2025 Kansas Legislative Update – First Adjournment

29 Mar 2025 Kansas Legislative Update – First Adjournment

Around 11:30 p.m., on Thursday, March 27, 2025, after narrowly passing a state budget bill for fiscal years 2025 – 2027, and numerous other bills, the Kansas legislature gaveled out for the First Adjournment of the 2025 session. Lawmakers will return to Topeka on April 10 for a short Veto Session where they could take final action on remaining legislation and also attempt to override any vetoes of bills by Governor Laura Kelly.

Ethanol Blended Fuel Retailer Grant Program and Biodiesel Tax Credit

House Bill 2012 was introduced as a tax credit for fuel retailers at 5 cents/gallon of E15 or higher blend sold. After receiving a hearing in the House Tax Committee, however, stakeholders were told tax credits would not advance this year. The bill was then referred to the House Committee on Agriculture which amended the bill to turn it into a grant program rather than a tax credit. Under the bill as amended, fuel retailers would be able to apply for a grant payment calculated at 5 cents/gallon of E15 or higher blend fuel sold at retail, up to $500,000 per entity (not per location). The amendment also removed language in the bill that would have qualified fuel distributors from receiving payments from the fund. Stakeholders were told that they could request an appropriation of up to $2M for the fund in the first year. The committee passed the bill out on March 7. The bill was scheduled for House floor debate on March 17. When it was briefed to the House Republican caucus on March 14, however, it received considerable opposition from urban fiscal conservatives. Stakeholders attempted to work with the conservatives to draft an amendment to reduce the entity cap. However, that proposed language brought opposition from some of the large fuel retailers. At that point, House leadership referred the bill back to the House Agriculture Committee. A similar bill, House Bill 2161, was introduced for biodiesel and renewable diesel. Both bills are still alive for the 2026 session, but they will not move forward this year.

Energy Storage Systems Property Tax Exemption

House Bill 2083 would amend Kansas personal property tax law on machinery and equipment, for new energy storage systems installed after January 1, 2026, by replacing the permanent property tax exemption with a 10-year property tax exemption. Stakeholders of non-utility ESS equipment are working with proponents to ensure thermal heat energy storage equipment would qualify for the new property tax exemption. The House passed the bill 90-29. After receiving a hearing in the Senate Tax Committee, the bill did not advance further.

EV Registration Fees

House Bill 2121 would increase annual license fees of electric and hybrid passenger vehicles and trucks. In a conference committee, the contents of the bill were placed into CCR on HB 2122 which was passed by the House and Senate. The bill will now be presented to the Governor for consideration.

Economic Incentive Tax Program Repeal

As introduced, Senate Bill 283 would discontinue tax credits of the high-performance incentive program (HPIP), discontinue payroll withholding tax benefits of the promoting employment across Kansas (PEAK) act, and discontinue the crediting of certain amounts to the job creation program fund, and repealing certain tax credits. The bill was introduced to repeal or remove these incentive programs as a way to broaden the base and lower the rates. There was broad opposition to the legislation during the hearing, and no further action was taken. While the bill did not receive further action this year, it is understood there may be interim hearings on the future of the HPIP and PEAK programs.

Tax Credit Elimination

Senate Bill 296, which did not receive a hearing, would repeal over 30 expired tax credits, exemptions, incentives, refunds, and limitations, including credits related to agricultural production loans, certain property tax refunds, and investment credits. One of the primary aspects of the bill addresses changes to the “economic revitalization and reinvestment act,” which previously fostered Kansas employment by encouraging product development and engineering leading to new manufactured products in the state.

Conservation Reserve Enhancement Program

As introduced, House Bill 2111 increases the state acreage cap for the conservation reserve enhancement program from 40,000 acres to 60,000 acres. The legislation also expands eligibility criteria, potentially allowing for dryland farming practices if approved by USDA. The law currently caps enrolled acres, per county, to no more than 25 percent of the total state acreage (currently 10,000 acres). As amended by the Senate, the bill would reduce this county cap to no more than 20 percent of the total state acreage. In addition, the bill limits newly- enrolled acres to no more than 1,600 acres per county, per year. In a conference committee between the House and Senate the contents of the bill were placed into CCR on House Bill 2255. The bill was passed by the House (116-8), and the Senate (40-0), and will be presented to Governor Kelly for consideration.

