Back to the drawing board on taxes. This week saw a flurry of activity on a tax bill passed by both chambers last week and sent to the Governor on Tuesday. The bill, which would raise revenue to fill the state’s $300 million-plus budget hole, increases personal income tax rates, including the addition of a third tax bracket, and closes the so-called LLC loophole. On Wednesday, the Governor vetoed the bill. The House overrode the veto 85-40, but the Senate vote was 24-16, just shy of the two-thirds majority (27) needed to override. Both chambers are now working on new tax proposals. It’s worth noting that a key sticking point for the Senate was that the tax increases would be retroactive to Jan. 1, not the elimination of the exemption for LLCs.
Thursday was also Turnaround Day, the last day for non-exempt bills to pass out of their chamber of origin. Just an FYI, exempt committees are not subject to yesterday’s deadline. Exempt committees include: House and Senate Federal and State Affairs, Senate Ways and Means, Senate Assessment and Taxation, and House committees on Calendar and Printing, Appropriations, and Taxation. Select committees of either house are also exempt when authorized. After this busy week, lawmakers are now on break until March 6.
Historic Tax Credit. Last week the Senate Assessment and Taxation Committee held an informational briefing on tax credits and abatement with the Kansas Department of Revenue. The briefing included an overview of the Historic Tax Credit. No action was taken, but it was a reminder for those concerned about preservation projects in Kansas that we must remain vigilant as lawmakers review the state’s tax policies.
Other bills of interest:
HB 2130 This bill changes some Department of Administration regulations on state contracts and purchase orders. From the supplemental note to the bill: “HB 2130 would remove the requirement that state agency contracts or leases extending for a period longer than one year be filed with the Director of Accounts and Reports. The bill would also remove the requirement that contracts subject to approval by the Attorney General be countersigned by the Director of Accounts and Reports. Finally, the bill would remove the requirement that orders or requisitions for contractual services be made on a prescribed form unless a purchase order is required for each contracted payment.” The bill was passed unanimously by the House and is now in Senate Ways and Means Committee.
HB 2201 This bill creates “the taxpayer empowerment, accountability and transparency in state contracting act.” It is in the House Federal and State Affairs Committee with the first hearing set for March 8.
HB 2227 This bill proposes a 5 mill tax levy for the Kansas Education Building Fund, “for the use and benefit of the state institutions of higher education.” The fund is to be administered by the State Board of Regents. The bill is currently in the House Taxation Committee.
SB 55 This bill addresses public construction contracts and performance and payment bonds. Introduced in Senate Federal and State Affairs Committee, it was referred to Senate Commerce with a hearing on Feb. 7. On Feb. 14, the committee amended the bill and recommended its passage. SB 55 is on Senate General Orders awaiting action. From the supplemental note on the bill: SB 55, as amended, would revise the Kansas Fairness in Public Construction Contract Act by requiring a contractor involved in a public-private partnership (P3) agreement with a public entity to furnish the following bonds:
- A performance bond, which would be equal to the full contract amount; and
A payment bond, which would be equal to the full contract amount for the protection of claimants supplying labor or materials to the contractor or subcontractors in the performance of work.
The bill would apply to P3 contracts valued at more than $100,000. The bonds would include a provision allowing for the recovery of attorney fees and related expense
The bill would define the terms “public-private agreement,” “private contribution,” and “public benefit.”