12 Apr 2025 Kansas Legislative Update – Veto Session/Sine Die Adjournment
Through a two-day veto session this week, the Legislature put its finishing touches on a condensed session and then adjourned sine die (final day). The adjournment, which concludes the 2025 Kansas legislative session, came one day before the 90th scheduled day.
During its veto session, the Legislature busied itself overriding about a dozen bills vetoed by Governor Laura Kelly, and also overrode 15 budget line-items that had been vetoed by the Governor. Additionally, this week, the Legislature passed a handful of bills that will be sent to the Governor for initial consideration. Because the legislature adjourned sine die, there will be no remaining opportunity for the Legislature to attempt to override any bills the Governor might veto.
Next year’s legislative session is scheduled to begin on January 12, 2026. Until then, a recap of the 2025 legislative session is below.
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.
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.
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. After passing the House and Senate, Governor Kelly signed the bill into law.
Property Tax Relief
Governor Laura Kelly signed into law CCR SB 35, a bill that eliminates, beginning in tax year 2026, the statewide mill levies of 1.0 mills for state educational buildings and 0.5 mills for state institutions buildings and replace those revenues with demand transfers from the state general fund. The transfer for state educational buildings will be $56 million in FY 2027, the transfer for state institutions buildings would be $25 million in FY 2027. The estimated property tax savings from the 1.5 mill reduction is around $25/year on a $150,000 home.
Other Property Tax Measures
- 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 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. The contents of the bill were placed into Conference Committee Report. However, the bill did not advance.
- Senate Sub for HCR 5011 would place a question on the public ballot to 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 the bill did not advance in the House.
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 CCR on HB 2125, which also reauthorizes 1.5 mills to be collected by the state to fund K-21 education. The legislature passed the bill and sent it to Governor Laura Kelly for consideration.
State Budget
The Kansas Legislature passed a $10.63 billion state general fund budget for fiscal years 2025 – 2027. The budget for fiscal year 2026 includes a 1.5% across-the-board cut in state spending. 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 about $210 million less than the 2025 state budget, analysts indicate the 2026 budget will leave the state with an estimated ending balance of $424 million in fiscal year 2027, and the budget could be $460 million in the red by 2028, and $877 million in the red by 2029. In addition to the state general fund, the state rainy-day fund will have about $1.8 billion by fiscal year 2028.
State Budget, Governor’s Line-Item Vetoes
After Governor Laura Kelly vetoed dozens of budget line-items, the Senate bundled the various spending proposals together and voted, with a two-thirds majority, to override each of those vetoed line-items. The House, after a couple of attempts, voted to override a smaller group of 15 budget line items, leaving the other remaining budget measures off the table and sustaining the Governor’s veto of line-items. Included in the smaller group of passed line-items was language authorizing bonding authority of $128 million by Kansas State University for the construction of a veterinary diagnostic laboratory on the Manhattan campus for FY 2026.
Water Program Task Force
Governor Kelly has signed into law CCR on HB 2172, a bill that establishes a water program task force to evaluate the state’s water programs and funding for the water plan. Task Force members are to be appointed by April 30, 2025. The task force will submit an initial report to the Legislature and Governor on or before January 31, 2026, and a final report the following year. The Senate amended the bill through amendments offered by Senator Kenny Titus. The amendments reduced the task force from 23 members down to 12, 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 5-person “water planning work group” that will function as a subcommittee of the Task Force. Members of the work group must have relevant experience with Kansas water issues and will be appointed by June 30, 2025. The work group will 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 modernize the state water plan, how the water plan is created, what the water plan should prioritize, and how the water plan should be implemented. After passing the legislature,.
Conservation District Funding
Senate Bill 36 makes 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 legislature, Governor Kelly signed the measure into law.
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 did not advance.
Muti-Year Flex Accounts Amendments
Governor Kelly has signed into law Senate Bill 58. The bill amends “muti-year flex account” (MYFA) statutes to streamline enrollment calculations based on net irrigation requirement (NIR) allocation, plus 10%, 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. Find more information on the bill here. The bill passed the Senate unanimously and passed the House 119-2.