Utilities

• Transmission Line Permits. House Bill 2040 extends the time in which the state corporation commission must make a final order on a transmission line siting application. After being passed by the House and Senate, the bill was presented to the Governor for consideration.
• EV Charging Station Fees Senate Bill 167 would prohibit electric public utilities from recovering from ratepayers the costs associated with electric vehicle charging stations and requiring electric public utilities to establish electric vehicle charging service rate schedules. The measure was strongly opposed by utility companies during a February 11 hearing.
• Large Transmission Lines. Senate Bill 266 would require legislative approval to build large, high-impact electric transmission lines. The bill was introduced by Senator Caryn Tyson in the Senate Tax Committee and then referred to the Senate Utilities Committee. No hearing has been scheduled.
• Nuclear Energy Feasibility Senate Bill 274 would request the state corporation commission to engage a consulting firm to study new nuclear energy generation currently resides in the Senate Utilities Committee. No hearing was scheduled.

Kansas Promise Scholarship Program

Senate Bill 44 would expand the Kansas promise scholarship program to allow private postsecondary educational institutions to participate. In a conference committee, the contents of the bill were placed into CCR on Senate Bill 24 and the House passed the bill 76-48. However, the legislature adjourned without the Senate taking action on the bill.

State Budget

Around 11:30 p.m., on March 27, after narrowly passing a state budget bill for fiscal years 2025 – 2027, the Kansas Legislature gaveled out for its First Adjournment. The legislature will return to Topeka for a short Veto Session on April 10 where Senate leadership has indicated they intend to act on some remaining legislation, possibly including the single sales factor analysis (SSFA) corporate income tax apportionment bill. The $10.63 billion state general fund budget for fiscal year 2026 includes a 1.5 percent across-the-board cut in state spending that is far more limited than what was originally proposed. The overall budget spends about $25.6 billion in all funds in fiscal 2026, about $1.47 billion less than will be spent during the current fiscal year. While the 2026 budget is about $210 million less than what was approved for fiscal year 2025, analysts indicate the approved budget will leave the state with an estimated ending balance of $424 million in fiscal year 2027, and then be about $460 million in the red by 2028, and $877 million in the red in 2029. The state would still have a rainy-day fund of about $1.8 billion by fiscal year 2028 under the approved budget.

State Water Plan Fund

The state budget provides the following state water plan fund appropriations:

• $2.0 million for high plains aquifer partnerships
• $2.0 million for streambank stabilization projects
• $2.6 million for irrigation technology
• $5.3 million for conservation district aid, and
• $3.1 million for contamination remediation

Water Program Task Force

Sub Bill for HB 2172 would establish a water program task force to evaluate the state’s water programs and source of funding for the water plan. Task Force members would be appointed by April 30, 2025, and the task force would submit an initial report to the Legislature and the Governor on or before January 31, 2026, and a final report the following year. Senate amendments to the bill reduced the task force from 23 members to 12 members and removed reference to various stakeholder groups, such as “groundwater management district, water assurance district, or ditch districts.” The Senate also changed the language in paragraph (g)(2) to remove the phrase “an on-going multigenerational promise” and replaced it with “achieve a future supply”. The Senate added a five-person “water planning work group” that will function as a sort of subcommittee of the Task Force. The working group, who are to be appointed by June 30, 2025, must have relevant experience with KS water issues, would review the water resource planning act, KSA 82a-901 et seq, and recommend proposed legislation in the 2026 legislative session to modernize the act and the state water plan, how the plan is created, what the plan should prioritize, and how the plan should be implemented. On March 27, the legislature passed the bill as CCR on HB 2172. The bill now goes to Governor Laura Kelly for consideration.

Conservation District Funding

Senate Bill 36 would make permanent a temporary increase in the current cap on moneys disbursed by the state division of conservation, to conservation districts across the state and increase the matching basis for state moneys disbursed to the districts. After passing the Senate (39-0) and the House (119-2), the bill was presented to the governor for consideration.

New Conservation Funds

House Bill 2063 would seek to transfer $60 million from the state general fund to a new state conservation fund, working lands conservation fund, and wildlife conservation fund. After a hearing in the House Committee on Agriculture and Natural Resources, the bill received no further action and is no longer a live bill this session.

Muti-Year Flex Accounts Amendments

Senate Bill 58 amends “muti-year flex account” (MYFA) statutes to streamline enrollment calculations based on net irrigation requirement (NIR) allocation, plus 10 percent, rather than on average use. The bill eliminates the potential to double-count overlapping acreage, and would align MYFA with participation in local enhanced management areas (LEMAs), intensive groundwater use management areas (IGUCAs), and water conservation areas. After passing the Senate unanimously, and the House (119-2), the bill was presented to the Governor.

