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BioKansas’ legislative report is provided by Kansas Agribusiness Retail Association. If you have questions or would like additional information, contact us.
April 28, 2023
The 2023 Kansas Legislature adjourned sine die (final day) around 10:30 pm on Friday, April 28. So, barring any veto by Governor Laura Kelly of either the omnibus budget bill or the K-12 education budget bill – which would require the legislature to come back for a special session – the legislature has adjourned for the year. There may be various interim committee hearings over the summer. If so, we will cover those as well.
This week, the legislature narrowly passed Conference Committee Report on House Bill 2285 on a vote of 63-56 in the House, and 22-18 in the Senate. The bill would, among other things, define the COVID-19 vaccine and prohibit the Kansas Secretary of Health and Environment from requiring the COVID-19 vaccine for any child cared for in a child care facility, any student enrolling or enrolled in a school for the first time, any child enrolling or enrolled for the first time in a preschool or daycare program operated by a school, and any other such students as may be designated by the Secretary, prior to admission or attendance at school. The bill would also restrict the duties and authority of the Secretary and local health officers regarding infectious and contagious diseases. In addition, the bill would amend statutes relating to tuberculosis, remove the requirement for enforcement of isolation and quarantine orders by law enforcement officers, provide employment protection for employees who isolate or quarantine, and address orders for school closure during a disaster.
CCR on HB 2285 will be sent to the governor for consideration sometime early next week. It is anticipated the governor will veto the bill. As the legislature has already adjourned sine die, there would be no opportunity for the legislature to attempt to an override of a veto by the governor.
On Thursday of this week, on a vote of 84-40 in the House and 28-12 in the Senate, the legislature overrode Governor Laura Kelly’s veto of Senate Bill 180. This bill defines sex in state law to mean an “individual’s biological sex, either male or female, at birth.” The new law will require transgender individuals to use public bathrooms that align with their sex assigned at birth, and would apply to school restrooms, locker rooms, prisons, domestic violence shelters and rape crisis centers. The law legally defines women as individuals “whose biological reproductive system is developed to produce ova” and men as individuals “whose biological reproductive system is developed to fertilize the ova of a female.” The law takes effect July 1, 2023.
Also this week, the legislature passed CCR on Sub for Senate Bill 131, a bill that would, among other things, amend the Kansas Pharmacy Act to authorize pharmacy technicians, who meet age and supervision parameters, to administer vaccinations. The bill now goes to the governor for consideration.
April 26, 2023
The 2023 Kansas legislature’s veto session began on Wednesday, April 26. Over proceeding three days, lawmakers took up a few bills for final action, passed an omnibus budget bill for the remainder of fiscal year ’23 and fiscal year ’24, and attempted to override about nineteen bills previously vetoed by Governor Laura Kelly.
Around 10:30 p.m., on Friday, April 28 the 2023 edition of the Kansas Legislature formally adjourned sine die (final day). Barring any veto by the Governor Kelly of either the omnibus budget bill or the K-12 education budget bill – which would require the legislators return for a special session – the legislature is now adjourned for the year. There is the possibility of a few interim committee hearings scheduled during the summer which we will monitor.
During the 2023 session, we reviewed and tracked each of the 470 bills introduced in the House and the 325 bills introduced in the Senate. Approximately 100 of those bills were passed by the legislature and sent to the governor, where 15 were ultimately vetoed. Please find a final summary, below, of the most relevant bills this session.
As always, thank you for allowing us to be your eyes and ears in the Kansas State Capitol. Please reach out to us any time for additional information or clarification.
Vaccines and Other Pharmaceuticals
Bathroom Restrictions for Transgendered Individuals
On Thursday, on a vote of 84-40 in the House and 28-12 in the Senate, the legislature overrode Governor Laura Kelly’s veto of Senate Bill 180. This bill defines sex in state law to mean an “individual’s biological sex, either male or female, at birth.” The new law will require transgender individuals to use public bathrooms that align with their sex assigned at birth, and would apply to school restrooms, locker rooms, prisons, domestic violence shelters and rape crisis centers. The law legally defines women as individuals, “Whose biological reproductive system is developed to produce ova,” and men as individuals, “Whose biological reproductive system is developed to fertilize the ova of a female.” The law takes effect July 1, 2023.
Abolishing the Kansas Bioscience Authority
House Bill 2418 would, among other things, abolish the Kansas Bioscience Authority and certain Kansas Dept. of Health and Environment advisory committees. The House passed the bill on a vote of 123-0. The bill was referred to the Senate Committee on Ways and Means but no further action was taken on the bill this session.
State Budget Bill
Last week, Governor Laura Kelly signed into law House Bill 2184 – the state’s budget bill for state fiscal years 2023, 2024, and 2025. According to Kelly, the budget allows the state to continue its path of economic growth through targeted investments in workforce development, health care, and affordable housing. Among other things, the budget directs $52 million to the State Treasurer for retiring reservoir debt at Milford and Perry Lakes which will save Kansas taxpayers nearly $30 million in future interest payments; adds $600 million to the state’s Budget Stabilization Fund, increasing the fund balance to more than $1.6 billion; directs $20.5 million toward modernization of the state unemployment insurance system; transfers $50 million to the Build Kansas Matching Grant Fund for infrastructure grants to local communities; adds $200,000 to the Kansas Dept. of Agriculture for the Soil Health Initiative; and adds $5 million to the COOP Extension service account for the KSU 105 program for fiscal year 2024.
Omnibus Budget Bill
The legislature passed Conference Committee Report on SB 25 – the omnibus budget for state fiscal years 2023 and 2024. The bill passed overwhelmingly in the House and Senate and is on its way to the governor for consideration. It is estimated to produce an ending balance for state fiscal year 2024 of nearly $2.6 billion – the largest ever for the state. Among other things, the bill directs an additional $18 million to the Kansas Water Office from the State Water Plan Fund; directs an additional $5 million to KDOT for the Rail Service Improvement Fund for increased assistance to short line railroads; and provides $120 million for state employee salary adjustments. Find a bill explainer here.
New State Revenue Estimates
State revenue forecasters have added more than $237 million to the revenue estimates. The estimates increased previous estimates, made last fall, by $128 million for the current fiscal year ending June 30, 2023, and by $109 million for the end of state fiscal year 2024. These revenue estimates could result in a state ending balance of $1.9 billion this year, and an estimated $2.6 billion ending balance the following year. This would be the largest ending balance in state history.
Prohibiting Foreign Ownership of Real Property
Senate Bill 283, as introduced, would prohibit the future conveyance of real property in Kansas to “foreign adversaries”, as the term is defined by federal law, beginning on July 1, 2023. This issue is a high priority item of new Kansas Attorney General Kris Kobach, who stood as a proponent to the bill. The Senate Judiciary Committee held a hearing on the bill and amended it before putting the contents of the bill into House Bill 2069, creating Senate Substitute for House Bill 2069. While no further action was taken on the bill this session, similar legislation was passed this year by the State of Texas.
Kansas Promise Scholarship Expansion for CDL Training
House Bill 2132 expands the Kansas Promise Scholarship Act to add new eligible fields of study, including transportation and commercial driver license training. Scholarships could total $8 million this academic school year, with the program likely reaching a statutory cap of $10 million next year as interest and demand for scholarships builds. The House Education Committee amended the bill before passing it out favorably. The full House passed the bill on a vote of 124-0. The bill was then placed into Conference Committee Report on SB 123 and passed by both chambers. Governor Laura Kelly has signed the bill into law.
Apprenticeship Tax Credit
HB 2292 establishes a three-year Kansas apprenticeship tax credit to encourage the development of apprenticeship programs by participating businesses. The credit is up to $2,500 for each apprentice so employed, and may be awarded up to 20 apprentices per year. The program will be administered by the Kansas Department of Commerce. Kansas Grain and Feed Association and Kansas Agribusiness Retailers Association joined other stakeholders in support of the measure which passed the House on a vote of 115-7. The Senate amended the bill to place a cap on the amount of the grant provision per year and added a provision that any unused balance in the fund would be transferred to the state general fund. The Senate passed the bill 30-7. The bill was placed into Conference Committee Report on HB 2292 and passed by both chambers. Governor Laura Kelly has signed the bill into law.
Government Competition Tax Exemptions
Senate Bill 252 would provide property and sales tax exemptions to certain businesses located in cities where a facility owned or operated by the government competes against an establishment. Businesses qualifying for the exemptions would be limited to child care centers, entertainment businesses, exercise businesses, health clubs, recreation businesses, or restaurants. In order to qualify for the exemptions, the competing government operation would be required to have begun after the business started using the real property for the qualifying purpose. This controversial bill is the latest development in a longstanding debate over whether local governments are competing against the private sector. The bill was placed into Conference Committee Report on Senate Bill 8 which is before the governor for consideration.
State and Local Tax Clarification
House Bill 2465 would clarify the determination of taxable income and the pass through of tax credits to electing pass-through entity owners for purposes of the state and local tax (SALT) parity act. The bill was introduced under the premise that the state department of revenue was not correctly applying the SALT parity act passed last year. The House passed the bill 124-0. The Tax Conference Committee placed the contents of the bill into CCR on SB 8 which is before the governor for consideration.
Single Rate Income Tax Legislation
House Sub for Senate Bill 169 was the legislature’s major tax reduction bill this session, and made various changes to income, sales, and property taxes. The bill created a single 5.15% individual income tax rate, removed the state sales tax on food, lowered the corporate income tax rate, increased the individual income tax standard deduction with a cost-of-living adjustment, removed the social security income tax cliff, lowered the bank privilege tax, and increased the amount of appraised value of residential property exempt from the statewide school finance levy. The bill decreased state revenues by $300 million in FY 2024, $570 million in FY 2025, and $480 million in FY 2026. After passage by the House and the Senate, the bill was presented to Governor Kelly for consideration. On April 24, the governor vetoed the bill comparing it to “failed tax experiments” under previous administrations. Last week, on a vote of 26-14, the Senate failed by one vote in its attempt to override the governor’s veto.
Property Tax Valuation Notice and Appeals
House Bill 2002 was introduced to extend reimbursement from the taxpayer notification costs fund for printing and postage costs for county clerks for 2024. The bill would also modify and prescribe the contents of the revenue neutral rate hearing notice. After passing the House, the Senate amended the bill to allow property owners to make payments under protest appeals even if the property owner taxpayer had previously appealed their property valuation through an informal equalization appeal. After passing the Senate, the bill was sent to a conference committee which added in the contents of five other non-controversial bills, creating Conference Committee Report on HB 2002. The Senate passed the bill 37-0, and the House passed the bill 122-0. The measure will soon be presented to the governor for consideration.
Maximum Property Valuation Annual Increase
SCR 1611 would amend section 1 of article 11 of the Kansas Constitution to limit annual increases in real property valuations to 4 percent. The bill was introduced as a means to help control the increase in ad valorem property taxes. The bill would require a ballot question for voters to approve the measure during the next state-wide election. The Senate passed the resolution on a vote of 28-11 and it is now with the House. No further action was taken on the measure this session.
Transmission Delivery Charges on Energy Users
House Bill 2225 was introduced to limit Evergy’s direct recovery of costs related to electric public utility transmission projects. The House Utilities Committee passed the bill out with an agreed amendment by Evergy and rate payer stakeholders. As amended, the bill (1) reduces Evergy’s authorized return on equity (ROE) on local transmission projects, (2) sets up a project review process at the KCC, and (3) requires Evergy to submit testimony on competitive rates and impacts on economic development during any rate case. The major consumer concession was allowing Evergy to continue to assess annual increases through its transmission delivery charge (TDC). The KCC estimates the bill will provide ratepayer savings of $40 million to $45 million over three years. That includes the cumulative impacts of about $10 million per year in upfront savings and approximately $2 million per year in annual savings from new projects at the lower ROE. The House passed the bill on a vote of 120-1, and the Senate passed the bill on a vote of 37-2. Governor Laura Kelly has signed the bill into law.
Electric Utility Rates and the Right of First Refusal
Kansas has the highest energy rates in our region, and multiple bills have been introduced to address high electric utility rates while ensuring reliable service. This year, Senate Bill 68 was introduced by state energy producers to provide them with a Right-of-First-Refusal for projects to build out new electric transmission line assets in the state. Renew Kansas, Kansas Grain and Feed Association, and Kansas Agribusiness Retailers Association joined other commercial and residential utility rate payers in opposing the measure arguing that the bill would remove competition from the build process and result in higher electric energy rates. The Senate Utilities Committee advanced the bill out of committee, but the bill has not been brought up for debate by the full Senate. The bill is likely to be discussed during an energy and utilities interim committee meeting this summer. The Iowa Supreme Court recently upheld a temporary injunction against a similar law in that state finding that the law was likely to be found in violation of Iowa’s state constitution.
Electric Vehicle and Hydrogen Vehicle Production
Senate Bill 325 was introduced in the Senate Ways and Means Committee. The bill would establish the “Transformation of Passenger and Freight Vehicle Industry Program” to attract businesses engaged in electric motor vehicle and hydrogen-powered vehicle production by offering qualified companies that meet certain requirements an investment tax credit, retention of a percentage of total payroll tax, reimbursement of a percentage of eligible employee training and education expenses, and a sales tax exemption for construction costs of the qualified company’s qualified business facility. The Senate Commerce Committee held a hearing on the bill on Monday, April 24. It is anticipated that further action will be taken on the bill next session.
Third-Party Funded Litigation
Senate Bill 74 would provide for joint liability of costs for third-party funded litigants and also allow for sanctions on third-party funded litigants. The bill would also require certain discovery disclosures and payment of certain costs for nonparty subpoenas. The bill was heard in the Senate Judiciary Committee, but no further action was taken on the bill this session.
State Preemption of Local Plastic Regulations
House Bill 2446 would prohibit cities and counties from regulating plastic and other containers designed for the consumption, transportation, or protection of merchandise. The House amended the bill before passing it 72-51. No further action was taken on the bill this session.
State Preemption of Regulation Lawful Products or Services
House Bill 2447 would prohibit cities and counties from banning the sale of products or services otherwise allowed by state law. The House Commerce Committee amended the bill to narrow its scope by excluding sales of services from the prohibition and to otherwise limit the prohibition as it relates to sales of products. The bill did not advance, and no further action was taken on the bill this session.
Unemployment Insurance
House Bill 2401 would (1) define the “benefit year” and “temporary unemployment” in the employment security law, (2) require electronic filing of reports for employers with 25 or more employees, and (3) extend the time required for establishment of a new account due to a business acquisition. The House Commerce Committee amended the bill by adding in language from House Bill 2333 that would allow for extensions of temporary unemployment for up to 12 weeks. The House passed the bill 119-4, but the bill did not advance further. Last week, however, proviso language was inserted into the omnibus budget bill, CCR on Senate Bill 25, which authorizes the Kansas Department of Labor to (1) recalculate the rate of both employers in a full or partial successorship, pursuant to K.S.A. 44-710a(b)(4)(A), on the first day of the next calendar year following the date of transfer of trade or business; and (2) determine the benefit year, including any subsequent benefit year, under K.S.A. 44-703(d), with respect to an individual as beginning with the Sunday of the first week for which such individual files a valid claim for benefits. The omnibus budget bill has been presented to Governor Laura Kelly for consideration.
Workers Compensation Permanent Disability Benefit
The Senate Commerce Committee held a hearing on Senate Bill 38, a bill that would increase the maximum Kansas workers compensation benefits payable by an employer for permanent total disability suffered by an injured employee. Under current law, the maximum workers compensation benefit that is payable by an employer to an employee for permanent total disability is $155,000. SB 38 would increase the amount to $350,000. The bill would take effect upon its publication in the Kansas Register. According to the Department of Administration, permanent total disability is paid out over time using an average weekly wage up to the statutory cap. Using the maximum average weekly wage, it would not reach $155,001 in either FY 2023 or FY 2024. It was understood that the bill was intended to initiate conversations between labor and industry. No further action on the bill was taken this year.
ADA Website Access Abusive Litigation
S Sub for House Bill 2016 enacts the Act Against Abusive Access Litigation to create a civil action for determining whether litigation that alleges any website access violation under the federal Americans with Disabilities Act (ADA) or similar law constitutes abusive litigation and authorize penalties for such abusive litigation. The House passed the bill on a vote of 122-0. The Senate amended the bill before passing it 33-5. The House concurred with the Senate amendments, and Governor Laura Kelly signed the bill into law.
Eminent Domain Approval by County Commission
Senate Bill 312 would require the board of county commissioners prior to the exercise of the power of eminent domain by certain public utilities. The Senate Committee on Local Government held a hearing on the bill, where Kansas Farm Bureau and Kansas Livestock Association testified as proponents to the bill along with Representative Carrie Barth (R-Baldwin City) and many private citizens. Standing in opposition to the bill were ITC Great Plains, Polsinelli Energy Practice Group, and Kansas Power Alliance. While the bill is unlikely to advance further this year, it allowed the proponents to place themselves on the record as standing in strong opposition to any expansion of eminent domain powers in the state. In addition, this issue may be discussed during an energy and utilities interim committee meeting this summer.
Prohibiting Mandatory ESG Criteria in State Contracts
As introduced, Senate Bill 291 enacts the Kansas public investments and contracts protection act concerning environmental, social and governance (ESG) criteria. The bill prohibits the state and political subdivisions from giving preferential treatment to or discriminating against companies based on such ESG criteria in procuring or letting contracts, requires KPERS fiduciaries to act solely in the financial interest of the participants and beneficiaries of the system, restricts state agencies from adopting ESG criteria or requiring any person or business to operate in accordance with such criteria, and directs registered investment advisers to provide ESG criteria notice to clients and providing for enforcement of such act by the attorney general. The bill language was placed into Conference Committee Report on House Bill 2100. The bill passed both chambers and was presented to Governor Laura Kelly for consideration. On Tuesday, April 25 the bill became law without the governor’s signature.
Initiative and Referendum
Senate Concurrent Resolution 1606 was introduced to amend the Kansas constitution to establish an initiative and referendum process in the state. The bill did not receive a hearing.
April 14, 2023
This week marked the second of two interim weeks the Kansas Legislature took off between the end of the 2023 regular session and what is likely to be a short veto session beginning Wednesday, April 26. During the veto session, the legislature will take final action on a few remaining bills, pass an omnibus budget bill for the remainder of fiscal year ’23 and fiscal year ’24, and possibly attempt to override a few bills vetoed by Governor Laura Kelly. Please find below, action on some bills over the last two weeks.
Vaccines and Other Pharmaceuticals
Abolishing the Kansas Bioscience Authority
House Bill 2418 would, among other things, abolish the Kansas Bioscience Authority and certain Kansas Dept. of Health and Environment advisory committees. The House passed the bill on a vote of 123-0. The bill has been referred to the Senate Committee on Ways and Means and may be added as a proviso to the omnibus budget bill during the veto session beginning on April 26.
Prohibiting Foreign Ownership of Real Property
Senate Bill 283, as introduced, would prohibit the future conveyance of real property in Kansas to “foreign adversaries”, as the term is defined by federal law, beginning on July 1, 2023. This issue is a high priority item of new Kansas Attorney General Kris Kobach, who stood as a proponent to the bill. The Senate Judiciary Committee held a hearing on the bill and amended it before putting the contents of the bill into House Bill 2069, creating Senate Substitute for House Bill 2069. No further action was taken on the bill this year.
Governor Signs State Budget Bill
On Friday, Governor Laura Kelly signed House Bill 2184, the state’s budget bill which allocates funding for state fiscal years 2023, 2024, and 2025. According to the governor’s news release, the budget allows the state to continue its path of economic growth through targeted investments in workforce development, health care, and affordable housing. Among other things, the budget adds $600 million to the state’s Rainy Day Fund, increasing the balance to a record $1.6 billion. Additionally, the budget directs $53 million for reservoir debt at Milford and Perry Lakes which will save Kansas taxpayers nearly $30 million in future interest payments.
Apprenticeship Tax Credit
HB 2292 would establish a three-year Kansas apprenticeship tax credit to encourage the development of apprenticeship programs by participating businesses. The credit would be up to $2,500 for each apprentice so employed, and the tax credit may be awarded up to 20 apprentices per year. The program would be administered by the Kansas Department of Commerce. Kansas Grain and Feed Association and Kansas Agribusiness Retailers Association joined other stakeholders in support of the measure which passed the House on a vote of 115-7. The Senate amended the bill to place a cap on the amount of the grant provision per year and added a provision that any unused balance in the fund would be transferred to the state general fund. The Senate passed the bill 30-7. The bill was then placed into Conference Committee Report on HB 2292 and passed by both chambers. The bill has been enrolled and presented to the governor for consideration.
New State Revenue Estimates Released
This week, state revenue forecasters – referred to as the Consensus Revenue Estimating Group (CREG) – added more than $237 million to the revenue estimates. The estimates increased previous estimates, made last fall, by $128 million for the current fiscal year ending June 30, 2023, and by $109 million for the end of state fiscal year 2024. These revenue estimates could result in a state ending balance of $1.9 billion this year, and an estimated $3.03 billion ending balance the following year. This would be the largest ending balance in state history.
Government Competition Tax Exemptions
On a vote of 24-16, the Senate passed Senate Bill 252 to provide property and sales tax exemptions to certain businesses located in cities where a facility owned or operated by the government competes against an establishment. Businesses qualifying for the exemptions would be limited to child care centers, entertainment businesses, exercise businesses, health clubs, recreation businesses, or restaurants. In order to qualify for the exemptions, the competing government operation would be required to have begun after the business started using the real property for the qualifying purpose. The bill is the latest development in a longstanding debate over whether local governments are competing against the private sector. The language of the bill was amended to narrow its scope and then placed into Conference Committee Report on Senate Bill 8.
Comprehensive Tax Legislation
House Sub for Senate Bill 169 is the legislature’s major tax reduction bill this session, and makes various changes to income, sales, and property taxes. The bill creates a single 5.15 percent individual income tax rate, remove the state sales tax on food, lower the corporate income tax rate, increase the individual income tax standard deduction with a cost-of-living adjustment, remove the social security income tax cliff, lower the bank privilege tax, and increase the amount of appraised value of residential property exempt from the statewide 20 mill school finance levy. The bill decreases state revenues by $300M in FY 2024, $570M in FY 2025, and $480M in FY 2026. The House passed the bill 85-38, and the Senate 24-13. The bill has been enrolled and presented to the governor for consideration. It is widely thought the governor is likely to veto this bill and send it back to the legislature.
State and Local Tax Clarification
House Bill 2465 would clarify the determination of taxable income and the pass through of tax credits to electing pass-through entity owners for purposes of the state and local tax (SALT) parity act. The bill was introduced under the premise that the state department of revenue was not correctly applying the SALT parity act passed last year. The House passed the bill 124-0. The Senate Tax Committee passed out a companion bill in Senate Bill 313. The Tax Conference Committee placed the contents of HB 2465 into CCR on SB 8, which has not yet received final action.
Property Tax Valuation Notice and Appeals
House Bill 2002 was introduced to extend reimbursement from the taxpayer notification costs fund for printing and postage costs for county clerks for 2024. The bill would also modify and prescribe the contents of the revenue neutral rate hearing notice. The House passed the bill 114-7. The Senate amended the bill to allow property owners to make payments under protest appeals even if the property owner taxpayer had previously appealed their property valuation through an informal equalization appeal. After passing the Senate 34-6, the bill was sent to a conference committee which added in the contents of around five other bills. The Senate passed Conference Committee Report on HB 2002 on a vote of 37-0. The House may take final action on the bill during veto session on April 26.
Maximum Property Valuation Annual Increase
SCR 1611 would amend section 1 of article 11 of the Kansas Constitution to limit annual increases in real property valuations to 4 percent. The bill was introduced as a means to help control the increase in ad valorem property taxes. The bill would require a ballot question for voters to approve the measure during the next state-wide election. The Senate passed the resolution on a vote of 28-11 and it is now with the House. Further action is anticipated when the legislature returns on April 26 for the Veto Session.
Transmission Delivery Charges on Energy Users
House Bill 2225 was introduced to limit Evergy’s direct recovery of costs related to electric public utility transmission projects. The House Utilities Committee passed the bill out with an agreed amendment by Evergy and rate payer stakeholders. As amended, the bill (1) reduces Evergy’s authorized return on equity (ROE) on local transmission projects, (2) sets up a project review process at the KCC, and (3) requires Evergy to submit testimony on competitive rates and impacts on economic development during any rate case. The major consumer concession was allowing Evergy to continue to assess annual increases through its transmission delivery charge (TDC). The KCC estimates the bill will provide ratepayer savings of $40M to $45M over three years. That includes the cumulative impacts of about $10M/year in upfront savings and approximately $2M/year in annual savings from new projects at the lower ROE. The House passed the bill on a vote of 120-1, and the Senate passed the bill on a vote of 37-2. This week, Governor Laura Kelly signed the bill into law.
Kansas Promise Scholarship Expansion for CDL Training
House Bill 2132 expands the Kansas Promise Scholarship Act to add new eligible fields of study, including transportation and commercial driver license training. Scholarships could total $8 million this academic school year, with the program likely reaching a statutory cap of $10 million next year as interest and demand for scholarships builds. The House Education Committee amended the bill before passing it out favorably. The full House passed the bill on a vote of 124-0. The bill was then placed into Conference Committee Report on SB 123 and passed by both chambers. This week, Governor Laura Kelly signed the bill into law.
Electric Utility Rates and the Right of First Refusal
Kansas has the highest energy rates in our region, and multiple bills have been introduced to address high electric utility rates while ensuring reliable service. This year, Senate Bill 68 was introduced by state energy producers to provide them with a Right-of-First-Refusal for projects to build out new electric transmission line assets in the state. Renew Kansas, Kansas Grain and Feed Association, and Kansas Agribusiness Retailers Association joined other commercial and residential utility rate payers in opposing the measure arguing that the bill would remove competition from the build process and result in higher electric energy rates. The Senate Utilities Committee advanced the bill out of committee, but the bill has not been brought up for debate by the full Senate. The bill is likely to be discussed during an energy and utilities interim committee meeting this summer. The Iowa Supreme Court recently upheld a temporary injunction against a similar law in that state finding that the law was likely to be found in violation of Iowa’s state constitution.
Electric Vehicle and Hydrogen Vehicle Production
On April 6th, Senate Bill 325 was introduced in the Senate Ways and Means Committee. The bill would establish the “Transformation of Passenger and Freight Vehicle Industry Program” to attract businesses engaged in electric motor vehicle and hydrogen-powered vehicle production by offering qualified companies that meet certain requirements an investment tax credit, retention of a percentage of total payroll tax, reimbursement of a percentage of eligible employee training and education expenses, and a sales tax exemption for construction costs of the qualified company’s qualified business facility.
Third-Party Funded Litigation
Senate Bill 74 would provide for joint liability of costs for third-party funded litigants and also allow for sanctions on third-party funded litigants. The bill would also require certain discovery disclosures and payment of certain costs for nonparty subpoenas. The bill was heard in the Senate Judiciary Committee, but because it has not passed either chamber, it will not likely advance further this session.
State Preemption of Local Plastic Regulations
House Bill 2446 would prohibit cities and counties from regulating plastic and other containers designed for the consumption, transportation, or protection of merchandise. The House amended the bill before passing it this week on a vote of 72-51, which is far short of the 83 votes necessary to override a potential veto from Governor Laura Kelly. The bill did not advance, and further action on the bill this year is unlikely.
State Preemption of Regulation Lawful Products or Services
House Bill 2447 would prohibit cities and counties from banning the sale of products or services otherwise allowed by state law. The House Commerce Committee amended the bill to narrow its scope by excluding sales of services from the prohibition and to otherwise limit the prohibition as it relates to sales of products. The bill did not advance, and further action on the bill this year is unlikely.
Unemployment Insurance
House Bill 2401, as introduced, would (1) define the “benefit year” and “temporary unemployment” in the employment security law, (2) require electronic filing of reports for employers with 25 or more employees, and (3) extend the time required for establishment of a new account due to a business acquisition. The House Commerce Committee amended the bill by adding in language from House Bill 2333 that would allow for extensions of temporary unemployment for up to 12 weeks. The House passed the bill 119-4. It is thought that further action may still be taken on the bill this year through a proviso in the omnibus budget bill.
Workers Compensation Permanent Disability Benefit
The Senate Commerce Committee held a hearing on Senate Bill 38, a bill that would increase the maximum Kansas workers compensation benefits payable by an employer for permanent total disability suffered by an injured employee. Under current law, the maximum workers compensation benefit that is payable by an employer to an employee for permanent total disability is $155,000. SB 38 would increase the amount to $350,000. The bill would take effect upon its publication in the Kansas Register. According to the Department of Administration, permanent total disability is paid out over time using an average weekly wage up to the statutory cap. Using the maximum average weekly wage, it would not reach $155,001 in either FY 2023 or FY 2024. It was understood that the bill was intended to initiate conversations between labor and industry and that further action on the bill is not likely to be taken this year.
