The legislative session gathered a full head of steam this past week with most House and Senate committees conducting numerous hearings and the House giving final approval to nearly a dozen bills. However, the Senate has yet to engage in any significant floor debates because Senate Majority Leader Terry Bruce (R-Hutchinson) has  indicated there needs to be adoption of the House/Senate joint rules before the Senate takes final action on their bills.

The joint rules hang-up centers on “bundling” – a process where the contents of several bills are lumped together in a final conference committee report. It is a procedure used extensively in the closing days of the legislative session. The House members want to limit the number of bills to two that can be bundled while the Senate  wants  no bundling limitations. How soon this controversy will be resolved is unknown, but it will definitely slow the whole legislative process if not resolved soon.

Early last week Governor Brownback signed the “rescission” bill designed to end this fiscal year (FY 2015) on June 30th with a positive balance in the State General Fund (SGF). This should clear the deck for the Legislature to concentrate on the Governor’s proposed budgets for FY 2016 and FY 2017. However, the possibility still looms that SGF revenues for the next five months could come in short of projections, thus forcing the Legislature and the Governor to revisit this year’s budget.

The Governor’s budget proposals for FY 2016 and FY 2017 suffered at least a temporary setback last week when a House Appropriations subcommittee voted to reject the Governor’s recommendation to move $140 million in each of those fiscal years from the state highway fund to the SGF. It would be virtually impossible to create balanced budgets for the coming two years without a significant transfer from the highway fund to the SGF unless legislators are willing to vote for a major increase in sales tax or income tax. There is an indication some legislators want to consider touching the third rail  of  tax  reform,  i.e.,  removal  of  some  of  the  dozens  of  current  state  sales  tax exemptions.

Another key revenue source for the Governor’s budget proposals will be up for consideration on Wednesday and Thursday this week when the House Committee on Taxation holds hearings on HB 2306 which calls for major increases in the state tax on cigarettes, tobacco products and alcohol (see below under TAXES). Legislative reaction to that proposal will likely be a harbinger as to whether the Governor’s total tax package has any realistic chance of passage.

Listed below are selected bills and resolutions introduced or on which final action was taken last week. Final actions in either house are shown in italics.

AGRIBUSINESS

SB 189 – Allows instructors to obtain an institutional license to practice veterinary medicine if it relates to the instructor’s regular function within the School of Veterinary Medicine. (Referred to the Senate Committee on Agriculture)

HB 2305 – Same provisions as SB 189 (see above). (Referred to the House Committee on Agriculture and Natural Resources)

HB 2310 – Any chemigation user who only applies fertilizer or has obtained a current private pesticide applicator certificate would not be required to have a chemigation user’s permit. Same provisions as SB 119. (Referred to the House Committee on Agriculture and Natural Resources)

BUSINESS AND ECONOMIC DEVELOPMENT

SB 154 – Makes several adjustments in the unemployment insurance rates for employers. Replaces the current “arrayed” system with a “fixed” interval  table  which  emphasizes  individual  merit  ratings  for  each employer.  Creates  a  standard  contribution  rate  schedule  with  fixed reserve ratio limits based on an employer’s experience and an associated standard contribution rate.   Also sets new contribution rates for new employers.  Sets  the  maximum  weekly  benefit  at  $474  starting  on 7/1/2015 and that maximum would be effective through 12/31/2017. Any future adjustments in the maximum weekly benefit after that date would require legislative action. (Referred to the Senate Committee on Commerce)

SB 166 – Creates the Rule of Law Restoration Act. Prohibits any employer or business entity from knowingly hiring an alien, as defined in the Act. Also prohibits any wages or other remuneration paid to an alien from being allowed as a deductible business expense. Also prohibits the issuance of a driver’s license to an alien. (Referred to the Senate Committee on Federal and State Affairs)

SB 186 – Same provisions as HB 2286 (see below). (Referred to the Senate Committee on Assessment and Taxation)

