May 29, 2007
 |
KFB in Action
RECAP OF THE 2007 LEGISLATIVE
SESSION
by Brad Harrelson
KFB Governmental Relations Staff
|
The 2007 Session was notable
for many things, but mostly new leadership
in the House, many new committee chairs,
approximately $380 million five-year funding
plan for college infrastructure repair, and
the largest net dollar increase in the
state’s budget ever.
If it was
historic, it will be remembered for the
legislature’s passage of expanded gaming.
While extending the state’s lottery, and
after nearly 12 hours of continuous debate
on the gaming amendment in the House, and a
12-hour filibuster in the Senate, Kansas
will become the first state to own
destination style casinos.
Briefly, expanded gaming will
consist of casinos in Wyandotte County,
Sedgwick or Sumner County, Crawford or
Cherokee County ($225 million minimum
investment), and Ford County ($50 million
investment). Approval of casino projects in
each of the potential host counties is
subject to a local referendum. Slot
machines will now be allowed at pari-mutual
tracks. Estimates indicate that the state
could see nearly $200 million in annual
revenues, which would be subject to
appropriation, but could be used for debt
reduction, infrastructure improvements or
property tax relief across the state.
Several million additional dollars in
revenue will be received in license fees
from the private entities that would “run”
the casinos.
These issues grabbed the
headlines, but many other policy matters
important to KFB members were addressed
during 2007 as well.
CREP
KFB was a strong supporter of
the establishment of a Conservation Reserve
Enhancement Program (CREP); a targeted,
voluntary water rights retirement program.
After strong passage of a CREP bill in the
Senate, resistance by some House members
unless a dry-land farming provision was
added prevented passage in that chamber.
Ultimately, compromise was
reached during the final days of the session
in the budget bill. As passed the measure
would create a voluntary CREP, limiting
enrollment to 20,000 acres for each of the
next two years and $1 million funding for
each of those years. Enrollment would also
be limited by requiring two acres of
traditional CRP acres to expire, before one
acre can be enrolled in CREP. This will
provide gradual implementation and no net
increase in idled farm ground, which was the
main concern of opponents.
During the final hours of the
veto-session, further clarification was
agreed to in a budget amendment that
provides that the initial 20,000-acre
sign-up may occur through calendar year
2007, but acres can’t carry forward if the
maximum is not reached. The 20,000 acres
eligible in ’08 are through the fiscal year
ending June 30. While the final version was
not all we’d initially hoped for, we will
continue to work with legislators for
possible future expansion of the program.
TAXATION
Franchise Tax
KFB played a significant role
in the passage of HB 2264, a measure that
raises the threshold for the Kansas
Franchise Tax to $1 million of net worth in
FY ‘08 and phases the tax out over the next
five years. Following the increase in the
exemption threshold, the state will
incrementally phase the tax out with a 25%
reduction in FY ‘09, a 50% reduction in FY
‘10, a 75% reduction in FY ‘11 and complete
elimination by 2012. The franchise tax is
the levy that companies pay to do business
in Kansas based on the corporation’s net
worth. Passage of this legislation
translates into $135 million in savings for
businesses across the state by 2012,
including many farm and ranch limited
liability companies and partnerships.
Other tax measures considered
in 2007
·
HB 2031 exempts Social
Security Benefits from state income tax for
retired and disabled Kansans who make less
than $50,000. The exemption threshold
increases to $75,000 in 2008. The bill was
signed by the Governor
·
Another measure that did not
pass this session but had support from many
lawmakers was a Constitutional Amendment
which would freeze residential property
valuations for homeowners 65 years of age
and older. KFB did not actively oppose the
measure but expressed serious concerns about
the property tax shift that would occur and
the impact to ag landowners and business.
KANSAS RURAL POLICY AUTHORITY
Early in the session KFB
began discussions with Senate President,
Steve Morris that resulted in the
introduction of SB 395. The bill creates
the Kansas Rural Policy Authority, an 11
member organization that is charged with
establishing and directing efforts to
revitalize rural communities.
As envisioned, the KRPA will
be charged with creating strategies on a
grass roots level that will attract and
retain young people, equip and encourage
entrepreneurship, provide opportunities to
create and preserve wealth, and develop
leadership in rural Kansas. The measure
will also include provisions for ongoing
funding of efforts to invest in rural
business ventures.
KFB is engaged in discussions
with leadership and potential coalition
members. The legislation will be refined
over the interim and will be considered when
the legislature returns in 2008.