Single Sales Factor Apportionment of Corporate Income Tax

HB 2336 would, beginning Jan. 1, 2028, require all corporations to use a single sales factor method to apportion income for tax purposes, rather than the current three-factor system for apportioning incomes. In a conference committee between the House and Senate, the contents of the bill were placed into Conference Committee Report on HB 2231. While the legislature adjourned on March 27 without acting on the measure, it is understood they intend to take action on the bill when they gather for a short Veto Session on April 10.

House and Senate Advance Income Tax Rate Trigger Legislation

Legislation was introduced to add a state revenue growth trigger that would automatically decrease individual and corporate income tax rates when state revenues exceed revenues received in fiscal year 2024. The bill would reduce the two existing individual income tax rates until both individual rates reached 4 percent, and would then reduce corporate income tax rates to 4 percent. In a conference committee between the House and Senate, the contents of the bill were placed into Conference Committee Report on SB 269. The bill was passed by the House (84-38) and the Senate (30-10), and will be presented to Governor Kelly for consideration.

Freedom from Tax and Citizen Review

HCR 5014, proposed by House Speaker Pro Tem Representative Blake Carpenter, would propose to amend article 11 of the Kansas Constitution by adding a new section establishing the “Freedom From Taxes fund” financed by reviewing roughly 130 existing sales tax exemptions worth about $8.7 billion annually. A citizen committee would recommend which exemptions to eliminate, with all exemptions set to expire every five years unless reauthorized by the Legislature. The fund would first target eliminating property taxes and then income taxes. It is anticipated the bill will receive additional consideration by the 2026 Legislature.

Property Tax Relief

• Senate Bill 35 would, beginning in tax year 2026, discontinue state property tax levies for the Kansas educational building fund  (1 mill) and state institutions building fund (.5 mill). Funding to replace the mills would be received as demand transfers from the State General Fund. In fiscal year 2027, a transfer of $56M would be made to the EBF and a transfer of $25M would be made to the SIBF. The bill was passed by the House and the Senate and will be presented to the Governor for consideration.
• Senate Bill 195 would establish a property tax task force to study the Kansas property tax system and develop recommendations. The Senate Tax Committee held a hearing on the bill but took no further action.
• Senate Bill 280 would require approval by a majority of electors voting at an election in order for the governing body of any taxing entity to increase its total amount of property tax by more than the annual rate of inflation. The Senate Tax Committee held a hearing on the bill but then did not advance out of committee.
• House Bill 2011 would increase the amount of the appraised value of residential property exempt from the statewide school finance levy from $75,000 to $100,000, and it would reduce the statewide school finance mill levy from 20 mills (currently) to 18.5 mills in tax years 2025. The bill passed out of the House Tax Committee but did not advance.
• House Bill 2396 would allow for a property tax funding limit following a successful protest petition. The bill would also create a new $60M (ASTRA) fund to provide payments to qualifying taxing jurisdictions, similar to the local ad valorem tax reduction fund that was repealed by the legislature in 2024. Find more information here. In a House and Senate conference committee, the contents of the bill were placed into Conference Committee Report on HB 2125. However, the legislature adjourned without taking action on the bill.
• House Bill 2406 would create a property tax exemption for all commercial and industrial machinery and equipment, regardless of the date the property was placed into service. The bill, introduced by the House Tax Committee Chairman, did not receive a hearing.
• Senate Sub for HCR 5011 would seek to place a question on the public ballet that would amend the Kansas Constitution to limit increases in real property valuations for ad valorem purposes to no more than 4 percent annually. After passing the Senate (27-13), the bill failed in the House (37-88).

BOTA Filing Fees

As introduced, Senate Bill 269 would prohibit filing fees paid by a taxpayer, on appeal to the Board of Tax Appeals, when a previous appeal by the taxpayer, for the same property, remains pending before the board. In a House and Senate conference committee, the contents of the bill were placed into Conference Committee Report on HB 2125. However, the legislature adjourned without taking final action on the bill.

Personal Property Tax Exemptions

As introduced, Senate Bill 10 would exempt certain personal property, such as ATVs, watercraft, and certain trailers from personal property taxation. In a House and Senate conference committee, the contents of the bill were placed into Conference Committee Report on HB 2125. However, the legislature adjourned without taking final action on the bill.