SB 198 – Requires employers and labor organizations to notify the Department of Labor when a “contractor,” as defined in the  bill,  is newly hired. Also defines what constitutes an “employee” and a “newly hired contractor” (Referred to the Senate Committee on Commerce)

SB 211 – Contains numerous redefinitions relating to the scope of practice for certain technical professions, including, but not limited to, architects, landscape architects, and engineers. (Same provisions as HB 2224). (Referred to the Senate Committee on Federal and State Affairs)

HB 2248 – Expands the definition of “eligible area” for tax increment financing purposes to include “a building or buildings which are 65 years of age or older and any adjacent vacant or condemned lots.” (Referred to the House Committee on Commerce, Labor and Economic Development)

HB 2254 – Amends current roofing contractor registration requirements by specifying that an “exempt general contractor” cannot be considered to be a roofing contractor. Further defines what constitutes an exempt general contractor. Also establishes the circumstances under which the Attorney General can issue a letter of exemption, stating that a general contractor can be considered an exempt general contractor. (Referred to the House Committee on Commerce, Labor and Economic Development)

HB 2261 – Contains the same provisions as SB 154 (see above). (Referred to the House Committee on Commerce, Labor and Economic Development)

HB 2286 – Creates the Kansas Transportation Network Company Services Act. Defines a “transportation network company” (TNC) as a licensed entity operating in Kansas and using a “digital network or software application service to connect passengers to TNC services provided by TNC drivers.” A TNC would not be considered a motor carrier, but obtaining a permit from the Kansas Securities Commission is necessary before it can begin operations. (Referred to the House Committee  on  Transportation)

HB 2294 – Requires employers specified in the bill to participate in the E-verify program as a condition for the reward of any contract or grant in excess of $5,000 entered into with the state or any municipality. Requires all public employers, as well as every “business entity,” as defined in the bill, with five or more employees to register with and participate in “good faith” in the e-verify program. Prohibits any type of payments to any new employee who has not been verified through the program. Prohibits the deduction for tax purposes of business expenses on a non-verified employee. Specifies businesses to which certain restrictions of the bill would not apply. (Referred to the House Committee on Federal and State Affairs)

HB 2299 – Directs the Kansas Secretary of Labor to develop a state Occupational Safety and Health Act (OSHA) plan with a completion date of 9/1/2015. Implementation of the plan would require legislative approval. (Referred to the House Committee on Commerce, Labor and Economic  Development)

HB 2325 – Requires any collective bargaining sessions between a “public employer,” as defined in the bill, and a labor organization, as defined, to be subject to the Kansas Open Records Act and the Open Meetings Act. (Referred to the House Committee on Commerce, Labor and Economic Development)

HB 2332 – Allows a properly licensed microbrewery to manufacture and store up to 100,000 gallons of “hard cider” or “mead,” as defined in the bill, in a calendar year. (Referred to the House Committee on Federal and State Affairs)

ENERGY AND NATURAL RESOURCES

HB   2245 –   Amends   the   Water   Appropriation   Act   relating   to groundwater.  Specifies  when  a  temporary  or  permanent  injunction involving groundwater can be denied. Further defines the responsibilities of  the  Chief  Engineer  when  a  groundwater  dispute  involves  a groundwater management district. (Referred to the House Committee on Agriculture and Natural Resources)

FINANCIAL  SERVICES

HB 2302 – Creates the Kansas Right to Financial Privacy Act which would  prohibit  government  authorities  from  gaining  access  to  or obtaining  copies  of  information  contained  in  a  customer’s  financial records. Specifies conditions under which such information could be made  available  to  government  authorities.  (Referred  to  the  House Committee on Judiciary)

HB 2304 – Creates the Local Conservation Lending Program allowing the Secretary of Health and Environment (KDHE) to enter into “linked deposit agreements” with eligible financial institutions to fund certain conservation projects that have been approved by the Secretary of KDHE. (Referred to the House Committee on Agriculture and Natural Resources)

