Capitol Review – Week One

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The 2018 Kansas Legislative Session commenced on Monday, January 8. Opening day was brief with each Chamber gaveling in at 2:00 p.m., for mostly formulaic procedure. The Legislature has the same makeup as last year with few changes. Kansas continues to represent three parties – conservative Republicans, moderate Republicans and Democrats – with no clear majority.

Attention quickly turned to Governor Sam Brownback’s annual State of the State address, which he delivered on Tuesday evening. The question on everyone’s mind was how long will Governor Brownback be in office? After being nominated by President Donald Trump to serve as U.S. Ambassador for International Religious Freedom for a second time in January, his nomination is still pending action by the U.S. Senate for confirmation. Without a clear timeline for his departure, there appears to be a blended Lieutenant Governor Jeff Colyer/Brownback administration adding to the confusion.

Focusing on his recommended $600 million in state aid to schools over the next five years, the Governor left the nitty-gritty to Budget Director Shawn Sullivan to present to the budget committees on Wednesday. The pace slowed down after that, with mostly bill introductions and informational hearings for the remainder of the week.

Legislature’s Response to School Finance Litigation

There’s no doubt that K-12 funding is the elephant in the Statehouse. After the Kansas Supreme Court deemed last year’s school finance plan unconstitutional, the Legislature is left to respond in one of several ways. Each option seeming worse than the other, this will be the overarching theme by which all other business is considered. While the Governor is proposing an additional $600 million for schools over the next five years, he is not suggesting how to finance this increased spending in his budget. In a response to the Governor’s State of the State address, leadership did not hold back their aversion and lack of appetite for such a proposal.

A Special Committee on School Finance met during the interim to dissect the Court’s Gannon vs. Kansas decision and consider their choices of either raising taxes or cutting spending to comply with the ruling. Some folks are also pushing for a constitutional amendment to “suitable” financing for K-12 public education in Article 6. While an April 30, 2018 deadline for a new school finance formula was given, attorneys have advised the Legislature to have their work completed by March 1, 2018 to allow time for review, response and potential revisions should they miss the mark. Again.

Governor Presents Budget Report

Kansas is in the second year of its biennial budget for fiscal years 2018 and 2019. Budget Director Shawn Sullivan presented the Governor’s budget report to the House Appropriations and Senate Ways and Means committees on Wednesday morning. The report highlighted funding proposals or enhancements for K-12 education, aviation, public safety, transportation, higher education and state government reform. A full report can be found at http://budget.ks.gov/gbr.htm.

Both committees have officially introduced the Governor’s budget bills and are expected to start working them in the next few weeks. Lawmakers are scratching their heads on how to balance the budget, since the Governor did not offer suggestions for financing the additional $600 million to schools. It’s all about the math; and when the math doesn’t add up, it makes for a difficult legislative session to get any other fiscal priorities accomplished.

Campaign Finance Update

The deadline for campaign finance reports for statewide offices was midnight on Thursday. With an unusually full slate of candidates running for Kansas Governor this November, association staff thought it valuable to give an update received by the Secretary of State’s office as of Thursday:

Governor, Republican:
Wink Hartman, (Wichita businessman): $1.8 million raised, $1.5 million on hand
Ken Selzer, (Insurance Commissioner): $713,000 raised, $668,000 on hand
Jeff Colyer, (Lieutenant Governor): $632,000 raised, $548,000 on hand
Mark Hutton, (Former State Representative): $581,000 raised, $393,000 on hand
Jim Barnett, (Former State Senator): $564,000 raised, $514,000 on hand
Kris Kobach, (Secretary of State): $355,000 raised, $261,000 on hand
Ed O’Malley, (Former State Representative): $218,000 raised, $158,000 on hand

Governor, Democrat:
Josh Svaty, (Former Secretary of Agriculture): $192,545 raised, $66,760 on hand
Laura Kelly, (State Senator): $155,000 raised/on hand
Jim Ward, (House Minority Leader): $90,534 raised, $58,833 on hand
Carl Brewer, (Former Wichita Mayor): $45,470 raised, $14,627 on hand

Governor, Independent:
Greg Orman, (Olathe entrepreneur): $440,700 raised/on hand

Small Business Expensing

A bill is expected to be introduced this week in the Senate Tax committee that would restore a provision for small businesses to expense their capital investments in full rather than using a depreciation schedule. When last year’s tax bill passed – imposing income taxes back on small businesses – statute was not updated reinstating expensing. This is more of a clean-up bill, as small businesses only lost their ability to expense after the 2012 tax cuts went into effect, removing their state tax liability all together. There is expected to be a small fiscal note attached, but the Senate Tax Chair has not shown opposition to the bill to this point.

