Kansas Legislature Update – 2020 Session Recap: Adjournment

Kansas Legislature Update - Adjournment

Kansas Legislature Update – 2020 Session Recap: Adjournment

On Thursday, May 21st, the Kansas legislature returned for one final day of business in 2020. Through 24 straight hours of debate and deliberation, conference committees met and assembled multiple bill packages.

The Legislature was initially scheduled to return for a full veto session in April. That date was postponed, however, in response to concerns over the COVID-19 pandemic. Due to the truncated timeframe with which the legislature had to conduct its final business, Leadership limited action to only those bills which were arguably related to the pandemic. The weighty issue of Medicaid expansion came up only once, in the Senate, as an attempted amendment.

Here are some of the highlights from the final day, referred to as Sine Die, each of which are subject to possible veto by Governor Laura Kelly:

COVID-Response Bundle Bill

The last, and most complex, piece of legislation passed by the legislature this session was Conference Committee Report on Senate Substitute for HB 2054. The legislation includes, inter alia, the following:

Kansas Emergency Management Act – The legislature implemented statutory changes to the Kansas Emergency Management Act (KEMA). These changes – recommended by Kansas Attorney General Derek Schmidt – limit the Governor’s authority by requiring the Governor to receive permission from the State Finance Council before issuing any new COVID-19-related emergency proclamation. In addition, the State Finance Council – made up of legislative leadership – must approve any new emergency proclamation that would order the closure of any business. Other changes to the KEMA require the Board of County Commissioners to approve any order issued by a local health officer.

Corporate Limited Liability re COVID – Other provisions of the bill create the “COVID-19 Response and Reopening for Business Liability Protection Act” to provide limited-liability protections to businesses and other organizations, and to health care providers, from claims of injury, other than for gross negligence, related actions resulting in COVID-19 exposure. The legislation also provides product liability limitations for companies making certain products to assist with the COVID-19 pandemic.

Unemployment Insurance Amendments – Amends Kansas unemployment compensation law to make it consistent with federal guidelines to ensure that Kansas remains eligible to receive COVID-related federal funds for the state’s unemployment compensation program.

Federal COVID-Relief Funds – Kansas looks to receive approximately $1.25 billion in federal pandemic relief

funds (through the federal CARES act). The funds may be used for expenses directly-related to the pandemic. This bill sets out the oversight and appropriation process for these funds through the Legislative Budget Committee.

Economic Recovery Linked Deposit Loan Program

The legislature passed Senate Substitute for House Bill 2619 which creates a new Economic Recovery Linked Deposit Loan Program for businesses in response to the economic downturn caused by the COVID-19 pandemic. This 10-year program will make up to $60 million available for low-interest (2 percent below market rate) loans to business. Similar programs in surrounding states have proven very successful. The measure was supported by Kansas Grain and Feed Association, Kansas Agribusiness Retailers Association, Renew Kansas Biofuels Association, and many others. The bill is now headed to the Governor for consideration. Renew Kansas reached out to the Kansas Bankers Association after reviewing a low interest loan biofuels program developed in North Dakota. We were pleased our efforts helped produce HB 2619, a bill that can be utilized not just by the biofuels industry, but all of agribusiness.

Property Tax Relief

The legislature held hearings on more than a dozen bills this year offering property tax relief. On its final day of work, however, the legislature only had time to pass one property tax bill: Conference Committee Report on House Bill 2702, which makes the following changes to Kansas property tax law:

In an attempt to increase transparency in the property tax process, the bill requires county commissioners to hold a public hearing, and a public vote, in order to increase the local mill levy above a “revenue-neutral” rate. At the same time, however, the bill also repeals the existing “property tax lid” which prohibits a county commission from increasing its annual budget above the existing budget (plus inflation) unless the proposed increase is approved by a vote of the public (similar to a local bond issue vote). Arguably, the current public vote requirement is a higher bar against increasing local budgets, and property tax burdens, than a mere vote of the county commissioners.

Another provision in the legislation prohibits a county appraiser from increasing the valuation of a property, for ad valorem tax purposes, solely as the result of normal maintenance or repair.

The legislation provides a COVID-19 related grace period for property owners who are unable to pay the second half of their property taxes in calendar year 2020, as a result of COVID-19, so that the payment due on May 10, 2020 would not be due until August 10, 2020. Penalties and interest would also be delayed.

A final provision aligns Kansas income tax payment timelines with federal timelines consistent with COVID-19 related payment delays.

There were a few non-COVID related bills that saw final action.

Kansas Promise Scholarship Act

The legislature passed Conference Committee Report on House Bill 2510, a bill which would establish the Kansas Promise Scholarship Act (KPSA). The Program would provide scholarships to eligible students for up to two years to attend an eligible postsecondary educational institution in an associate degree program, career and technical education program, or baccalaureate degree completion program. Eligible applicants must be a graduate of Kansas high school or high school equivalency. The scholarship program would be subject to appropriations that would not exceed $10.0 million annually. Previous forms of the bill were supported by the Kansas Grain and Feed Association, Kansas Agribusiness Retailers Association, and Renew Kansas Biofuels Association. The bill is now headed to the Governor for consideration.

Electric Utility Rate Relief

Kansas has some of the highest electric utility rates in our region. To correct this, and to make Kansas a more competitive state to live and conduct business, the legislature passed Senate Substitute for House Bill 2585. This bill lowers electric utility rates for rate payers by exempting certain public utilities from paying an income tax and requiring the savings to be passed directly to the rate payers through lower rates. This measure is estimated to save more than 2 million Kansas residential and industrial rate payers more than $40 million annually. The bill, which was supported by the Kansas Grain and Feed Association, Renew Kansas Biofuels Association, Kansas Agribusiness Retailers Association, and others, is now headed to the Governor for consideration.

Scrap Metal Theft Reduction Act

The legislature passed Senate Substitute for House Bill 2137, a bill which removes the photograph requirement for people recycling certain metals listed in the Scrap Metal Theft Reduction Act (Act). In 2019, the agribusiness industry supported legislative amendments to the Act that would extend the life of the program and require additional record keeping of certain scrap metal recycling transactions. Proponents to the changes made in the current legislation argued that the photograph requirement was overly burdensome and of little value in most cases. The bill is now headed to the Governor.



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