the full text of the bill. Read the estimated fiscal impact.
The House Commerce Committee held a hearing on HB 2391, legislation changing the Secretary of State’s business filing provisions including instituting biennial business report filings and making other changes to business filing provisions, information requirements, and fees. Read the full text of the bill. Read the estimated fiscal impact.
LOOKING AHEAD (FEB. 22-26)*
(Remember that schedules can change — check calendars at www.kslegislature.org.)
On Wednesday the Senate Taxation Committee will hold a hearing on SB 98, legislation that includes changing the burden of proof from the taxpayer to the county appraiser to demonstrate the validity and correctness of the property valuation or classification of residential or commercial property in appeal hearings before the district court. (This bill passed the Senate (36-3) in 2020 as SB 309.) Read the full text of the bill. Read the estimated fiscal impact. The same day the committee will also hold a hearing on SB 119, legislation that includes State Board of Tax Appeals reforms such as changing the time to request a full and complete opinion from the state board tax appeals, requiring the state board of tax appeals to serve orders and notices by electronic means if requested by the party, prohibiting valuation increases of county-appraised property during valuation appeals (prohibits appraisers and BOTA from increasing valuation during appeal to an amount greater than initial appeal), and requiring appraisal directives to require compliance with uniform standards of professional appraisal practice. (This bill contains five bills from 2020 – SB 262, 264, 265, 272, and 297 – which all passed the Senate (40-0).) Read the full text of the bill. Read the estimated fiscal impact.
On Monday the House Federal & State Affairs Committee will hold a hearing on HB 2340, legislation increasing the minimum age from 18 to 21 to purchase or possess cigarette and tobacco products. This bill essentially conforms state law to federal law; the committee previously held a hearing on a much more expansive bill with additional restrictions and fees, HB 2061, on which it has not taken action. Read the full text of the bill.
On Wednesday and Thursday the House Federal & State Affairs Committee will hold hearings on HB 2184, legislation putting forth a framework for legalizing medical marijuana usage. The bill currently includes language impacting workers compensation, allowing for workers compensation benefits if an employee is injured while under the influence but registered as a patient pursuant to the Act. Business advocates will ask to delete that provision, as well as add language to the bill allowing for employer determination of drug-free and drug testing policies similar to what has been added in other states that have passed medical marijuana laws – advocates seeks to ensure employer policies regarding drug use are protected in order to safeguard workplace safety. Read the full text of the bill.
On Thursday the Senate Federal & State Affairs Committee will hold a hearing on SB 254, legislation related to cereal malt beverages (CMBs) allowing liquor stores to sell on a wholesale basis low-alcohol CMBs to licensed on-premises drinking establishments and CMB retailers, and allowing those drinking establishments to serve CMBs without having to get a separate license to do so as they currently must. This bill appears to be the Senate’s mirror version of HB 2137, which has already passed out of a House committee. Read the full text of the bill.
On Monday the House Commerce Committee will hold a hearing on HB 2351, legislation providing liability protection for businesses, municipalities and educational institutions that participate in high school work-based learning programs and providing that schools are responsible for injuries to students participating in such programs. The negligence liability protections would not apply to incidents arising from gross negligence or willful misconduct. A current lack of clarity about who bears liability risks in high school work-based learning programs such as internships, shadowing, practicums, and on-the-job training – the employer or the student’s school – have been a deterrent to many companies from participating in these important workforce development opportunities, denying students critical experience and preventing employers from connecting with potential employees. Read the full text of the bill. Read the estimated fiscal impact.
On Monday the House Taxation Committee will hold a hearing on HB 2328, legislation providing income tax credits for graduates of aerospace and aviation-related educational programs and employers of program graduates. Read the full text of the bill. Read the estimated fiscal impact.
On Tuesday the Senate Commerce Committee will hold a hearing on SB 137, legislation to support workforce development by expanding state occupational licensing reciprocity in some cases. Essentially the legislation would place people occupationally licensed out of state who move to Kansas on a fast track to obtain a Kansas license unless the requirements from their original state are substantially different. The bill is the mirror version of original version HB 2066 in the House, which contained telemedicine waiver provisions of concern to some health care providers that the House committee amended out. Providers will likely seek to amend those provisions out of the Senate bill as well if the committee moves forward with the bill. Read the full text of the bill. Read the estimated fiscal impact.
On Thursday the Senate Commerce Committee will hold a hearing on SB 213, legislation prohibiting an employer from taking any adverse employment action against an employee because of the employee’s vaccination status. Opponents say employers should retain decisionmaking authority over whether to require vaccinations based on their company’s specific circumstances, and oppose this prohibition just as they would a mandate requiring employee vaccinations. Read the full text of the bill.
On Thursday the Senate Education Committee will hold a hearing on SB 235, legislation enacting the back to school act to require school districts to provide an full-time, in person attendance option for all students beginning on March 26, 2021. Opponents say timing should be determined by locally-elected school boards based on their community’s circumstances and standards, rather than the State imposing a one-size-fits-all approach. Read the full text of the bill.
On Thursday the Senate Financial Institutions & Insurance Committee will hold a hearing on SB 199, legislation providing for short-term, limited-duration health plans. “Short-term, limited-duration” would mean an insurance policy period less than 12 months that offers renewal or extension periods up to a maximum policy period of 36 months total duration. Such plans would have to include a prominent statement that the policy is not required to comply with Affordable Care Act coverage mandates and should be carefully reviewed for exclusions and limitations, including limits on preexisting condition coverage. The changes would mirror federal guidelines that were revised at the end of 2018. Proponents say such plans provide Kansans an important stopgap coverage option, while opponents say consumers too often discover the policies don’t cover much. Read the full text of the bill.
On Tuesday the House Energy, Utilities & Telecom Committee will hold a hearing on HB 2381, legislation establishing the state energy plan task force to develop a comprehensive state energy plan. Read the full text of the bill. Read the estimated fiscal impact.
*Interested in any of these bills and want to learn more? Remember, you can:
Explore the legislature’s website www.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 at https://www.youtube.com/channel/UC_0NO-Pb96CFABvxDwXAq8A.
Access archived committee meeting audio recordings at http://sg001-harmony.sliq.net/00287/Harmony/en/View/Calendar/.
Follow legislative action simultaneously detailed on Twitter using the hashtag #ksleg.
Ask questions such as how to read the calendar, what’s existing law and what would be changed in a proposed bill, etc, by contacting me at email@example.com or 913-888-1414.
AREA LEGISLATORS ZOOM WITH CHAMBER COMMITTEE
On Friday, January 15, 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. Charlotte Esau, Linda Featherston, Jo Ella Hoye, John Resman, Susan Ruiz and Brandon Woodard for taking time to engage with your business constituents.
The Chamber’s Legislative Affairs Committee efforts are being headed in 2021 by Chair Andy Huckaba of Huckaba & Associates – thank you for your time, leadership, and positive attitude, Andy!
CHAMBER BOARD APPROVES 2021 STATE LEGISLATIVE AGENDA
The Lenexa Chamber Board of Directors has approved a legislative platform to guide our advocacy in the upcoming 2021 state legislative session. The platform addresses a spectrum of issues important to the business community including pandemic relief and recovery, 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 firstname.lastname@example.org.