2021 Kansas Legislative Update – Week 13

Kansas Legislative Update - Week 13

2021 Kansas Legislative Update – Week 13

Week Thirteen of the Kansas Legislative Session

On Friday, April 9, the Kansas Legislature adjourned for the last day of the 2021 regular session. The House and Senate will now take a three-week break before returning for a veto session on May 3rd where they will consider bills vetoed by Governor Laura Kelly, work on the omnibus appropriations bill, and possibly take final action on other bills. During the last few days, the House and Senate worked long hours on a flurry of action on bills that will now be sent to the Governor for consideration. The legislature finished the regular session by passing a budget bill for the state’s next two fiscal years. One other headline concerned a change in Senate leadership when the Republican caucus voted to remove Senate Majority Leader Gene Suellentrop (R-Wichita) due to his legal trouble in early-March.

Governor Signs Critical Infrastructure Facility Protection Bill

On April 9, Governor Kelly signed into law Senate Bill 172. This bill creates multiple felony crimes for criminal trespassing or damage to a critical infrastructure facility (CIF). As defined in the bill, critical infrastructure facilities would include biofuel processing facilities. While on the floor, an amendment was adopted to clarify that the language protects Kansan’s right to peacefully protest. The legislation was supported by Renew Kansas Biofuels Association.

Budget Bill Sent to Governor

This week, the Legislature passed to the Governor the major budget bill of the session. The approved budget is $4 billion less than Governor Kelly’s proposed budget, but that shortfall includes about $3 billion in not-yet-passed K-12 education funding. If the Governor signs all of the tax bills sent to her desk, the state could have an ending balance of $648 million on July 1, 2021; a very low $20 million on July 1, 2022, and a projected negative ending balance of $627 million on July 1, 2023. This budget bill will be followed by an Omnibus budget bill to be assembled during the veto session in May.

Property Tax Legislation To Governor

This week the Legislature passed conference committee report on HB 2104, a bill that contains the contents of multiple property tax bills, including the language form Senate Bills 98, 119, and 72. These property tax bills were supported by Kansas Grain and Feed Association, Kansas Agribusiness Retailers Association, and Renew Kansas Biofuels Association. The bill has now been presented to the Governor for consideration. Senate Bill 98 would ensure that, in a hearing before a Kansas District Court, the county retains the burden of proof on the county appraiser’s valuation and classification. The bill also extends the time a state board of tax appeals member may continue to serve after such member’s term expires. In addition, the bill would allow the Governor to temporarily appoint former board members as necessary. Senate Bill 119, explained in greater detail here, includes many positive changes to the Kansas property tax system that were spread out over a handful of bills last year. Of particular note, the bill would prohibit the Board of Tax Appeals from increasing the appraised valuation of property as a result of an appeal or an informal meeting concerning the property.

Extraordinary Natural Gas Price Relief Bill

This week, the legislature passed Senate Bill 86, which creates the Kansas Extraordinary Utility Costs Loan Deposit Program to allow low-interest loans for businesses and other eligible borrowers to help them cover natural gas bills following the extreme prices following the February polar vortex. “Eligible borrowers” are defined as any wholesale natural gas customer in the state of Kansas which experienced extraordinary prices due to the extreme weather, providing they are not an individual receiving loans for personal reasons. The bill provides $20 million for this new Extraordinary Utility Costs Loan Deposit Program. Eligible borrowers may borrow up to $500,000 from the program. The bill now advances to Governor Kelly for consideration, and she is expected to sign the bill.

Electric Utility Securitization/Bonding Authority Becomes Law

On April 9, Governor Kelly signed into law Sen Substitute for HB 2072. This bill creates the Utility Financing and Securitization Act (UFSA) to allow for the securitization of utility assets to recover energy transition costs for certain regulated electric public utilities. The bill was amended to include language requiring any cost savings realized by the utility through bonding to be passed on to rate payers. The bill would also allow certain regulated electric and natural gas public utilities to pursue securitization to finance certain extraordinary expenses, such as fuel costs recently incurred during the extreme weather events.