HB 2334 – Amends the requirements related to cash advance consumer loans under the Uniform Consumer Credit Code (UCCC). Makes the minimum term for such loans at least 60 days if the advance is less than $500 and 120 days for advances over $500. Reduces from 2 to 1 the number of loans a lender can have outstanding to the same borrower at any one time. Prohibits the lender from making more than three loans to the same borrower in a 60-day period. Extends the due date for such loans in certain work-related circumstances. (Referred to the House Committee on Financial Institutions)

HEALTH  CARE

SB 172 – Creates the Patient Right to Shop Act which requires that two days after a request and prior to an admission, procedure or service, a health care entity must disclose the allowed amount or charge of the admission, procedure or service (or if unable to quote a specific amount, the  estimated  maximum  amount),  including  facility  fees. The  entity must  provide  enough  information  that  the  patient  can  access  his insurer’s toll free number or website to enable the patient to obtain out-of-pocket costs.  Health insurers must establish a toll free number and website for the patient to obtain information about out-of-pocket charges and must provide a binding estimate for maximum allowed amounts or charges and the estimated amount of the patient’s responsibility, within two days of a request. Also requires health insurers to pay patients a percentage of cost savings when the patient elects treatment with a participating provider whose costs are below average. (Referred to the Senate Committee on Financial Institutions and Insurance)

SB 180 – Creates the medical assistance fee fund in the state treasury. Fund monies will be collected by the Insurance Commissioner from HMOs and MPOs. Increases the HMO privilege fee to 5 1/2 %. Fund will be used to finance medical assistance payments. (Referred to the Senate Committee on Public Health and Welfare)

SB 181 – Amends K.S.A. 39-7,120 enabling the Secretary to place a hold on new prescription only drugs until the medicaid drug utilization board has completed its review. (Referred to the Senate Committee on Public Health and Welfare)

SB 196 – Provides that peer support counseling for and through emergency services providers and law enforcement agencies are (with few exceptions) confidential and inadmissible. (Referred to the Senate Committee on Judiciary)

SB 202 – Limits monthly co-payments and co-insurance fees for 30 day supplies of prescription drugs. Sets the limits as $100 per month for platinum, gold or silver plans; and $200 per month for bronze plans. Also provides that insureds may ask for exceptions to the formulary and requires insurers to implement a process for exception requests. (Referred to the Senate Committee on Financial Institutions and Insurance)

SB 218 – Requires the Board of Nursing and the Board of Healing Arts to jointly adopt regulations for advance practice registered nurses, including the authority to prescribe medications, order tests and treatments and to perform other delegated tasks. This bill is the functional equivalent to HB 2205. (Referred to the Senate Committee on Public Health and Welfare)

HB 2270 – Expands eligibility for KanCare to 138% of the federal poverty level; establishes a three-tiered administrative support fee system to be collected from health care providers; requires the Secretary and managed care organizations to establish co-payments and/or a monthly premium payment support system for beneficiaries to access private insurance through an exchange; establishes a pilot program for primary care delivery; encourages the use of telemedicine and electronic communications for management of the frail elderly, patients with chronic conditions and consultations; requires health data analysis to identify successful cost-effective outcomes; permits use of health savings accounts for co-payments; authorizes the Secretary to apply for waivers to implement the program; provides that if federal funding drops beneath 90% the continuation of the program may be re-evaluated; authorizes studies of integrated treatment prices; and authorizes the Secretary to implement a work requirement for benefits. (Referred to the House Committee on Health and Human Services)

HB 2280 – Creates authorization for practice as a certified nurse midwife; defines the educational requirements  and  authorization process for a CNM; details transition requirements from an APRN to CNM; sets forth illegal acts associated with CNM authorization; sets out collaboration requirements; and defines CNM scope of practice and approved surgical procedures. (Referred to the House Committee on Taxation)

