The following Kansas legislative newsletter is provided to the clients and association members of Bright & Carpenter Consulting, Inc.
Sine Die Preview

Legislative leadership called several committees to begin meeting last week in preparation for Sine Die, the official adjournment and last day of the 2020 Kansas Legislative Session. What is typically only ceremonial, tomorrow’s 1-day Veto Session and Sine Die agenda is chock-full of legislation for COVID-19 recovery. Lawmakers will begin their work at 8 am and while closed to the public those with official business will be allowed to enter the Statehouse after being screened and having temperatures taken.

The most pressing issue the Legislature may consider is a proposal to limit the Governor’s powers during a state emergency. The State Finance Council last week denied Governor Kelly’s 30-day extension of her emergency declaration now set to expire on May 26. Republican leadership has been critical of her emergency orders and the “Reopen Kansas” plan, which they consider to be too restrictive on business and harmful to the state’s economy.

Leadership and committee chairs have also identified which bills they want passed that were left from the early and abrupt ending of the regular session in March. House committees met virtually while the Senate committees met in-person at the Statehouse in Topeka, where social distancing and other precautions were taken. All meetings were livestreamed for the public.

House and Senate Tax Committee

Both the House and Senate Tax Committees met last week to focus mainly on internet sales tax and property taxes. Eight property tax reform bills moved out of committee and are expected to be considered by the full Legislature on Thursday. The main proposal repeals the current property tax lid and requires “Truth in Taxation” notice and public hearings prior to a local governing body exceeding their property tax revenue from the previous year. The other seven bills are more technical in nature and deal with appraisers' qualifications and penalties, and procedures for challenging an appraisal before the Board of Tax Appeals.

Lawmakers also made progress on dealing with internet sales tax, which has been a hot topic in recent years but has not been able to cross the finish line. The bill would require online marketplace facilitators that have over $100,000 of sales in Kansas to collect and remit sales and compensating use tax. Transient guest taxes, taxes on pre-paid wireless cards, and 911 fees are also included.

In response to economic hardships during the pandemic, a measure passed out of the Senate committee last week that would allow taxpayers a three-month grace period on paying their property taxes. Counties could waive penalties and fees on payments that were due May 10 th until August 1, 2020.

Commerce Committee

Kansas Department of Labor (KDOL) Secretary Delia Garcia appeared before the House and Senate Commerce Committees last week to give an update on the state’s unemployment insurance program. Lawmakers have been flooded with complaints from their constituents and were not shy to communicate their frustration with Garcia and her agency to enact a triage plan.

KDOL representatives testified that Kansas has experienced 236,000 new unemployment claims since March, going from roughly 2,000 to 250,000 claims in one day. Lack of sufficient staffing and an outdated computer system have caused weeks-long delays in Kansans receiving their state and federal unemployment insurance benefits after job loss during COVID-19.

At the request of the Department, the Senate Commerce Committee approved a proposal that would address federal temporary waivers of state requirements and allow Kansas to continue to qualify for any federal pandemic unemployment assistance. The plan includes several provisions such as waiving the requirement to look for work if laid off due to COVID-19 and making negative balance employers available for the shared work program. The Legislature is expected to take final action on the bill on Thursday.

Judiciary Committee

The House Judiciary Committee met virtually last week to review proposed bill language that would limit liability for businesses and healthcare professionals from claims and litigation related to COVID-19. The Kansas Medical Society and Kansas Hospital Association are seeking liability protections for physicians while providing COVID-related care or for delayed response time due to the pandemic.

The Kansas Chamber presented a separate bill granting limited liability protections to businesses, churches, and schools from claims of injury from the virus. The American Tort Reform Association testified that under the proposal, employees would be required to have an actual injury and not only alleged exposure to COVID-19. Companies involved in manufacturing PPE in response to the pandemic would have product liability protections as well.

The Senate Judiciary Committee this week is considering legislation that addresses both the medical and business communities’ liability concerns surrounding COVID-19 as well as the Governor’s Emergency Powers.

Financial Institutions and Insurance Committee

The Kansas Bankers Association brought forward a $60 million plan to the Senate Financial Institutions and Insurance Committee last week that would result in low-interest loans to struggling businesses during COVID-19.

These idle funds are part of a housing program established in 2008 that has been accessed very few times. The Kansas State Treasurer’s Office would repurpose the money into a new Link Deposit Program and allow banks, credit unions, and Farm Credit institutions to grant loans to businesses at up to 3.25 percent interest and up to $250,000 for ten years or less.

The bill would also grant banking institutions a privilege tax deduction on agricultural real estate loans, effective January 1, 2022. The full Legislature is likely to approve the measure on Thursday.

The Senate Committee also bundled several non-controversial insurance items together and hope to pass the measure on General Orders. The bill will then need a motion to concur by the House before it moves to the Governor for her signature.

One-Day Veto Session

While the Senate plans to debate bills on General Orders Thursday, it is still unclear if the House will do the same ultimately determining the fate of several of the bills passed out of committee last week. Current plans call for House members to vote on the House floor in blocks of 20 and otherwise remain in their offices awaiting official business.

The largest obstacle facing the legislators is time. With a one-day Veto Session, social distancing protocols in place that will extend the time it takes to debate and vote on a bill, it will be imperative that they move quickly for bills gain passage this session.