ADA Website Access Abusive Litigation
S Sub for House Bill 2016 enacts the Act Against Abusive Access Litigation to create a civil action for determining whether litigation that alleges any website access violation under the federal Americans with Disabilities Act (ADA) or similar law constitutes abusive litigation and authorize penalties for such abusive litigation. The House passed the bill on a vote of 122-0. The Senate amended the bill before passing it 33-5. The House concurred with the Senate amendments, and Governor Laura Kelly signed the bill into law.
Eminent Domain Approval by County Commission
Senate Bill 312 would require the board of county commissioners prior to the exercise of the power of eminent domain by certain public utilities. The Senate Committee on Local Government held a hearing on the bill, where Kansas Farm Bureau and Kansas Livestock Association testified as proponents to the bill along with Representative Carrie Barth (R-Baldwin City) and many private citizens. Standing in opposition to the bill were ITC Great Plains, Polsinelli Energy Practice Group, and Kansas Power Alliance. While the bill is unlikely to advance further this year, it allowed the proponents to place themselves on the record as standing in strong opposition to any expansion of eminent domain powers in the state. In addition, this issue is likely to be discussed during an energy and utilities interim committee meeting this summer.
Prohibiting Mandatory ESG Criteria in State Contracts
As introduced, Senate Bill 291 would enact the Kansas public investments and contracts protection act concerning environmental, social and governance (ESG) criteria, prohibit the state and political subdivisions from giving preferential treatment to or discriminating against companies based on such ESG criteria in procuring or letting contracts, require KPERS fiduciaries to act solely in the financial interest of the participants and beneficiaries of the system, restrict state agencies from adopting ESG criteria or requiring any person or business to operate in accordance with such criteria, and direct registered investment advisers to provide ESG criteria notice to clients and providing for enforcement of such act by the attorney general. The Senate passed the bill 29-11, and the House passed a similar companion bill 85-38. The bill language was placed into Conference Committee Report on House Bill 2100, which passed both chambers. The bill has been enrolled and presented to Governor Laura Kelly for consideration.
Another Bill We Are Monitoring: SCR 1606 establishing an initiative and referendum Constitutional Amendment. Did not receive a hearing.
April 7, 2023
April 3 – 6 was the final week of the regular portion of the 2023 Kansas legislative session. It was a busy four days of winding down legislative business with dozens of bills to monitor, punctuated by a marathon session of House and Senate floor debate on bills beginning in the morning on Thursday, April 6 and running overnight before adjourning around 4:45 a.m., on Friday, April 7. The legislature passed an adjournment resolution calling them back to Topeka on April 26 to begin a short Veto Session, where it is anticipated that final action will be taken on the omnibus budget and some tax bills.
As always, thank you for allowing us to be your eyes and ears in the Kansas State Capitol.
Vaccines and Other Pharmaceuticals
Abolishing the Kansas Bioscience Authority
House Bill 2418 would, among other things, abolish the Kansas Bioscience Authority and certain Kansas Dept. of Health and Environment advisory committees. The House passed the bill on a vote of 123-0. The bill has been referred to the Senate Committee on Ways and Means. The bill may be added as a proviso to the omnibus budget bill during the legislative veto session beginning on April 26.
Government Competition Property Tax Exemption
On a vote of 24-16, the Senate passed Senate Bill 252 to provide property and sales tax exemptions to certain businesses located in cities where a facility owned or operated by the government competes against an establishment. Businesses qualifying for the exemptions would be limited to child care centers, entertainment businesses, exercise businesses, health clubs, recreation businesses, or restaurants. In order to qualify for the exemptions, the competing government operation would be required to have begun after the business started using the real property for the qualifying purpose. The bill is the latest development in a longstanding debate over whether local governments are competing against the private sector. The language of the bill was amended to narrow its scope and then placed into Conference Committee Report on Senate Bill 8.
Comprehensive Tax Legislation
House Sub for Senate Bill 169 is the legislature’s major tax reduction bill this session, and makes various changes to income, sales, and property taxes. The bill creates a single 5.15 percent individual income tax rate, remove the state sales tax on food, lower the corporate income tax rate, increase the individual income tax standard deduction with a cost-of-living adjustment, remove the social security income tax cliff, lower the bank privilege tax, and increase the amount of appraised value of residential property exempt from the statewide 20 mill school finance levy. The bill decreases state revenues by $300 million in FY 2024, $570 million in FY 2025, and $480 million in FY 2026. On Thursday, the bill passed the House 85-38, and the Senate 24-13. The bill now goes to the Governor for consideration.
State and Local Tax Clarification
House Bill 2465 would clarify the determination of taxable income and the pass through of tax credits to electing pass-through entity owners for purposes of the state and local tax (SALT) parity act. The bill was introduced under the premise that the state department of revenue was not correctly applying the SALT parity act passed last year. The House passed the bill 124-0. The Senate Tax Committee passed out a companion bill in Senate Bill 313. The Tax Conference Committee placed the contents of HB 2465 into CCR on SB 8, which has not yet received final action in the Senate.
Property Tax Valuation Notice and Appeals
House Bill 2002 was introduced to extend reimbursement from the taxpayer notification costs fund for printing and postage costs for county clerks for 2024. The bill would also modify and prescribe the contents of the revenue neutral rate hearing notice. The House passed the bill 114-7. The Senate amended the bill to allow property owners to make payments under protest appeals even if the property owner taxpayer had previously appealed their property valuation through an informal equalization appeal. After passing the Senate 34-6, the bill was sent to a conference committee which added in the contents of around five other bills. On Friday, the Senate passed Conference Committee Report on HB 2002 on a vote of 37-0. However, the House did not take final action on the bill before adjourning on April 7. The legislature may still take final action on the bill during Veto Session on April 26.
Maximum Property Valuation Annual Increase
SCR 1610 would amend section 1 of article 11 of the Kansas Constitution to limit annual increases in real property valuations to 3 percent. The bill was introduced as a means to help control the increase in ad valorem property taxes. The bill would require a ballot question for voters to approve the measure during the next state-wide election. In a vote by the full Senate, the measure failed to garner the two-thirds majority required for passage of a proposed constitutional amendment and did not advance. This week, the Senate introduced SCR 1611, a bill similar to SCR 1610 that would allow a maximum annual valuation increase of 4 percent. The Senate passed the resolution on a vote of 28-11 and it is now with the House. Further action is anticipated when the legislature returns on April 26 for the Veto Session.
Transmission Delivery Charges on Energy Users
House Bill 2225 was introduced in an attempt to limit Evergy’s direct recovery of costs related to electric public utility transmission projects. The House Utilities Committee passed the bill out with an agreed amendment by Evergy and rate payer stakeholders. As amended, the bill (1) reduces Evergy’s authorized return on equity (ROE) on local transmission projects, (2) sets up a project review process at the KCC, and (3) requires Evergy to submit testimony on competitive rates and impacts on economic development during any rate case. The major consumer concession was allowing Evergy to continue to assess annual increases through its transmission delivery charge (TDC). The KCC estimates the bill will provide ratepayer savings of $40M to $45M over three years. That includes the cumulative impacts of about $10M/year in upfront savings and approximately $2M/year in annual savings from new projects at the lower ROE. The House passed the bill on a vote of 120-1, and this week, the Senate passed the bill on a vote of 37-2. The bill has been presented to Governor Laura Kelly for consideration.
Prohibiting Foreign Ownership of Real Property
Senate Bill 283, as introduced, would prohibit the future conveyance of real property in Kansas to “foreign adversaries”, as the term is defined by federal law, beginning on July 1, 2023. This issue is a high priority item of new Kansas Attorney General Kris Kobach, who stood as a proponent to the bill. The Senate Judiciary Committee held a hearing on the bill and amended it before putting the contents of the bill into House Bill 2069, creating Senate Substitute for House Bill 2069. No further action was taken on the bill this year.
Apprenticeship Tax Credit
HB 2292 would establish a three-year Kansas apprenticeship tax credit to encourage the development of apprenticeship programs by participating businesses. The credit would be up to $2,500 for each apprentice so employed, and the tax credit may be awarded up to 20 apprentices per year. The program would be administered by the Kansas Department of Commerce. Kansas Grain and Feed Association and Kansas Agribusiness Retailers Association joined other stakeholders in support of the measure which passed the House on a vote of 115-7. The Senate amended the bill to place a cap on the amount of the grant provision per year and added a provision that any unused balance in the fund would be transferred to the state general fund. The Senate passed the bill on a vote of 30-7. This week, the bill was placed into Conference Committee Report on HB 2292 and passed by both chambers. The bill now heads to Governor Laura Kelly for consideration.
Electric Utility Rates
Kansas has the highest energy rates in our region, and multiple bills have been introduced to address high electric utility rates while ensuring reliable service:
Third-Party Funded Litigation
Senate Bill 74 would provide for joint liability of costs for third-party funded litigants and also allow for sanctions on third-party funded litigants. The bill would also require certain discovery disclosures and payment of certain costs for nonparty subpoenas. The bill was heard in the Senate Judiciary Committee, but because it has not passed either chamber, it will not likely advance further this session.
State Preemption of Local Plastic Regulations
House Bill 2446 would prohibit cities and counties from regulating plastic and other containers designed for the consumption, transportation, or protection of merchandise. The House amended the bill before passing it this week on a vote of 72-51, which is far short of the 83 votes necessary to override a potential veto from Governor Laura Kelly. The bill did not advance, and further action on the bill this year is unlikely.
State Preemption of Regulation Lawful Products or Services
House Bill 2447 would prohibit cities and counties from banning the sale of products or services otherwise allowed by state law. The House Commerce Committee held a hearing on the bill on March 13. The committee amended the bill to narrow its scope by excluding sales of services from the prohibition and to otherwise limit the prohibition as it relates to sales of products. The bill did not advance, and further action on the bill this year is unlikely.
Unemployment Insurance
House Bill 2401, as introduced, would (1) define the “benefit year” and “temporary unemployment” in the employment security law, (2) require electronic filing of reports for employers with 25 or more employees, and (3) extend the time required for establishment of a new account due to a business acquisition. The House Commerce Committee amended the bill by adding in language from House Bill 2333 that would allow for extensions of temporary unemployment for up to 12 weeks. This week, the House passed the bill, as amended, on a vote of 119-4. It is thought that further action may still be taken on the bill this year through a proviso in the omnibus budget bill.
Workers Compensation Permanent Disability Benefit
On March 29, the Senate Commerce Committee held a hearing on Senate Bill 38, a bill that would increase the maximum Kansas workers compensation benefits payable by an employer for permanent total disability suffered by an injured employee. Under current law, the maximum workers compensation benefit that is payable by an employer to an employee for permanent total disability is $155,000. SB 38 would increase the amount to $350,000. The bill would take effect upon its publication in the Kansas Register. According to the Department of Administration, permanent total disability is paid out over time using an average weekly wage up to the statutory cap. Using the maximum average weekly wage, it would not reach $155,001 in either FY 2023 or FY 2024. It was understood that the bill was intended to initiate conversations between labor and industry and that further action on the bill would not be taken this year.
ADA Website Access Abusive Litigation
S Sub for House Bill 2016 would enact the Act Against Abusive Access Litigation to create a civil action for determining whether litigation that alleges any website access violation under the federal Americans with Disabilities Act (ADA) or similar law constitutes abusive litigation and authorize penalties for such abusive litigation. The House passed the bill on a vote of 122-0. This week, the full Senate debated and amended the bill before passing it on a vote of 33-5. This week, the House concurred with the Senate amendments. The bill is now headed to Governor Laura Kelly for consideration.
Eminent Domain Approval by County Commission
Senate Bill 312 would require the board of county commissioners prior to the exercise of the power of eminent domain by certain public utilities. The Senate Committee on Local Government held a hearing on the bill, where Kansas Farm Bureau and Kansas Livestock Association testified as proponents to the bill along with Representative Carrie Barth (R-Baldwin City) and many private citizens. Standing in opposition to the bill were ITC Great Plains, Polsinelli Energy Practice Group, and Kansas Power Alliance. While the bill is unlikely to advance further this year, it allowed the proponents to place themselves on the record as standing in strong opposition to any expansion of eminent domain powers in the state. In addition, this issue is likely to be discussed during an energy and utilities interim committee meeting this summer.
Prohibiting Mandatory ESG Criteria in State Contracts
As introduced, Senate Bill 291 would enact the Kansas public investments and contracts protection act concerning environmental, social and governance (ESG) criteria, prohibit the state and political subdivisions from giving preferential treatment to or discriminating against companies based on such ESG criteria in procuring or letting contracts, require KPERS fiduciaries to act solely in the financial interest of the participants and beneficiaries of the system, restrict state agencies from adopting ESG criteria or requiring any person or business to operate in accordance with such criteria, and direct registered investment advisers to provide ESG criteria notice to clients and providing for enforcement of such act by the attorney general. The Senate passed the bill 29-11, and the House passed a similar companion bill 85-38. The bill language was placed into Conference Committee Report on House Bill 2100, which passed both chambers and now goes to Governor Laura Kelly for consideration.
Another Bill We Are Monitoring:
SCR 1606 establishing an initiative and referendum Constitutional Amendment. Did not receive a hearing.
March 31, 2023
The House and Senate debated dozens of bills over three days this week at the Kansas statehouse. A few bills received final approval from both chambers and are on their way to the Governor, but most of the bills still being debated will be referred to conference committees next week to discuss their potential content and passage. The legislature will continue its work through Thursday, April 6, before taking its first adjournment. Also, this week, the Governor signed four mostly non-controversial bills. There is much work left to be done for lawmakers as they deliberate on bills concerning the state budget, rail infrastructure, personal and commercial tax policy, public health, and much more.
Vaccines and Other Pharmaceuticals
Abolishing the Kansas Bioscience Authority
House Bill 2418 would, among other things, abolish the Kansas Bioscience Authority and certain Kansas Dept. of Health and Environment advisory committees. The House passed the bill on a vote of 123-0. The bill has been referred to the Senate Committee on Ways and Means. Because the bill has passed at least one chamber, it can be considered by a Conference Committee of members of the House Appropriations Committee and Senate Ways and Means Committee.
HMO/MCO Provider Requirements
House Bill 2094 would specify certain requirements necessary to demonstrate fiscal soundness for health maintenance organizations and Medicare provider organizations applying for certificates of authority. The House passed the bill on a vote of 124-0. The Senate, having considered and amended the bill, passed it on a vote of 38-0. The House did not concur with the Senate amendments to the bill, and the bill has been referred to a House and Senate Insurance Conference Committee. The Senate passed a companion bill, Senate Bill 26, on a vote of 38-1.
Prohibiting Foreign Ownership of Real Property
Senate Bill 283, as introduced, would prohibit the future conveyance of real property in Kansas to “foreign adversaries”, as the term is defined by federal law, beginning on July 1, 2023. This issue is a high priority item of new Kansas Attorney General Kris Kobach, who stood as a proponent to the bill. The Senate Judiciary Committee held a hearing on the bill and amended it before putting the contents of the bill into House Bill 2069, creating Senate Substitute for House Bill 2069. The bill was not passed by the full Senate, and because House Bill 2069 is not an “exempt” bill, it is unlikely to advance further this session.
Comprehensive Tax Legislation
This week, the House amended Senate Bill 169 as House Substitute for Senate Bill 169 and then passed the bill favorably on a vote of 94-30. The bill – estimated to reduce taxes by around $500 million in state fiscal years 2024, 2025, and 2026 – makes various changes to state sales tax, income tax, and property tax. The bill creates a flat percentage individual income tax, removes the state sales tax on food and food ingredients, lowers the corporate income tax rate, increases the individual income tax standard deduction, increases the residential property tax exemption, removes the social security income tax cliff, and lowers the bank privilege tax. The Senate had previously passed three separate tax bills addressing these issues that, together, would have provided more than $1.1 billion in tax reductions. House Sub for Senate Bill 169 – the House’s response to the Senate tax bills – will now be returned to the Senate, where the chamber will likely refer the bill to a House and Senate Tax Conference Committee to debate its final contents.
State and Local Tax Clarification
House Bill 2465 would clarify the determination of taxable income and the pass through of tax credits to electing pass-through entity owners for purposes of the SALT parity act. The bill was introduced under the premise that the state department of revenue was not correctly applying the state and local tax (SALT) parity bill that was passed last year. This week, the House passed the bill on a vote of 124-0, and the bill was advanced to the Senate. The Senate Tax Committee has already considered a Senate companion bill in Senate Bill 313, and passed the bill out of committee favorably. Both bills will likely be discussed further in a House and Senate Tax Conference Committee.
Property Tax Valuation and Notice
House Bill 2002 was introduced to extend reimbursement from the taxpayer notification costs fund for printing and postage costs for county clerks for 2024. The bill would also modify and prescribe the contents of the revenue neutral rate hearing notice. The House passed the bill on a vote of 114-7. The Senate Tax Committee amended the bill and then passed it out of committee. The full Senate Committee further amended the bill to allow property owners to make payments under protest appeals even if the property owner taxpayer had previously appealed their property valuation through an informal equalization appeal. The Senate passed the bill, as amended, on a vote 34-6. The bill now returns to the House, where the chamber will likely refer the bill to a House and Senate Tax Conference Committee to debate its final contents.
Maximum Property Valuation Annual Increase
SCR 1610 was introduced by Senator Caryn Tyson (R-Parker), Chair of the Senate Committee on Assessment and Taxation. The resolution would amend section 1 of article 11 of the Kansas Constitution to limit annual increases in real property valuations to no more than 3 percent. The bill was introduced as a means to help control the increase in ad valorem property taxes. If passed, the bill would have required a ballot question for voters to approve the measure during the next state-wide election. In a vote by the full Senate this week, however, the measure failed to garner the two-thirds majority required for passage of a proposed constitutional amendment and will not advance further this year.
Transmission Delivery Charges on Energy Users
House Bill 2225 was introduced in an attempt to limit Evergy’s direct recovery of costs related to electric public utility transmission projects. The House Utilities Committee passed the bill out with an agreed amendment by Evergy and rate payer stakeholders. As amended, the bill (1) reduces Evergy’s authorized return on equity (ROE) on local transmission projects, (2) sets up a project review process at the KCC, and (3) requires Evergy to submit testimony on competitive rates and impacts on economic development during any rate case. The major consumer concession was allowing Evergy to continue to assess annual increases through its transmission delivery charge (TDC). The KCC estimates the bill will provide ratepayer savings of $40M to $45M over three years. That includes the cumulative impacts of about $10M/year in upfront savings and approximately $2M/year in annual savings from new projects at the lower ROE. The House passed the bill on a vote of 120-1, and this week, the Senate passed the bill on a vote of 37-2. The bill now goes to the Governor for consideration.
Apprenticeship Tax Credit Act
HB 2292 would establish a three-year Kansas apprenticeship tax credit to encourage the development of apprenticeship programs by participating businesses. The credit would be up to $2,500 for each apprentice so employed, and the tax credit may be awarded up to 20 apprentices per year. The program would be administered by the Kansas Department of Commerce. Kansas Grain and Feed Association and Kansas Agribusiness Retailers Association joined other stakeholders in support of the measure which passed the House on a vote of 115-7. The Senate Commerce Committee amended the bill to place a cap on the amount of the grant provision per year and added a provision that any unused balance in the fund would be transferred to the state general fund. This week, the full Senate passed the bill on a vote of 30-7. Next week, the bill will be returned to the House where the chamber can either concur with the Senate amendments or refer the bill to a House and Senate Commerce Conference Committee to debate the bill’s final contents.
Government Competition Property Tax Exemption
This week, on a vote of 24-16, the Senate passed Senate Bill 252 to provide property and sales tax exemptions to certain businesses located in cities where a facility owned or operated by the government competes against an establishment. Businesses qualifying for the exemptions would be limited to child care centers, entertainment businesses, exercise businesses, health clubs, recreation businesses, or restaurants. In order to qualify for the exemptions, the competing government operation would be required to have begun after the business started using the real property for the qualifying purpose. The bill is the latest development in a longstanding debate over whether local governments are competing against the private sector. Because the bill has passed at least one chamber, it can be considered by a Conference Committee of members of the House and Senate Tax Committees.
Electric Utility Rates
Kansas has the highest energy rates in our region, and multiple bills have been introduced to address high electric utility rates while ensuring reliable service:
Third-Party Funded Litigation
Senate Bill 74 would provide for joint liability of costs for third-party funded litigants and also allow for sanctions on third-party funded litigants. The bill would also require certain discovery disclosures and payment of certain costs for nonparty subpoenas. The bill was heard in the Senate Judiciary Committee, but because it has not passed either chamber, it will not likely advance further this session.
State Preemption of Local Plastic Regulations
House Bill 2446 would prohibit cities and counties from regulating plastic and other containers designed for the consumption, transportation, or protection of merchandise. The House amended the bill before passing it this week on a vote of 72-51, which is far short of the 83 votes necessary to override a potential veto from Governor Laura Kelly. The bill has been referred to the Senate Commerce Committee for consideration. Because the bill has passed at least one chamber, it can be considered by a Conference Committee of members of the House and Senate Commerce Committees.
State Preemption of Regulation Lawful Products or Services
House Bill 2447 would prohibit cities and counties from banning the sale of products or services otherwise allowed by state law. The House Commerce Committee held a hearing on the bill on March 13. The committee amended the bill to narrow its scope by excluding sales of services from the prohibition and to otherwise limit the prohibition as it relates to sales of products. The bill did not advance, and further action on the bill this year is unlikely.
Unemployment Insurance
House Bill 2401, as introduced, would (1) define the “benefit year” and “temporary unemployment” in the employment security law, (2) require electronic filing of reports for employers with 25 or more employees, and (3) extend the time required for establishment of a new account due to a business acquisition. The House Commerce Committee amended the bill by adding in language from House Bill 2333 that would allow for extensions of temporary unemployment for up to 12 weeks. This week, the House passed the bill, as amended, on a vote of 119-4. The bill has advanced to the Senate Commerce Committee. Because the bill has passed at least one chamber, it can be considered by a Conference Committee of members of the House and Senate Commerce Committees.
Workers Compensation Permanent Disability Benefit
On March 29, the Senate Commerce Committee held a hearing on Senate Bill 38, a bill that would increase the maximum Kansas workers compensation benefits payable by an employer for permanent total disability suffered by an injured employee. Under current law, the maximum workers compensation benefit that is payable by an employer to an employee for permanent total disability is $155,000. SB 38 would increase the amount to $350,000. The bill would take effect upon its publication in the Kansas Register. According to the Department of Administration, permanent total disability is paid out over time using an average weekly wage up to the statutory cap. Using the maximum average weekly wage, it would not reach $155,001 in either FY 2023 or FY 2024. It was understood that the bill was intended to initiate conversations between labor and industry and that further action on the bill would not be taken this year.
ADA Website Access Abusive Litigation
S Sub for House Bill 2016 would enact the Act Against Abusive Access Litigation to create a civil action for determining whether litigation that alleges any website access violation under the federal Americans with Disabilities Act (ADA) or similar law constitutes abusive litigation and authorize penalties for such abusive litigation. The House passed the bill on a vote of 122-0. This week, the full Senate debated and amended the bill before passing it on a vote of 33-5. Next week, the bill will return to the House where the chamber can either concur with the Senate amendments or refer the bill to a Conference Committee of members of the House and Senate Judiciary Committees.
Eminent Domain Approval
Senate Bill 312 would require the board of county commissioners prior to the exercise of the power of eminent domain by certain public utilities. The Senate Committee on Local Government held a hearing on the bill, where Kansas Farm Bureau and Kansas Livestock Association testified as proponents to the bill along with Representative Carrie Barth (R-Baldwin City) and many private citizens. Standing in opposition to the bill were ITC Great Plains, Polsinelli Energy Practice Group, and Kansas Power Alliance. While the bill is unlikely to advance further this year, it allowed the proponents to place themselves on the record as standing in strong opposition to any expansion of eminent domain powers in the state.
Other Bills We Are Monitoring:
HB 2436 prohibiting public contracts from giving preferential treatment based on ESG criteria. Passed the House 85-38, to Sen Fed and State.
SCR 1606 establishing an initiative and referendum Constitutional Amendment. Did not receive a hearing.
March 24, 2023
There was frenzied committee activity inside the Kansas statehouse this week as the 2023 legislature reached its March 24 deadline for committees to meet and evaluate bills. Next week will include hours of floor debate in the House and Senate. With the legislature’s first adjournment scheduled for April 6, lawmakers contemplated numerous bills concerning rail infrastructure, personal and commercial tax policy, the state budget, public health, and much more.
Vaccines and Other Pharmaceuticals
Prohibiting Foreign Ownership of Real Property
Senate Bill 283 would prohibit the future conveyance of real property in Kansas to “foreign adversaries”, as the term is defined by federal law, beginning on July 1, 2023. This issue is a high priority item of new Kansas Attorney General Kris Kobach. The Senate Judiciary Committee held a hearing on the bill. On Friday, the committee amended the bill before putting its contents into House Bill 2069, creating Senate Substitute for House Bill 2069. The committee passed the bill out favorably and it now goes to the full Senate for consideration.
Abolishing the Kansas Bioscience Authority
HB 2418 would, among other things, abolish the Kansas Bioscience Authority and certain Kansas Dept. of Health and Environment advisory committees. The House Appropriations Committee held a hearing on the bill and, this week, advanced the bill out of committee favorably for passage. The bill now goes to the full House for consideration.
HMO/MCO Provider Requirements
House Bill 2094 would specify certain requirements necessary to demonstrate fiscal soundness for health maintenance organizations and Medicare provider organizations applying for certificates of authority. The House passed the bill on a vote of 124-0. The Senate, having considered and amended the bill, passed it on a vote of 38-0. The Senate passed a companion bill, Senate Bill 26, on a vote of 38-1. The bill was referred to the House Committee on Insurance which recommended the bill favorably for passage.
House Tax Bill
This week, the House Tax Committee considered a tax bill that included various tax cuts. After multiple amendments, the committee placed the contents of its bill into a senate bill and passed it out as House Substitute for Senate Bill 169. The bill is estimated to reduce taxes by around $500 million in state fiscal years 2024, 2025, and 2026. The bill removes the state sales tax on food and food ingredients, inserts a flat tax on individual income, lowers the corporate income tax rate, increases the residential property tax exemption, removes the social security income tax cliff, increases the individual income tax standard deduction, and lowers the bank privilege tax. The Senate has passed three tax bills that, together, would provide more than $1.1 billion in cuts to income tax, social security tax, and food sales tax. These tax bills will be debated in a House and Senate Tax Conference Committee next week.
State and Local Tax Clarification
Senate Bill 313 would clarify the determination of taxable income and the pass through of tax credits to electing pass-through entity owners for purposes of the SALT parity act. The bill was introduced under the premise that the state department of revenue was not correctly applying the SALT parity bill that was passed last year. The Senate Tax Committee advanced the bill for consideration by the full Senate. In addition, the House Tax Committee considered and advanced a companion bill House Bill 2465 to the full House for consideration.
Maximum Property Valuation Annual Increase
This week, SCR 1610 was introduced by Senator Caryn Tyson (R-Parker), Chair of the Senate Committee on Assessment and Taxation. The resolution would amend section 1 of article 11 of the Kansas Constitution to limit annual increases in real property valuations to no more than 3 percent. The bill was introduced as a means to help control the increase in ad valorem property taxes. The Senate Tax Committee held a hearing on the bill and passed it out favorably to the full Senate for consideration.
Electric Utility Rates
Kansas has the highest energy rates in our region, and multiple bills have been introduced to address high electric utility rates while ensuring reliable service:
Transmission Delivery Charges on Energy Users
House Bill 2225 was introduced in an attempt to limit Evergy’s direct recovery of costs related to electric public utility transmission projects. The House Utilities Committee passed the bill out favorably, but stakeholders were asked to work with Evergy to find a compromise position. The bill was then referred back to committee and, on Thursday, an agreed amendment was added to the bill before being passed out favorably. As amended, the bill (1) reduces Evergy’s authorized return on equity (ROE) on local transmission projects, (2) sets up a project review process at the KCC, and (3) requires Evergy to submit testimony on competitive rates and impacts on economic development during any rate case. The major consumer concession was allowing Evergy to continue to assess annual increases through its transmission delivery charge (TDC). The KCC estimates the bill will provide ratepayer savings of $40M to $45 million over three years. That includes the cumulative impacts of about $10M/year in upfront savings and approximately $2 million per year in annual savings from new projects at the lower ROE. The full House voted to pass the bill favorably on a vote of 120-1. This week, the Senate Utilities Committee held a hearing on the bill and advanced it out of committee to the full Senate for consideration.