HB 2282 – Creates “Otis’s Law” and permits  hemp  preparations  to treat or alleviate conditions causing seizures and other debilitation or life-threatening  conditions  as  approved  by  the  Secretary.  Establishes criteria for cardholders, hemp preparation centers; regulation and oversight of cardholders and centers; possession amounts; and illegal activities. (Referred to the House Committee on Health and Human Services)

HB 2290 – Creates 24-hour crisis centers for the emergency treatment of persons suffering from mental illness, alcohol abuse or substance abuse. Individuals may be brought and admitted to a crisis center upon application of law enforcement. Supplements the mental illness and substance abuse treatment statutes. (Referred to the House Committee on Judiciary)

HB 2319 – Provides for expansion of Medicaid eligibility to 138% of the federal poverty level; and requires KDHE to develop a waiver application for a budget neutral managed care program for newly eligible beneficiaries employing personal responsibility mechanisms of cost sharing, rewarding healthy outcomes, rewarding responsible health choices. (Referred to the House Committee on Health and Human Services)

HB 2321 – Expands the definition of charitable health care provider to include the Shriners’ Nation Hospital Network providing telemedical care. (Referred to the House Committee on Health and Human Services)

HB 2324 – Creates the Newell Stillbirth Research and Dignity Act which mandates that the KDHE Secretary, through regulations, require general hospitals and freestanding birthing centers to implement policies and procedures to assign primary responsibility to one physician to communicate the condition of the fetus to the mother and family and to inform and coordinate staff to assist with labor, delivery and postmortem procedures; to assess the family’s awareness and knowledge of stillbirth; to establish a bereavement checklist and educational pamphlet; to provide one-on-one nursing care; to train staff to ensure that information is provided to the family in a sensitive manner; to develop best practices to provide emotional support following delivery; to develop protocols to ensure the physician discusses the importance of autopsy with the family; to develop protocols for coordinated visits by trained staff to assess psychosocial needs; and to develop guidelines to educate staff on caring for families following stillbirth. The Secretary must also establish a fetal death evaluation protocol to collect specific data about the stillborn infant and family. (Referred to the House Committee on Health and Human Services)

INSURANCE

SB 155 – Adds five new definitions relating to surplus lines insurance and restructures the calculation of the gross premiums tax on surplus lines  insurance.  (Referred  to  the  Senate  Committee  on  Financial Institutions and Insurance)

HB 2066 – Expands the investment powers of domestic insurance companies and further defines what constitutes a “business entity.” (Passed by the House on a vote of 123-0. Referred to the Senate Committee on Financial Institutions and Insurance)

HB 2241 – Prohibits an insurance company from canceling or denying renewal of any property and casualty insurance policy issued or renewed on or after 7/1/2015 based “solely” on claims arising from “natural causes,” as defined in the bill. (Referred to the House Committee on Insurance)

REAL ESTATE AND CONSTRUCTION

SB 178 – Establishes the valuation of land devoted to agricultural use on the basis of the agricultural income or productivity “based on cash rental rates typically received by the landlord from such land.”   Such cash rental rates would be based on the average of the previous five calendar years. (Referred to the Senate Committee on Assessment and Taxation)

STATE GOVERNMENT

HCR  5012  –  Moves  the  responsibilities  of  the  Supreme  Court Nominating Commission to the House Committee on Judiciary.  The Committee  would  forward  the  names  of  three  nominees  to  the Governor who would appoint one of the three to the Supreme Court, subject to approval by a majority of the Senate. (Referred to the House Committee on Judiciary)

HCR 5013 – A constitutional amendment that would place the Kansas Court of Appeals in the state constitution and would continue the roll of the Supreme Court Nominating Commission, but would expand the Commission to fifteen people with six members being chosen by the legislative leadership, five appointed by the Governor and four attorneys being chosen by attorneys in each congressional district. The Governor’s statewide appointee would serve as chairman of the Commission. (Referred to the House Committee on Judiciary)

