The Kansas Legislature adjourned for Turnaround break on Wednesday and will return to Topeka on Tuesday, March 1. Committees only met on Monday, leaving the next two days for debating and passing legislation on the floor. Any non-exempt bills that didn’t pass their house of origin or get “blessed” by leadership by Wednesday are dead for this year.
When lawmakers return next week, they only have one month to finish all business for the year. First adjournment is scheduled for April 1, followed by three-week spring break before Veto Session begins on April 25.
Regulatory Reform
The House passed House Concurrent Resolution 5014 with 85 votes on Monday, one vote over the two-thirds majority required to pass a constitutional amendment. The resolution provides for legislative authority to revoke or suspend rules and regulations adopted by executive branch agencies and officials. It passed the House Judiciary Committee last year and is supported by Attorney General Derek Schmidt and various business and agricultural organizations. The initial vote taken last Friday was 80-33, so House Republicans were successful in flipping five votes over the weekend. HCR 5014 is moving through the process quickly with a hearing already scheduled in the Senate Judiciary Committee next Wednesday.
The Senate passed another regulatory reform bill on Thursday, Substitute for Senate Bill 34, by a vote of 32-7. This bill was introduced last year as an automatic sunset of all rules and regulations after five years. Stakeholders worked with lawmakers over the past few months in making the bill more palatable for the majority. Instead of an automatic sunset, all regulations will be subject to review by the agency every five years. Language was also added to speed up the process if a rule or regulation needs to be revoked. The Attorney General and the joint legislative committee on rules and regulations will also have oversight. SB 34 now heads to the House Federal and State Affairs Committee, but no hearing has been scheduled.
Water
The House Water Committee met again on Monday to begin discussing amendments to the mega water bill, House Bill 2686. Legislators plan to remove provisions regarding ground water management districts (GMDs) as well as keeping environmental divisions within the Kansas Department of Health and Environment and only moving water programs to the new agency. The committee plans to take official action on the bill when they return on Tuesday next week.
HB 2686 as currently written deals with three main subjects: agency consolidation, funding sources, and ground water management districts (GMDs). The bill creates a new state agency of Water and Environment. Currently, water law touches 16 different agencies, and this bill would transfer all duties to the new department. It would also establish new fee funds and boards, modify election procedures for GMDs, and set new fees on water right owners. See bill brief. The Committee will refer the GMD portion of the bill to a summer interim for further study.
Medicaid Contracts
The House Health and Human Services Committee reconsidered, amended, and passed out Substitute for House Bill 2463 on Monday. Democrats voted to table the bill last week, pending an opinion by the Attorney General on whether the state can legally delay the Medicaid rebidding process. Currently, state health officials are planning to seek requests for proposals this fall, with new contracts to go into effect in January 2024.
The committee amended the bill that no changes could be made to KanCare prior to January 1, 2025, maintaining the current system until December 31, 2024. They also added language that clarifies the administration is not prevented from taking any action required by an act or appropriation of the Legislature, federal law, or CMS. Prior to January 1, 2025, a state agency can also submit to the Legislative Coordinating Council a request to make substantive changes to KanCare if the Legislature is not in session.
The intent of the bill is that should Kansas elect a different Governor in November, the new administration would have time to grasp the KanCare program and have input on the new RFPs.
Plastic Bag Preemption
The Senate passed a bill on Wednesday that would prohibit cities and counties from regulating plastic bags or containers designed for the consumption, transportation or protection of merchandise, food, or beverages. Senate Bill 493 passed by a vote of 27-13. Currently, cities like Lawrence and Wichita have considered adopting such ordinances, and business and retail groups are looking to preemptively address the issue statewide. Kansas would be the 23rd state to pass similar plastic bag preemption legislation. The bill now heads to the House Commerce Committee, but no hearing has been scheduled.
Single Factor Tax Apportionment
The House Taxation Committee on Monday passed House Bill 2186. The bill was introduced last year and would allow the election to use a single sales factor apportionment of business income for calculating income taxes. The qualifying taxpayer would be required to have its principal business activity in the following industries: manufacturing, electricity production or storage, or involved in certain agricultural activities. The election would be effective for the taxable year of the election and the following nine taxable years.
Before passing the bill, the committee added the following eligible industries: hog and pig farming, scientific and technical consulting for biofuel facilities, and petroleum and paper product wholesalers. The Kansas Department of Revenue will also be required to report to the Legislature on the program. The bill will now be considered by the full House.
Disabled Employment Incentive
The Senate Commerce Committee worked House Bill 2219, which creates the Kansas targeted employment act that provides tax credits for the employment of persons with developmental disabilities. The tax credit could be claimed by a “targeted employment business,” or by a taxpayer outsourcing work to a targeted business. For every hour of work provided by developmentally disabled individual, the qualified business would earn a tax credit equal to 50% of the wages paid, but not to exceed $7.50 per hour. The tax credit program would be authorized for 5 years and capped at $5 million.
Unemployment Insurance
The House unanimously passed House Bill 2703 on Wednesday. The measure contains mostly technical clean-up provisions to last year’s mega Unemployment Insurance Reform Bill, including minor updates to rate tables as well as to the My Re-Employment Plan to make it work better for agencies charged with over-seeing the program. The bill was requested jointly on behalf of the Kansas Department of Labor, Kansas Department of Commerce, and business groups. It now heads to the Senate Commerce Committee for a hearing.
Other Insurance Bills
The House Pensions and Insurance Committee passed out Senate Bill 199 on Monday, which would allow renewals of short-term, limited-duration health plans to go from two to three years. This is a bill held over from last session, but its contents were passed in another bill last year that was ultimately vetoed by the Governor. The bill awaits consideration by the full House.
The House passed House Bill 2386 118-3 on Wednesday. The bill would establish requirements for the payment and reimbursement of dental services by a dental benefit plan. The bill now heads to the Senate Health Committee for a hearing.
Budget Review
It was a very light week for budget work. Budget committees only met on Monday before leaving for Turnaround break. Most of the subcommittee work is done for the House and Senate. The full House Appropriations and Senate Ways and Means Committees will finish their discussions to complete the first round of the state budget in the coming weeks. Two big budget bills typically finish out the session. The first should be completed before they take their April spring break, then they come back and finish the remaining budget issues at the end of April or first part of May. There have been recent sessions when there is only one budget bill, so there’s always a chance of that happening again.
Looking Forward-Hearing Next Week
House Bill 2719 provides a property tax exemption for machinery and equipment including inventory and work in progress machinery and equipment. A hearing is scheduled in the House Tax Committee next Tuesday.
House Bill 2711 eliminates the state sales tax on food and House Bill 2720 reduces the state sales tax on food. Both bills will be heard in the House Taxation Committee next Wednesday.
Senate Bill 510 enacts the vacant property act and prohibits municipalities from imposing fees or registration requirements on unoccupied residential or commercial property. A hearing has been scheduled in the Senate Local Government Committee next Thursday.
Senate Bill 513 allows certain property for a thrift store to qualify for a property tax exemption. A hearing has been scheduled in the Senate Tax Committee next Wednesday.
The Senate Judiciary Committee will have informational hearings on Thursday regarding orders and actions by public officials relating to vaccine passports, face mask mandates, gathering limitations, business restrictions, and religious gathering limitations and on Friday, the Selection of Supreme Court Justices.