New KDHE Secretary Announced

The Brownback administration appointed Jeff Anderson as the new Acting Secretary of the Kansas Department of Health and Environment on Friday. He has worked in various segments of the health care industry for over 30 years. Anderson officially assumes his post on Tuesday, taking over Interim Secretary Darin Dernovish. Former Secretary Susan Mosier stepped down last November.

State Water Plan Fund

This week, the Chairman of the House Water and Environment committee began conversations again on enhanced funding sources for the state water plan fund, following the special committee hearings held during the interim specifically on this subject.

A portion of the registration fees on pesticides products, and fertilizer tonnage inspection fees, are used to fund the state water plan fund. Last session, bills were introduced seeking to increase those fees, and others, for additional revenue for the fund. As our industry fees are already higher than those in our surrounding states, KARA staff will continue to oppose any legislation seeking to increase fees, or create new fees, on the industry for the purpose of increasing the size of the state water plan fund.

Dicamba Informational Hearings

This week, both the House and Senate Agriculture committee chairmen indicated that they plan to hold informational hearings on Dicamba this session. Concerns with Dicamba raised last year are fueling more interest in regulating this issue at the state level. For the past few years, we have met with stakeholders and support increasing education practices for producers and commercial applicators. Recently, product manufacturers worked with the United States Environmental Protection Agency to introduce changes to the product labels to further minimize the potential for issues. In addition, lawmakers are growing increasingly concerned about 2,4-D and its impact on cotton.

Noxious Weed Law Revision

In recent years, the Kansas Department of Agriculture has attempted to amend existing noxious weed laws in our state and plans to do so again this year. A bill has not yet been introduced.

The proposed amendments would move the authority to designate a weed as a noxious weed to the Secretary of Agriculture. This authority currently resides with the legislature, which creates a slow and cumbersome process to add or remove weeds from the list. The proposal would create a noxious weed stakeholder advisory committee which would make science-based recommendations to the Secretary on the listing or de-listing of a weed. Most importantly, it would provide a seat on the advisory committee to KARA, as such an appointee would maintain the technical and professional knowledge base to determine when a plant has become invasive to the point of recommending being added to the list.

Kansas Department of Agriculture Agenda

Kansas Department of Agriculture has filed a multi-part bill. Two of the items directly affect our industry. One amends the Kansas Liming Act to make it unlawful to operate an unregistered manufacturing or distribution facility of ag liming materials. This includes failing to timely file annual registration with KDA. The other amends the Kansas pesticide law to authorize the KDA to assess a late fee against a company that fails to timely renew its pesticide business license. The late fee is 40 percent of the cost of the $140 license (minimum $56). According to KDA, the purpose of these changes is to try and attempt to lower administrative costs by ensuring each company renews its business license in a timely manner.

KARA staff have received the bill language and are analyzing its impact on the industry before taking an official position, should it receive any hearings.

Other bills on radar this week

HCR 5004 – Last year, the House Federal and State Affairs committee held a hearing on a proposed constitutional amendment granting counties constitutional home rule authority. Currently, their home rule authority is statutory. As of last Thursday, the bill was scheduled to be worked on Tuesday. However, the Chairman pulled it from the calendar on Friday due to lack of support for the bill.

SB 263 – A bill was introduced in the Senate Agriculture and Natural Resources committee last week, which would create a program to research the use of industrial hemp. A hearing is scheduled on Wednesday.

HB 2452 – A bill that would limit the duration of certain conservation easements was introduced last week in the House Water and Environment committee. A hearing is scheduled for Thursday.