Construction Sales Tax Exemption

House Bill 2162 would create a sales tax exemption for the service of installing tangible personal property for the reconstruction, restoration, remodeling, renovation, repair, or replacement of a building or facility. The bill was referred to the House Committee on Taxation, but no hearing was held.

Prohibiting Foreign Ownership of Real Property and Drone Critical Components

The House placed into Sub for SB 9 the contents of HB 2290, prohibit foreign ownership of land in the state, and HB 2293, prohibiting critical components of certain drones from foreign adversary countries. As amended, the bill would prohibit identified “countries of concern” from directly or indirectly acquiring any interest (except a de minimis interest) in any real property located within 100 miles of the boundary of any military installation located in Kansas, or any adjacent state. The bill would require current affected properties to register the property with the Kansas Attorney General. The bill does not exempt CFIUS-approved or vetted properties. The bill would also prohibit Kansas governmental agencies from purchasing drones if their critical components were produced in designated countries of concern. The government agencies could continue to use drone equipment acquired before July 1, 2025, if maintained with previously acquired replacement parts. In a conference committee, the bill was amended to allow a foreign principal that owns real property as described above prior to July 1, 2025, and seeks to acquire additional real property for the purpose of expanding operations, to request approval for the transaction from the Governor. The amended language, placed into CCR on SB 9, was passed by the House (98-24) and the Senate (38-1) and will be presented to the Governor for consideration.

Prohibiting Guaranteed Income Programs

House Bill 2101 would prohibit cities and counties from adopting an ordinance or enforcing a resolution that establishes or provides for the operation of a guaranteed income program. The bill passed the House (86-37) and the Senate (29-11) and will be presented to the Governor for consideration.

KDHE Remediation Authority

As introduced, House Bill 2340 would remove authority from any state regulatory agency to order the remediation of a specific property, located in Johnson County and previously owned by the U.S. Army, for the removal of pesticide residue in soil, groundwater, or surface water, when the U.S. Army had applied registered commercial pesticide products to land, at or near structures, for the control of pests, prior to 2005. The bill would only apply if the property was used for nonresidential purposes. In a conference committee, contents of the bill were placed into CCR on HB 2169. The bill passed the House (92-32) and the Senate (30-10) and will now be presented to the Governor for consideration.

PFAS Presentations

The Kansas Dept. of Health and Environment (KDHA) gave presentations to the House Water Committee and House Committee on Agriculture and Natural Resources on the presence of per- and polyfluoroalkyl substances (PFAS) chemicals in Kansas soil and groundwater. KDHE stated that the chemicals have been found in livestock and agricultural products. Depending on the chemical, KDHE indicates that USEPA has set standards of between 4 and 10 ppt, and that wastewater facilities are required to treat wastewater prior to discharge. The agency mentioned that the State of Minnesota has passed new PFAS standards, but that Kansas is waiting on guidance from USEPA.

Weights and Measures Law

House Bill 2255 would make comprehensive changes to the state’s weights and measures law, mostly focused on new licensing and training requirements for licensed scale service companies. The House amended the “scale ticket” section of the bill to say that the scale ticket requirements were only necessary for scales used for commercial purposes. The bill was passed by the House and Senate and will now be presented to the Governor for consideration.

New Duty of Caution for Stationary Vehicles

Senate Bill 8 would create a duty of caution for drivers when approaching stationary vehicles displaying hazard warning lights. After passing the House and Senate, Governor Laura Kelly signed the bill into law.

Immigration

• SB 178 would require law enforcement agencies to enter into agreements with US immigration and customs enforcement. A hearing was scheduled for March 6 but later canceled.
• SB 196 would require business entities and public employers to register and use E-verify for their employees. The Senate Committee on Federal and State Affairs held a hearing on the bill but no further action was taken.
• SB 254 would prohibit aliens who are unlawfully present in the United States from receiving any state or local public benefit in accordance. The Senate Committee on Federal and State Affairs advanced the bill out of committee but the bill did not advance further.
• SCR 1602 encourages the Governor “to cooperate with federal enforcement of immigration laws.” The Senate passed the bill 31-9, and the House passed the bill 82-35.

Rural Opportunity Zones Extension

Senate Bill 69 would extend the rural opportunity zone loan repayment and income tax credit program by five years. After passing the Senate on a vote of 23-17, the bill did not receive further consideration.

County Home Rule

SCR 1605 proposes an amendment to article 9 of the Kansas Constitution to grant counties home rule powers. No hearing has been scheduled.