Third-Party Funded Litigation
Senate Bill 74 would provide for joint liability of costs for third-party funded litigants and also allow for sanctions on third-party funded litigants. The bill would also require certain discovery disclosures and payment of certain costs for nonparty subpoenas. The bill was heard in the Senate Judiciary Committee.
State Preemption of Local Plastic Regulations
House Bill 2446 would prohibit cities and counties from regulating plastic and other containers. The House Committee on Federal and State Affairs held a hearing on the bill and then amended it before advancing the bill to the full House for consideration.
Eminent Domain Approval
Senate Bill 312 would require the board of county commissioners prior to the exercise of the power of eminent domain by certain public utilities. This week, the Senate Committee on Local Government held a hearing on the bill, where Kansas Farm Bureau and Kansas Livestock Association testified as proponents to the bill along with Representative Carrie Barth (R-Baldwin City) and many private citizens. Standing in opposition to the bill were ITC Great Plains, Polsinelli Energy Practice Group, and Kansas Power Alliance. The bill is unlikely to advance further this year.
Other Bills We Are Monitoring:
SB 311 prohibiting use of 1031 exchange sale information in property valuation. Sen Tax passed out.
SCR 1606 establishing an initiative and referendum Constitutional Amendment. No hearing.
HB 2002 various property tax valuation and notice changes. Senate committee passed out.
HB 2192 creating a Kansas Secretary of State website for grants, applications, awards. No hearing.
HB 2436 prohibiting public contracts from giving preferential treatment based on ESG criteria. Passed the House 85-38, to Sen.
HCR 5009 amending the Kansas constitution to decrease residential assessed value for real property to 9 percent. House Tax Hearing.
March 17, 2023
Senate Advances Budget Bill
On Thursday evening, the Senate advanced its initial budget bill (Sen Sub for Senate Bill 155) to a final action vote after amending the bill multiple times. The bill includes a $9.24 billion budget for the remainder of the current fiscal year (2023) and $9.420 billion for the upcoming fiscal year (2024). The bill includes $52.0 million that would be transferred to the Office of the State Treasurer for investment and the interest would be used to pay off water storage debt associated with the Milford and Perry Lake reservoirs. The bill does not include a $500 million transfer to the Budget Stabilization Fund that was recommended by Governor Laura Kelly. Notable amendments to the budget include:
Vaccines and Other Pharmaceuticals
Abolishing the Kansas Bioscience Authority
Midway through the week, the House Appropriations Committee introduced HB 2418 which would, among other things, abolish the Kansas Bioscience Authority and certain Kansas Dept. of Health and Environment advisory committees. The bill received a hearing in the House Appropriations Committee on March 16. The bill received minimal opposition and will likely receive final committee action soon.
HMO/MCO Provider Requirements
House Bill 2094 would specify certain requirements necessary to demonstrate fiscal soundness for health maintenance organizations and Medicare provider organizations applying for certificates of authority. The House passed the bill on a vote of 124-0. The Senate Committee on Financial Institutions and Insurance held a hearing on the bill on March 7 and passed the bill on March 15 with an amendment to change the effective date to publication in the Kansas Register. The Senate passed a companion bill, Senate Bill 26, on a vote of 38-1. The bill was referred to the House Committee on Insurance which recommended the bill favorably for passage.
Hemp Grain
House Bill 2168 would add industrial hemp seed to the statutory definition of grain in the Kansas grain warehouse law. The Kansas Department of Agriculture is reviewing the bill for other impacts the designation might have. No hemp ingredients have been federally approved for use in animal feed, and it is unknown whether hemp ingredients are safe for animals or can be utilized as a source of nutrition when consumed for extended periods of time. These questions should be answered before hemp is used for commercial feed purposes to ensure the safety of the public, animals, and the agricultural industry. The House Committee on Agriculture held a hearing on the bill on March 15 where Kansas Grain and Feed Association provided opposition testimony. It is not anticipated that the bill will move forward.
Various Tax Bills
The Senate passed three tax bills that, together, would provide more than $1.1 billion in tax cuts. The bills are scheduled for hearing in the House Tax Committee.
State and Local Tax Clarification
This week, Senate Bill 313 was introduced to clarify the determination of taxable income and the pass through of tax credits to electing pass-through entity owners for purposes of the SALT parity act. The bill was introduced under the premise that the state department of revenue was not correctly applying the SALT parity bill that was passed last year. The bill will be heard on the Senate Tax Committee on Wednesday, March 22.
Maximum Property Valuation Annual Increase
This week, SCR 1610 was introduced by Senator Caryn Tyson, Chair of the Senate Committee on Assessment and Taxation. The resolution would amend section 1 of article 11 of the Kansas Constitution to limit annual increases in real property valuations to no more than 3 percent. The bill was introduced as a means to help control the increase in ad valorem property taxes. The bill is scheduled for hearing in the Senate Tax Committee on Wednesday, March 22.
Penalties for Failing to Timely Remit Withholding Taxes
House Bill 2411 would decrease statutory penalties for employer failing to timely remit employee withholding income taxes. Under current law, the penalty for the failure of an employer to remit any amount of withholding taxes is 15.0 percent of the amount of underpayment. The bill would set the penalty as a percentage of the amount of the underpayment as follows: 2 percent if remitted within one to five days; 5 percent if remitted within six to 15 days; 10 percent if remitted after 15 days; and 15 percent if remitted after 15 days and the Department has issued a notice to the person regarding the underpayment, but the amount of the underpayment was not remitted within ten days of issuance of the notice. The House Tax Committee will take final action on the bill next week.
Prohibiting Foreign Ownership of Real Property
Senate Bill 283 would prohibit the future conveyance of real property in Kansas to “foreign adversaries”, as the term is defined by federal law. The bill was referred to the Senate Judiciary Committee, and a hearing is scheduled for Tuesday, March 21, with committee action to be taken the following day. Two similar bills were previously introduced this year in Senate Bill 100 and House Bill 2397. The House Committee on Agriculture held a hearing on House Bill 2397 but did not act on the bill. Senate Bill 100 was referred to the Senate Judiciary committee where it did not receive a hearing. This issue is a high priority item of new Kansas Attorney General Kris Kobach.
Electric Utility Rates
Kansas has the highest energy rates in our region, and multiple bills have been introduced to address high electric utility rates while ensuring reliable service:
Transmission Delivery Charges on Energy Users
House Bill 2225 was introduced in an attempt to limit Evergy’s direct recovery of costs related to electric public utility transmission projects. The House Utilities Committee passed the bill out favorably, but stakeholders were asked to work with Evergy to find a compromise position. The bill was then referred back to committee and, on Thursday, an agreed amendment was added to the bill before being passed out favorably. As amended, the bill (1) reduces Evergy’s authorized return on equity (ROE) on local transmission projects, (2) sets up a project review process at the KCC, and (3) requires Evergy to submit testimony on competitive rates and impacts on economic development during any rate case. The major consumer concession was allowing Evergy to continue to assess annual increases through its transmission delivery charge (TDC). The KCC estimates the bill will provide ratepayer savings of $40M to $45M over three years. That includes the cumulative impacts of about $10M/year in upfront savings and approximately $2M/year in annual savings from new projects at the lower ROE. The full House voted to pass the bill favorably on a vote of 120-1. It is expected that the Senate Utilities Committee will hold a hearing on the bill next week.
Third-Party Funded Litigation
Senate Bill 74 would provide for joint liability of costs for third-party funded litigants and also allow for sanctions on third-party funded litigants. The bill would also require certain discovery disclosures and payment of certain costs for nonparty subpoenas. The bill was heard in the Senate Judiciary Committee. The bill was referred to an exempt committee to keep it alive for further action this session and stakeholders are working on a possible amendment to address specific concerns.
State Preemption of Local Plastic Regulations
House Bill 2446 would prohibit cities and counties from regulating plastic and other containers. The bill received a hearing in the House Committee on Federal and State Affairs on March 15.
Eminent Domain Approval
This week, Senate Bill 312 was introduced and referred to the Senate Committee on Local Government. The bill would require the board of county commissioners prior to the exercise of the power of eminent domain by certain public utilities. The bill has been scheduled for hearing on Thursday, March 23 at 9:30 am in room 142-S.
March 10, 2023
This week, the legislature continued its consideration of bills that had passed in the opposite chamber and began finalizing work on general agency budget bills for fiscal years 2024, 2025, and 2026. Most committees only have two weeks remaining this session to meet and consider bills before the full House and Senate begin deliberation.
Vaccines and Other Pharmaceuticals
Abolishing the Kansas Bioscience Authority
Midway through the week, the House Appropriations Committee introduced HB 2418 which would, among other things, abolish the Kansas Bioscience Authority and certain Kansas Dept. of Health and Environment advisory committees. The bill is scheduled for hearing in the House Appropriations Committee on Thursday, March 16 at 9:00 am in room 112-n.
HMO/MCO Provider Requirements
House Bill 2094 would specify certain requirements necessary to demonstrate fiscal soundness for health maintenance organizations and Medicare provider organizations applying for certificates of authority. The House passed the bill on a vote of 124-0. The Senate Committee on Financial Institutions and Insurance held a hearing on the bill on March 7. The Senate passed a companion bill, Senate Bill 26, on a vote of 38-1. The bill was referred to the House Committee on Insurance which recommended the bill favorably for passage.
Prohibiting Foreign Ownership of Real Property
Senate Bill 283 would prohibit the future conveyance of real property in Kansas to “foreign adversaries”, as the term is defined by federal law. The bill was referred to the Senate Judiciary Committee. It will likely be given a hearing on March 21, and then receive committee action the following day. Two similar bills were previously introduced this year in Senate Bill 100 and House Bill 2397. The House Committee on Agriculture held a hearing on House Bill 2397 but did not act on the bill. Senate Bill 100 was referred to the Senate Judiciary committee where it did not receive a hearing. This issue is a high priority item of new Kansas Attorney General Kris Kobach.
Corporate Income Tax Apportionment
As introduced, House Bill 2110 would allow corporate taxpayers, based on NAICS codes included in the bill, to elect to use a single-factor apportionment formula, based on sales in the state, to determine their income tax liability. The bill is estimated to have a cost to the state of approximately $20 million. The House Tax Committee held a hearing on the bill, where Kansas Grain and Feed Association joined the Kansas Chamber as the only proponents. The committee declined to take further action on the bill while it considered whether to adopt an amendment requested by the Kansas Dept. of Revenue to require all corporations in the state to use the sales single-factor apportionment formula. Most states require use of this apportionment methodology. As industry stakeholders weighed in with varying positions on whether the bill should be made mandatory for all corporate filers, it was decided to hold off on further action on the bill until next year.
Various Tax Bills
The Senate passed three tax bills that, together, would provide more than $1.1 billion in tax cuts. The bills are scheduled for hearing in the House Tax Committee.
Penalties for Failing to Timely Remit Withholding Taxes
House Bill 2411 would decrease statutory penalties for employer failing to timely remit employee withholding income taxes. Under current law, the penalty for the failure of an employer to remit any amount of withholding taxes is 15.0 percent of the amount of underpayment. The bill would set the penalty as a percentage of the amount of the underpayment as follows: 2 percent if remitted within one to five days; 5 percent if remitted within six to 15 days; 10 percent if remitted after 15 days; and 15 percent if remitted after 15 days and the Department has issued a notice to the person regarding the underpayment, but the amount of the underpayment was not remitted within ten days of issuance of the notice. A hearing was held on the bill in the House Tax Committee.
Tax Withholding Requirements for Employees in Multiple States
House Bill 2420 would establish withholding tax requirements for employers with employees working in multiple states. The bill was referred to the House Committee on Taxation and has not been scheduled for hearing.
Electric Utility Rates
Kansas has the highest energy rates in our region, and multiple bills have been introduced to address high electric utility rates while ensuring reliable service:
Transmission Delivery Charges on Energy Users
House Bill 2225 was introduced in an attempt to limit Evergy’s direct recovery of costs related to electric public utility transmission projects. The House Utilities Committee passed the bill out favorably, but stakeholders were asked to work with Evergy to find a compromise position. The bill was then referred back to committee and, on Thursday, an agreed amendment was added to the bill before being passed out favorably. As amended, the bill (1) reduces Evergy’s authorized return on equity (ROE) on local transmission projects, (2) sets up a project review process at the KCC, and (3) requires Evergy to submit testimony on competitive rates and impacts on economic development during any rate case. The major consumer concession was allowing Evergy to continue to assess annual increases through its transmission delivery charge (TDC). The KCC estimates the bill will provide ratepayer savings of $40M to $45M over three years. That includes the cumulative impacts of about $10M/year in upfront savings and approximately $2M/year in annual savings from new projects at the lower ROE. A full House vote on the bill is expected next week. Many thanks to the Kansas Industrial Consumers Group that negotiated for all industrial energy users during this process.
Third-Party Funded Litigation
Senate Bill 74 would provide for joint liability of costs for third-party funded litigants and also allow for sanctions on third-party funded litigants. The bill would also require certain discovery disclosures and payment of certain costs for nonparty subpoenas. The bill was heard in the Senate Judiciary Committee. The bill was referred to an exempt committee to keep it alive for further action this session and stakeholders are working on a possible amendment to address specific concerns.
State Preemption of Local Plastic Regulations
House Bill 2446 would prohibit cities and counties from regulating plastic and other containers. The bill is scheduled for hearing in the House Committee on Federal and State Affairs on Wednesday, March 15.
Cannabis Legislation
The following cannabis bills have been introduced this year:
Senate Bill 135 would create the medical cannabis regulation act to regulate the cultivation, processing, distribution, sale, and use of medical cannabis. The bill is scheduled for hearing in the Senate Committee on Federal and State Affairs on Wednesday, March 15.
Senate Bill 171 would create the veterans first medical cannabis act to regulate the cultivation, distribution, sale, possession and use of medical cannabis.
Senate Bill 276 would specify the delta-9 tetrahydrocannabinol concentration amount for final hemp products and allow hemp products to be manufactured, marketed, or sold.
March 3, 2023
Vaccines and Other Pharmaceuticals
Senate Bill 6, introduced prior to the first week of this legislative session, would restrict the authority of the secretary of health and environment and local health officers to prevent the introduction and spread of infectious or contagious diseases. Testimony from proponents and opponents during the committee hearing is located HERE. The bill was passed out of committee, and this week the full Senate passed the fill favorably on a vote of 22-18, well short of the 27 votes needed for a veto override.
Senate Bill 20 would require childcare facilities, elementary, secondary, postsecondary educational institutions, and employers to grant exemptions from vaccine requirements without inquiring into the sincerity of the request. The bill would also create a penalty that childcare facilities would have to pay to parents if the facility rejected an unvaccinated child. It would also repeal the meningitis vaccine requirement to live in student housing. Leadership in the Kansas Senate chose to ‘bless’ this bill and keep it alive by moving it to an exempt committee prior to the legislative turnaround on Friday, Feb. 24.
Senate Bill 112 would authorize certain prescribing authority to nurse anesthetists. The Senate Committee on Public Health and Welfare held a hearing on the bill on Thursday, Feb. 16 and then passed the bill favorably out of committee. Senate leadership chose to ‘bless’ this bill, leaving it alive for the remainder of the session.
Senate Bill 173 would authorize over the counter purchase of ivermectin and hydroxychloroquine. HB 2126 is the House companion bill. Neither bill received a hearing and they are no longer live bills for this session.
House Bill 2007 in the House Committee on Health and Human Services, would prohibit the secretary of health and environment from requiring a COVID-19 vaccination for care at a childcare facility or attendance at a school. The bill did not receive a hearing and is no longer a live bill for this session.
House Bill 2099 would discontinue certain exemptions from the pharmacy benefits manager licensure act concerning third party administrators. The bill did not receive a hearing and is no longer a live bill for this session.
House Bill 2202 would create a sales tax exemption for over-the-counter drugs. The bill has not received a hearing, but remains a live bill.
House Bill 2259 would remove prior authorization for Mental health medications for Medicaid patients. The bill received a hearing on Feb. 14 and was passed out of committee with an amendment. The bill, as amended, would state that a prescriber shall not be required to obtain prior authorization for medications used for mental illness. Medications would include, but would not be limited to, conventional antipsychotic medications and atypical antipsychotic medications. The prior authorization for mental health medication would only be removed for persons who are Medicaid recipients. The bill was referred to an exempt committee to keep it alive for the rest of this session.
House Bill 2263 would authorize pharmacy technicians to administer certain vaccines. The House Committee on Health and Human Services amended the bill and then passed it out favorably. This week, the full House passed the bill on a vote of 119-3. The bill now goes to the Senate for consideration.
House Bill 2347, introduced last week, would provide price limits and other requirements for health benefits covering prescription insulin drugs and establishing the insulin affordability program for the uninsured. The bill did not receive a hearing and is no longer a live bill for this session.
Drug Pricing
Senate Bill 236, introduced this week, would require drug manufacturers to provide pricing under the federal 340B drug pricing program to pharmacies that enter into contractual agreements with entities covered under the 340B program, and prohibit pharmacy benefits managers from denying patients the freedom to use the pharmacy and healthcare provider of such patient’s choice. The bill did not receive a hearing and is no longer a live bill for this session.
Abolishing the Kansas Bioscience Authority
Midway through the week, the House Appropriations Committee introduced HB 2418 which would, among other things, abolish the Kansas Bioscience Authority and certain Kansas Dept. of Health and Environment advisory committees. The bill is likely to receive a hearing and Appropriations Committee action.
HMO/MCO Provider Requirements
HB 2094 would specify certain requirements necessary to demonstrate fiscal soundness for health maintenance organizations and Medicare provider organizations applying for certificates of authority. This week, the bill was considered by the full House which passed the bill favorably on a vote of 124-0. The bill now moves to the Senate for consideration. A Senate companion bill, SB 26, has passed the Kansas Senate, 38-1 and been read into the House of Representatives.
Corporate Income Tax Apportionment
House Bill 2110 would allow certain taxpayers, based on NAICS codes included in the bill, to elect to use a single-factor apportionment formula, based on sales in the state, to determine corporate income tax liability. The bill is estimated to have a cost to the state of approximately $20 million. The House Tax Committee held a hearing on the bill on Tuesday. Kansas Grain and Feed Association joined the Kansas Chamber as the only proponents on the bill. The committee was scheduled to take action on the bill this week, but pushed off action as they are considering whether to adopt an amendment requested by the Kansas Dept. of Revenue that would require all corporations to use the single-factor apportionment formula. The committee will likely take action on the bill in the following weeks.
Flat Tax Bill Advanced
This week, the Senate passed Senate Bill 169, a bill which would move the state from its current three bracket system to a single individual income tax rate of 4.75 percent. It is estimated the proposal would cost the state more than $1.3 billion in lost income tax revenues over a three-year period. The bill would provide, beginning in tax year 2024, for a single rate of 4.75 percent to be applied to all Kansans individual taxable income in excess of $10,450 for married individuals filing joint returns and $5,225 for all other individuals. Kansas taxable income less than those amounts would not be taxed. The bill passed 22-17, short of the 27 votes needed to override a veto from the governor.
Prohibiting Foreign Ownership of Real Property
This year, two bills were introduced that would have prohibited the conveyance of real property in Kansas to foreign companies or persons. The House Committee on Agriculture held a hearing on House Bill 2397 but the committee did not take it up for further action. Senate Bill 100, introduced in the Senate, was referred to the Senate Judiciary committee where it did not receive a hearing.
Tax Withholding Requirements for Employees in Multiple States
This week, the Kansas Chamber of Commerce requested introduction of House Bill 2420, a bill which would establish withholding tax requirements for employers with certain employees who work in multiple states. The bill was referred to the House Committee on Taxation and has not been scheduled for hearing.
Electric Utility Rates
Kansas has the highest energy rates in our region, and multiple bills have been introduced to address high electric utility rates while ensuring reliable service:
Senate Bill 54 allowing a 0 percent sales tax rate on commercial utilities, was passed out favorably by the Senate Tax Committee. House Bill 2221 is the House companion bill.
Senate Bill 68 would allow state energy producers a Right-of-First-Refusal to build out new electric transmission line assets in the state. Renew Kansas, Kansas Grain and Feed Association, and Kansas Agribusiness Retailers Association joined other commercial and residential utility rate payers in opposing the measure during multi-day hearings, arguing that the bill would remove competition from the build process and result in higher electric energy rates. The Senate Utilities Committee advanced the bill out of committee, but the bill has not been brought up for debate by the full Senate.
House Bill 2225 would limit cost recovery for electric public utility transmission-related costs. The House Utilities Committee passed the bill out favorably.
House Bill 2227 would authorize solar power purchase agreements with renewable energy suppliers, exempt the sales of electricity pursuant to power purchase agreements from public utility regulation, and require electric public utilities to enter into parallel generation contracts with certain (non-industrial) customers of the utility. Kansas Grain and Feed Association and Renew Kansas Biofuels Association supported the measure. The bill did not advance.
House Bill 2228 would increase the capacity limitation of the total amount of net-metered generation systems that may operate within the service territory of an investor-owned electric utility and remove the load-size limitations on certain customers’ net-metered systems. The bill did not advance.
House Bill 2154 would seek to reform the Kansas Corporation Commission by allowing for the election of commissioners and establishing a utilities regulation division in the office of the attorney general to represent and protect the collective interests of utility customers in utility rate-related proceedings. A hearing was held on the bill, and it has been referred to an exempt committee to keep it alive for the rest of the legislative session. The Senate Utilities Committee held a hearing on its companion bill, Senate Bill 88.
Senate Bill 78 and House Bill 2155 would require the state corporation commission to review the regional rate competitiveness of electric utility rates. The bills did not receive a hearing.
Senate Bill 214 would prohibit public utilities from recovering dues or contributions to a charitable organization through rates. The bill did not receive a hearing.
House Bill 2310 would increase the number of commissioners on the state corporation commission. The bill did not receive a hearing.
Third-Party Funded Litigation
Senate Bill 74 concerns litigation funding by third parties. The bill provides for joint liability of costs and also allows for sanctions in third-party funded litigation. It would also require certain discovery disclosures and payment of certain costs for nonparty subpoenas. The bill was heard in the Senate Judiciary Committee on February 2. Stakeholders are currently working on tweaking language to address specific concerns. This week, the bill was referred to an exempt committee to keep it alive for further action this session.
State Preemption of Plastic Container Regulations
Senate Bill 47 would prohibit cities and counties from regulating plastic and other containers designed for the consumption, transportation or protection of merchandise, food, or beverages. The Senate Commerce Committee held a hearing on the bill. The bill did not make it out of committee, but a substitute bill is being drafted to alleviate certain expressed concerns.
Other Bills We Are Monitoring:
SB 246 requiring certain insurance coverage of in-state telemedicine services. The bill did not advance.
SB 279 granting law enforcement access to the prescription monitoring program database without a warrant
SCR 1606 establishing an initiative and referendum Constitutional Amendment
HB 2192 creating a Kansas Secretary of State website for grants, applications, and awards
HB 2215 creating crime of utilizing a drug-masking product. The bill did not advance.
HB 2222 prohibiting enforcement of federal regs and enforcement of state regulations to carry them out. The bill did not advance.
HB 2283 enacting the ensuring transparency in prior authorization act to impose requirements on the use of prior authorization in healthcare. The bill did not advance.
HB 2337 requiring certain insurance coverage of in-state telemedicine services. The bill did not advance.
HB 2368 enacting the making work pay act to increase the Kansas minimum wage. The bill did not advance.
HB 2436 prohibiting public contracts from giving preferential treatment based on ESG criteria.
February 17, 2023
Most committee work for the first half of the 2023 Kansas legislative session wrapped up this week. Some committees will still meet Monday, Feb. 20 and Tuesday, Feb. 21, before legislators finish out the week debating bills on the floor. This week saw advancement of a water policy bill and a water funding bill from the House Water Committee. Next week, the House and Senate Utilities committees look to take final action on multiple bills seeking to provide lower costs of electric utilities.
Vaccines and Other Pharmaceuticals
Prohibiting Foreign Ownership of Real Property
This week, the House Committee on Agriculture held a hearing on House Bill 2397, a bill which would have prohibited the conveyance of real property in Kansas to foreign adversaries. Following the hearing, it did not appear the bill would be taken up for further action. Senate Bill 100, a similar bill, was introduced in the Senate but did not receive a hearing.
Drug Pricing Program
Senate Bill 236, introduced this week, would require drug manufacturers to provide pricing under the federal 340B drug pricing program to pharmacies that enter into contractual agreements with entities covered under the 340B program, and prohibit pharmacy benefits managers from denying patients the freedom to use the pharmacy and healthcare provider of such patient’s choice. No hearing has been scheduled on this bill.
Abolishing the Kansas Bioscience Authority
Midway through the week, the House Appropriations Committee introduced HB 2418 which would, among other things, abolish the Kansas Bioscience Authority and certain Kansas Dept. of Health and Environment advisory committees. The bill is likely to receive a hearing and Appropriations Committee action. BioKansas representatives have scheduled a meeting with House Appropriations Chairman Troy Waymaster (R-Bunker Hill) to discuss the impacts of the proposed legislation.
HMO/MCO Provider Requirements
HB 2094 would specify certain requirements necessary to demonstrate fiscal soundness for health maintenance organizations and Medicare provider organizations applying for certificates of authority. The House Committee on Insurance held a hearing on the bill and then passed the bill out favorably for passage. A companion bill, SB 26, has passed the Kansas Senate and been read into the House of Representatives.
Corporate Income Tax Apportionment
House Bill 2110 would allow certain taxpayers, based on NAICS codes included in the bill, to elect to use a single-factor apportionment formula, based on sales in the state, to determine corporate income tax liability. The bill is estimated to have a cost to the state of approximately $20 million. The House Tax Committee held a hearing on the bill on Tuesday. Kansas Grain and Feed Association joined the Kansas Chamber as the only proponents on the bill. The committee will likely take final action on the bill next week.
Electric Utility Rates
Kansas has the highest energy rates in our region. In recent years, legislation was introduced to reduce rates while ensuring reliable service. This year, multiple bills have been introduced which focus on various ways to address high electric utility rates in our state:
State Preemption of Plastic Container Regulations
Senate Bill 47 would prohibit cities and counties from regulating plastic and other containers designed for the consumption, transportation or protection of merchandise, food, or beverages. The Senate Commerce Committee held a hearing on the bill. The bill did not make it out of committee, but a substitute bill is being drafted to alleviate certain expressed concerns.
Tax Withholding Requirements for Employees in Multiple States
This week, the Kansas Chamber requested introduction of House Bill 2420, a bill which would establish withholding tax requirements for employers with certain employees who work in multiple states. The bill was referred to the House Committee on Taxation.
Third-Party Funded Litigation
Senate Bill 74 concerns litigation funding by third parties. The bill provides for joint liability of costs and also allows for sanctions in third-party funded litigation. It would also require certain discovery disclosures and payment of certain costs for nonparty subpoenas. The bill was heard in the Senate Judiciary Committee on February 2. Stakeholders are currently working on tweaking language to address specific concerns.
Cannabis Legislation
The following cannabis bills have been introduced this year to legalize marijuana in some fashion, but are not currently scheduled for hearing:
Senate Bill 135 would create the Medical Cannabis Regulation Act to regulate the cultivation, processing, distribution, sale and use of medical cannabis.
Senate Bill 171 would create the Veterans First Medical Cannabis Act to regulate the cultivation, distribution, sale, possession and use of medical cannabis.
House Bill 2367 would establish the Adult Use Cannabis Regulation Act to allow for the lawful cultivation, manufacture, possession, and sale of cannabis in this state.
House Bill 2417 creating the Medical Cannabis Regulation Act to regulate the cultivation, processing, distribution, sale and use of medical cannabis.
Other Bills We Are Monitoring:
SB 43 appropriations for fiscal years 2023, 2024, and 2025, for Kansas University medical center and Midwest stem cell therapy center
SB 246 requiring certain insurance coverage of in-state telemedicine services
SCR 1606 establishing an initiative and referendum Constitutional Amendment
HB 2171 providing that peer review privilege for healthcare providers does not apply to factual information
HB 2192 creating a Kansas Secretary of State website for grants, applications, and awards
HB 2215 creating crime of utilizing a drug-masking product
HB 2222 prohibiting enforcement of federal regs and enforcement of state regulations to carry them out
HB 2283 enacting the ensuring transparency in prior authorization act to impose requirements on the use of prior authorization in healthcare. Hearing Scheduled for Monday, Feb. 20, at 3:30 pm in House Insurance Committee
HB 2337 amending the Kansas telemedicine act, requiring certain insurance coverage of in-state telemedicine services
HB 2368 enacting the making work pay act to increase the Kansas minimum wage
February 10, 2023
This week was the last week for new bills to be introduced in either chamber in 2023, unless brought forward through an “exempt committee,” such as tax or appropriations. Committees will be busy holding hearings next week, as all hearings and other action on most bills must be completed by Tuesday, Feb. 21.