SB 192 – Reduces the requirements for establishing a racetrack gaming facility in the northeast Kansas gaming zone and specifies how the net electronic gaming machine income from such a facility is to be distributed. (Referred to the Senate Committee on Federal and State Affairs)

SB 197 – Amends the procedure by which attorneys become eligible to vote for candidates to serve on the Supreme Court Nominating Commission. Also specifies that proceedings of the Commission must be subject to the Kansas Open Records Act. (Referred to the Senate Committee on Judiciary)

HB 2291 – Creates the Kansas Charitable Gaming Act under the supervision of the Department of Revenue. Defines “charitable gaming” as “bingo, including call bingo and instant bingo and charitable raffles.” The latter is defined as a raffle conducted by a non- profit religious, charitable, fraternal, educational or veterans organization.” (Referred to the House Committee on Federal and State Affairs)

HB 2312 – Same provisions as SB 192 (see above). (Referred to the House Committee on Federal and State Affairs)

HB 2322 – Creates the “Kansas Agricultural Opportunity Act” which establishes the requirements for operating a racetrack gaming facility in one or more of the Kansas gaming zones. Specifies the number of electronic gaming machines that can be placed in each facility. Provides how the net electronic gaming machine income from each facility will be distributed. (Referred to the House Committee on Federal and State Affairs)

TAXES

SB  203  –  Amends  various  statutes  relating  to  the  regulation  and licensure of sales of cigarettes and tobacco products. Increases all categories of license fees. Specifies who is not eligible for issuance of or renewal of a license. Also specifies penalties for violations. (Referred to the Senate Committee on Assessment and Taxation)

HB 2264 – Specifies circumstances under which equipment at an oil or gas well site are considered to be personal property and therefore taxed as commercial machinery and equipment. Also specifies that all oil and gas leases and all oil and gas wells capable of producing oil or gas in “paying quantities,” as well as equipment used in operating the wells, shall be considered personal property and assessed and taxed as “the mineral leasehold estate.” (Referred to the House Committee on Taxation)

HB 2283 – Exempts all sales of “farm products,” as defined in the bill, at a “farmers’ market,” as defined. The exemption would not apply to any person or entity with “estimated” total annual sales of $25,000 or more at farmers’ markets. (Referred to the House Committee on Taxation)

HB 2306 – Increases the state tax rate on a pack of cigarettes to $2.29 from $0.79 as of 7/1/2015. Also imposes a similar tax increase on existing cigarette inventories. Raises to 25% from 10% the tax at the distributor level on tobacco products. Also lowers from 4% to1.6% (of the total tobacco tax liability) the compensation rate for the distributor’s administrative expenses. Increases to 12% from 8% the tax on gross receipts received from the sale of alcoholic liquor by retailers, micro- breweries, micro-distilleries and farm wineries to consumers and on the sale of alcoholic liquor or cereal malt beverage by distributors. (Referred to the House Committee on Taxation)

HB 2307 – Establishes a tax amnesty period between 9/1/2015 and 10/15/2015 for enumerated state taxes. Applies to unpaid taxes for the period prior to 12/31/2013. Specifies matters which would not be eligible for the amnesty. Creates the budget stabilization fund and the tax reduction fund which are designed to maintain adequate ending balances in the State General Fund (SGF) in the coming fiscal years. Starting with tax year 2016, and for all subsequent tax years, the income tax rate for married couples filing jointly, as well as for all other individuals, will be higher than the currently scheduled rate. Establishes a procedure to lower income tax rates if the tax reduction fund reaches a certain level. (Referred to the House Committee on Taxation)

WORKERS COMPENSATION

SB  167  –  Eliminates  the  use  of  the  sixth  edition  of  the  American Medical  Association  (AMA)  guides  to  the  evaluation  of  permanent impairment.  Also  specifies  circumstances  under  which  additional permanent  partial  general  disability  compensation  may  be  available. (Referred to the Senate Committee on Commerce)

Jim Maag