102 days and counting. The Kansas Legislature has labored mightily to pass a tax package and budget that would allow an end to the 2015 session, but every tax plan put forth so far has suffered a Sisyphus-like fate. There has been no dearth of tax plans that would fill the $400 million hole in the FY 2016 budget in either the House or Senate, but selecting one that could get a majority vote in both houses has been impossible to date.
Most of the plans involve an increase in the state sales tax and the cigarette tax, as well as an amnesty program for delinquent taxpayers, but there is little agreement on whether the current tax exemptions for LLCs and other business entities should be altered. Nor is there agreement on an increase in the state motor fuels tax. There is also a sizeable group of legislators who want to focus on further reductions in the state budget and reject any type of a tax increase.
Governor Brownback weighed in on Saturday with his tax plan. It contained most of the elements found in other plans, but also included a new twist of removing state income tax liability for low income Kansans. This would positively impact more than 300,000 individuals. While that idea appeared intriguing to many legislators it was not enough to start a stampede to support the Governor’s whole plan. Late on Sunday the Governor, through Secretary of Revenue Nick Jordan, issued a warning that he would veto any tax plan that included a tax increase on business entities. That definitely complicates the possibility of finding a compromise that can make it through both houses.
In a rare Sunday session, the Senate spent several hours debating a proposal by Senator Steve Abrams (R-Arkansas City) which would have reduced both the state sales tax rate and state income tax rates by eliminating most of the current exemptions on the state sales tax. This too failed to gather any significant support and the Senate finally adjourned at 1:45 a.m. this morning without taking any final action on the long-debated bill. The House has scheduled a debate on two tax measures later today.
With the session now dragging into the first week of June, a new - and soon to be pressing - problem arises. If legislators fail to pass a budget for FY 2016 (which starts on July 1, 2015) by the end of this week, state agencies will be forced to start furloughing non-essential employees since the next pay period for state employees stretches into the new fiscal year for which there is no approved budget. This creates some additional pressure for legislators to get a tax plan passed so they can then quickly approve the FY 2016 budget.
It now appears the session will continue for most of this week and possibly into next weekend. If that occurs, the current record for the longest legislative session in Kansas history could be broken.
Listed below are selected bills which have been acted on in the past week or which have been signed by the Governor. Additional information on any of the bills can be accessed by clicking on the bill number.
BUSINESS AND ECONOMIC DEVELOPMENT
SB 101 – Makes adjustments in the Kansas Transportation Network Company (TNC) Services Act which was passed earlier in the session and subsequently vetoed by the Governor. The veto was overridden by the Legislature and the Act went into effect on 5/14/2015. SB 101 amends the definition of a TNC and alters the requirements for becoming a qualified driver for a TNC, as well as a driver’s insurance responsibilities. Eliminates the KBI background check for potential drivers and expands the list of actions that could result in a driver’s disqualification. (Signed by the Governor. Becomes effective on 7/1/2015 except for provisions relating to lien holders' interests which become effective on 1/1/2016)
HB 2223 – Makes numerous amendments to existing wine and spirits statutes. Expands the ability to obtain a vineyard permit; allows for use of automated wine devices; bans the dispensing of powdered alcohol; expands the eligibility to obtain a liquor license; allows alcoholic sales in “core commercial districts”; facilitates the acquisition of Kansas State Fair permits; allows for the “infusing” of alcohol flavors; broadens the opportunity to sell Kansas wines at farmers markets; and allows alcohol at events in the state capitol if approved by the legislative leadership. (Passed by the Senate on a vote of 30-6 and by the House on a vote of 90-30. Awaiting action by the Governor)
ENERGY AND NATURAL RESOURCES
House Sub for SB 91 – Replaces the current renewable energy portfolio mandate for utilities with a voluntary renewable energy goal. Removes individuals and companies from the definition of public utility if such individuals and companies are generating electricity only from renewable sources. Reduces most lifetime property tax exemptions on renewable energy resources to a 10-year period after 12/31/2016. (Signed by the Governor. Becomes effective on 7/1/2015)
Senate S. HB 2228 – Requires the physical presence of the physician, absent an emergency, in the administration of abortifacient drugs. (Passed by the House on a vote of 109-2. Awaiting action by the Governor)