Unemployment Insurance Bill Advances to Governor

Senate Sub for HB 2196 creates the Unemployment Compensation Modernization and Improvement Council to recommend changes to the unemployment insurance system. The bill also requires the Kansas Department of Labor to modernize its information technology (IT) infrastructure, make changes to the Employment Security Review Board, and alter the employment security rate tables. In addition, the bill would provide for certain employer account protections, adjust thresholds for maximum benefits, and make other employment security compensation changes. The bill also ensures that employers are held harmless for any fraudulent unemployment claims filed in the business’ name. Employers who have paid for these claims since March 15, 2020, are to be refunded through the unemployment insurance trust fund. The bill will reimburse the unemployment insurance trust fund up to $500 million from federal funds. The bill passed the Senate and the House, and now advances to the Governor for consideration. Find more information Here. It was also reported this week that Kansas has now reached pre-pandemic levels of unemployment, with rates now even lower than at this same time in 2019.

Emergency Temporary Employee Withholding Language Still Not Passed

On April 1, 2021, Governor Kelly issued Executive Order 21-18 providing temporary provisions for employer payment of income tax withholding for work performed in another state. In the event that the executive order is revoked by the Legislature, an amendment with similar language was added to House Bill 2106 to place the temporary withholding relief in Kansas law through December 31, 2021. However, this bill did not advance. On another front, on the last day of the regular session, a conference committee between the House and Senate Tax Committees agreed to place this language in a conference committee report (CCR on SB 47). While the legislature was unable to bring this bill up for action before adjournment, action can still be taken on the bill during the May veto session.

Kansas Promise Scholarship Bill Advances to the Governor

On Friday, April 9, the House and Senate adopted the conference committee report on House Bill 2064. This bill contains language creating the Kansas Promise Scholarship Act. Administered by the Board of Regents, the Act would make this new scholarship available to students attending any Kansas community college, technical college, or two-year associate degree program or career and technical education program offered by a private postsecondary educational institution with its primary location in Kansas. The scholarship would be eligible for students pursing certain fields of study, including manufacturing, construction and others. The bill now goes to Governor Kelly for consideration.

Governor Signs Hazardous Chemical Spill Notification Bill Into Law

On April 9, 2021, Governor Kelly signed into law House Bill 2155, a bill which authorizes the Kansas Dept. Health and Environment (KDHE) to establish reportable minimum quantities of hazardous chemical spills in agency regulations. Currently, all spills of hazardous chemicals must be reported to KDHE, regardless of the amount. This bill would also allow the agency to provide technical guidance during a clean-up response, and permit cost-recovery from the responsible party for any state expenses related to a response to a release. In addition, the bill would allow KDHE to levy penalties for illegal dumping, refusal by a responsible party to clean up a release, or failure to timely report a release. KDHE has indicated that it intends to establish minimum thresholds in agency regulations that are consistent with federal requirements (EPA’s list of lists). Renew Kansas Biofuels Association, Kansas Agribusiness Retailers Association, and Kansas Grain and Feed Association testified in support of the bill. In previous years, these associations worked with KDHE to amend the bill language to limit the total civil penalty authority and limit the effect on agriculture chemicals.

Proposed Air Emissions Fee Increase

In recent years, the Kansas Department of Health and Environment (KDHE) has looked at increasing the emissions fees to supplement a decrease in Air Quality Fee Fund revenues. Last year, the legislature included a budget proviso which restricted KDHE from raising fees and encouraged it to hold stakeholder meetings to find a compromise. This year, the department brought the proposal forward again, which includes a more than $1 million increase in industry fees. This week, your association worked with an industry group to meet with legislators and KDHE, and offered an alternative fee proposal to KDHE. The proposal would maintain the integrity of the fund while minimizing the financial impact on industry.

Asbestos Remediation Fund Bill Advanced

House Bill 2203 would allow the department to retain fees collected for the Kansas asbestos control program and would end an historic practice of annually transferring money from the – unrelated – Air Quality Fee Fund to cover the asbestos program budget. This transfer from the Air Quality Fee Fund to the asbestos program was viewed by industry as an inappropriate use of fee funds. For that reason, Kansas Grain and Feed Association, Kansas Agribusiness Retailers Association, and Renew Kansas Biofuels Association testified in support of the legislation. The bill was passed by the Legislature and will now be advanced to the Governor.

Other Bills of Note

  • SB 52 establishing the Sedgwick county urban area nuisance abatement act. Approved by Governor Kelly.
  • SB 91 exempting businesses from certain liability claims arising from a secondary student engaged in a work-based learning program. Passed the House.
  • HB 2066amending temporary licensure law to all applicants who establish Kansas residency. Passed House and Senate, to Governor for consideration.
  • SB 95 redefining ATVs to allow for increased maximum width and weight for highway use. Passed House and Senate, to Governor for consideration.