Fast Tracking of Construction Permits

House Bill 2088 would enact the fast-track permits act to require local governments to meet specified deadlines for issuing building permits and other required approvals for residential real estate development. Specifically, the bill requires local government authorities to approve or deny a building permit within 60 days of receiving the application. If the authority fails to provide written notice of an application’s approval or denial, the application must be deemed approved by the authority. After passing the House and Senate, the bill will now be presented to the Governor for consideration.

Scrap Metal Theft Reduction Act

As introduced, House Bill 2349 would authorize law enforcement officers to conduct investigations of violations of the scrap metal theft reduction act, and would establish criminal penalties for certain violations of the act. It would also permit municipalities to enact or enforce ordinances, resolutions and regulations relating to scrap metal that are not in conflict with the act. In a conference committee between the House and Senate, the contents of the bill were placed into CCR on SB 237. The House passed the bill 121-3, however the legislature adjourned without the Senate taking action on the bill.

Water Pollution Control Permits

House Bill 2085 extends the renewal period for water pollution control permits from five to 10 years. After passing the House and Senate unanimously, the bill was presented to the Governor for consideration.

Political Subdivision Legal Contracts

Senate Bill 242 was introduced on behalf of the Kansas Attorney General. The bill would require any political subdivision to hold an open meeting before approving a contingent fee contract for legal services and requiring such contract to be approved by the Attorney General before becoming effective. The purpose of the bill is to assist local governments with contracting with outside legal counsel when pursuing tort litigation. The Senate placed the contents of the bill into Senate Sub. for HB 2228 and the House concurred with the Senate amendments. The bill will now be presented to the Governor for consideration.

3^rd Party Litigation Funding

Senate Bill 54 would require disclosure of third-party litigation funding agreements to the opposing party. The bill would require a party to provide the agreement to the court for in camera review, and unless otherwise stipulated by the parties or ordered by the court, deliver a sworn statement disclosing certain facts related to the agreement within 30 days after commencement of legal action or 30 days after the execution of the agreement, whichever is later. After being amended by the House the bill was passed by the House and Senate, and now goes to the Governor for consideration.

Executive Branch Agency Regulations

• Senate Bill 77 would require state agencies to provide notice of revocation of admin regulations and remove certain state agencies from the required agency review. After passing the House and Senate unanimously, the bill now goes to the Governor for consideration.
• Senate Bill 222 would prohibit deference to state agency’s interpretation of statutes and regulations by a court or administrative hearing officer. The bill seeks to adopt recent administrative law from a 2024 U.S. Supreme Court decision. The contents of the bill were placed into CCR on HB 2183 and passed by the Senate (30-10). However, the legislature adjourned before the House could take final action on the bill.
• Senate Bill 229 was introduced to terminate all occupational licenses after five years. The Senate Commerce Committee amended the bill to remove section 2 which would have terminated all occupational licenses. In a conference committee, the contents of the bill were placed into CCR on SB 30 and then passed by the House (86-38). However, the legislature adjourned before the Senate could take final action on the bill.
• HB 2279 was introduced to exempt the state department of wildlife and parks from current restrictions and requirements on executive branch agencies when adopting regulations. The House Committee on Federal and State Affairs held a hearing on February 17, but no further action was taken.
• HB 2291 would create a regulatory relief division of the attorney general and a regulatory sandbox program for start-up businesses. The House passed the bill 90-28. The Senate passed the bill on a vote of 31-9, and the bill will now be presented to the Governor for consideration.
• HCR 5008 would propose an amendment to Art. 2 of the Kansas constitution to provide the legislature with direct oversight of regulations of executive branch agencies. After passing the House on a vote of 86-37, the bill passed from the Senate Judiciary Committee but did not advance.

Critical Infrastructure Facilities

House Bill 2061 would add aboveground and belowground lines, cables, and wires in the definition of critical infrastructure facility used for telecommunications or video services for the crimes of trespassing on a critical infrastructure facility and criminal damage to a critical infrastructure facility. After passing the House and Senate, the bill was presented to the Governor for consideration.

Gross Truck Weight Exemption for Ag Commodities

Senate Bill 17 exempts haulers of grain and certain other agricultural goods from gross weight limitations during the harvest season. Following a hearing in the Senate Transportation Committee, no further action was taken and the bill is no longer a live bill this session.

Local Government Eco-Devo Program Reporting

House Bill 2304 would require local governments to report certain local eco devo incentive program information to the secretary of commerce. After the Senate amended the bill, the House concurred with the amendments. The bill was presented to the Governor for consideration.