06 Feb Kansas Capitol Review – Week Four
Last week concluded Week 4 of the 2020 Kansas Legislature. Floor votes were taken in both the House and Senate on a constitutional amendment on abortion. The legislature had slow activity outside of that issue, as all activities on Wednesday were cancelled to allow people to attend a celebration for the Kansas City Chiefs Super Bowl victory. Please find a summary of some of highlights of the week below.
Property Tax Focus
This week saw additional hearings on property tax-related bills in the Senate Committee on Assessment and Taxation.
- SB 295, prohibiting property tax valuation increases solely as the result of normal repair, replacement or maintenance of existing structure.
- SB 294 would establish notice and public hearing requirements prior to approval by a governing body to exceed its certified tax rate for property tax purposes. This bill, patterned after Utah property tax law, would require local taxing jurisdictions to lower the mill levy in order to keep the budget flat if property valuations in the jurisdiction increased. The stated goals of the Utah property tax model are taxpayer protection, increased accountability to tax payers, and increased transparency in the process. The model would prohibit automatic property tax increases from increases in property valuations, as usually happens when valuations rise. The model is intended to offer a balanced approach by allowing greater transparency and more local control by allowing local governments the flexibility to pay for the services their constituents say they want. If local government requests an increased budget, they must first notify all property owners in their jurisdiction of their intent to increase the budget. Then then must hold a public meeting on the proposal, and take a public vote in order to raise the budget.
Short Line Railroad’s Income Tax Credit Bill
On Monday, February 3rd, at 3:30 pm, the House Tax Committee held a hearing on House Bill 2460, a bill which would provide for an income tax credit for qualified railroad track maintenance expenditures of short line railroads. The tax credit would allow “50% of an eligible taxpayer’s qualified railroad track maintenance expenditures paid or incurred in a given year,” and would be recoverable in any one year at the rate of $5,000 per mile of rail owned or leased. Your association testified as a proponent to the bill if the bill were amended to extend the tax credit to owners/lessees of rail siding located on Class II or Class III rail. Your association proposed such an amendment to the bill, and proponents to the bill have stood in agreement with the amendment.
KDA Ag Marketing Division Transferred to Dept. of Commerce
On Tuesday, February 4th, the House Committee on Agriculture and Natural Resources Budget reviewed and approved the Governor’s proposed budget for the Kansas Department of Commerce for fiscal year 2021. The Governor’s proposed budget would take $650,000 (6.5 FTE’s) from the Agricultural Marketing Division of the Kansas Dept. of Agriculture and transfer that money and FTE’s to the Kansas Department of Commerce. This transfer represents 60% of the KDA’s Ag Marketing budget. KDA testified that these positions are currently unfilled, and that they will back fill two of the positions internally so the transfer will create a net loss of 4.5 positions within KDA’s Division of Ag Marketing. KDOC staff testified that the Ag Marketing Division will not be leaving KDA, but KDA would only lose those positions that are dedicated to Agricultural business development. If the transfer is allowed to happen, KDA and KDOC will enter into a Memorandum of Understanding of how the two agencies will work together to continue to conduct agricultural marketing.
Multi-Year Flex Accounts Water Law Amended
On Thursday, February 6, 2020, the Senate Committee on Agriculture took final action on SB 270, a bill which would allow water rights certified after 2009 to be rolled into multiyear flex accounts (MYFA). The bill would amend existing law by changing eligibility for MYFA accounts for water right owners who did not have a perfected water right by 2009. The bill would allow those water right owners to use net irrigation requirements as a substitute for past use in order to establish flex account totals. The committee reported the bill out favorably for passage.
Ag Commodity Commission Reports Presented
On Tuesday, February 4, 2020, the various Kansas Agricultural Commodity Commissions presented their Annual Reports to the House and Senate Committees on Agriculture. The Kansas Corn Commission reported that Kansas experienced a record corn crop of 801 million bushels in 2019. They reported more acres planted in 2019 than in previous years. The Commission is focused on promotion of E15 and higher blends of ethanol fuel, as well as agricultural efficiency, sustainability, and ag education and STEM instruction. The Kansas Soybean Commission reported that soybean farmers produced 186 million bushels in 2019, which was the 8th ranked state in the US. The Commission collected $3.8 million in 2019. The Commission reported that Federal Market Facilitation payments assisted soybean producers during the 2019 tariff trade war and the resulting market loss. In addition, the Commission reported that Cargill’s new 60 million-gallon-year biodiesel plant in Wichita, Kansas will positively support demand for Kansas soybeans. The Kansas Grain Sorghum Commission reported that in 2019 Kansas continued to be the U.S.’s largest grain sorghum producing state, and makes up 64% of the total U.S. Checkoff program. Grain Sorghum Checkoff funds are used for research and program development such as crop research and water technology farms. The Commission also reports that the sugar cane aphid issue in Kansas grain sorghum has been resolved with new seed varieties. The Kansas Wheat Commission reports that Kansas wheat farmers produced 338 million bushels of wheat in 2019, at 52 bushels per acre, which is up 22% from 2018. Wheat acreage forecast for 2020 is equal to 2019 acreage. The Commission reports Kansas exports one-half of its wheat crop, with Mexico, Nigeria and Japan as our largest export markets.
Underground Storage Tank Funds
On Friday, February 7, 2020, the Senate Committee on Agriculture held hearings on Senate Bills 285, 286, and 287, concerning the underground storage tank (UST) redevelopments funds managed by the Kansas Dept. of Health and Environment. Your Association testified in support of the bills.
- SB 285 would extend the existence of the UST redevelopment fund and compensation advisory board to 2032.
- SB 286 would amend the Kansas storage tank act by extending the sunset of the aboveground fund and the underground fund and increasing the maximum reimbursement from the fund.
- SB 287 would amend the Kansas storage tank act by extending the expiration of certain reimbursement provisions to 2030 and increasing the underground storage tank replacement reimbursement maximum.
Kansas Targeted Employment Act, Income Tax Credit
On Thursday, February 6, 2020, the Kansas Commerce Committee held a hearing on House Bill 2416, a bill which would create the “Kansas targeted employment act and income tax credit. The bill would create credits for qualifying businesses who employ individuals in competitive employment in an integrated setting. An “Integrated setting” would be defined to mean a place of employment that is typically found in a community in which people with disabilities are able to interact with non-disabled individuals. The credit would be equal to $4 for every hour that an eligible employee is employed. The employee must be employed for at least 2080 hours in a calendar year. The credit would increase to $6 per hour if the targeted employment business employs an eligible employee in a job that has been relocated from another county.
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