A water policy bill was heard in the House Water Committee this week, to be followed by a water funding bill next week. Utilities committees in both the House and Senate were very busy this week, and next, holding hearings on bills seeking to lower the rising cost of electric utilities. Final action on a Senate Resolution happened this week pushing back on the United States Fish and Wildlife’s listing of the Lesser Prairie Chicken as a threatened species in Kansas.
Vaccines and Other Pharmaceuticals
Drug Pricing Program
Senate Bill 236, introduced this week, would require drug manufacturers to provide pricing under the federal 340B drug pricing program to pharmacies that enter into contractual agreements with entities covered under the 340B program, and prohibit pharmacy benefits managers from denying patients the freedom to use the pharmacy and healthcare provider of such patient’s choice.
Senate Tax Committee Advances Tax Bills
This week, the Senate Tax Committee advanced multiple tax bills out of committee with a total fiscal note of nearly $180 million, including:
Corporate Income Tax Apportionment
House Bill 2110 would allow certain taxpayers, based on NAICS codes included in the bill, to elect to use a single-factor apportionment formula, based on sales in the state, to determine corporate income tax liability. The bill is estimated to have a cost to the state of approximately $20 million. The House Tax Committee held a hearing on the bill on Tuesday. Kansas Grain and Feed Association joined the Kansas Chamber as the only proponents on the bill. The committee may take final action on the bill next week.
Prohibiting Foreign Ownership of Real Property
Senate Bill 100 would seek to prohibit foreign ownership of real property in Kansas. The bill prohibits “foreign business entities” from purchasing or otherwise acquiring any interest in real property in the state. A “foreign business entity” would be defined as “[A]ny corporation, limited liability company, partnership, limited partnership, firm or other association in which the majority of the shares or ownership interest is held by one or more foreign nationals, foreign business entities or foreign governments; (2) any corporation, limited liability company, partnership, limited partnership, firm or other association in which the majority of the shares or ownership interest is held by one or more entities described in paragraph (1); and (3) any agent, trustee or fiduciary of an entity described in paragraph (1). A House companion bill may be introduced soon. Next week, the House Committee on Agriculture will receive an overview of House Bill 2397 a different House version of the bill which would prohibit the conveyance of certain real property in Kansas to foreign adversaries.
Electric Utility Rates
Kansas has the highest energy rates in our region. In recent years, legislation was introduced to reduce rates while ensuring reliable service. This year, multiple bills have been introduced which focus on various ways to address high electric utility rates in our state:
Right of First Refusal for Electric Transmission Line Build Out
Senate Bill 68 has been introduced by state energy producers to allow those companies a Right-of-First-Refusal to build out new electric transmission line assets in the state. Renew Kansas, Kansas Grain and Feed Association, and Kansas Agribusiness Retailers Association joined other commercial and residential utility rate payers in opposing the measure during multi-day hearings this week, arguing that the bill would remove competition from the build process and result in higher electric energy rates.
Third-Party Funded Litigation
Senate Bill 74 concerns litigation funding by third parties. The bill provides for joint liability of costs and also allows for sanctions in third-party funded litigation. It would also require certain discovery disclosures and payment of certain costs for nonparty subpoenas. The bill was heard in the Senate Judiciary Committee on Feb. 2. Stakeholders are currently working on tweaking language to address specific concerns.
Cannabis Legislation
The following cannabis bills have been introduced this year to legalize marijuana in some fashion, but are not currently scheduled for hearing:
Senate Bill 135 would create the medical cannabis regulation act to regulate the cultivation, processing, distribution, sale, and use of medical cannabis.
Senate Bill 171 would create the veterans first medical cannabis act to regulate the cultivation, distribution, sale, possession and use of medical cannabis.
House Bill 2367 would establish the adult use cannabis regulation act to allow for the lawful cultivation, manufacture, possession, and sale of cannabis in this state.
Other Bills We Are Monitoring:
SB 43 appropriations for fiscal years 2023, 2024, and 2025, for Kansas University medical center and Midwest stem cell therapy center.
HB 2094 concerning health maintenance organizations and Medicare provider organizations and specifying requirements necessary to demonstrate fiscal soundness.
HB 2171 providing that peer review privilege for healthcare providers does not apply to factual information
HB 2192 creating a Kansas Secretary of State website for grants, applications, and awards
HB 2215 creating crime of utilizing a drug-masking product
HB 2222 prohibiting enforcement of federal regs and enforcement of state regulations to carry them out
HB 2283 enacting the ensuring transparency in prior authorization act to impose requirements on the use of prior authorization in healthcare
HB 2337 amending the Kansas telemedicine act, requiring certain insurance coverage of in-state telemedicine services
HB 2368 enacting the making work pay act to increase the Kansas minimum wage
February 3, 2027
Legislative committees held many hearings on bills this week as new legislation continues to be introduced. A water bill was introduced and quickly scheduled for hearing. Utilities committees in the House and Senate have scheduled hearings on numerous bills concerning utility rates. Committees have also begun to review agency budgets, and the Senate held a hearing this week on a bill seeking to transfer another $1 billion into the budget stabilization fund. Next week, the House Committee on Agriculture will hold a hearing on a Senate Resolution pushing back on the US Fish and Wildlife’s listing of the Lesser Prairie Chicken as a threatened species in Kansas.
Vaccine Bills
There is no new action to report this week on the following vaccine bills that were introduced prior to the first week of this legislative session:
Flat Tax Discussions
A flat tax proposal, introduced by the Kansas Chamber of Commerce as House Bill 2061 and Senate Bill 61, would move the state from its current three bracket system to a single bracket taxed at 5 percent. The bill would further buy down that rate whenever the state had excess revenues. It has been estimated that the proposal would cost the state more than $3 billion in lost income tax revenues over a three-year period.
Appropriations Bill Introduced
As the various budget committees in the House and Senate are busy reviewing each agency’s submitted budget, the House has introduced House Bill 2273 as its appropriations bill for state agencies for fiscal years 2024, 2025, and 2026. Greatly impacting the budget for 2023 will be the question of how much state general fund money the legislature decides to move into the Budget Stabilization Fund: Legislative leaders are asking for $1 billion, while Governor Laura Kelly is leaning toward a $500 million transfer. There is discussion around the capitol of concerns that state revenues could fall below state expenditures by as early as fiscal year 2025.
Third-Party Funded Litigation
Senate Bill 74 concerns litigation funding by third parties. The bill provides for joint liability of costs and also allows for sanctions in third-party funded litigation. It would also require certain discovery disclosures and payment of certain costs for nonparty subpoenas. The Senate Judiciary Committee held a hearing on the bill on Thursday, February 2.
Chip Maker Expansion Project Announced in Kansas
Governor Laura Kelly announced that the state has agreed to invest about $304 million into a $1.8 billion expansion of Wichita-based Integra Technologies computer chip manufacturing plant which is estimated to bring 2,000 new jobs to the area. The computer chip plant, estimated to be operational in two or three years, will increase the nation’s participation in the rapidly growing semiconductor industry. This announcement follows the state’s $830 million investment last year toward a $4 billion construction project of a Panasonic electric vehicle battery plant in De Soto, Kansas. Both investment packages were made possible by the Attracting Powerful Economic Expansion (APEX) Act signed into law Feb. 22, 2022.
Corporate Income Tax Apportionment
House Bill 2110 would allow certain taxpayers, based on NAICS codes included in the bill, to elect to use a single-factor apportionment formula based on sales in the state to determine corporate income tax liability. The bill is estimated to have a cost to the state of approximately $20 million. The House Tax Committee held a hearing on the bill on Tuesday. Kansas Grain and Feed Association joined the Kansas Chamber as the only proponents on the bill. There were no opponents.
Electric Utility Rates
Kansas has the highest energy rates in our region. In recent years, legislation was introduced to reduce rates while ensuring reliable service. This year, multiple bills have been introduced which focus on various ways to address high electric utility rates in our state:
Right of First Refusal for Electric Transmission Line Build Out
Senate Bill 68 has been introduced by state energy producers to allow those companies a Right-of-First-Refusal to build out new electric transmission line assets in the state. The bill is likely to be heavily opposed by commercial and residential utility rate payers. Renew Kansas, Kansas Grain and Feed Association, and Kansas Agribusiness Retailers Association will stand opposed to this measure during multi-day hearings scheduled for next week.
Plastic Container Regulation, State Level Preemption
Senate Bill 47 would prohibit cities and counties from regulating plastic and other containers designed for the consumption, transportation or protection of merchandise, food, or beverages. The Senate Commerce Committee held a hearing on the bill on January 31.
Other Bills We Are Monitoring:
SB 43 appropriations for fiscal years 2023, 2024, and 2025, for Kansas University medical center and Midwest stem cell therapy center
SB 112 authorizing prescribing authority to nurse anesthetists
SB 135 creating medical cannabis regulation act
HB 2099 relating to third party administrators; discontinuing certain exemptions from the pharmacy benefits manager licensure act
HB 2094 concerning health maintenance organizations and Medicare provider organizations and specifying requirements necessary to demonstrate fiscal soundness.
HB 2126 authorizing over-the-counter purchase of ivermectin and hydroxychloroquine tablets.
HB 2171 providing that peer review privilege for healthcare providers does not apply to factual information
HB 2192 creating a Kansas Secretary of State website for grants, applications, and awards
HB 2202 creating a sales tax exemption for over-the-counter drugs
HB 2215 creating crime of utilizing a drug-masking product
HB 2222 prohibiting enforcement of federal regulations and enforcement of state regulations to carry them out
HB 2225 limiting cost recovery for electric public utility transmission-related costs
HB 2259 no prior authorization for Mental health medications for Medicaid patients
HB 2263 pharmacy technicians to administer certain vaccines
HB 2283 enacting the ensuring transparency in prior authorization act to impose requirements on the use of prior authorization in healthcare
January 27, 2023
This week, the governor gave her delayed State of the State, and the legislature introduced a flurry of additional bills. A few hearings are being held, but many more are scheduled for next week. There was continued discussion around the capitol on the recent listing of the Lesser Prairie Chicken as a threatened species in Kansas, which culminated in the introduction of a Senate Resolution pushing back on the listing.
Vaccine Bills
There was no new action this week on the following vaccine bills:
Governor Kelly Gives State of the State Address
In Governor Kelly’s annual State of the State address this week, the governor vowed to “remain in the middle” to accomplish the following policy goals:
Governor’s Budget Recommendations
Governor Laura Kelly’s FY 2024 Budget Recommendations focuses on “targeted and sustainable tax relief,” and various one-time investments, including:
Corporate Income Tax Apportionment
House Bill 2110 would allow certain taxpayers, based on NAICS codes included in the bill, to elect to use a single-factor apportionment formula based on sales in the state to determine corporate income tax liability. The bill is estimated to have a cost to the state of approximately $20 million, and it is scheduled for hearing in the House Taxation Committee on Tuesday, January 31.
Right of First Refusal for Electric Transmission Line Build Out
Kansas has the highest energy rates in our region. In recent years, legislation was introduced to reduce rates while ensuring reliable service. Senate Bill 68 has been introduced in the Senate Utilities Committee to allow energy producers a Right-of-First-Refusal to build out new electric transmission lines assets in the state. The bill is likely to be heavily opposed by commercial and residential utility rate payers.
Prohibiting Foreign Ownership of Real Property
This week, Senate Bill 100 was introduced in the Senate Committee on Federal and State Affairs. The bill would seek to prohibit foreign ownership of real property in Kansas. The bill was referred to the Senate Judiciary Committee. The bill prohibits “foreign business entities” from purchasing or otherwise acquiring any interest in real property in the state. The bill defines the term “foreign business entity” as “[A]ny corporation, limited liability company, partnership, limited partnership, firm or other association in which the majority of the shares or ownership interest is held by one or more foreign nationals, foreign business entities or foreign governments; (2) any corporation, limited liability company, partnership, limited partnership, firm or other association in which the majority of the shares or ownership interest is held by one or more entities described in paragraph (1); and (3) any agent, trustee or fiduciary of an entity described in paragraph (1).
Plastic Container Regulation, State Level Preemption
Last year, legislation was passed and sent to the governor that would have prohibited cities and counties from regulating plastic and other containers designed for the consumption, transportation or protection of merchandise, food, or beverages. Governor Kelly vetoed the bill to the legislature. There were not enough votes to override the veto, and the bill died. A similar bill has been introduced this year as Senate Bill 47. The bill is scheduled for hearing in the Senate Commerce Committee on January 31, 2022.
Third-Party Funded Litigation
Senate Bill 74 concerns litigation funding by third parties. The bill provides for joint liability of costs and also allows for sanctions in third-party funded litigation. It would also require certain discovery disclosures and payment of certain costs for nonparty subpoenas. The bill is scheduled for hearing in the Senate Judiciary Committee on Thursday, February 2.
Other Bills We Are Monitoring:
HB 2099: AN ACT concerning insurance; relating to third party administrators; discontinuing certain exemptions from the pharmacy benefits manager licensure act.
HB 2094: concerning health maintenance organizations and Medicare provider organizations and specifying requirements necessary to demonstrate fiscal soundness.
SB 43: making appropriations for fiscal years ending June 30, 2023, June 30, 2024, and June 30, 2025, for Kansas University medical center and Midwest stem cell therapy center.
HB 2126: authorizing over-the-counter purchase of ivermectin and hydroxychloroquine tablets.
HB 2171: providing that peer review privilege for healthcare providers does not apply to factual information
HB 2192: creating a Kansas Secretary of State website for grants, applications, and awards
HB 2202: creating a sales tax exemption for over-the-counter drugs
January 20, 2023
This week, the legislature introduced many new bills and even began to hold hearings. There was discussion around the capitol on the recent listing of the Lesser Prairie Chicken as a threatened species in Kansas, and the negative impacts this would have on various industries in our state, which culminated in the introduction of a Senate Resolution pushing back on the listing. Here are some of the other highlights from this week.
Vaccine Bills
A pair of Republican politicians the Kansas legislature are targeting vaccines this session. Find more information here: Kansas Republican lawmakers push anti-vaccine politics with new bills (cjonline.com)
$1 Billion Transfer Proposed
With an estimated $2.3 billion ending balance for fiscal year 2023, and an estimated ending balance of $3.24 billion for fiscal year 2024, the enveloping question for the legislature is how to best spend those funds. As an answer to that question, Senate Bill 67 was introduced this week which would transfer an additional $1 billion from the state general fund to the budget stabilization fund at the end of the current fiscal year. This would be in addition to the roughly $1 billion that was transferred to the fund on June 30, 2022.
Corporate Income Tax Apportionment
Kansas currently uses a three-factor system for apportioning income between states for corporate income tax purposes. Legislation has been introduced in recent years to allow corporate taxpayers the option to elect which methodology to use when apportioning their corporate income between Kansas and other states in which it operates to determine tax liability. The proposed legislation would allow certain taxpayers, based on NAICS codes included in the bill, to elect to use a single-factor apportionment formula based on sales in the state to determine corporate income tax liability. This week, similar legislation was introduced in the House Tax Committee as House Bill 2110. The bill is estimated to have a cost to the state of approximately $20 million. However, additional NAICS codes have been added to the bill this year which may increase this cost estimation.
Single Rate Income Tax
This week, the Kansas Chamber requested introduction of House Bill 2061 and Senate Bill 61 which would create a flat tax and remove the state’s three tax brackets for individuals into one and use excess revenues to lower income tax rates. The bill calls for a 5 percent income tax rate for individuals while exempting $15,000 in income for individuals and $30,000 for married couples. The bill would also set a rate of 5 percent for corporations, which now pay 4 percent on net income plus 3 percent on net income exceeding $50,000. The bill also would continue to buy down income tax rates using revenues in excess of estimates in the out years. A similar bill last year, setting a flat tax rate for individuals at 4.75 percent, was estimated to have cost the state about $500 million over three years.
Sales Tax on Food Products
Governor Laura Kelly has recommended speeding up the scheduled full repeal of the state sales tax on food products. The tax was reduced from 6.5 percent to 4 percent on Jan. 1 of this year, and is scheduled to be reduced to 2 percent in 2024, and to zero in 2025. Governor Kelly has recommended changing the law to eliminate the state sales tax entirely – or “axe the tax” – beginning April 1, 2023. It is thought that the full cost of the repeal might frustrate passage of the proposal. A compromise proposal has been discussed of fully repealing the sales tax but narrowing the scope of qualifying products. Multiple bills, including House Bill 2111, have been filed to achieve this goal.
Plastic Container Regulation, State Level Preemption
Last year, legislation was passed and sent to the governor that would have prohibited cities and counties from regulating plastic and other containers designed for the consumption, transportation or protection of merchandise, food, or beverages. Governor Kelly vetoed the bill to the legislature. There were not enough votes to override the veto, and the bill died. A similar bill has been introduced this year as Senate Bill 47. The bill will have a hearing on January 31, 2022, in the Senate Commerce Committee.
Right of First Refusal for Electric Transmission Line Build Out
Kansas has the highest energy rates in our region. In recent years, legislation was introduced to reduce rates while ensuring reliable service. This week, Senate Bill 68 was introduced in the Senate Utilities Committee. The bill would allow energy producers a Right-of-First-Refusal to build-out new electric transmission lines assets in the state. The bill is likely to be heavily opposed by commercial and residential utility rate payers.
A Few Other Bills We Are Monitoring:
HB 2099: concerning insurance; relating to third party administrators; discontinuing certain exemptions from the pharmacy benefits manager licensure act.
HB 2094: concerning health maintenance organizations and Medicare provider organizations, and specifying requirements necessary to demonstrate fiscal soundness.
SB 43: making appropriations for fiscal years ending June 30, 2023, June 30, 2024, and June 30, 2025, for Kansas University medical center and Midwest stem cell therapy center.
January 13, 2023
2023 Legislative Session Commences
The Kansas legislature gaveled in on Monday, January 9, 2023, on the first day of the 90-day session of the two-year biennium. House and Senate Leadership released their shared vision for this session. Governor Laura Kelly’s was sworn in, but her State of the State address was postponed while she recovered from symptoms of what was initially thought to be COVID-19, but later turned out not to be the case.
Key issues anticipated this session include a quickening of the removal of sales tax on food products, various attempts at property tax reform, continued discussions on water policy and workforce development, a look at reducing the high cost of energy, possible legalization of medical marijuana, and deliberations on how to effectively spend the state’s growing projected ending balances. Please find a summary of the legislative action from this week below.
Vaccine Bills Introduced Early
This week, multiple bills were introduced aimed at restricting vaccine requirements:
Prohibiting Tele-Medicine Prescriptions of Abortion Drugs
This week, Senate Bill 5 was introduced which would prohibit the prescribing of drugs intended to cause an abortion using telemedicine and restrict the governor’s power during a state of emergency to alter such prohibitions. The bill was referred to Senate Committee on Public Health and Welfare.
Pharmacy Benefits Manager Act Exemptions
Senate Bill 16 was introduced which would discontinue current exemptions from the pharmacy benefits manager act. The bill was referred to the Senate Committee on Financial Institutions and Insurance.
Legalization of Medical Marijuana
In 2022, a survey of Kansas voters found that 62 percent wanted to legalize marijuana nationwide. Last session, the House passed a bill legalizing medical marijuana, however the Senate did not debate the measure. In a recent interview, Senate President Ty Masterson said the Senate may look at the medical marijuana issue, but any legislation coming from the Senate is likely to be much more conservative. Masterson said that it would need to be “legitimate medicine” with a medically recognized medical benefit, dosage, and delivery method.
Plastic Container Regulation, State Level Preemption
Last year, legislation was passed and sent to the Governor that would have prohibited cities and counties from regulating plastic and other containers designed for the consumption, transportation or protection of merchandise, food, or beverages. Governor Kelly vetoed the bill to the legislature. There were not enough votes to override the veto, and the bill died. However, we anticipate similar legislation being introduced this session.
November 2022 Election Results
A Fox News survey of the 2022 Kansas election showed 59 percent of Kansas voters identified as Republican, 35 percent as Democrats, and 6 percent independent. This is a 5 percent increase in Republican voters from 2018. Kansas remains a Republican state, electing conservative Kris Kobach, R- Tecumseh, for Attorney General, but also re-elected Democrats in Congresswoman Sharice Davids and Governor Laura Kelly. The 125-member House will see 35 new legislators this year, and the Senate will also experience four new members due to resignations. House and the Senate Republicans will begin the session with super-majorities to over-ride the Governor’s veto. Looking forward, however, large population movements from rural areas to more urban areas of the state will likely result in fewer rural legislative districts and new districts in urban areas.
Governor’s Office Releases Budget Priorities
Governor Laura Kelly’s FY 2024 Budget Recommendations were released on Thursday, focusing on “targeted and sustainable tax relief,” Medicaid expansion, and various one-time investments. Here are some highlights of the budget and policy recommendations:
New House Leadership
Following the 2022 election, the 2023 session brings the following new leadership in the House of Representatives:
GOP Leadership Introduces “Better Way” Agenda
On Tuesday, Republican Speaker of the House Dan Hawkins and Senate President Ty Masterson unveiled a shared vision for the 2023 legislative session – referred to as “A Better Way.” The agenda contains about a dozen points covering such items as taxes, health care, education and school choice, the economy, welfare reform, law enforcement, and battling the fentanyl crisis. The announcement sets forth a general road map of what the GOP would to get accomplished in the next two years. Senate President Masterson indicated he is looking for opportunities to work with Governor Laura Kelly.
Consensus Revenue Budget Estimates
The House and Senate Budget Committees received an update from the State Budget Director on the State’s projected revenues and expenses for fiscal years 2023 and 2024. Here is a summary:
Single Rate Income Tax
This week, House and Senate leadership, and some business interests, have begun to discuss the idea of a single rate income tax, or flat tax, for both individuals and businesses. Kansas has three tax brackets for individuals. The corporate income tax consists of 4 percent of all taxable income plus a 3 percent surtax on all taxable income above $50,000. Proponents say a single income tax rate would make Kansas’ business climate more competitive and provide a more simple and transparent tax code to taxpayers. A single-rate bill was introduced in the Senate Tax Committee on the second day of session.
Corporate Income Tax Apportionment
Kansas currently uses a three-factor system for apportioning income between states for corporate income tax purposes. Legislation has been introduced in recent years to allow corporate taxpayers the option to elect which methodology to use when apportioning their corporate income between Kansas and other states in which it operates to determine tax liability. The proposed legislation would allow certain taxpayers, based on NAICS codes, to elect to use a single-factor apportionment formula based on sales to determine corporate income tax liability. The bill may have a cost to the state of approximately $20 million. Similar legislation is likely be introduced again this year.
Property Tax Discussions
House Democrats have indicated that residential property tax relief is a top priority. During an interim tax committee meeting last fall, House Minority Leader Vic Miller, D-Topeka, proposed reinstating funding to local units of government, through the local ad valorem tax reduction fund, to provide financial assistance for local reduction in property taxes. Additionally discussed was a proposed amendment to the Kansas constitution which would reduce the residential property assessment from 11.5 percent to 9 percent, and legislation to increase the school mill levy exemption from $40,000 per residential property to $65,000. Other ideas discussed during the interim tax hearings include the election of local property tax appraisers. Currently, county commissions hire local tax appraisers as employees of the county.
Sales Tax on Food Products
Governor Laura Kelly has recommended speeding up the scheduled full repeal of the state sales tax on food products. The state sales tax on food was reduced from 6.5 percent to 4 percent on Jan. 1 of this year, and it is scheduled to be reduced to 2 percent in 2024, and to zero in 2025. Governor Kelly has recommended changing the law to eliminate the state sales tax entirely – or “axe the tax” – beginning April 1 of this year. It remains to be seen what leadership in the House and Senate will decide to do, but it is thought that the full cost of the repeal might frustrate passage of the proposal. A compromise proposal has been discussed of fully repealing the sales tax but narrowing the scope of what products would qualify for the exemption as “food.” Multiple bills have already been filed this week directed at achieving this goal.
Kansas Unemployment Insurance Trust Fund
This week, the House Committee on Commerce received an update from the Kansas Secretary of Labor. In 2021, during the COVID-19, the state’s Unemployment Insurance (UI) Trust Fund lost around $600 million due to improper fraudulent payments from the fund. Prior to this, the fund balance was around fully funded at $1 billion, and was considered one of the healthiest UI funds in the nation. Using state general funds and federal COVID relief funds, the legislature has now shored-up the UI fund to a balance of over $1 billion, and in 2022 the fund was once again certified as solvent.
Electric Rates
Kansas has the highest energy rates in our region. In recent years, legislation was introduced to reduce rates while ensuring reliable service. Other legislation is likely to be introduced this year to do the following:
Proposed Hydrogen Hub
A private-public partnership is looking to help Kansas establish a regional hub for producing hydrogen that would reduce the country’s dependence on fossil fuels. A trade association that promotes the development of renewable energy is working with the Kansas Geological Survey and the University of Kansas to land a $1.2 billion federal grant for a regional hydrogen hub. The U.S. Department of Energy is seeking proposals for a $7 billion program. Hydrogen will be one of the main issues discussed in the House Utilities Committee this year.
April 29, 2022
2022 Legislative Session, Veto Session
The 2022 Kansas Legislature returned on Monday, April 25 to begin its Veto Session. Legislators continued work on unfinished legislation and took action to attempt to override vetoes of various bills by Governor Laura Kelly. The legislature finished its work late on Thursday, with the Senate finally adjourning around 2:20 am early Friday morning.
The Legislature passed a resolution to adjourn until May 23, 2022, at which time it will return and take any action necessary to pass a new Congressional redistricting map following a review by the Kansas Supreme Court of the map adopted earlier this session.
Sales Tax Cut on Food
CCR on House Bill 2106 would phase out the state’s 6.5% sales tax on groceries by cutting the tax to 4% by Jan. 1, 2023, 2% in 2024, and then to zero by 2025. The cost of the tax cut to the state is estimated at $80 million in fiscal year 2023, $250 million in 2024, and $400 million in 2025 and each year beyond. The tax cut does not apply to most prepared foods at restaurants or grocery stores. The phaseout would be paid for by increases in internet sales taxes. The House passed the bill on a vote of 114-3, and the Senate on a vote of 39-0. The measure now goes to Governor Kelly who has indicated she will sign the bill.
Income and Sales Tax Bundle Bills
During the Veto Session, the Tax Conference Committee met multiple times and reached tentative agreement on a bill (CCR on SB 2136) that would have included portions of CCR on House Bill 2597, a larger bill that had been previously agreed to by the committee containing income and sales tax provisions: sales tax exemption on utility services; a provision to allow net operating losses to be carried forward; a provision providing property tax relief for small businesses that were forced to close by the state during the COVID-19 pandemic. Late in the evening on Thursday, during the final minutes of the veto session, there was a motion by the Senate to take action on CCR on House Bill 2597. However, a substitute motion led to adjournment and no final action was taken. There is a possibility the legislature may consider the bill when they meet again on May 23, 2022.
Corporate Income Tax Apportionment
Kansas currently uses a three-factor system for apportioning income between states for corporate income tax purposes. House Bill 2186 would allow corporate taxpayers the option to elect which methodology to use when apportioning their corporate income between Kansas and other states in which it operates. The legislation would allow certain taxpayers, based on NAICS codes, to elect to use a single-factor apportionment formula based on sales to determine corporate income tax liability. The House Tax Committee amended the bill to add NAICS codes 541690 and 112210. The Tax Conference Committee met during the veto session but did not consider this bill for further action.
Credit and Debit Card Surcharge Fees
Kansas law prohibits the seller or lessor in any sales or lease transaction or any credit or debit card issuer from imposing a surcharge on a card holder who elects to use a credit or debit card in lieu of payment by cash, check or similar means. A surcharge is defined as any additional amount imposed at the time of the sales or lease transaction by the merchant, seller or lessor that increases the charge to the buyer or lessee for the privilege of using a credit or debit card. House Bill 2316 was introduced to eliminate this prohibition and allow the imposition of a surcharge. The Senate Tax Committee placed the contents of HB 2316 into Sub SB 462. During the veto session, the Tax Conference Committee placed the contents of SB 462 into Conference Committee Report on Senate Bill 331. The House passed CCR SB 331 on a vote of 91-26. While the Senate did not take the bill up for a vote, there is a possibility that it may consider the bill when it meets again on May 23, 2022.
