24 Jan 2025 Kansas Statehouse insider – Week 02
Following Monday’s holiday, lawmakers took advantage of the short work week and quickly introduced a flurry of bills ahead of the Jan. 27 deadline concluding the window for individual bill drafts. In all, nearly 170 pieces of legislation have been introduced in the 2025 Kansas legislative session, with many more ideas still in the drafting queue.
The House of Representatives passed its resolution of the joint rules for the 2025-2026 biennium to the Senate for consideration, however, most of the heavy-lifting was conducted in committees during the legislature’s second week in Topeka. Leadership in both the House and Senate are focused on tax policy early-on in the session, evidenced by the Senate Tax Committee’s passage of SCR 1603, which would, if adopted by two-thirds majority in both chambers of the legislature, cap the growth of taxable value of any real property or residential mobile home personal property to three (3) percent per year.
Outside of tax bills, next week’s calendar is quickly filling up with hearings on bills in many of the pertinent committees we are monitoring on your behalf. We thank you for allowing us to serve as your eyes and ears at the Kansas statehouse. Below is a brief summary of the notable events in the legislature’s second week.
Corporate Income Tax Single Sales Factor Apportionment
Legislation will be introduced again this year to require corporate taxpayers to use a single factor sales method to apportion income for tax purposes, rather than the current three-factor system for apportioning incomes. The bill will allow a three-year phase-in period and will also include market-based sourcing provisions to replace the cost of performance requirements. Past similar legislation had an estimated cost to the state of approximately $20 million, but the fiscal note on the new legislation is unknown.
Property Tax Relief
- House Bill 2011 would decrease the rate of ad valorem tax imposed by school districts from 20 (currently) to 18.5 in school years 2025 and 2026. A hearing was held on the bill in the House Tax Committee on Jan. 22.
- Senate Bill 35 would discontinue state property tax levies for the Kansas educational building fund and the state institutions building fund. This measure would remove 1.5 mills from the state portion of the property tax mill levy for all taxpayers. The lost revenue from the measure would need to be backfilled from the state general fund. The Senate Tax Committee held a hearing on the bill and passed it out of committee on January 23.
- SCR 1603 would amend the Kansas Constitution to limit annual increases in real property valuations to 3 percent. A similar bill was passed by the Senate last year but did not advance in the House. As a constitutional question, the bill requires passage of a 2/3 supermajority of the legislature but does not require the Governor’s signature. If passed by the legislature, the measure would be included as a ballot question on a special state-wide election in November of 2025 and, if passed, would become effective in 2026. The Senate Tax Committee held a hearing on the measure on Jan. 16 and passed it out of committee on January 23.
Gross 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. A hearing is scheduled for Wednesday, Jan. 29 in the Senate Transportation Committee.
Immigration
SCR 1602 was introduced to “encourage the Governor to cooperate with federal enforcement of immigration laws.”
House Bill 2066 would require business entities and public employers to register and use e-verify program for employment purposes.
Rural Opportunity Zones Extension
Senate Bill 69 would extend the rural opportunity zone loan repayment and income tax credit program by five years.
Personal Property Tax Exemptions
House Bill 2014 would exempt certain personal property, such as ATVs, watercraft, and certain trailers from personal property tax.
Conservation District Funding
Senate Bill 36 was introduced to 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 to provide increased matching basis for state moneys disbursed to conservation districts. A hearing was held this week in the Senate Agriculture Committee.
Muti-Year Flex Accounts
Senate Bill 58 would amend the muti-year flex account (MYFA)statutes. The amendments would seek to make it easier for applicants to enroll in the program and make it easier for the
agency to administer. The amendments would also streamline calculations based on net irrigation requirement (NIR) allocation, plus 10%, rather than on average use. The bill will
eliminate the potential to double-count overlapping acreage. The bill will align MYFA to allow participation in local enhanced management areas (LEMAs), intensive groundwater use
management areas (IGUCAs), and water conservation areas (WCA). A hearing on this bill is scheduled for Thursday, Jan. 30 in the Senate Agriculture Committee.
Income Tax Rate Trigger
Legislation modeled off other states will soon be introduced to add a trigger to the state tax code that automatically lowers individual and corporate income tax rates as state revenues increase.
Prohibiting Foreign Ownership of Real Property
Last session, the House passed legislation to prohibit principals from federally designated countries of concern from holding or acquiring interest in real property in the state within 100 miles of a military installation. The bill exempted individuals and properties previously verified by the federal interagency Committee on Foreign Investment in the United States. After passing the House and Senate, Governor Laura Kelly vetoed the bill, and the legislature did not attempt to override the veto. On January 23, a new bill was introduced in the House Commerce Committee.
Childcare Income Tax Credit
House Bill 2078 would create an income tax credit for contributions to a childcareprovider.
New Seward County Sales Tax
House Bill 2004 would provide a countywide retailers’ sales tax authority for Seward County, KS for the purpose of financing the costs of roadways, bridge construction, maintenance and
improvement in the county. A hearing was held in the House Tax Committee on Tuesday, January 21.
Three-Mile Extraterritorial Planning and Zoning Authority
Current law allows city planning commissions to apply subdivision regulations to land outside of the city but within three miles of the nearest point of the city limits provided such land does not extend more than 1/2 the distance between the city and another city. Senate Bill 37 would repeal this three-mile extraterritorial planning and zoning authority. A companion bill was introduced as House Bill 2025.
County Home Rule
SCR 1605 proposes an amendment to article 9 of the Kansas Constitution to grant counties home rule powers.
Fast Tracking of Construction Permits Act
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 real estate development.
Kansas Promise Scholarship Program
Senate Bill 44 would expand the Kansas promise scholarship programto allowprivate postsecondary educational institutions to participate.
KCC Transmission Line Permits
House Bil 2040 extends the time in which the state corporation commission shall make a final order on a transmission line siting application. A hearing is scheduled in the House Utilities
Committee on Thursday, Jan. 30.
KCC Review of Utility ROE
House Bill 2032 would authorize KCC to increase or decrease electric public utility’s return on equity based on whether the utility’s all-in average retail rate has increased or decreased.
Competitive Bid Requirement
House Bill 2041 would require a competitive bid process for the permitting of electric transmission lines.
New Energy Storage Systems Property Tax Exemption
House Bill 2083 would create a property tax exemption for new energy storage systems installed or approved after January 1, 2026. A hearing is scheduled in the House Tax Committee on Thursday, January 30.
Water Pollution Control Permit Extension
House Bill 2085 extends the renewal period for water pollution control permits from five to 10 years.A hearing on the bill is scheduled for Thursday, Jan. 30 in House Water Committee.
3rd Party Litigation Funding
Senate Bill 54 would limit discovery and disclosure of third-party litigation funding agreements in certain circumstances and require reporting of such agreements to the judicial council for study.
Telecommunications as Critical Infrastructure Facilitates
House Bill 2061 would include aboveground and belowground lines, cables and wires in the definition of a 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.