25 Feb 2022 Kansas Legislature Update – Week 07
2022 Legislative Session, Week 7 (Turnaround)
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%.
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.
Elevator Safety Act
Senate Bill 181 would create the Elevator Safety Act – establishing a new state level regulatory scheme for all elevators, man-lifts, and conveyance systems. The bill would grant state inspectors the authority to adopt regulations over the industry and prohibit any inspections of elevators and conveyance equipment unless by a state-licensed company. Similar legislation adopted in other states increased costs on the grain industry substantially. The bill specifically exempts grain elevators, feed mills, and biofuel facilities. The bill was amended to exempt elevator inspection companies that are currently certified in another state. Kansas Grain and Feed Association and Renew Kansas Biofuels Association testified neutral on the bill so long as it was not amended to remove our industry exemptions. The bill passed out of the Senate, passed out of the House Committee on Federal and State Affairs, and is now on the House calendar pending consideration.
Ag Use of County Right-of-Ways
House Bill 2531 would permit, upon approval of the county commission, any person engaged in an agriculture activity to construct and operate pipelines in pursuit of an agricultural activity along, upon, under, and across the right-of-way of any county or township road in conformity with the laws and regulations of the State of Kansas and the county in which the pipeline is located. The bill was brought following a District Court ruling in Philips County in which the judge found the county did not have authority to permit a swine producer to place an effluent line in the county right-of-way through a neighboring property, and that the pipeline created a trespass and nuisance by the swine producer. Considerable civil damages were assessed against the swine producer. The bill was amended by the House Agriculture Committee and passed out favorably. This week, the House referred the bill to its Committee on Appropriations to “bless” it and keep it alive after “turnaround.”
Wind Energy
Senate Bill 478 was introduced by Senate Utilities Committee Chairman Sen. Mike Thompson (R-Shawnee). The bill would establish requirements for wind energy conversion system obstruction lighting to mitigate the visual impact of such lighting systems. In order to be “blessed” and remain alive following “turnaround,” the bill was withdrawn from the Senate Utilities Committee and referred to the Senate Committee on Ways and Means. Other wind bills that were heard by the committee (Senate Bill 353, Senate Bill 323, and Senate Bill 324) did not advance from committee and are considered dead bills.
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 workers 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, in order to be “blessed” and remain alive following “turnaround,” 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.
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.
Water Law Bill Hearings
The House Water Committee is scheduled to take final action on House Bill 2686 on Tuesday, March 1. The bill would rewrite much of the existing structure of Kansas water law. The bill would: create the Kansas department of water and environment within the executive branch of government; transfer certain powers, duties and functions regarding water; abolish the Kansas water office, the Kansas department of health and environment, division of environment, the Kansas department of agriculture, division of conservation and the Kansas department of agriculture, division of water resources; establish a water and environment maintenance fund; modify procedures for elections of the board of directors for a groundwater management district, board of directors eligibility, definition of eligible voter and term limits of board of directors; require groundwater management districts to submit annual financial reports to the legislature and to submit water conservation and stabilization plans to the chief engineer; create a water usage fee for irrigators; increase water fees for public water supply systems, industrial use and stock watering permit holders; establish a civil penalty for obstructions in streams violations and creating the water structures emergency fund. Many opponents from the agriculture industry – including the Kansas Agricultural Alliance – pushed back on the new fees, GMD board requirements, and the placing of water quality and quantity regulation within one agency.
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 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.
KDA Agency Fees
House Bill 2560 would authorize the KS Dept. of Agriculture to extend current fees on agribusiness without increasing those fees. The bill would also extend, to 2030, the existing water right transition assistance program (WTAP) administered by the agency. The agribusiness industry testified neutral on the bill and explained that fees on agribusiness are currently higher than most neighboring states and the associations would oppose any attempt to increase the fees. The bill passed the House and is scheduled for a hearing in the Senate Committee on Agriculture and Natural Resources on Wednesday, March 2.
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.
Kansas Rail Safety Improvement Act
Likely prompted by a train accident near the city of Wichita last fall, State Senator Carolyn McGinn introduced, this week, Senate Bill 530. The bill would establish the Kansas rail safety improvement act and mandate many changes directed at increasing safety for railroad operations and crossings. The bill was referred to the Senate Committee on Transportation. As this is not an exempt committee, the bill will not survive the “turnaround” deadline this week.
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. This week, on a vote of 27-13, the bill passed the Senate and now moves to the House for consideration.
Rural Remote Worker Incentive Act
House Bill 2623 would enact the Rural Remote Worker Incentive Act, allowing for any expanding or new business that created a minimum of five net new remote jobs in rural areas of the state to apply to the Secretary of Commerce for a cash incentive payment of $4,000 per net new rural remote job created. A “rural area” would be defined as a city with a population of 60,000 or less located in a county with a population of 80,000 or less, or a county with a population of 40,000 or less. The bill would include requirements for the incentives and create the Rural Remote Worker Incentive Fund. The total amount of cash incentive payments out of the fund would be limited to $600,000. The bill passed favorably from the House Committee on Financial Institutions and Rural Development. In order to be “blessed” and remain alive following “turnaround,” the bill was referred to the Committee on Appropriations.
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 on 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, 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 amend the act to authorize additional programs and fields of study. The bill was advanced from the Senate Committee on Education, and this week, in order to “bless” the bill and keep it alive for consideration after “turnaround”, the bill was referred to the Senate Committee on Ways and Means.