State Level Preemption of Plastic Regulation
Senate Bill 493 would prohibit cities and counties from regulating plastic and other containers designed for the consumption, transportation or protection of merchandise, food, or beverages. After receiving a veto by Governor Kelly, the Senate overrode the veto on a vote 27-12. However, the House did not take action to override and the veto was eventually sustained.
Career Technical Education Credential and Transition Pilot Program
House Bill 2631 would enact the Career Technical Education (CTE) Credential and Transition Incentive (CTI) pilot program. The bill would provide a new category of state aid to school districts for students obtaining a CTE credential. In addition, a school district that offers CTE and has students that obtain a CTE credential would receive state aid payments subject to the availability of appropriations. During the veto session, an Education Conference Committee placed contents of HB 2631 into Conference Committee Report on Sub HB 2466. The conference committee report was passed 29-6 by the Senate, and 109-10 by the House. The bill now goes to Governor Kelly for consideration.
Workforce Development Scholarship
Last year, Governor Kelly signed into law a workforce development bill creating the Kansas Promise Scholarship Act which provides educational scholarships to students attending a Kansas community college, technical college, or two-year associate degree program or career and technical education programs. The scholarship would be eligible for students pursing certain fields of study, including manufacturing, construction, and others. This year, Senate Bill 340 was introduced to authorize additional programs and fields of study. During the veto session, an Education Conference Committee placed contents of SB 340 into Conference Committee Report on S Sub for HB 2567. The conference committee report was passed 24-14 by the Senate, and 75-45 by the House. The bill now goes to Governor Kelly for consideration.
Rural Housing Incentive and Child Care Tax Credit
Conference Committee Report on HB 2237 includes multiple economic development provisions. It would enact the Kansas Housing Investor Tax Credit, and the Kansas Affordable Housing Tax Credit, to incentive rural and urban housing construction. The bill would also enact the Kansas Rural Home Loan Guarantee Act. In addition, the bill would authorize appraisers to exclude the sales comparison approach in rural county mortgage financing appraisals if the property is unique in style or square footage and if there exists a lack of available comparable sales. The bill also creates an income tax credit for child day care services. The conference committee report was passed 34-3 by the Senate, and 109-12 by the House. The bill now goes to Governor Kelly for consideration.
Government Response to COVID Pandemic
CCR on Senate Bill 286 would amend and extend the expiration dates and effectiveness of provisions regarding the governmental response to the COVID-19 pandemic; amend certain healthcare provider immunity provisions related to the COVID-19 public health emergency; create the crime of interference with the conduct of a hospital; and increase the penalty for the crime of battery when committed against a healthcare provider. After receiving a veto by Governor Kelly, the Senate did not take override action and the veto was sustained.
Multi-Part Public Health Bill Addressing KEMA Powers, COVID Testing, COVID passports, Face Mask and Quarantine Orders
Late in the evening on Thursday, the Legislature passed Conference Committee Report on Sub SB 34, which includes provisions from Senate Bill 541 and Senate Bill 489. The new bill would create law regarding actions by governmental entities or public officials affecting face mask requirements as a response to a contagious or infectious disease and would prohibit a COVID-19 vaccination passport be required. The bill would amend the Kansas Emergency Management Act (KEMA) and public health statutes regarding face mask requirements and judicial review of governmental action in response to state of disaster emergencies and state of local disaster emergencies. The bill would remove the authority of the Secretary of Health and Environment (Secretary) or a local health officer to order any law enforcement officer of the state or any subdivision to assist in the execution or enforcement of any order regarding infectious and contagious diseases. The bill would also amend student health statutes regarding certification of tests or inoculations for first-time enrollment in a school or preschool or day care program operated by a school to specify the tests or inoculations the Secretary would be prohibited from requiring. The bill passed the Senate on a vote of 23-17 and the House on a vote of 64-53. The bill now goes to the Governor for consideration, where it faces a likely veto.
COVID Vaccines and Off-Label Medications
Sen Substitute for HB 2280 was amended in the Senate Committee on Public Health and Welfare to insert the contents of Senate Bill 381, allowing for the prescribing and dispensing of medications for off-label use to prevent and treat COVID-19 infections; and Senate Bill 398 requiring a childcare facility or school to grant religious exemptions from vaccination requirements without inquiring into the sincerity of the religious beliefs. The Senate had passed the bill on a vote of 21-16, but the House did not take it up for consideration and it did not receive further action during the veto session.
April 22, 2022
2022 Legislative Session, First Adjournment Update
The 2022 Kansas legislature was adjourned until Monday, April 25 when it began the Veto Session where it continued work on unfinished legislation and reconsider bills vetoed by Governor Laura Kelly. Please find, below, an update on bills reviewed by the Governor during the interim, and legislation yet to be completed this year.
Biological Lab Accidents
Senate Bill 441 would enact the biological laboratory accident transparency act and would require institutions and organizations to report accidents and near miss accidents at high-risk biological laboratories. The bill drew only one proponent, who testified from Israel and stated he, “Had no ties to Kansas.” The bill passed the Senate and was referred to the House Committee on Health and Human Services but received no further action.
Pharmacy Act, Prescription Monitoring Program, K-TRACS
CCR on Senate Bill 200 would amend the Kansas Pharmacy Act to include point-of-care testing for and treatment of certain health conditions (therapy). The bill also would also amend provisions of the Prescription Monitoring Program Act to add to the list of information a dispenser may submit to the Prescription Monitoring Program (K-TRACS), amend the list of individuals who may request and receive data from K-TRACS, amend how data is stored outside of K-TRACS, and add one member to the K-TRACS Advisory Committee. The bill was passed by both chambers and signed into law by Governor Kelly.
Over-the-Counter Sales Tax Exemption
House Bill 2721 would provide for a sales tax exemption on sales of over-the-counter drugs. During the House Taxation Committee hearing, there was one proponent and no opponents. The fiscal note on the bill was estimated at $20.5 million, and the bill did not move forward.
Midwest Stem Cell Therapy Center
Senate Bill 373 would make appropriations of $500,000 for the University of Kansas Medical Center for COVID-19 clinical trials at the Midwest Stem Cell Therapy Center. The funds could be used any time before June 30, 2024. The bill passed the Senate and was referred to the House Committee on Appropriations. It does not appear that the funds were included in the budget bill.
Pharmacy Benefits Manager
House Sub for SB 28 concerns the regulation of pharmacy benefit managers (PBMs). The bill ends registration of PBMs in the state and instead moves to a licensure system overseen by the Kansas Department of Insurance. Additionally, the bill amends maximum allowable cost (MAC) pricing and the appeals process. The bill was passed by both chambers and signed into law by Governor Kelly.
COVID and Vaccines
Sen Substitute for HB 2280 was amended in the Senate Committee on Public Health and Welfare to insert the contents of Senate Bill 381, allowing for the prescribing and dispensing of medications for off-label use to prevent and treat COVID-19 infections; and Senate Bill 398 requiring a childcare facility or school to grant religious exemptions from vaccination requirements without inquiring into the sincerity of the religious beliefs. The Senate Committee of the Whole passed the bill on a vote of 21-16, which would not be enough to override a potential veto by the Governor. Last week, the bill was referred to a House and Senate conference committee where multiple amendments were offered and debated by both sides. The bill remains in the conference committee and may see further action during the veto session.
Senate Bill 489 would remove certain regulatory authority concerning infectious or contagious diseases from the secretary of health and environment. The Senate Committee Public Health and Welfare Committee held a hearing on the bill where, despite only two proponents and 10 opponents, it was amended to allow local health officers to only recommend a quarantine or patient isolation in the event of a public health emergency. The Senate passed the bill on a vote of 24-15, which would not be enough to override a potential veto by the Governor. The bill was referred to the House Committee on Health and Human Services and did not receive further action.
State Budget
Governor Kelly has signed House Sub for Senate Bill 267, the budget for state agencies for fiscal years 2022, 2023, and 2024. The bill leaves an ending balance projection of $1.4 billion in fiscal year 2022, and $895 million in fiscal year 2023. A previous Senate version of the budget included a provision requiring use of the federal E-Verify system for all state hiring and contracts of more than $50,000. The final agreed language in the budget bill, however, does not include the E-verify provision. Governor Kelly exercised her line-item veto authority on only two sections of the budget.
This week, state economic forecasters boosted their tax revenue estimates by $760 million over two years, leaving Kansas with a projected ending balance of $3.1 billion for this year and firing up the debate on elimination of the state sales tax on food. The state is anticipated to receive $9.3 billion in taxes for the current fiscal year ending June 30, up from estimates last fall of about $8.9 billion.
Corporate Income Tax Apportionment
Kansas currently uses a three-factor system for apportioning income between states for corporate income tax purposes. House Bill 2186 would allow corporate taxpayers the option to elect which methodology to use when apportioning their corporate income between Kansas and other states in which it operates. The legislation would allow certain taxpayers, based on NAICS codes, to elect to use a single-factor apportionment formula based on sales to determine corporate income tax liability. The House Tax Committee amended the bill to add NAICS codes 541690 and 112210. During a Tax Conference Committee, the House requested to include the contents of HB 2186 in a tax committee report. However, the Senate, which had not held a hearing on the bill, has continued to refuse the request stating the bill’s fiscal cost ($20 m) and that the bill was a policy change that should not be made without a full hearing. Other tax bills will likely be considered during the veto session, and proponents of this bill will continue to seek its passage.
Industry Regulations
House Concurrent Resolution 5014 proposes an amendment to the Kansas Constitution that would increase legislative oversight of agency regulations. Having been approved by two-thirds of the legislature, the amendment will now go before Kansas voters as a ballot question during the November 2022 election. In addition, House Bill 2087 amends current law by requiring the state budget director to review any proposed agency regulation with an economic impact of $1 million or more over a two-year period. The legislature amended the bill to include the contents of Senate Bill 34, a bill that requires each state agency to review its regulations at least once every five years to determine if they are still necessary. The bill also allows for a 15-day quick repeal process for outdated regulations. The bill was passed by both chambers and signed into law by Governor Kelly.
Unlawful Legal Solicitation
Senate Bill 150 defines and prohibits certain deceptive lawsuit advertising practices and restrict the use or disclosure of protected health information to solicit individuals for legal services. The bill, supported by business and industry, was signed into law by Governor Kelly.
Major Tax Relief Bills
CCR on House Bill 2239 contains myriad provisions concerning income taxes, property taxes, and sales taxes, and was the only bill to be passed by the legislature during the regular session. The bill, which was signed into law by Governor Kelly, contains inter alia the following:
In addition, the Tax Conference Committee reached agreement on two other tax bills that will likely be taken up for final action:
Unemployment Insurance
House Bill 2703 modifies the My Reemployment Plan Program and, with certain exceptions, make use of the program mandatory for those receiving unemployment insurance benefits. The bill also lowers credit rate schedules for payments made by employers into the Employment Security Fund, which will potentially save employers millions of dollars in payments to the fund. Both chambers passed Conference Committee Report on HB 2703 and the bill was signed into law by Governor Kelly.
Bill Opposing Sanctuary Cities
House Bill 2717 prohibits any Kansas municipality from preventing the enforcement of federal immigration laws, requiring municipal law enforcement agencies to provide written notice to each law enforcement officer of the officer’s duty to cooperate with state and federal agencies in the enforcement of immigration laws and requiring any municipal identification card to state on its face that it is not valid for state identification. The bill was signed into law by Governor Kelly.
State Level Preemption of Plastic Regulation
Senate Bill 493 would prohibit cities and counties from regulating plastic and other containers designed for the consumption, transportation or protection of merchandise, food, or beverages. The bill was passed by both chambers but then was vetoed by Governor Kelly.
Credit and Debit Card Fees
Kansas law prohibits the seller or lessor in any sales or lease transaction or any credit or debit card issuer from imposing a surcharge on a card holder who elects to use a credit or debit card in lieu of payment by cash, check or similar means. A surcharge is defined as any additional amount imposed at the time of the sales or lease transaction by the merchant, seller or lessor that increases the charge to the buyer or lessee for the privilege of using a credit or debit card. House Bill 2316 was introduced to eliminate this prohibition and allow the imposition of a surcharge. The Senate Tax Committee placed the contents of HB 2316 into Sub SB 462, but the bill did not advance further this year.
Retailer Tax Credit for Collection of State Sales Tax
Senate Bill 463 would allow retailers to retain 1.5 percent of the retail sales and compensating use tax that they collect each month up to $300. Any retailer that files a consolidated return for reporting retail sales and compensating use tax prior to January 1, 2022, would be subject to the $300 per retailer limitation. The bill would decrease sales tax revenue to the state by an estimated $50 million in fiscal year 2023. The Senate Tax Committee passed the bill out favorably, but the bill did not advance further this year.
Student Work-Based Learning Program Liability
House Sub for SB 91 was introduced with the purpose of providing businesses with immunity from general liability for participating in work-based learning programs with students. Under the bill, schools will be able to insure against this liability in the same way that they insure students during field trips and sporting events. This reasonable legislation is beneficial for businesses as they seek to increase the Kansas workforce. Both chambers passed Conference Committee Report on SB 91 and the bill was signed into law by Governor Kelly.
Career Technical Education Credential and Transition Incentive
House Bill 2631 would enact the Career Technical Education (CTE) Credential and Transition Incentive (CTI) for Employment Success Act. The bill would provide a new category of state aid to school districts for students obtaining a CTE credential. In addition, a school district that offers CTE and has students that obtain a CTE credential would receive state aid payments subject to the availability of appropriations. The Education Committee amended the bill this week to: Specify reimbursement rates for approved standard CTE credentials and approved high-value CTE credentials; provide reimbursement for assessments for standard CTE credentials exclusively for students with an IEP, 504 plan, or as identified by the discretion of the school district. The House passed the bill on a vote of 122-0. The Education Conference Committee may continue discussions on the bill during the veto session.
Workforce Development Scholarship
Last year, Governor Kelly signed into law a workforce development bill creating the Kansas Promise Scholarship Act which provides educational scholarships to students attending a Kansas community college, technical college, or two-year associate degree program or career and technical education programs. The scholarship would be eligible for students pursing certain fields of study, including manufacturing, construction, and others. This year, Senate Bill 340 was introduced to authorize additional programs and fields of study. The Education Conference Committee may continue discussions during the veto session.
KEMA Disaster Emergency Powers
Senate Bill 541 would, inter alia, limit the authority of the governor, and other governmental entities in issuing and enforcing orders for face mask mandates, gathering limitations, and business restrictions related to a contagious or infectious disease. The bill would also prohibit post-secondary educational institutions, the State Board of Education, local boards, schools, and school officials from requiring a COVID-19 vaccination and from issuing or requiring a COVID-19 passport. Schools would be required to recognize exemptions for mask requirements and alternative measures regarding religious exemptions for vaccinations. The bill would also give local boards of education and governing bodies of community and technical colleges the authority to issue orders or policies for contagious or infectious diseases instead of the current authority given during the state of disaster emergency related to the COVID-19 health emergency. SB 541 would also remove the sunset for the Contact Tracing Privacy Act. The bill would prohibit schools and childcare facilities from denying access to their facilities unless there were reasonable grounds that a person was infected with a disease suspected of being infectious or contagious. The Senate passed the bill favorably on a vote of 24-14. The bill was then referred to the House Committee on Judiciary but received no further action. The contents of the bill may be considered in conference during the veto session.
Government Response to COVID Pandemic
CCR on Senate Bill 286 would amend and extend the expiration dates and effectiveness of provisions regarding the governmental response to the COVID-19 pandemic; amend certain healthcare provider immunity provisions related to the COVID-19 public health emergency; create the crime of interference with the conduct of a hospital; and increase the penalty for the crime of battery when committed against a healthcare provider. After passage in both chambers, the bill was vetoed by Governor Kelly.
March 25, 2022
2022 Legislative Session, Week 12
Last week was the final week of regular session for the 2022 Kansas legislature. Both chambers deliberated for hours, with final action on Friday concluding about 1:30 am. Legislators will take off most of the month of April before returning on Monday, April 25 for a, likely brief, veto session to consider bills vetoed by Governor Laura Kelly. In addition, multiple bills of significant interest that failed to be passed Friday evening could still be addressed during the veto session.
Biological Lab Accidents
Senate Bill 441 would enact the biological laboratory accident transparency act and would require institutions and organizations to report accidents and near miss accidents at high-risk biological laboratories. The bill drew only one proponent, who testified from Israel and stated he, “Had no ties to Kansas.” The bill passed the Senate and was referred to the House Committee on Health and Human Services but received no further action.
Pharmacy Act, Prescription Monitoring Program, K-TRACS
CCR on Senate Bill 200 would amend the Kansas Pharmacy Act to include point-of-care testing for and treatment of certain health conditions (therapy). The bill would also amend provisions of the Prescription Monitoring Program Act to add to the list of information a dispenser may submit to the Prescription Monitoring Program (K-TRACS), amend the list of individuals who may request and receive data from K-TRACS, amend how data is stored outside of K-TRACS, and add one member to the K-TRACS Advisory Committee. Last week, the bill was passed by both chambers and will be presented to the Governor for consideration.
Over-the-Counter Sales Tax Exemption
House Bill 2721 would provide for a sales tax exemption on sales of over-the-counter drugs. During the House Taxation Committee hearing, there was one proponent and no opponents. The fiscal note on the bill was estimated at $20.5 million, and the bill did not move forward.
Midwest Stem Cell Therapy Center
Senate Bill 373 would make appropriations of $500,000 for the University of Kansas Medical Center for COVID-19 clinical trials at the Midwest Stem Cell Therapy Center. The funds could be used any time before June 30, 2024. The bill passed the Senate and was referred to the House Committee on Appropriations. It does not appear that the funds were included in the budget bill.
Pharmacy Benefit Manager Licensure Act to Governor
The legislature sent House Sub for SB 28 concerning the regulation of pharmacy benefit managers to Governor Laura Kelly on Friday, April 1. As passed, the bill ends registration of PBMs in the state and instead moves to a licensure overseen by the Kansas Department of Insurance.
COVID and Vaccines
Sen Substitute for HB 2280 was amended in the Senate Committee on Public Health and Welfare to insert the contents of Senate Bill 381, allowing for the prescribing and dispensing of medications for off-label use to prevent and treat COVID-19 infections; and Senate Bill 398 requiring a childcare facility or school to grant religious exemptions from vaccination requirements without inquiring into the sincerity of the religious beliefs. The Senate Committee of the Whole passed the bill on a vote of 21-16, which would not be enough to override a potential veto by the Governor. Last week, the bill was referred to a House and Senate conference committee where multiple amendments were offered and debated by both sides. The bill remains in the conference committee and may see further action during the veto session.
Senate Bill 489 would remove certain regulatory authority concerning infectious or contagious diseases from the secretary of health and environment. The Senate Committee Public Health and Welfare Committee held a hearing on the bill where, despite only two proponents and 10 opponents, it was amended to allow local health officers to only recommend a quarantine or patient isolation in the event of a public health emergency. The Senate passed the bill on a vote of 24-15, which would not be enough to override a potential veto by the Governor. The bill was referred to the House Committee on Health and Human Services and did not receive further action.
Workforce Development Scholarship
Last year, Governor Kelly signed into law a workforce development bill creating the Kansas Promise Scholarship Act which provides educational scholarships to students attending a Kansas community college, technical college, or two-year associate degree program or career and technical education programs. The scholarship would be eligible for students pursing certain fields of study, including manufacturing, construction, and others. This year, Senate Bill 340 was introduced to authorize additional programs and fields of study. The Senate passed the bill out on a unanimous vote. The bill may be given further consideration during the veto session along with House Bill 2631.
State Budget Passed
The House and Senate agreed on a budget for state agencies in House Sub for Sub Senate Bill 267 for fiscal years 2022, 2023, and 2024. The budget bill includes an allotment of $60,000 from state general funds for the KDA grain warehouse inspection program for fiscal years 2023 and 2024 which was included at the request of the Kansas grain industry. The bill leaves an ending balance projection of $1.4 billion in fiscal year 2022, and $895 million in fiscal year 2023. A previous Senate version of the budget included a provision requiring use of the federal E-Verify system for all state hiring and contracts of more than $50,000. The final agreed language in the budget bill, however, does not include the E-verify provision. The bill now goes to Governor Laura Kelly, where line-item veto authority may be exercised over any portion of the budget.
Corporate Income Tax Apportionment
Kansas currently uses a three-factor system for apportioning income between states for corporate income tax purposes. House Bill 2186 would allow corporate taxpayers the option to elect which methodology to use when apportioning their corporate income between Kansas and other states in which it operates. The legislation would allow certain taxpayers, based on NAICS codes, to elect to use a single-factor apportionment formula based on sales to determine corporate income tax liability. The House Tax Committee amended the bill to add NAICS codes 541690 and 112210. During a Tax Conference Committee last week, the House requested to include the contents of HB 2186 in an agreed tax committee report. However, the Senate, which had not held a hearing on the bill, refused the request stating that the bill had a high ($20m) fiscal note and was a policy change that should not be made without a hearing. Additional tax bills could be considered during the veto session, and proponents of HB 2186 will continue to seek its passage.
Industry Regulations
House Concurrent Resolution 5014 proposes an amendment to the Kansas Constitution that would increase legislative oversight of agency regulations. Having been approved by two-thirds of the legislature, the amendment will now go before Kansas voters as a ballot question during the November 2022 election. In addition, House Bill 2087would amend current law by requiring the state budget director to review any proposed agency regulation with an economic impact of $1 million or more over a two-year period. The legislature amended the bill to include the contents of Senate Bill 34, a bill that would require each state agency to review its regulations at least once every five years to determine if they are still necessary. The bill would also allow for a 15-day quick repeal process for outdated regulations. The bill was passed by both Chambers with a veto-proof majority, and will now be forwarded to the Governor for consideration.
Unlawful Legal Solicitation
Senate Bill 150 would define and prohibit certain deceptive lawsuit advertising practices and restrict the use or disclosure of protected health information to solicit individuals for legal services. The bill, supported by business and industry, passed both chambers favorably and will be presented to the Governor for consideration.
Major Tax Relief Bills
Late last week, members of a House and Senate tax conference committee reached agreement on three different tax bills. CCR on House Bill 2106 would phase out the state’s 6.5% sales tax on groceries by cutting the tax to 4% by Jan. 1, 2023, 2% in 2024, and then to zero by 2025. The cost of the tax cut to the state is estimated at $80 million in fiscal year 2023, $250 million in 2024, and $400 million in 2025 and each year beyond. The tax cut does not apply to prepared food at restaurants. The phaseout would be paid for by increases in internet sales taxes. While the measure seems to have broad support in the legislature, Republican leadership have voiced concerns about the state’s ability to continue covering this lost revenue in the out years. The legislature ran out of time last on Friday to debate the agreement, but it will likely take the measure up for action during the veto session.
In addition, the conference committee reached agreement on Sub for House Bill 2597 which would amend various income and sales tax provisions, including a provision to allow a sales tax exemption on utility services; a provision to allow net operating losses to be carried forward; and a provision providing property tax relief for small businesses that were forced to close by the state during the COVID-19 pandemic. The legislature may consider this bill during the veto session.
A third bill, CCR on House Bill 2239, includes myriad provisions concerning income taxes, property taxes, and sales taxes, and was the only bill to be passed by the legislature and presented to the Governor for consideration. The bill contains, inter alia, the following:
Credit and Debit Card Fees
Kansas law prohibits the seller or lessor in any sales or lease transaction or any credit or debit card issuer from imposing a surcharge on a card holder who elects to use a credit or debit card in lieu of payment by cash, check or similar means. A surcharge is defined as any additional amount imposed at the time of the sales or lease transaction by the merchant, seller or lessor that increases the charge to the buyer or lessee for the privilege of using a credit or debit card. House Bill 2316 was introduced to eliminate this prohibition and allow the imposition of a surcharge. The Senate Tax Committee placed the contents of HB 2316 into Sub SB 462, but the bill did not advance further this year.
Retailer Tax Credit for Collection of State Sales Tax
Senate Bill 463 would allow retailers to retain 1.5 percent of the retail sales and compensating use tax that they collect each month up to $300. Any retailer that files a consolidated return for reporting retail sales and compensating use tax prior to January 1, 2022, would be subject to the $300 per retailer limitation. The bill would decrease sales tax revenue to the state by an estimated $50 million in fiscal year 2023. The Senate Tax Committee passed the bill out favorably, but the bill did not advance further this year.
Unemployment Insurance
House Bill 2703 would modify the My Reemployment Plan Program and, with certain exceptions, make use of the program mandatory for those receiving unemployment insurance benefits. The Secretary of Commerce would be allowed to require claimants to participate in reemployment services. The bill would also lower credit rate schedules for payments made by employers into the Employment Security Fund. Last week, Conference Committee Report on HB 2703 was passed by the House and Senate and will be presented to the Governor for consideration.
Bill Opposing Sanctuary Cities
House Bill 2717 would prohibit any Kansas municipality from preventing the enforcement of federal immigration laws, requiring municipal law enforcement agencies to provide written notice to each law enforcement officer of the officer’s duty to cooperate with state and federal agencies in the enforcement of immigration laws and requiring any municipal identification card to state on its face that it is not valid for state identification. Last week, the bill was passed by both chambers and will be presented to the Governor for consideration.
State Level Preemption of Plastic Regulation
Senate Bill 493would prohibit cities and counties from regulating plastic and other containers designed for the consumption, transportation or protection of merchandise, food, or beverages. Last week, the bill was passed by both chambers and forwarded to the Governor for consideration.
Work-Based Learning Program Liability
House Sub for SB 91 was introduced with the purpose of providing businesses with immunity from general liability for participating in work-based learning programs with students. Under the bill, schools would insure against this liability in the same way that they insure students during field trips and sporting events. This reasonable legislation is beneficial for businesses as they seek to increase the Kansas workforce. A conference committee between the House and the Senate agreed to language in Conference Committee Report on SB 91. The bill was passed by both chambers and will be presented to the Governor for consideration.
Technical Education Credential and Transition Incentive
House Bill 2631 would enact the Career Technical Education (CTE) Credential and Transition Incentive (CTI) for Employment Success Act. The bill would provide a new category of state aid to school districts for students obtaining a CTE credential. In addition, a school district that offers CTE and has students that obtain a CTE credential would receive state aid payments subject to the availability of appropriations. Before sending it to the full House, the Education Committee amended the bill this week to: Specify reimbursement rates for approved standard CTE credentials and approved high-value CTE credentials; provide reimbursement for assessments for standard CTE credentials exclusively for students with an IEP, 504 plan, or as identified by the discretion of the school district. The House passed the bill favorably on a vote of 122-0. The bill was discussed extensively in the Education conference committee, and may be given further consideration during the veto session.
Medical Marijuana
Certain factions within the Legislature are eager to see recreational and medicinal use of marijuana be legalized in the state and various bills were introduced this year for that purpose. Marijuana is now a Schedule 1 Controlled Substance under federal law, which makes illegal the interstate transportation of most forms of medical marijuana. The Senate Federal and State Affairs Committee deliberated on SB 560, a bill regulating medical marijuana, and on House Sub for SB 158, a bill that would have created the Kansas Medical Marijuana Regulation Act. The committee heard testimony on the economic development prospects of getting a Kansas medical marijuana industry established to make the state competitive if federal restrictions were eliminated. Opponents to the measures argue that this is only the first step toward state legalization of recreational marijuana, as has happened in Colorado and 18 other states. The legislation did not move forward this year.
KEMA Disaster Emergency Powers
Senate Bill 541 would, inter alia, limit the authority of the governor, and other governmental entities in issuing and enforcing orders for face mask mandates, gathering limitations, and business restrictions related to a contagious or infectious disease. The bill would also prohibit post-secondary educational institutions, the State Board of Education, local boards, schools, and school officials from requiring a COVID-19 vaccination and from issuing or requiring a COVID-19 passport. Schools would be required to recognize exemptions for mask requirements and alternative measures regarding religious exemptions for vaccinations. The bill would also give local boards of education and governing bodies of community and technical colleges the authority to issue orders or policies for contagious or infectious diseases instead of the current authority given during the state of disaster emergency related to the COVID-19 health emergency. SB 541 would also remove the sunset for the Contact Tracing Privacy Act. The bill would prohibit schools and childcare facilities from denying access to their facilities unless there were reasonable grounds that a person was infected with a disease suspected of being infectious or contagious. The Senate passed the bill favorably on a vote of 24-14. The bill was then referred to the House Committee on Judiciary but received no further action. The contents of the bill may be considered in conference during the veto session.