Conservation Reserve Enhancement Program
Governor Kelly has signed into law CCR on House Bill 2255, a bill that includes the contents of House Bill 2111 amending 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 previous law capped enrolled acres, per county, to no more than 25% of the total state acreage (currently 10,000 acres). As amended by the Senate, the bill reduces this county cap to no more than 20% 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 HB 2255. The bill was passed 116-8 in the House, and 40-0 in the Senate.
Single Sales Factor Apportionment of Corporate Income Tax
The Single Sales Factor Apportionment (SSFA) corporate income tax bill was introduced as House Bill 2336. The bill 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. The bill includes market-based sourcing provisions to replace cost of performance requirements. In a House and Senate conference committee, the contents of the bill were placed into CCR on HB 2231. The bill was then passed unanimously by the Senate, and with strong support in the House (118-4). It is believed Governor Kelly will sign the bill into law.
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, there may be interim hearings this summer on the future of the HPIP and PEAK programs.
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 CCR on SB 269. After being passed by the House and Senate, Governor Kelly vetoed the bill. During the veto session, the bill was passed into law by a supermajority of the House and Senate overriding the Governor’s veto.
Tax Credit Elimination
Senate Bill 296, which did not receive a hearing this session, 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.
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.
Personal Property Tax Exemptions
As introduced, Senate Bill 10 would exempt particular personal property from property taxation, such as ATVs, watercraft, and certain trailers. In a House and Senate conference committee, the contents of the bill were placed into CCR on HB 2231. The bill was then passed unanimously by the Senate, and with strong support in the House (118-4). It is believed Governor Kelly will sign the bill into law.
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
On April 7, Governor Laura Kelly signed into law CCR on SB 9, a bill that prohibits certain foreign ownership or acquisition of land in the state. The bill prohibits identified “countries of concern” from acquiring any interest (except a de minimis interest) in real property located within 100 miles of the boundary of any military installation located either in Kansas, or any adjacent state. The bill requires affected properties currently present in the state to register the property with the Kansas Attorney General. While the bill does not exempt CFIUS-approved or vetted properties, the bill was amended to allow foreign principals that owns real property in the state (owned before July 1, 2025), and that seek to acquire additional real property for the purpose of expanding their operations, to request approval for such transaction and expansion from the Governor. The bill also prohibits 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 parts. Find more detailed information here: CCR Brief SB 9.
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). On April 10, the bill was allowed to become law without the Governor’s signature.
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. After passing the House (92-32) and the Senate (30-10), Governor Kelly signed the bill into law.
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 makes 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. After passing the House and the Senate, Governor Kelly signed the bill into law.
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 no further action was taken.
- 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 was 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, Governor Kelly signed the bill into law.
Kansas Promise Scholarship Program
As introduced, 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. After passing the House 76-48, and the Senate 40-0, the bill will be sent to Governor Kelly for consideration. If the bill is vetoed, there is no remaining opportunity for the legislature to attempt to override that veto.
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. After passing the House 121-3, and the Sente 38-2, the bill will be sent to Governor Kelly for consideration. If the bill is vetoed, there is no remaining opportunity for the legislature to attempt to override that veto.
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, Governor Kelly signed the bill into law.
- 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 but no hearing was 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 held.
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, Governor Kelly signed the bill into law.
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. After passing the House (73-52) and Senate 28-12), Governor Kelly vetoed the bill, and the Legislature did not attempt to override the veto.
3rd 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 the bill was passed by the House and Senate, and signed into law by Governor Kelly.
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 was signed into law by Governor Kelly.
- 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. However, the House did not 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 passed by the House (86-38). However, the Senate did not 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, 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. After being passed by the House and Senate, Governor Kelly vetoed the bill. During the veto session, the bill was passed into law by a supermajority of the House and Senate overriding the Governor’s veto.
- 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, and being passed out of the Senate Judiciary Committee, the bill did not advance further.
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, Governor Kelly signed the bill into law.
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. Governor Kelly signed the bill into law.