Government Response to COVID Pandemic
CCR on Senate Bill 286 would amend and extend the expiration dates and effectiveness of provisions regarding the governmental response to the COVID-19 pandemic; amend certain healthcare provider immunity provisions related to the COVID-19 public health emergency; create the crime of interference with the conduct of a hospital; and increase the penalty for the crime of battery when committed against a healthcare provider. Last week, the bill was passed by both chambers and will be presented to the Governor for consideration.
March 18, 2022
2022 Legislative Session, Week 10
The Kansas legislature’s final day for non-exempt committees to meet passed without much fanfare on Friday, March 18. As a rain and snow mixture fell on Topeka Friday, a few lawmakers navigated the statehouse hallways, while the majority of legislators returned home to gear up for a week of late-night floor debate on big-ticket issues as time winds down on the 2022 session.
This week the Senate passed two high-priority pieces of legislation to the House: the 2023 state agency budget and redistricting maps. The House meanwhile is holding off on completing its version of the aforementioned bills, likely leading up to extended hours of conference committees to negotiate differences before adjourning on April 1.
Biological Lab Accidents
Senate Bill 441 would enact the biological laboratory accident transparency act and would require institutions and organizations to report accidents and near miss accidents at high-risk biological laboratories. The bill drew only one proponent, who testified from Israel and stated he, “Had no ties to Kansas.” Senate Public Health and Welfare Committee Chairman Richard Hilderbrand (R-Galena) acknowledged he requested the bill’s introduction in relation to a laboratory at Kansas State University and the speculation of similar incidents occurring in Wuhan, China. Having passed the Senate, the bill now has now been referred to the House Committee on Health and Human Services for consideration where chairwoman Brenda Landwehr (R-Wichita) has shown little interest in hearing the bill.
Over-the-Counter Sales Tax Exemption
House Bill 2721 would provide for a sales tax exemption on sales of over-the-counter drugs. A hearing was held on the bill on March 8 in the House Committee on Taxation, where there was one proponent and no opponents. The estimated fiscal note on the bill would be an annual cost to the state of $20.5 million. This week, the House Tax Committee passed the bill favorably.
Research and Development Income Tax Credit
House Bill 2394 would establish a 6.5 percent research and development tax credit for LLCs and small businesses. Currently, Kansas law provides this tax credit for corporations only, and has a one-time transferability. The tax credit is based on the amount above the average of actual qualified research and development expenses in the tax year and the previous two tax years. HB 2394 would allow all taxpayers the ability to claim this tax credit and increases the initial tax credit calculation from 6.5 percent to 10.0 percent. The House Tax Committee added a date-change amendment prior to passing the bill out favorably this week.
State Contractor Foreign Disclosure Requirement
Senator Kellie Warren (R-Leawood) introduced SB 537 late in the session requiring state agencies, political subdivisions, state contractors and vendors to disclose certain contracts, gifts, or grants received from foreign sources and state educational institutions to screen certain foreign applicants seeking employment in certain research positions, prohibiting agreements with or accepting grants from certain foreign countries of concern and establishing research integrity offices and international travel and approval programs at state educational institutions. Warren indicated the bill likely will not move forward this year, but she introduced it to, “Get the conversation on this topic started.”
COVID Vaccine
Sen Sub for House Bill 2280, pressed by Sen. Mark Steffen (R-Hutchinson), was referred to the Senate Committee on Public Health and Welfare, where it was amended to insert the contents of Senate Bill 381, allowing for the prescribing and dispensing of medications for off-label use to prevent and treat COVID-19 infections; and Senate Bill 398requiring a childcare facility or school to grant religious exemptions from vaccination requirements without inquiring into the sincerity of the religious beliefs. After tabling the bill for a few weeks, the committee, despite attempts by committee members to strike the vaccination language from the bill, passed the legislation favorably to the Senate Committee of the Whole on Thursday. The Kansas Reflector provided an in-depth article on the meeting.
Senate Bill 370 would prohibit COVID-19 vaccination requirements for national guard members. A hearing on the bill was held in the exempt Senate Committee on Federal and State Affairs.
Senate Bill 489 would remove certain regulatory authority concerning infectious or contagious diseases from the secretary of health and environment. The Senate Committee Public Health and Welfare Committee held a hearing on the bill on March 8, where despite only two proponents and 10 opponents, it was amended to allow local health officers to only recommend a quarantine or patient isolation in the event of a public health emergency. This week, the bill passed out of committee favorably and is on the docket to be debated by the full Senate.
House Bill 2501 would prohibit COVID-19 vaccination requirements for National Guard members. The bill was referred to the House Committee on Federal and State Affairs.
Midwest Stem Cell Therapy Center
This week, on a vote of 23-17, the Senate amended Senate Bill 373 and passed it out favorably. The bill would make appropriations of $500,000 for the University of Kansas Medical Center for COVID-19 clinical trials at the Midwest Stem Cell Therapy Center. The Senate amended the bill to allow the funds to be used any time before June 30 2024. The bill has been referred to the House Committee on Appropriations.
Senate Passes Budget
The Senate passed its version of the state agency budget (Sub SB 444) to the House around 7 o’clock Tuesday evening. Senator Tom Holland and Senator Caryn Tyson tacked on the only successful amendments to include: the federal E-Verify provision for state hiring and contracts of more than $50,000; and, a 15 percent pay raise for legislative employees – not legislators – who were left out of last year’s budget bill. Also included in the Senate budget bill is an allotment of $60,000 from state general funds for the KDA grain warehouse inspection program for fiscal years 2023 and 2024.
Corporate Income Tax Apportionment
Kansas currently uses a three-factor system for apportioning income between states for corporate income tax purposes. House Bill 2186 would allow corporate taxpayers the option to elect which methodology to use when apportioning their corporate income between Kansas and other states in which it operates. The legislation would allow certain taxpayers, based on NAICS codes, to elect to use a single-factor apportionment formula based on sales to determine corporate income tax liability. This week, the House Tax Committee amended the bill to add NAICS codes for additional businesses and industries as requested by the Kansas Chamber of Commerce, to include 541690 and 112210. Having gone through the exempt Committee on Taxation, the bill remains alive and has been placed on the House calendar for consideration. The House is holding off acting on tax bills.
Industry Regulations
House Concurrent Resolution 5014 would propose a constitutional amendment to increase legislative oversight of agency regulations. If approved by two-thirds of the legislature, the amendment would go before Kansas voters in the 2022 election. The House passed the resolution on a vote of 85-39. The Senate Judiciary Committee passed the resolution out favorably and it now awaits consideration by the full Senate.
Substitute for Senate Bill 34 would require states agencies to review each of its regulations, at least once every five years, to determine if they are still valid and necessary. The bill also allows for a 15-day quick repeal process for outdated regulations. Kansas Grain and Feed Association, Kansas Agribusiness Retailers Association, and Renew Kansas Biofuels Association testified in support of the measure prior to the House Committee on Federal and State Affairs passing the bill out of committee favorably on March 17.
House Bill 2087would amend a law requiring review of economic impact of proposed regulations by the state budget director. The Senate amended the bill to reduce the review threshold from $3 million to, $1 million, to increase the number of regulations reviewed by the state budget director. The bill is now on the House calendar to either concur or non-concur with the Senate amendment.
Resolution Denouncing Natural Gas “Price Gouging”
Introduced by House Speaker Pro Tem Blaine Finch (R-Ottawa), HCR 5023 denounces price gouging and market manipulation in the natural gas marketplace, and supports investigations into the extraordinary price increases of wholesale natural gas during the extreme cold weather event “Uri” during February 2021 that resulted in increased costs on ratepayers. On Friday, March 11, the Senate Utilities Committee passed the resolution out favorably.
Salt (State and Local Tax) Parity Act
Senate Bill 495 would establish the “salt parity act” to allow a S corporation or partnership to annually elect to be subject to income tax at the entity level for the taxable period beginning in tax year 2022. The S corporation or partnership would make the election on the return filed by the S corporation or partnership. The filing of the return would be binding on all electing passthrough entity owners. The election would only be allowed in a taxable year where there is a limitation on state and local tax deductions allowed to individuals under the federal Internal Revenue Code. An electing pass-through entity would be subject to a tax in an amount equal to 5.7 percent of the sum of each electing pass-through entity owner’s distributive share of the electing pass-through entity’s income attributable to the state. Any excess income tax credit, net operating loss, or other modification would be allowed to be carried forward on the electing pass-through entity’s return but would only be utilized in a year in which the electing pass-through entity has made the election, except that any limitation for an income tax credit, the net operating loss, or any other modification would apply to the electing pass-through entity.
The bill would allow the electing pass-through entity owners to not be liable for the income tax in their separate or individual capacities, and the electing pass-through entity’s income attributable to the state would not be taken into account by the electing pass-through entity owners. A nonresident individual or fiduciary whose only source of income from this state is income from an electing pass-through entity under the Salt Parity Act would not be required to file an income tax return. A hearing on the bill was held in the Senate Tax Committee on March 10.
Food Sales Tax Exemption
The legislature has held hearings on multiple bills, each taking a unique angle at exempting purchases of “food” from state sales tax. This week, the House Tax Committee passed House Bill 2711, a bill that would cut the state sales tax while gradually lowering the sales tax on food with a goal of eliminating it within three years. The bill would cut the state sales tax by two-tenths of a penny to 6.3% beginning July 1 of this year, while starting a slow reduction in the sales tax on food over time.
Workers Compensation
Introduced and referred to the Senate Commerce Committee, Senate Bill 361 would eliminate the $155,000 cap on permanent total disability in Kansas’ Workers Compensation Act. The bill would allow an injured worker who is determined to be permanently totally disabled to receive weekly benefits at the rate of the employee’s average weekly wage in effect on the date of the injury for which compensation is being made, starting from the date of maximum medical improvement and continuing for life, or the duration of the disability. A hearing on the bill was held on Tuesday, March 8.
Unemployment Insurance
House Bill 2703 would modify the My Reemployment Plan Program and, with certain exceptions, make use of the program mandatory for those receiving unemployment insurance benefits. The Secretary of Commerce would be allowed to require claimants to participate in reemployment services. In addition, the bill would amend solvency and credit rate schedules for the Employment Security Fund. Having passed the House, the Senate Commerce Committee amended the bill to clarify which individuals are exempt from participation in the My Reemployment Plan including: claimants on temporary layoff with a return-to-work date, claimants that are currently employed or that no longer reside in Kansas, claimants that are current reemployment services and eligibility assessment participants, claimants that are members of a placement union or claimants that are engaged in a training program.
Bill Opposing Sanctuary Cities
House Bill 2717 would prohibit any Kansas municipality from preventing the enforcement of federal immigration laws, requiring municipal law enforcement agencies to provide written notice to each law enforcement officer of the officer’s duty to cooperate with state and federal agencies in the enforcement of immigration laws and requiring any municipal identification card to state on its face that it is not valid for state identification. The hearing in the House Federal and State Affairs Committee on Tuesday drew a large crowd to the Statehouse as nearly 70 pieces of testimony were submitted and discussed on the record. Committee chairman Rep. John Barker (R-Abilene) closed the hearing stating his intention to move forward working on the legislation with the time remaining in the session this year.
Plastic Regulation, State Level Preemption
Senate Bill 493would prohibit cities and counties from regulating plastic and other containers designed for the consumption, transportation or protection of merchandise, food, or beverages. The House Commerce Committee amended the bill slightly to add plastic straws to the definition of “auxiliary container” before sending it to the full House for consideration.
Work-Based Learning Program Liability
In 2021, House Sub for SB 91 was introduced with the purpose of providing businesses with immunity from general liability for participating in work-based learning programs with students. Under the bill, schools would insure against this liability in the same way that they insure students during field trips and sporting events. This reasonable legislation is beneficial for businesses as they seek to increase the Kansas workforce. A conference committee between the House and the Senate has been appointed to determine final language on the bill.
Workforce Development Scholarship
Last year, Governor Kelly signed into law a workforce development bill creating the Kansas Promise Scholarship Act which provides educational scholarships to students attending a Kansas community college, technical college, or two-year associate degree program or career and technical education programs. The scholarship would be eligible for students pursing certain fields of study, including manufacturing, construction, and others. This year, Senate Bill 340 was introduced to modify the act to authorize additional programs and fields of study. On March 10, the Senate Ways and Means Committee amended the bill and passed it out favorably as amended.
Special Legislative Tax Committee Recommendations
In November of 2021, a Special Committee on Taxation met to review current tax exemptions and abatements in Kansas. The committee made multiple recommendations on, inter alia, the use of state general fund ending balances, constitutional amendment proposals limiting taxes or expenditures, and the taxation of energy production in the state. On March 10, the Senate Committee on Taxation held a hearing on Senate Concurrent Resolution 1619 which urges the legislature to adopt the recommendations of the Special Committee. While no testimony was offered during the hearing, the committee recommended that the full Senate adopt SCR 1619.
KEMA Disaster Emergency Powers
The Senate Judiciary Committee held a hearing on Senate Bill 541, a bill that would, inter alia, limit the authority of the governor, and other governmental entities in issuing and enforcing orders for face mask mandates, gathering limitations, and business restrictions related to a contagious or infectious disease. The bill would also prohibit post-secondary educational institutions, the State Board of Education, local boards, schools, and school officials from requiring a COVID-19 vaccination and from issuing or requiring a COVID-19 passport. Schools would be required to recognize exemptions for mask requirements and alternative measures regarding religious exemptions for vaccinations. The bill would also give local boards of education and governing bodies of community and technical colleges the authority to issue orders or policies for contagious or infectious diseases instead of the current authority given during the state of disaster emergency related to the COVID-19 health emergency. SB 541 would also remove the sunset for the Contact Tracing Privacy Act. The bill would prohibit schools and childcare facilities from denying access to their facilities unless there were reasonable grounds that a person was infected with a disease suspected of being infectious or contagious. On Friday, March 11, the committee amended the bill and passed it out favorably. We anticipate a floor amendment to clarify that the bill does not apply to animal infectious disease and quarantine orders.
March 11, 2022
2022 Legislative Session, Week 9
Despite winter weather moving into Topeka the evening before BioKansas’ 2022 Bioscience Day, industry representatives joined together on March 7 inside of the Kansas Statehouse to meet with and educate lawmakers on legislation important to the industry.
The event featured a full day of meetings with legislative leadership and pertinent committee chairmen including: House Speaker Pro Tem Blaine Finch (R-Ottawa); Senator Kristen O’Shea (R-Topeka); Senator Pat Pettey (D-Kansas City); Senate Vice President Rick Wilborn (R-McPherson); Representative Dr. John Eplee (R-Atchison); Representative Megan Lynn (R-Olathe); Senate Minority Leader Dinah Sykes (D-Lenexa); Representative Brandon Woodard (D-Lenexa); House Minority Leader Tom Sawyer (D-Wichita); Senator Cindy Holscher (D-Overland Park); and Representative Brenda Landwehr (R-Wichita).
During the meetings, BioKansas’ members explained the association’s position on impactful legislation being worked on in the 2022 session including support for Senate Bill 340 and House Bill 2394. Senate Bill 340 Amends the Kansas promise scholarship act by clarifying the responsibilities of the state board of regents and postsecondary educational institutions and authorizing designation of additional programs and fields of study. Passage of SB 340 incentivizes training and education in agriculture, food and natural resources, distribution, and logistics; driving development of a well-trained workforce that can fortify a modern economy.
House Bill 2394 increases the amount of the research and development tax credit, expanding eligibility beyond corporate taxpayers and permitting transfer of the credit. BioKansas supports innovative treatments that keep Kansans healthy, our livestock and crops bountiful and excellent, and our economy strong.
A bill BioKansas opposed in meetings with legislators was Senate Bill 441 which would enact the biological laboratory accident transparency act. Most legislators BioKansas met with were receptive to the association’s position on the bill that would create distrust between the public and key state and federal assets. During a meeting with Landwehr, the House Health Committee Chairwoman where the bill currently resides, she stated at this time she does not have intentions of bringing the bill up for a hearing.
This week, on a vote of 32-5, the Senate confirmed Janet Stanek as the Governor’s nominee for Secretary of the Kansas Department of Health and Environment. In addition, both chambers continue to debate and pass mostly noncontroversial bills, leaving debate on the major issues still to come in the remaining couple weeks of the session – including various tax cut bills, redistricting of legislative districts, and passage of the 2023 state agency budget.
Midwest Stem Cell Therapy Center
This week, on a vote of 23-17, the Senate amended Senate Bill 373 and passed it out favorably. The bill would make appropriations of $500,000 for the University of Kansas Medical Center for COVID-19 clinical trials at the Midwest Stem Cell Therapy Center. The Senate amended the bill to allow the funds to be used any time before June 30, 2024. The bill has been referred to the House Committee on Appropriations.
Workforce Development Scholarship
Last year, Governor Kelly signed into law a workforce development bill creating the Kansas Promise Scholarship Act which provides educational scholarships to students attending a Kansas community college, technical college, or two-year associate degree program or career and technical education programs. The scholarship would be eligible for students pursing certain fields of study, including manufacturing, construction, and others. This year, Senate Bill 340 was introduced to modify the act to authorize additional programs and fields of study. On March 10, the Senate Ways and Means Committee amended the bill and passed it out favorably as amended.
Biological Lab Accidents
Senate Bill 441 would enact the biological laboratory accident transparency act and would require institutions and organizations to report accidents and near miss accidents at high-risk biological laboratories. The bill drew only one proponent, who testified from Israel and stated he, “Had no ties to Kansas.” Senate Public Health and Welfare Committee Chairman Richard Hilderbrand (R-Galena) acknowledged he requested the bill’s introduction in relation to a laboratory at Kansas State University. Having passed the Senate, the bill now has now been referred to the House Committee on Health and Human Services for consideration.
Over-the-Counter Sales Tax Exemption
House Bill 2721 would provide for a sales tax exemption on sales of over-the-counter drugs. A hearing was held on the bill on March 8 in the House Committee on Taxation, where there was one proponent and no opponents. The estimated fiscal note on the bill would be an annual cost to the state of $20.5 million.
Research and Development Income Tax Credit
House Bill 2394 would establish a 6.5 percent research and development tax credit for LLCs and small businesses. Currently, Kansas law provides this tax credit for corporations only, and has a one-time transferability. The tax credit is based on the amount above the average of actual qualified research and development expenses in the tax year and the previous two tax years. HB 2394 would allow all taxpayers the ability to claim this tax credit and increases the initial tax credit calculation from 6.5 percent to 10.0 percent. The House Tax Committee is scheduled to take final committee action on the bill on Monday, March 14.
KEMA Disaster Emergency Powers
The Senate Judiciary Committee held a hearing on Senate Bill 541, a bill that would, inter alia, limit the authority of the governor, and other governmental entities in issuing and enforcing orders for face mask mandates, gathering limitations, and business restrictions related to a contagious or infectious disease. The bill would also prohibit post-secondary educational institutions, the State Board of Education, local boards, schools, and school officials from requiring a COVID-19 vaccination and from issuing or requiring a COVID-19 passport. Schools would be required to recognize exemptions for mask requirements and alternative measures regarding religious exemptions for vaccinations. The bill would also give local boards of education and governing bodies of community and technical colleges the authority to issue orders or policies for contagious or infectious diseases instead of the current authority given during the state of disaster emergency related to the COVID-19 health emergency. SB 541 would also remove the sunset for the Contact Tracing Privacy Act. The bill would prohibit schools and childcare facilities from denying access to their facilities unless there were reasonable grounds that a person was infected with a disease suspected of being infectious or contagious. On Friday, March 11, the committee amended the bill and passed it out favorably. We anticipate a floor amendment to clarify that the bill does not apply to animal infectious disease and quarantine orders.
COVID Vaccine
Sen Sub for House Bill 2280, pressed by Sen. Mark Steffen (R-Hutchinson), was referred to the Senate Committee on Public Health and Welfare, where it was amended to insert the contents of Senate Bill 381, allowing for the prescribing and dispensing of medications for off-label use to prevent and treat COVID-19 infections; and Senate Bill 398 requiring a childcare facility or school to grant religious exemptions from vaccination requirements without inquiring into the sincerity of the religious beliefs. The committee began the amendment process on the bill midway through the week, however, action was tabled until a later date. The bill remains in the committee.
Senate Bill 370 would prohibit COVID-19 vaccination requirements for national guard members. A hearing on the bill was held in the exempt Senate Committee on Federal and State Affairs.
Senate Bill 489 would remove certain regulatory authority concerning infectious or contagious diseases from the secretary of health and environment. The Senate Committee Public Health and Welfare Committee held a hearing on the bill on March 8. There were two proponents and 10 opponents.
House Bill 2501 would prohibit COVID-19 vaccination requirements for National Guard members. The bill was referred to the House Committee on Federal and State Affairs.
Corporate Income Tax Apportionment
Kansas currently uses a three-factor system for apportioning income between states for corporate income tax purposes. House Bill 2186 would allow corporate taxpayers the option to elect which methodology to use when apportioning their corporate income between Kansas and other states in which it operates. The legislation would allow certain taxpayers, based on NAICS codes, to elect to use a single-factor apportionment formula based on sales to determine corporate income tax liability. This week, the House Tax Committee amended the bill to add NAICS codes for additional businesses and industries as requested by the Kansas Chamber of Commerce, to include 541690 and 112210. Having gone through the exempt Committee on Taxation, the bill remains alive and has been placed on the House calendar for consideration. The House is holding off acting on tax bills.
Industry Regulations
House Concurrent Resolution 5014 would propose a constitutional amendment to increase legislative oversight of agency regulations. If approved by two-thirds of the legislature, the amendment would go before Kansas voters in the 2022 election. During a hearing in the Senate Judiciary Committee, Kansas Agribusiness Retailers Association, Kansas Grain and Feed Association, and Renew Kansas Biofuels Association joined other stakeholders in support of the measure. The committee passed the resolution out favorably on March 9.
Substitute for Senate Bill 34 would require states agencies to review each of its regulations, at least once every five years, to determine if they are still valid and necessary. The bill also allows for a 15-day quick repeal process for outdated regulations. The House Committee on Federal and State Affairs held a hearing on the bill on March 9. We anticipate the bill being passed out of committee next week.
House Bill 2087would amend a law requiring review of economic impact of proposed regulations by the state budget director. The Senate amended the bill to reduce the review threshold from $3 million to, $1 million, to increase the number of regulations reviewed by the state budget director. The bill is now on the House calendar to either concur or non-concur with the Senate amendment.
Resolution Denouncing Natural Gas “Price Gouging”
Introduced by House Speaker Pro Tem Blaine Finch (R-Ottawa), HCR 5023 denounces price gouging and market manipulation in the natural gas marketplace, and supports investigations into the extraordinary price increases of wholesale natural gas during the extreme cold weather event “Uri” during February 2021 that resulted in increased costs on ratepayers. On Friday, March 11, the Senate Utilities Committee passed the resolution out favorably.
Salt (State and Local Tax) Parity Act
Senate Bill 495 would establish the “salt parity act” to allow a S corporation or partnership to annually elect to be subject to income tax at the entity level for the taxable period beginning in tax year 2022. The S corporation or partnership would make the election on the return filed by the S corporation or partnership. The filing of the return would be binding on all electing passthrough entity owners. The election would only be allowed in a taxable year where there is a limitation on state and local tax deductions allowed to individuals under the federal Internal Revenue Code. An electing pass-through entity would be subject to a tax in an amount equal to 5.7 percent of the sum of each electing pass-through entity owner’s distributive share of the electing pass-through entity’s income attributable to the state. Any excess income tax credit, net operating loss, or other modification would be allowed to be carried forward on the electing pass-through entity’s return but would only be utilized in a year in which the electing pass-through entity has made the election, except that any limitation for an income tax credit, the net operating loss, or any other modification would apply to the electing pass-through entity. The bill would allow the electing pass-through entity owners to not be liable for the income tax in their separate or individual capacities, and the electing pass-through entity’s income attributable to the state would not be taken into account by the electing pass-through entity owners. A nonresident individual or fiduciary whose only source of income from this state is income from an electing pass-through entity under the Salt Parity Act would not be required to file an income tax return. A hearing on the bill was held in the Senate Tax Committee on March 10.
Workers Compensation
Introduced and referred to the Senate Commerce Committee, Senate Bill 361 would eliminate the $155,000 cap on permanent total disability in Kansas’ Workers Compensation Act. The bill would allow an injured worker who is determined to be permanently totally disabled to receive weekly benefits at the rate of the employee’s average weekly wage in effect on the date of the injury for which compensation is being made, starting from the date of maximum medical improvement and continuing for life, or the duration of the disability. A hearing on the bill was held on Tuesday, March 8.
Unemployment Insurance
House Bill 2703 would modify the My Reemployment Plan Program and, with certain exceptions, make use of the program mandatory for those receiving unemployment insurance benefits. The Secretary of Commerce would be allowed to require claimants to participate in reemployment services. In addition, the bill would amend solvency and credit rate schedules for the Employment Security Fund. Having passed the House, a hearing on the bill is scheduled for Monday, March 14 in the Senate Commerce Committee.
Bill Opposing Sanctuary Cities
House Bill 2717 would prohibit any Kansas municipality from preventing the enforcement of federal immigration laws, requiring municipal law enforcement agencies to provide written notice to each law enforcement officer of the officer’s duty to cooperate with state and federal agencies in the enforcement of immigration laws and requiring any municipal identification card to state on its face that it is not valid for state identification. The bill is scheduled for a hearing in the House Committee on Federal and State Affairs on Tuesday, March 15.
Plastic Regulation, State Level Preemption
Senate Bill 493would prohibit cities and counties from regulating plastic and other containers designed for the consumption, transportation or protection of merchandise, food, or beverages. The bill was heard by the House Commerce Committee on March 9.
Work-Based Learning Program Liability
In 2021, House Sub for SB 91 was introduced with the purpose of providing businesses with immunity from general liability for participating in work-based learning programs with students. Under the bill, schools would insure against this liability in the same way that they insure students during field trips and sporting events. This reasonable legislation is beneficial for businesses as they seek to increase the Kansas workforce. A conference committee between the House and the Senate has been appointed to determine final language on the bill.
Special Legislative Tax Committee Recommendations
In November of 2021, a Special Committee on Taxation met to review current tax exemptions and abatements in Kansas. The committee made multiple recommendations on, inter alia, the use of state general fund ending balances, constitutional amendment proposals limiting taxes or expenditures, and the taxation of energy production in the state. On March 10, the Senate Committee on Taxation held a hearing on Senate Concurrent Resolution 1619 which urges the legislature to adopt the recommendations of the Special Committee. While no testimony was offered during the hearing, the committee recommended that the full Senate adopt SCR 1619.
March 4, 2022
2022 Legislative Session, Week 8
The legislature returned to work this week to begin further consideration of bills. On Thursday afternoon, while debating a bill that would provide income tax credits to graduates of aviation-related programs and their employers, the Senate amended the bill multiple times to add other income and property tax bills and programs with a total cost of over $100 million to the state. The bill now includes such items as an income tax credit for schoolteachers, a freeze on property taxes for seniors and veterans, property tax breaks on school taxes, and a rural housing development tax credit. One amendment that was narrowly defeated would have added Governor Laura Kelly’s proposal to provide every Kansas taxpayer with a one-time $250 cash rebate. That proposal would have cost the state $460 million. The bill would be the first major piece of tax legislation to pass a chamber this session.
The House continues to hold off action on tax bills as the legislature wrestles with how best to spend down the estimated $3 billion ending balance for the current fiscal year. That ending balance was just increased as February state tax revenues beat estimates by 4 percent, adding another $18 million to this year’s ending balance. The major issues remaining for the session include various tax cut bills, redistricting of legislative districts, and passage of the 2022 omnibus and 2023 state agency budgets.
Midwest Stem Cell Therapy Center
This week, on a vote of 23-17, the Senate amended Senate Bill 373 and passed it out favorably. The bill would make appropriations of $500,000 for the University of Kansas Medical Center for COVID-19 clinical trials at the Midwest Stem Cell Therapy Center. The Senate amended the bill to allow the funds to be used any time before June 30 2024. The bill has been referred to the House Committee on Appropriations.
Biological Lab Accidents
Senate Bill 441 would enact the biological laboratory accident transparency act and would require institutions and organizations to report accidents and near miss accidents at high-risk biological laboratories. The bill drew only one proponent, who testified from Israel and stated he, “Had no ties to Kansas.” Senate Public Health and Welfare Committee Chairman Richard Hilderbrand (R-Galena) acknowledged he requested the bill’s introduction. Having passed the Senate, the bill has now been referred to the House Committee on Health and Human Services for consideration.
Over-the-Counter Sales Tax Exemption
House Bill 2721 would provide for a sales tax exemption on sales of over-the-counter drugs. A hearing on the bill is scheduled for Tuesday, March 8 in the House Committee on Taxation.
COVID Vaccine Bills
Sen Sub for House Bill 2280, pressed by Sen. Mark Steffen (R-Hutchinson), was referred to the Senate Committee on Public Health and Welfare, where it was amended to insert the contents of Senate Bill 381, allowing for the prescribing and dispensing of medications for off-label use to prevent and treat COVID-19 infections; and Senate Bill 398 requiring a childcare facility or school to grant religious exemptions from vaccination requirements without inquiring into the sincerity of the religious beliefs. The bill remains in the committee.
Senate Bill 370would prohibit COVID-19 vaccination requirements for national guard members. A hearing on the bill was held in the exempt Senate Committee on Federal and State Affairs.
Senate Bill 489 would remove certain regulatory authority concerning infectious or contagious diseases from the secretary of health and environment. A hearing on the bill is scheduled in the Senate Committee Public Health and Welfare Committee on Tuesday, March 8.
House Bill 2501would prohibit COVID-19 vaccination requirements for National Guard members. The bill was referred to the House Committee on Federal and State Affairs.
Senate Bill 541, a multi-pronged bill concerning orders and actions by public officials relating to vaccine passports, face mask mandates, gathering limitations, business restrictions, and religious gathering limitations. The Senate Judiciary Committee held an informational hearing on this bill on March 3, and has scheduled for a full hearing on Monday, March 7.
Research and Development Income Tax Credit
House Bill 2394 would establish a 6.5 percent research and development tax credit for LLCs and small businesses. Currently, Kansas law provides this tax credit for corporations only, and has a one-time transferability. The tax credit is based on the amount above the average of actual qualified research and development expenses in the tax year and the previous two tax years. HB 2394 would allow all taxpayers the ability to claim this tax credit and increases the initial tax credit calculation from 6.5 percent to 10.0 percent. The House Tax Committee held a hearing on the bill on Wednesday, February 16. Because of the exempt status of the tax committee the bill remains alive for the session. Kansas Dept. of Commerce submitted proponent testimony available HERE.
Workforce Development Scholarship
Last year, Governor Kelly signed into law a workforce development bill creating the Kansas Promise Scholarship Act which provides educational scholarships to students attending a Kansas community college, technical college, two-year associate degree program, or career and technical education programs. The scholarship would be eligible for students pursuing certain fields of study, including manufacturing, construction, and others. This year, Senate Bill 340 was introduced to amend the act to authorize additional programs and fields of study. A presentation on the bill will be held in the Senate Committee on Ways and Means on Thursday, March 10.
Corporate Income Tax Apportionment
Kansas currently uses a three-factor system for apportioning income between states for corporate income tax purposes. House Bill 2186 would allow corporate taxpayers the option to elect which methodology to use when apportioning their corporate income between Kansas and other states in which it operates. The legislation would allow certain taxpayers, based on NAICS codes, to elect to use a single-factor apportionment formula based on sales to determine corporate income tax liability. This week, the House Tax Committee amended the bill to add NAICS codes for additional businesses and industries as requested by the Kansas Chamber of Commerce. The House is holding off acting on tax bills.
Industry Regulations
House Concurrent Resolution 5014would propose a constitutional amendment to increase legislative oversight of agency regulations. If approved by two-thirds of the legislature, the amendment would go before Kansas voters in the 2022 election. Having passed the House, the Senate Judiciary Committee held a hearing on the resolution this week. Proponent testimony was provided by Kansas Agribusiness Retailers Association, Kansas Grain and Feed Association, and Renew Kansas Biofuels Association.
Substitute for Senate Bill 34would require states agencies to review each of its regulations, at least once every five years, to determine if they are still valid and necessary. The bill also allows for a 15-day quick repeal process for outdated regulations. Having passed the Senate, it is scheduled for a hearing in the House Committee on Federal and State Affairs on Wednesday, March 9.
House Bill 2087 would amend a law requiring review of economic impact of proposed regulations by the state budget director. The Senate amended the bill to reduce the review threshold from $3 million to $1 million, to increase the number of regulations reviewed by the state budget director. The bill is now on the House calendar to either concur or non-concur with the Senate amendment.
Credit and Debit Card Fees
Kansas law prohibits the seller or lessor in any sales or lease transaction or any credit or debit card issuer from imposing a surcharge on a card holder who elects to use a credit or debit card in lieu of payment by cash, check, or similar means. A surcharge is defined as any additional amount imposed at the time of the sales or lease transaction by the merchant, seller or lessor that increases the charge to the buyer or lessee for the privilege of using a credit or debit card. House Bill 2316was introduced to eliminate this prohibition and allow the imposition of a surcharge. Having passed the House, the Senate Tax Committee held a hearing on the bill where Kansas Agribusiness Retailers Association provided proponent testimony.
Resolution Denouncing Natural Gas “Price Gouging”
Introduced by House Speaker Pro Tem Blaine Finch (R-Ottawa), HCR 5023 denounces price gouging and market manipulation in the natural gas marketplace and supports investigations into the extraordinary price increases of wholesale natural gas during the extreme cold weather event “Uri” during February 2021 that resulted in increased costs on ratepayers. Having passed the House, a hearing on the resolution is scheduled in Senate Utilities Committee on Tuesday, March 8.
Plastic Regulation,State Level Preemption
Senate Bill 493 would prohibit cities and counties from regulating plastic and other containers designed for the consumption, transportation or protection of merchandise, food, or beverages. Having passed the Senate, the bill is scheduled for hearing in the House Commerce Committee on Wednesday, March 9.
Salt Parity Act
Senate Bill 495 was introduced at the request of the Kansas Society of Certified Public Accountants. The bill would establish the “salt parity act” to allow pass-through entities to elect to pay state income tax at the entity level. The bill is scheduled for hearing in the Senate Tax Committee on Thursday, March 10.
Workers Compensation
Introduced and referred to the Senate Commerce Committee, Senate Bill 361 would eliminate the $155,000 cap on permanent total disability in Kansas’ Workers Compensation Act. The bill would allow an injured worker who is determined to be permanently totally disabled to receive weekly benefits at the rate of the employee’s average weekly wage in effect on the date of the injury for which compensation is being made, starting from the date of maximum medical improvement and continuing for life, or the duration of the disability. A hearing on the bill is scheduled for Tuesday, March 8.
Unemployment Insurance
House Bill 2703 wouldmodify the My Reemployment Plan Program and, with certain exceptions, make use of the program mandatory for those receiving unemployment insurance benefits. The Secretary of Commerce would be allowed to require claimants to participate in reemployment services. In addition, the bill would amend solvency and credit rate schedules for the Employment Security Fund. Having passed the House, a hearing on the bill is scheduled for Thursday, March 10 in the Senate Commerce Committee.
Work-Based Learning Program Liability
In 2021, House Sub for SB 91was introduced with the purpose of providing businesses with immunity from general liability for participating in work-based learning programs with students. Under the bill, schools would insure against this liability in the same way that they insure students during field trips and sporting events. This reasonable legislation is beneficial for businesses as they seek to increase the Kansas workforce. A conference committee between the House and the Senate has been appointed to determine the final language on the bill.
February 25, 2022
2022 Legislative Session, Week 7
This was Turnaround week in the Kansas legislature, where the House and Senate debated dozens of bills before adjourning on Wednesday afternoon. Any bill that was either not passed by its chamber of origin by Wednesday, or is otherwise exempt, will no longer be an active bill this session. This week, the House passed and sent 29 bills to the Senate, and the Senate sent 37 bills to the House. The legislature will return to work next Tuesday to begin further consideration of bills. The major issues remaining for the session include various tax cut bills – including sales tax on food, passage of reapportionment maps for the House and Senate, and how to best spend the state’s approximately $3 billion ending cash balance. In other news, with a re-election campaign this year, it was reported this week that Governor Laura Kelly’s approval rating has slipped to just 45.4%.
Biological Lab Accidents
This week, on a close vote of 21-19, the Senate passed Senate Bill 441. The bill would enact the biological laboratory accident transparency act and would require institutions and organizations to report accidents and near miss accidents at high-risk biological laboratories. The bill drew only one proponent, who testified from Israel and stated he, “Had no ties to Kansas.” Senate Public Health and Welfare Committee Chairman Richard Hilderbrand (R-Galena) acknowledged he requested the bill’s introduction. The bill now goes to the House for consideration.
COVID Vaccine Bills
Sen Sub for House Bill 2280, pressed by Sen. Mark Steffen (R-Hutchinson), was referred to the Senate Committee on Public Health and Welfare, where it was amended to insert the contents of Senate Bill 381, allowing for the prescribing and dispensing of medications for off-label use to prevent and treat COVID-19 infections; and Senate Bill 398requiring a childcare facility or school to grant religious exemptions from vaccination requirements without inquiring into the sincerity of the religious beliefs. The bill remains in the committee.
Senate Bill 370 would prohibit COVID-19 vaccination requirements for national guard members. A hearing on the bill was held in the exempt Senate Committee on Federal and State Affairs, and the bill will survive turnaround.
Senate Bill 466 would prohibit any place of public accommodation from refusing service, products, admission, or transportation based upon an individual’s vaccination status or possession of an immunity passport. The bill would define “immunity passport” as a document, digital record, or software application indicating that a person is immune to disease, either through vaccination or infection and recovery. The bill would specify county commission boards would be authorized to review, amend, or revoke any order by a local health officer, including orders issued pursuant to a Governor’s executive order, or on behalf of a county concerning any communicable disease. The bill will not survive legislative turnaround and is now a dead bill.
Senate Bill 489 would remove certain regulatory authority concerning infectious or contagious diseases from the secretary of health and environment. The bill was referred to the exempt Senate Federal and State Affairs Committee, and then referred to the Committee Public Health and Welfare Committee. The bill will survive turnaround.
House Bill 2498 would prohibit the Secretary of KDHE from requiring COVID-19 vaccination for children to attend school. The bill will not survive legislative turnaround and is now a dead bill.
House Bill 2501 would prohibit COVID-19 vaccination requirements for National Guard members. The bill was referred to the exempt House Federal and State Affairs Committee and will survive turnaround.
House Bill 2535 would enact the individual liberty preservation act to nullify certain federal COVID-19 vaccine requirements, prohibit enforcement of such requirements and provide criminal penalties for violations. The bill will not survive legislative turnaround and is now a dead bill.
House Bill 2669 would require childcare facilities and schools to grant religious exemptions from vaccination requirements without inquiring into the sincerity of the religious beliefs. The bill will not survive legislative turnaround and is now a dead bill.
House Bill 2670 would prohibit certain acts by business entities, governmental entities or public officials based upon a person’s vaccination status or possession of an immunity passport, amending the Kansas act against discrimination to define unlawful employment practices related to vaccination status or possession of an immunity passport and limiting powers of the secretary of health and environment and local health officers. The bill will not survive legislative turnaround and is now a dead bill.
Midwest Stem Cell Therapy Center
This week, on a vote of 23-17, the Senate amended Senate Bill 373 and passed it out favorably. The bill would make appropriations of $500,000 for the University of Kansas Medical Center for COVID-19 clinical trials at the Midwest Stem Cell Therapy Center. The Senate amended the bill to allow the funds to be used any time before June 30, 2024.
Over-the-Counter Sales Tax Exemption
This week, House Bill 2721 was introduced in the House Committee on Taxation. The bill provides for a sales tax exemption on sales of over-the-counter drugs.
Corporate Income Tax Apportionment
Kansas currently uses a three-factor system for apportioning income between states for corporate income tax purposes. House Bill 2186 would allow corporate taxpayers the option to elect which methodology to use when apportioning their corporate income between Kansas and other states in which it operates. The legislation would allow certain taxpayers, based on NAICS codes, to elect to use a single-factor apportionment formula based on sales to determine corporate income tax liability. This week, the House Tax Committee amended the bill to add NAICS codes for additional businesses and industries as requested by the Kansas Chamber of Commerce, to include 541690 and 112210, as requested by Seaboard. Having gone through the exempt Committee on Taxation, the bill remains alive and has been placed on the House calendar for consideration.
Industry Regulations
House Concurrent Resolution 5014 would propose a constitutional amendment to increase legislative oversight of agency regulations. If approved by two-thirds of the legislature, the amendment would go before Kansas voters in the 2022 election. This week, with 84 votes needed, the House narrowly passed HCR 5014 on a vote of 85-39. The resolution is now scheduled for hearing on Wednesday, March 2 in the Senate Judiciary Committee, which recently held a hearing on Senate Concurrent Resolution 1618 – the senate version of the resolution.
Also, this week, the Senate passed (on a vote of 32-7) Substitute for Senate Bill 34 which would require states’ agencies to review each of its regulations, at least once every five years, to determine if they are still valid and necessary. The bill also allows for a 15-day quick repeal process for outdated regulations.
In addition, House Bill 2087would amend a law requiring review of economic impact of proposed regulations by the state budget director. The Senate amended the bill to reduce the review threshold from $3 million to $1 million, to increase the number of regulations reviewed by the state budget director. The bill is now on the House calendar to either concur or non-concur with the Senate amendment.
Credit and Debit Card Fees
Kansas law prohibits the seller or lessor in any sales or lease transaction or any credit or debit card issuer from imposing a surcharge on a card holder who elects to use a credit or debit card in lieu of payment by cash, check or similar means. A surcharge is defined as any additional amount imposed at the time of the sales or lease transaction by the merchant, seller or lessor that increases the charge to the buyer or lessee for the privilege of using a credit or debit card. House Bill 2316 was introduced to eliminate this prohibition and allow the imposition of a surcharge. The Senate Tax Committee held a hearing on the bill where Kansas Agribusiness Retailers Association provided proponent testimony.
Electric Rates
Kansas has the highest energy rates in our region. Multiple bills were introduced this week targeted at either lowering those rates or stemming any increase in the rates. The Senate Utilities Committee held a hearing on Senate Bill 349, prohibiting the Kansas Corporation Commission (KCC) from approving any increase in retail electric rates for an electric public utility that would result in an annual increase of greater than 1.0 percent when compared to the preceding calendar year’s total retail rates or an average of 1.0 percent per year if the electric public utility does not file for a rate increase in two or more subsequent years. Because the bill was not referred to an exempt committee, it will not survive legislative turnaround this week. The Senate Committee on Assessment and Taxation held a hearing on Senate Bill 359, a bill that would remove the state sales tax on utilities and grant the same authority to cities and counties. In addition, the committee added the contents of this bill into Senate Bill 339, a tax bill concerning a reduction in the state sales tax on food, and then passed SB 339 out favorably.
Plastic Regulation, State Level Preemption
Senate Bill 493would prohibit cities and counties from regulating plastic and other containers designed for the consumption, transportation, or protection of merchandise, food, or beverages. This week, on a vote of 27-13, the bill passed the Senate and now moves to the House for consideration.
Workers Compensation Bill
House Bill 2704 would specify that an employer, or their insurance carrier, would not be required to notify an injured worker of any change or termination of medical or disability benefits for a worker’s compensation injury. The bill would also establish that an employee’s patient privilege would be waived for certain medical records when they file a workers compensation claim. All related treatment records would be required to be provided to the employer or insurance carrier without any medical release. Employers and insurance carriers would be able to communicate with healthcare providers without notice to the employee and communications would not need to be memorialized, though they could be at the employer or insurance carrier’s discretion. The bill would specify that costs associated with post award motions do not include costs incurred by a claimant for an expert opinion or expert testimony. For purposes of calculating an employee’s average weekly wage, the bill would require that any week an employee worked for any part of such week be considered a week of actual employment. In cases of dispute as to the injury, when a medical examination is ordered by the Director of Workers Compensation, the bill would require the Director, prior to the examination, to communicate in writing to the examining provider the medical questions to be answered by the provider that may be applicable to the case. This week, the bill was withdrawn from the House Commerce Committee and referred to the Committee on Appropriations. The bill should be returned to the Commerce Committee.
Unemployment Insurance Updates
House Bill 2703 would modify the My Reemployment Plan Program and, with certain exceptions, make use of the program mandatory for those receiving unemployment insurance benefits. The Secretary of Commerce would be allowed to require claimants to participate in reemployment services. In addition, the bill would amend solvency and credit rate schedules for the Employment Security Fund. This week, the House passed the bill by a vote of 121-0. It now advances to the Senate for consideration.
Workforce Development Scholarship
Last year, Governor Kelly signed into law a workforce development bill creating the Kansas Promise Scholarship Act which provides educational scholarships to students attending a Kansas community college, technical college, two-year associate degree program, or career and technical education programs. The scholarship would be eligible for students pursuing certain fields of study, including manufacturing, construction, and others. This year, Senate Bill 340 was introduced to amend the act to authorize additional programs and fields of study. The bill was advanced from the Senate Committee on Education, and this week the bill was referred to the Senate Committee on Ways and Means.
February 18, 2022
2022 Legislative Session, Week 6
The Legislature passed a Congressional redistricting map last week (Sub Senate Bill 355), overriding Governor Laura Kelly’s veto. Multiple legal challenges to the bill were filed. Major floor action in the House included the attempted passage of a resolution on a proposed constitutional amendment giving the Legislature oversight of rules and regulations adopted by executive branch agencies. The vote failed to gain the super majority votes required to pass, but it will likely come up for reconsideration on Monday. In the Senate, the Senate Tax Committee passed a large bill full of tax cuts, including reductions in property taxes and a new sales tax holiday for school supplies. The bill would also eliminate a property tax set aside for buildings at state universities, state hospitals, veterans’ homes, and schools for the deaf and blind, with the intent being to appropriate the necessary funds directly from the state general fund.
Biological Lab Accidents
On Friday, February 18, the Senate Committee on Public Health and Welfare passed Senate Bill 441 out favorably. The bill would enact the biological laboratory accident transparency act and would require institutions and organizations to report accidents and near miss accidents at high-risk biological laboratories. The bill drew only one proponent, who testified from Israel and stated he, “Had no ties to Kansas.” Senate Public Health and Welfare Committee Chairman Richard Hilderbrand (R-Galena) acknowledged he requested the bill’s introduction in relation to a laboratory at Kansas State University and the speculation of similar incidents occurring in Wuhan, China. The bill now goes to the Senate floor for possible debate and action.
Research and Development Income Tax Credit
House Bill 2394 would establish a 6.5 percent research and development tax credit for LLCs and small businesses. At this time, Kansas law provides this tax credit for corporations only, and has a one-time transferability. The tax credit is based on the amount above the average of actual qualified research and development expenses in the tax year and the previous two tax years. HB 2394 would allow all taxpayers the ability to claim this tax credit and increases the initial tax credit calculation from 6.5 percent to 10.0 percent. The House Tax Committee held a hearing on the bill on Wednesday, February 16. Kansas Department of Commerce submitted proponent testimony available HERE.
Midwest Stem Cell Therapy Center
On Friday, February 18, the Senate Committee on Public Health and Welfare passed Senate Bill 373 out favorably. The bill would make appropriations of $500,000 for the fiscal years ending June 30, 2022, or June 30, 2023, for the University of Kansas Medical Center for COVID-19 clinical trials at the Midwest Stem Cell Therapy Center. Republican senators Mark Steffen and Mike Thompson were strong proponents of the legislation.
COVID Vaccine Bills
Sen Sub for House Bill 2280, pressed by Sen. Mark Steffen (R-Hutchinson), was referred back to the Senate Committee on Public Health and Welfare to provide a technical amendment. It is uncertain when the committee will work the bill. Sen Substitute for House Bill 2280 was amended by the Senate Committee to include Senate Bill 381, allowing for the prescribing and dispensing of medications for off-label use to prevent and treat COVID-19 infections; and to include Senate Bill 398requiring a childcare facility or school to grant religious exemptions from vaccination requirements without inquiring into the sincerity of the religious beliefs.
Senate Bill 370 would prohibit COVID-19 vaccination requirements for national guard members. A hearing was held on the bill in the Senate Committee on Federal and State Affairs on Monday, January 31.
Senate Bill 466 would prohibit any place of public accommodation from refusing service, products, admission, or transportation based upon an individual’s vaccination status or possession of an immunity passport. The bill would define “immunity passport” as a document, digital record, or software application indicating that a person is immune to disease, either through vaccination or infection and recovery. Violation of these prohibitions would be a class A nonperson misdemeanor. The bill would specify county commission boards would be authorized to review, amend, or revoke any order by a local health officer, including orders issued pursuant to a Governor’s executive order, or on behalf of a county concerning any communicable disease. The bill was referred to the Senate Judiciary Committee but the hearing on the bill was canceled.
Senate Bill 489 would remove certain regulatory authority concerning infectious or contagious diseases from the Secretary of Health and Environment. The bill was referred to the Senate Committee on Federal and State Affairs. No hearing has been scheduled.
House Bill 2498 would prohibit the Secretary of KDHE from requiring COVID-19 vaccination for children to attend school. The bill was referred to the House Committee on Health and Human Services. A hearing was scheduled for Monday, February 21.
House Bill 2501 would prohibit COVID-19 vaccination requirements for National Guard members. The bill was referred to the House Committee on Federal and State Affairs. No hearing has been scheduled.
House Bill 2535 would enact the individual liberty preservation act to nullify certain federal COVID-19 vaccine requirements, prohibit enforcement of such requirements and provide criminal penalties for violations. The bill was referred to the House Committee on Judiciary. No hearing has been scheduled.
House Bill 2669 would require childcare facilities and schools to grant religious exemptions from vaccination requirements without inquiring into the sincerity of the religious beliefs. Introduced on 2/9/2022 and referred to Committee on Health and Human Services. No hearing has been scheduled.
House Bill 2670 would prohibit certain acts by business entities, governmental entities, or public officials based upon a person’s vaccination status or possession of an immunity passport, amending the Kansas act against discrimination to define unlawful employment practices related to vaccination status or possession of an immunity passport and limiting powers of the secretary of health and environment and local health officers. No hearing has been scheduled.
Corporate Income Tax Apportionment
Kansas currently uses a three-factor system for apportioning income between states for corporate income tax purposes. House Bill 2186 is a bill that would allow corporate taxpayers the option to elect which methodology to use when apportioning their corporate income between Kansas and other states in which it operates to determine tax liability. The proposed legislation would allow certain taxpayers, based on NAICS codes, to elect to use a single-factor apportionment formula based on sales to determine corporate income tax liability. The bill may have a cost to the state of approximately $20 million. The House Tax Committee held a hearing on the bill and the Kansas Chamber of Commerce offered language to amend the bill to include additional NAICS codes requested by industry, including 541690 and 112210. The committee intends to take final action on the bill on Monday, February 21.
Industry Regulations
Legislation on regulatory reform is being advanced this year. House Bill 2087would amend a law requiring review of economic impact of proposed regulations by the state budget director. The Senate amended the bill to reduce the review threshold from $3 million to $1 million to increase the number of regulations reviewed by the state budget director. The Senate passed the bill on a vote of 39-0, and it now goes back to the House to either concur or non-concur with the Senate amendment.
Also, as amended this week, Senate Bill 34 would require a five-year review of all agency regulations and allow for a 15-day quick repeal process for outdated regulations. The Senate will likely take this bill up for consideration next week.
House Concurrent Resolution 5014and Senate Concurrent Resolution 1618 would propose a constitutional amendment to increase legislative oversight of agency regulations. If approved by two-thirds of the legislature, the amendment would go before Kansas voters in the 2022 election. SCR 1618 received a hearing in the Senate Judiciary Committee this week, and the committee will likely work the bill on Monday, February 18. In addition, after failing to garner the 2/3 majority vote in the House this last week, we anticipate a motion for reconsideration on Monday for HCR 5014.
Mega Senate Sales Tax Bill
This week, the Senate Tax Committee took final action on Senate Bill 339, a bill that would exempt food and food ingredients, including food sold at restaurants, from state sales tax. The exemption would begin on January 1, 2024. The Committee amended the bill to allow local taxing jurisdictions to remove the sales tax on food, and also amended the bill to include the following: Senate Bill 359, exempting utilities from state sales tax ($55 million fiscal note in 2024); and, include Senate Bill 327, exempting delivery charges from state sales tax ($4 million annual fiscal note). The committee passed the bill out favorably, as amended. The fiscal note on the bill, as amended, is substantial.
Credit and Debit Card Fees
Kansas law prohibits the seller or lessor in any sales or lease transaction or any credit or debit card issuer from imposing a surcharge on a card holder who elects to use a credit or debit card in lieu of payment by cash, check, or similar means. A surcharge is defined as any additional amount imposed at the time of the sales or lease transaction by the merchant, seller, or lessor that increases the charge to the buyer or lessee for the privilege of using a credit or debit card. House Bill 2316 was introduced to eliminate this prohibition and allow the imposition of a surcharge. This week, the Senate Tax Committee held a hearing on the bill.
Electric Rates
Kansas has the highest energy rates in our region. Multiple bills were introduced this week targeted at either lowering those rates or stemming any increase in the rates. This week, the Senate Utilities Committee held a hearing on Senate Bill 349, prohibiting the Kansas Corporation Commission (KCC) from approving any increase in retail electric rates for an electric public utility that would result in an annual increase of greater than 1.0 percent when compared to the preceding calendar year’s total retail rates or an average of 1.0 percent per year if the electric public utility does not file for a rate increase in two or more subsequent years.
In addition, the Senate Committee on Assessment and Taxation advanced Senate Bill 359, a bill that would remove the state sales tax on utilities and grant the same authority to cities and counties. The committee added the contents of this bill into Senate Bill 339, concerning a reduction in the state sales tax on food and then passed SB 339 out favorably as amended.
February 11, 2022
2022 Legislative Session, Week 5
This week saw the override of Governor Laura Kelly’s veto of a Republican-friendly map (Sub Senate Bill 355) that will draw new lines for the state’s four Congressional districts. It is assumed that legal challenges to the bill will follow. Following much consternation over the congressional map veto override vote, Senate President Ty Masterson removed two Republican senators from their committee leadership positions. Masterson also removed Senator Mark Steffen of Hutchinson from his vice chairmanship of the senate commerce committee and from his seat on the senate tax committee. In addition, the House and Senate each passed Governor Kelly’s economic development bill aimed at bringing a large national corporate headquarters to the state with a specified capital investment of at least $1,000,000,000. Governor Kelly quickly signed the bill into law to advance the state’s economic development proposal to the company. Finally, a billwas introduced this week to designate the Sand Hill Plumas the official state fruit of Kansas.
Prescription Monitoring Program
Senate Bill 168 would update provisions of the prescription monitoring program act relating to program data, storage, and access, increasing the membership of the advisory committee, and providing for setup and annual maintenance fees for program data integration. On Friday, February 11, the Senate Health Committee amended the bill and then passed it out of committee favorably.
Midwest Stem Cell Therapy Center
Senate Bill 373 would make appropriations for the fiscal year ending June 30, 2022 for the University of Kansas Medical Center for COVID-19 clinical trials at the Midwest Stem Cell Therapy Center. A hearing on the bill has been scheduled for Wednesday, February 16 in the Senate Committee on Public Health and Welfare.
Biological Lab Accidents
Senate Bill 441 would enact the biological laboratory accident transparency act and would require institutions and organizations to report accidents and near miss accidents at high-risk biological laboratories. A hearing on the bill is scheduled for Wednesday, February 16 in the Senate Committee on Public Health and Welfare.
COVID Vaccine Bills
Sen Sub for House Bill 2280, pressed by Senator Mark Steffen (R-Hutchinson), was referred back to the Senate Committee on Public Health and Welfare to provide a technical amendment. It is uncertain when the committee will work the bill. Sen Substitute for House Bill 2280 was amended by the Senate Committee to include Senate Bill 381, allowing for the prescribing and dispensing of medications for off-label use to prevent and treat COVID-19 infections; and to include Senate Bill 398requiring a childcare facility or school to grant religious exemptions from vaccination requirements without inquiring into the sincerity of the religious beliefs.
Senate Bill 370 would prohibit COVID-19 vaccination requirements for national guard members. A hearing was held on the bill in the Senate Committee on Federal and State Affairs on Monday, January 31.
Senate Bill 489 would remove certain regulatory authority concerning infectious or contagious diseases from the secretary of health and environment. The bill was referred to the Senate Committee on Federal and State Affairs. No hearing has been scheduled.
House Bill 2498 would prohibit the Secretary of KDHE from requiring COVID-19 vaccination for children to attend school. The bill was referred to the House Committee on Health and Human Services. No hearing has been scheduled.
House Bill 2501 would prohibit COVID-19 vaccination requirements for National Guard members. The bill was referred to the House Committee on Federal and State Affairs. No hearing has been scheduled.
House Bill 2535 would enact the individual liberty preservation act to nullify certain federal COVID-19 vaccine requirements, prohibit enforcement of such requirements and provide criminal penalties for violations. The bill was referred to the House Committee on Judiciary. No hearing has been scheduled.
House Bill 2669 would require childcare facilities and schools to grant religious exemptions from vaccination requirements without inquiring into the sincerity of the religious beliefs. Introduced on 2/9/2022 and referred to Committee on Health and Human Services. No hearing has been scheduled.
House Bill 2670 would prohibit certain acts by business entities, governmental entities, or public officials based upon a person’s vaccination status or possession of an immunity passport, amending the Kansas act against discrimination to define unlawful employment practices related to vaccination status or possession of an immunity passport and limiting powers of the secretary of health and environment and local health officers. No hearing has been scheduled.
Research and Development Income Tax Credit
House Bill 2394 would establish a 6.5 percent research and development tax credit for LLCs and small businesses. Kansas law provides this tax credit for corporations only and has a one-time transferability. The tax credit is based on the amount above the average of actual qualified research and development expenses in the tax year and the previous two tax years. HB 2394 would allow all taxpayers the ability to claim this tax credit and increases the initial tax credit calculation from 6.5 percent to 10.0 percent. A hearing on the bill is scheduled for Wednesday, February 16 in the House Tax Committee.
Corporate Income Tax Apportionment
Kansas currently uses a three-factor system for apportioning income between states for corporate income tax purposes. This week, the House Tax Committee held a hearing on House Bill 2186, a bill that would allow corporate taxpayers the option to elect which methodology to use when apportioning their corporate income between Kansas and other states in which it operates to determine tax liability. The proposed legislation would allow certain taxpayers, based on NAICS codes, to elect to use a single-factor apportionment formula based on sales to determine corporate income tax liability. The bill may have a cost to the state of approximately $20 million. During the hearing, language was offered to amend the bill to include additional NAICS codes requested by industry, including 541690 and 112210. Kansas Grain and Feed Association submitted testimony in support of the measure.
Industry Regulations
Legislation on regulatory reform is being advanced this year. House Bill 2087would amend a law requiring review of economic impact of proposed regulations by the state budget director. The Senate amended the bill to reduce the review threshold from $3 million to $1 million to increase the number of regulations reviewed by the state budget director. The Senate passed the bill on a vote of 39-0. The bill now goes back to the House to either concur or non-concur with the Senate amendment. Also, as amended this week, Senate Bill 34 would require a five-year review of all agency regulations and allow for a 15-day quick repeal process for outdated regulations. In addition, House Concurrent Resolution 5014and Senate Concurrent Resolution 1618 would propose a constitutional amendment to increase legislative oversight of agency regulations. If approved by two-thirds of the legislature, the amendment would go before Kansas voters in the 2022 election.
Senate Committee Advances Mega Sales Tax Bill
On Thursday, the Senate Tax Committee took final action on Senate Bill 339, a bill that would exempt food and food ingredients, including food sold at restaurants, from state sales tax. This bill has an estimated fiscal note of approximately $320 million in fiscal year 2023, $782.0 million in fiscal year 2024, and $797 million in fiscal year 2025. The exemption would begin on January 1, 2024. The Committee amended the bill to allow local taxing jurisdictions to remove the sales tax on food and amended the bill to include the following: Senate Bill 359, exempting utilities from state sales tax ($55 million fiscal note in 2024); and, include Senate Bill 327, exempting delivery charges from state sales tax ($4 million annual fiscal note). The committee passed the bill out favorably, as amended.
Resolution Denouncing Natural Gas “Price Gouging”
This week, the House Committee of the Whole passed HCR 5023 favorably. The Resolution, introduced by House Speaker Pro Tem Blaine Finch (R-Ottawa), denounces price gouging and market manipulation in the natural gas marketplace, and supports investigations into the extraordinary price increases of wholesale natural gas during the extreme cold weather event “Uri” during February 2021 that resulted in increased costs on ratepayers.
Credit and Debit Card Fees
Kansas law prohibits the seller or lessor in any sales or lease transaction or any credit or debit card issuer from imposing a surcharge on a card holder who elects to use a credit or debit card in lieu of payment by cash, check, or similar means. A surcharge is defined as any additional amount imposed at the time of the sales or lease transaction by the merchant, seller, or lessor that increases the charge to the buyer or lessee for the privilege of using a credit or debit card. House Bill 2316 was introduced to eliminate this prohibition and allow the imposition of a surcharge. A hearing on the bill was held this week in the Senate Committee on Assessment and Taxation, where Kansas Agribusiness Retailers Association provided proponent testimony.
Electric Rates
Kansas has the highest energy rates in our region. Multiple bills were introduced this week targeted at either lowering those rates or stemming any increase in the rates. One bill, Senate Bill 349, is scheduled for a hearing next week in the Senate Utilities Committee. The bill would prohibit the Kansas Corporation Commission (KCC) from approving any increase in retail electric rates for an electric public utility that would result in an annual increase of greater than 1.0 percent when compared to the preceding calendar year’s total retail rates or an average of 1.0 percent per year if the electric public utility does not file for a rate increase in two or more subsequent years. The bill would provide guidelines for the KCC to use for determining the annual limitation. In addition, a hearing was held this week on Senate Bill 359 in the Senate Committee on Assessment and Taxation. The bill would remove the state sales tax on utilities and grant the same authority to cities and counties.
Entity Level Taxation for Pass-Through Businesses
This week, Senate Bill 495 was introduced and referred to the Senate Committee on Assessment and Taxation. The bill would establish the “salt parity act” to allow pass-through entities to elect to pay state income tax at the entity level. The bill may receive a hearing next week.
Economic Development Proposal
This week, the Legislature passed, and Governor Laura Kelly quickly signed into law, Senate Bill 347 – the Attracting Power Economic Expansion(APEX) bill. The bill authorizes tax incentives to companies that make a minimum $1 billion investment in Kansas over a five-year period. Kansas is one of two finalists for a $4 billion, 3 million square foot advanced manufacturing facility that would permanently employ 4,000, $50,000-a-year workers and create 16,000 temporary jobs during construction. The bill was amended to include accountability and safeguard measures meant to drive economic development across the state and various industries. Just an hour after the $1 billion-plus mega economic development bill, Lieutenant Governor David Toland explained to the State Finance Council the deal the state was extending to a yet unnamed company to offer inducements to move to the state.
$1,000,000,000 KPERS Transfer Considered
On Wednesday, February 9, the House Committee on Insurance and Pensions held a hearing on House Bill 2561, a bill that would transfer $1 billion from our state general fund to the Kansas public employees retirement system (KPERS) fund during fiscal year 2022. The bill would save the state $100 million annually in interest payments on its outstanding KPERS debt. The first $250 million would be used to pay off the “layering payments” for debt payments the state missed in recent years.
February 4, 2022
2022 Legislative Session, Week 4
This week, the legislature took a day of hiatus when winter storms were predicted to bring heavy snow to the capitol city. On Thursday, as predicted, Governor Laura Kelly vetoed a Republican-friendly map that would have drawn new lines for the state’s four Congressional districts. The House got bogged down in deliberation over the Kelly Administration’s economic development bill aimed at bringing a large national corporate headquarters to the state with a specified capital investment of at least $1,000,000,000.
COVID Vaccine Bills
Senate Bill 381 would allow for the prescribing and dispensing of medications for off-label use to prevent and treat COVID-19 infections. The Senate Committee on Public Health and Welfare is scheduled to take committee action on the measure on Tuesday, February 8.
Prescription Monitoring Program Act
The Senate Committee on Public Health and Welfare has scheduled a hearing on Senate Bill 168 for Thursday, February 10. The bill proposes to make several amendments to the Kansas Prescription Monitoring Program Act.
Research and Development Tax Credit
Last session, certain stakeholders requested the introduction of HB 2394, a bill which would establish a 6.5 percent research and development tax credit for LLCs and small businesses. Currently, Kansas law provides this tax credit for corporations only, and has a one-time transferability. The tax credit is based on the amount above the average of actual qualified research and development expenses in the tax year and the previous two tax years. HB 2394 would allow all taxpayers the ability to claim this tax credit and increases the initial tax credit calculation from 6.5 percent to 10.0 percent beginning in tax year 2021. The bill was referred to the House Tax Committee.
Economic Development Proposal
Following decisive passage (32-7) last week in the Senate, a House committee this week worked through dozens of proposed amendmentsto Senate Bill 347 – the development incentives package for a manufacturing prospect that the state is racing to land. The legislation, which has strong support from Governor Kelly’s administration, is now possibly in limbo. House members sounded alarms over several provisions, including one added by the Senate to phase out the state’s corporate income tax for the business. The bill would enact the “Attracting Powerful Economic Expansion” act to provide for tax and other incentives to boost the state’s economic development. The bill would be the single biggest economic development bill in state history, with up to $1 billion in tax and other inducements to bring an unidentified business to the state. It is said the business would bring a $4 billion investment, build a 3 million square foot facility for a headquarters or factory in eastern Kansas, and hire at least 4,000 workers. The House Committee will continue deliberations next week.
Redistricting
One of the required benchmarks of the 2022 session is the passage of new district maps for the legislature, statewide offices, and Congressional districts. On Thursday of this week, Governor Kelly vetoed Sub Senate Bill 355 which would have redrawn Kansas’ four congressional districts. The bill had previously passed from the legislature (Senate 26-9 and in the House 79-37). The bill lacked Democrat support as the map would split Wyandotte County and Johnson County in the 3rd Congressional District, which was seen as making re-election efforts more difficult for Congresswoman Sharice Davids (D-Kansas City). The bill now returns to the legislature for consideration of an override of the Governor’s veto.
Corporate Income Tax Apportionment
Kansas currently uses a three-factor system for apportioning income between states for corporate income tax purposes. House Bill 2186 would allow corporate taxpayers the option to elect which methodology to use when apportioning their corporate income between Kansas and other states in which it operates to determine tax liability. The proposed legislation would allow certain taxpayers, based on NAICS codes, to elect to use a single-factor apportionment formula based on sales to determine corporate income tax liability. The bill may have a cost to the state of approximately $20 million. The House Tax Committee will hold a hearing on the bill on Tuesday, Feb 8 at 3:30 pm. It is understood that the Kansas Chamber is prepared to offer suggested language as an amendment to the bill to include additional NAICS codes requested by industry. Kansas Grain and Feed Association will submit testimony in support of the measure.
Food Sales Tax Exemption
Governor Laura Kelly, and 2022 Gubernatorial Candidate (and current Attorney General) Derek Schmidt have stated a goal of eliminating, to some degree, the current state sales tax on food. Referred to as Governor Kelly’s “Axe the Tax” plan, a full repeal of the food sales tax would cost the state over $500 million annually in lost revenues, while allowing the average Kansas family to save about $500. Multiple bills on the issue have been introduced. This week, the Senate Tax Committee held a hearing on Senate Bill 342 which would provide a 0% state rate for sales and use taxes for sales of food and food ingredients but also allow cities and counties to assess the sales tax. The bill would also provide for a tax exemption for sales of farm products sold at farmers’ markets and discontinue the current nonrefundable food sales tax credit. The committee also held a hearing on Senate Bill 339, a bill which would also exempt sales tax on food sold in restaurants. This bill has an estimated fiscal note of approximately $320 million in fiscal year 2023, $782.0 million in fiscal year 2024, and $797 million in fiscal year 2025.
Resolution Denouncing Natural Gas “Price Gouging”
This week, the House Utilities Committees advanced HCR 5023 out of committee favorably. The Resolution, introduced by House Speaker Pro Tem Blaine Finch (R-Ottawa), denounces price gouging and market manipulation in the natural gas marketplace, and supports investigations into the extraordinary price increases of wholesale natural gas during the extreme cold weather event “Uri” during February 2021 that resulted in increased costs on ratepayers.
Credit and Debit Card Fees
Kansas law prohibits the seller or lessor in any sales or lease transaction or any credit or debit card issuer from imposing a surcharge on a card holder who elects to use a credit or debit card in lieu of payment by cash, check, or similar means. A surcharge is defined as any additional amount imposed at the time of the sales or lease transaction by the merchant, seller, or lessor that increases the charge to the buyer or lessee for the privilege of using a credit or debit card. House Bill 2316 was introduced to eliminate this prohibition and allow the imposition of a surcharge. A hearing on the bill has been scheduled for Tuesday, February 8 in the Senate Committee on Assessment and Taxation.
Electric Rates Bill
Kansas has the highest energy rates in our region. Senate Bill 359 was introduced to help reduce those costs on rate payers by removing the state sales tax on utilities and granting the same authority to cities and counties. The measure is thought to have an elevated fiscal cost for the state. A hearing on the bill is scheduled for Tuesday, February 8 in the Senate Committee on Assessment and Taxation.
Workforce Development Scholarship
Last year, Governor Kelly signed into law a workforce development bill creating the Kansas Promise Scholarship Act. The Act provides educational scholarships to students attending a Kansas community college, technical college, two-year associate degree program, or career and technical education programs. The scholarship would be eligible for students pursuing certain fields of study, including manufacturing, construction, and others. Senate Bill 340 was introduced to amend the act to authorize additional programs and fields of study. This week, the Senate Education Committee amended the bill and advanced it out of committee favorably as amended.
January 28, 2022
2022 Legislative Session, Week 3
This week, the Legislature passed a map drawing new lines for the state’s four Congressional districts, held hearings on various bills proposing to exempt food from states sales tax, and advanced an economic development bill that would provide incentives for specified industries to establish their national corporate headquarters in the state with specified capital investment of at least $1,000,000,000. In addition, the Committees on Agriculture received annual reports from the state commodity commissions and the House Agriculture Committee held a hearing on a bill making it unlawful to capture or possess an ornate box turtle – the official state reptile of Kansas. Here are some of the other highlights from this week.
COVID Vaccine Bills
Senate Bill 370 would prohibit COVID-19 vaccination requirements for national guard members. A hearing on this bill has been scheduled in the Senate Committee on Federal and State Affairs for Monday, January 31 at 10:30 am in room 144-s.
Senate Bill 381 would allow for the prescribing and dispensing of medications for off-label use to prevent and treat COVID-19 infections. The Senate Committee on Public Health and Welfare held a hearing on the measure and is scheduled to take committee action on Thursday, February 3, at 8:30 am in room 548-S. During the bill’s hearing earlier this week there were 385 pieces of proponent testimony, while the Kansas Medical Society and Kansas State Board of Healing Arts submitted neutral testimony. The University of Kansas Health System and Ascension Via Christi Health were the only opponents.
Introduced on Friday and referred to the Senate Committee on Public Health and Welfare, Senate Bill 398would require a child care facility or school to grant religious exemptions from vaccination requirements without inquiring into the sincerity of the religious beliefs. A hearing has not been announced.
House Bill 2535 was introduced on Tuesday, January 25 and referred to the House Judiciary Committee. The bill would enact the individual liberty preservation act to nullify certain federal COVID-19 vaccine requirements, prohibit enforcement of such requirements, and provide criminal penalties for violations.
New Economic Development Idea Proposed
On Thursday, January 27, on a vote of 32-7, the Senate passed Senate Bill 347, a bill which would enact the “Attracting Powerful Economic Expansion” act to provide for tax and other incentives to boost the state’s economic development. The bill would be the single biggest economic development bill in state history, with up to $1 billion in tax and other inducements to bring an unidentified business to the state. It is said the business would bring a $4 billion investment, build a 3 million square foot facility for a headquarters or factory in eastern Kansas, and hire at least 4,000 workers. The inducements would include a refundable tax credit for a portion of the investment, reimbursement of certain payroll and training costs, retention of certain payroll withholding taxes, a sales tax exemption for project construction, and a property tax incentive for projects located in a foreign trade zone. Proponents of the measure, including the Kansas Department of Commerce, argued that competitive economic incentives were vital to Kansas being competitive with surrounding states. The bill is now scheduled for hearing in the House Committee on Commerce, Labor and Economic Development on Monday, January 31.
Redistricting
Aside from passing a budget, one of the main objectives of the 2022 session will be adopting new maps and boundaries for the legislature, statewide elected seats, state school board, and our state Congressional districts. This week, both the Senate (26-9) and the House (79-37) passed Sub Senate Bill 355, a bill containing a reapportionment map for Kansas’ four congressional districts. Each district would contain 734,470 Kansans – a four-way division of the state’s census population which is thought to be the key to a federal court holding the map as constitutional. The bill was presented to Governor Kelly for consideration on Thursday, January 27. It is assumed that the Governor will veto the bill.
Unemployment Fund Briefing
This week, the Kansas Department of Labor provided a reportto the legislature on a recent increase in fraudulent unemployment claims received by the agency. The agency has seen renewed attempts to file fraudulent unemployment claims in the new benefits year. Thankfully, the agency reported it is catching these claims – using identity verification protocols and a one-week waiting period – and has not paid out substantially more in unemployment claims. Last year, state auditors found the state had paid out about $700 million in fraudulent claims from its employment security fund during the pandemic.
Food Sales Tax Exemption
Governor Laura Kelly, and 2022 Gubernatorial Candidate (and current Attorney General) Derek Schmidt have stated a goal of eliminating, to some degree, the current state sales tax on food. Referred to as Governor Kelly’s “Axe the Tax” plan, a full repeal of the food sales tax would cost the state over $500 million annually in lost revenues, while allowing the average Kansas family to save about $500. Multiple bills on the issue have been introduced. The Senate Tax Committee will hold hearings on Senate Bill 339 and Senate Bill 342 on Tuesday, February 1. In addition, the House Tax Committee held hearings on House Bill 2484and House Bill 2487.
Hearing on Resolution Denouncing Natural Gas “Price Gouging”
This week, the House Utilities Committees held a hearing on HCR 5023, denouncing price gouging and market manipulation in the natural gas marketplace. The resolution supports investigations into the extraordinary price increases of wholesale natural gas during the extreme cold weather event “Uri” during February 2021 that resulted in increased costs on ratepayers. The Committee Chairman has indicated his intent to take Committee action on the resolution next week.
Industry Regulations
Legislation on regulatory reform will be advanced this year. House Bill 2087would amend a law requiring review of economic impact of proposed regulations by the state budget director. The Senate amended the bill to reduce the review threshold from a $3 million to $1 million threshold, to increase the number of regulations reviewed by the state budget director. The Senate passed the bill on a vote of 39-0. The bill now goes back to the House to either concur or non-concur with the Senate amendment. Also, as introduced, Senate Bill 34 would sunset all administrative regulations every five years unless extended by the legislature. However, the bill is likely to be amended to require a five-year review, only, and allow for a 15-day quick repeal process for outdated regulations. In addition, House Concurrent Resolution 5014and Senate Concurrent Resolution 1609 would propose a constitutional amendment to increase legislative oversight of agency regulations. If approved by two-thirds of the legislature, the amendment would go before Kansas voters in the 2022 election.
Electric Rates Bill
Kansas has the highest energy rates in our region. Senate Bill 359 was introduced to help reduce those costs on rate payers by removing the state sales tax on utilities and granting the same authority to cities and counties. The measure is thought to have an elevated fiscal cost for the state. A hearing on the bill is scheduled for Wednesday, February 2 in the Senate Committee on Assessment and Taxation.
Renewable Energy Bills Heard
This week, the Senate Committee on Utilities held hearings on two bills (SB 323, SB 324) that would add new requirements for lease instruments concerning wind and solar projects. In addition, the Senate Committee on Local Government held multiple-day hearings on SB 325 which would enact the “Kansas Renewable Energy Transparency Act,” adding state-level zoning requirements for wind and solar easements and projects. Specifically, SB 325 would state that, on and after July 1, 2022, no facility could be constructed on any parcel of land that is not zoned for industrial use by the county in which the facility is to be constructed, and no developer could begin site preparation for or construction of a facility without first acquiring the appropriate building permit or conditional use permit from the county where the facility is to be constructed. The bill outlines a process for citizens to petition the county government to protest a decision to rezone land for industrial activities. It is thought the bills were intended to initiate discussion on concerns with wind and solar projects in Kansas.
January 21, 2022
2022 Legislative Session, Week 2
This week, the Legislature worked through bills and hearings, even while many legislators were absent due to positive COVID-19 tests. The Senate passed a few important bills, as the House also began initial committee work. Here are some of the highlights from the week.
COVID-19Vaccine Bills
This week, two bills were introduced in the legislature concerning COVID-19 vaccinations. House Bill 2498 would prohibit the Secretary of KDHE from requiring COVID-19 vaccination for children to attend school. The bill was referred to the House Committee on Health and Human Services. Similarly, House Bill 2501 would prohibit COVID-19 vaccination requirements for National Guard members. This second bill was referred to the House Committee on Federal and State Affairs.
Food Sales Tax Exemption
Governor Laura Kelly and 2022 Gubernatorial Candidate Derek Schmidt (current Attorney General) have stated a goal of eliminating, to some degree, the current state sales tax on food. This would cost the state approximately $440 million in annual revenues lost. Multiple bills on the issue have been introduced and the House Tax Committee has scheduled hearings on two of those bills (House Bill 2484 and House Bill 2487) on Tuesday, January 25.
Redistricting
Aside from passing a budget, one of the main objectives of the 2022 session will be adopting new maps and boundaries for the legislature, statewide elected seats, state school board, and our state Congressional districts. On Friday, the Senate passed Sub Senate Bill 355 containing reapportionment maps for Kansas’ congressional districts. The bill creates four congressional districts, each with 734,470 Kansans – a four-way division of the state’s census population, which is thought to be the key to a federal court holding the map as constitutional.
New Economic Development Idea Proposed
On Thursday, January 20, the Senate Commerce Committee held a hearing on Senate Bill 347, a bill which would enact the “Attracting Powerful Economic Expansion” act to provide for tax and other incentives to boost the state’s economic development. The bill includes projects in specified industries, or for national corporate headquarters, that involve a significant capital investment. The program would include: a refundable tax credit for a portion of the investment, reimbursement of certain payroll and training costs, retention of certain payroll withholding taxes, a sales tax exemption for project construction, and a property tax incentive for projects located in a foreign trade zone. Proponents to the measure, including the Kansas Department of Commerce, argued that competitive economic incentives were vital to Kansas being competitive with surrounding states and that 12 other states have similar programs. The bill was focused on providing investment tax credits for an unnamed business that would invest up to $4 billion for a headquarters or factory in eastern Kansas. If passed, it would be the largest specific development bill in Kansas history, with an estimated fiscal note of up to $1 billion.
House Resolution Denounces Natural Gas “Price Gouging”
This week, the House Utilities Committees introduced HCR 5023 which denounces price gouging and market manipulation in the natural gas marketplace. The resolution also supports investigations into the extraordinary price increases of wholesale natural gas during the extreme cold weather event “Uri” during February 2021 that resulted in increased costs on residential and industrial ratepayers. A hearing on the resolution is scheduled for Thursday, January 27. In addition, on Tuesday, January 18, the Senate Committee on Utilities received a presentation from Jim Zakoura, Executive Director, Natural Gas Transportation Customer Coalition, about the financial effects of winter storm Uri on various residents, schools, hospitals and businesses in Kansas. Mr. Zakoura discussed the free-market price exposure in the unregulated market.
Bill Introduced to Allow Sales Tax Exemption on Utilities
A bill has been introduced in the Senate that would seek to remove the sales tax paid on utilities. Introduced as a cost savings measure for businesses and residential rate payers, Senate Bill 359 would allow cities and counties to tax certain utilities beginning July 1, 2023, but would also grant cities and counties the ability to exempt those utilities from sales tax. The bill may be scheduled for a hearing soon.
Workforce Development Scholarship
Last year, Governor Kelly signed into law a workforce development bill creating the Kansas Promise Scholarship Act. The Act provides educational scholarships to students attending a Kansas community college, technical college, two-year associate degree program, or career and technical education programs. The scholarship would be for students pursing certain fields of study, including manufacturing, construction, and others. This year, Senate Bill 340 has been introduced to amend the act to authorize additional programs and fields of study. The Senate Education Committee may take the bill up for final action on Monday, January 24 or Tuesday, January 25.
January 14, 2022
2022 Legislative Session Commences
The Kansas legislature gaveled in on Monday, January 10, 2022. It was a busy week in Topeka which saw hearings on various tax issues related to wildfires in the state and Governor Laura Kelly’s State of the State address. Key issues this session will include reapportionment and redistricting following the 2020 census, a Senate vote on the “Value Them Both” constitutional amendment question on abortion, legalization of medical marijuana, and deliberation of how to spend most appropriately the projected $2.9 billion ending balance – either through tax cuts (such as removal of the sales tax on food), or the paying down of outstanding debt (such as KPERS, the state employee retirement system).
Governor Kelly Gives State of the State Address
In Governor Kelly’s annual State of the State address, the Governor doted on our state’s low unemployment rate, which has been below 4% for more than a year. The Governor also focused on her policy goals this year, which include: (1) pursuing responsible tax policy, to include full elimination of the sales tax on food, and a one-time income tax return to taxpayers of $250 per person or $500 per married couple; (2) investing in rural Kansas, to include investments in broadband, and the rural housing shortage; (3) investing fully in the state highway plan and other transportation infrastructure, including short line rail; (4) fully funding Kansas K-12 education; (5) fully funding the state water plan as required by Kansas law, for the first time in 15 years; (6) putting a freeze on increases in the cost of college tuition; and (7) adding $600 million dollars to the state’s “Rainy-Day fund”.
Redistricting Following 2020 Census
Aside from passing a budget, one of the main objectives of the 2022 Legislature will be adopting new maps and boundaries for the legislature, statewide elected seats, state school board, and our state Congressional districts. Demographic shifts have shown large population movements from rural areas to more urban areas of the state. This will likely result in larger rural legislative districts, and new districts in more urban areas. Kansas was fortunate it did not lose a congressional district because of the 2020 census. During the last redistricting, in 2012, the legislature was unable to agree on the boundaries which resulted in the 2012 maps being drawn up by the court.
Corporate Income Tax Apportionment
Kansas currently uses a three-factor system for apportioning income between states for corporate income tax purposes. House Bill 2186 would allow corporate taxpayers the option to elect which methodology to use when apportioning their corporate income between Kansas and other states in which it operates to determine tax liability. The proposed legislation would allow certain taxpayers, based on NAICS codes, to elect to use a single-factor apportionment formula based on sales to determine corporate income tax liability. The bill may cost the state approximately $20 million.
Legislature Receives Report on Effects of “Uri”
This week, the Utilities Committees received a presentation from the Kansas Corporation Commission (KCC) on the severe effects suffered by Kansas residents and businesses during winter storm “Uri” in February 2021. The severe cold temperature from the storm greatly increased the demand for electricity and natural gas over multiple days, which greatly increased the costs of electricity and natural gas in the state and region. Those price spikes prompted the passage of legislation in 2021 by the Kansas legislature which created state programs to assist Kansas entities in covering the costs of their natural gas bills. KCC explained that, prior to the storm, natural gas production had declined. Together with the increased demand for natural gas caused by Uri, Kansans experienced unprecedented price spikes across the region that were up to 250 times greater than the highest prices ever experienced previously. In addition, the wholesale price for electricity increased greatly during the winter storm. Further, natural gas providers placed “curtailments,” or reductions, in the amount of natural gas delivered to certain commercial facilities during Uri. This resulted in various other costs for those businesses.
Industry Regulations
Legislation on regulatory reform will be advanced this year. House Concurrent Resolution 5014 would propose a constitutional amendment to increase legislative oversight of agency regulations. If approved by two-thirds of the legislature, the amendment would go before Kansas voters in the 2022 election. In addition, House Bill 2087 would amend a law requiring review of economic impact of proposed regulations by the state budget director. The Senate amended the bill to reduce the review threshold from a $3 million to $1 million threshold to increase the number of regulations to be reviewed by the state budget director.
Electric Rates
Kansas has the highest energy rates in our region. There may be hearings on the issue of high electric utility rates in response to Evergy’s stated plan to spend billions in additional capital expenditures in coming years, which would increase Kansan’s electric energy rates even more. Legislation will likely be introduced to reduce costs on rate payers while ensuring reliable service and still protecting the cooperative business structure that many rural members rely on for service.
Work-Based Learning Program Liability
In 2021, House Sub for SB 91 was introduced with the purpose of providing businesses with immunity from general liability for participating in work-based learning programs with students. Under the bill, schools would insure against this liability in the same way that they insure students during field trips and sporting events. We anticipate the final passage of the legislation in some form this year.