RENEWABLE FUELS STANDARD
KFB supported Legislation to
give a 6.5-cent per gallon tax credit to
fuel retailers who sell enough ethanol to
meet an annually increasing Renewable Fuels
Standard (RFS) It passed the Senate and
House by wide margins. The bill also would
give a 3-cent per gallon credit for each
gallon of biodiesel sold by a retailer. The
bill is an attempt to build the necessary
infrastructure for ethanol and biodiesel
throughout the state so retailers can
purchase renewable fuels at fuel terminals.
For ethanol, the RFS starts at 10% in 2009
and increases 1% per year until 2024 when it
will be 25%. In order to qualify for the
full ethanol incentive, retailers will have
to add E-85 pumps after the first year. The
biodiesel standard starts at 2% in 2009 and
increases 2% per year until 2017 and then 1%
per year until it is 25% in 2025. (HB 2145)
DEER MANAGEMENT
Starting in 2008, the process
for issuance of deer permits will be
changed; for residents and non-residents of
the state. Kansas Department of Wildlife
and Parks will increase the total number of
non-resident permits so that demand for
those permits will be met. The trade-off
for this increase in permits is that the
landowner transferable permit system will no
longer exist. Non-residents will be able to
choose the season in which they want to hunt
when they apply for their permit. Residents
will be able to hunt during any season,
state wide, with their permit for an
antlered deer. KDWP will be drafting new
regulations to institute the system this
summer and fall. No changes will occur for
the 2007 deer hunting season. KFB worked
with the department and legislators in an
effort to address most member concerns and
supported the bill. (HB 2437)
URBAN BLIGHT
A bill attempting to clarify
the definition of “urban blight” was
considered by the Senate Judiciary
Committee. With significant input from KFB,
specific exemptions for agricultural
properties were included. Ultimately, after
several amendments were added, the bill died
in committee and saw no further action. It
is likely that another interim study will be
requested and the issue may come before the
legislature again next year. (SB 296)
KANSAS/NEBRASKA LAWSUIT
KFB supported a measure,
which would designate the distribution of
potential settlement dollars in the
Republican River lawsuit with Nebraska. The
bill was intended to be a proactive approach
for the allocation of these funds before
they are received and would benefit the
interests of water users in the affected
area and across the state. The concept was
non-controversial until it fell victim to
politics and the passage of expanded gaming.
Interested lawmakers vow to resurrect the
issue in 2008. (SB 89)
BUDGET SHORTFALL AND TAXES
The fiscal year
2008 budget once again grew by almost 10%,
setting up a potential crisis in FY 2010.
This year, legislators had the largest cash
reserve in memory - almost $900 million. By
the end of the session, they spent over $500
million of their cash reserves because
spending dramatically outpaced receipts. Tax
increases, including property, will likely
be on the table, even in an election year.
There is growing support for a significant
shift in tax policy that would “broaden the
base and shrink the rates”. Agriculture is
particularly vulnerable under this scenario
as the industry benefits from a significant
number of preferential sales and property
tax exemptions.
HEALTH CARE
KFB offered conceptual
support for passage of the Foundations of
Health Reform Act of 2007, which was
intended to provide the framework for more
comprehensive health care reform in the 2008
session. This significant first step
established a premium assistance program,
which uses state and federal subsidies, as
well as available employer support; to help
low income uninsured Kansans purchase
private health insurance. It also directs
the Kansas Health Policy Authority to
develop broader health reform options,
including responsible, market-oriented
reforms and report to the legislature on
November 1, 2007. Kansas Farm Bureau has
been asked to provide significant input over
the interim. (Sub. SB 11)
GRADUATED DRIVERS LICENSE
There was
significant support for increasing the age
requirements for beginning drivers and SB
294 passed the Senate early in the session.
KFB was diligent in ensuring that the farm
permit remain unchanged from current law.
The bill ultimately stalled in the House and
interim study is likely. The issue will most
certainly arise in the 2008 session. (SB
294)
IMMIGRATION
Illegal immigration was a
prominent issue during the 2006 campaigns
and there was interest in many political
circles to address the problem at the state
level. Some lawmakers saw the solution in
tougher employer sanctions. KFB worked hard
to make sure unreasonable burdens were not
placed on business and small employers in
agriculture. This issue is also headed for
additional interim study and may come up in
2008.
IGUCA
Intensive Groundwater Use
Control Areas is the broad authority for the
Kansas Department of Water Resources to
declare targeted areas with declining
groundwater to be impaired, and impose use
restrictions to most water right
allocations. Some feel that IGUCA’s are
inconsistently applied and supercede
existing water law, often at the expense of
senior water right holders. KFB will
participate in interim studies this fall and
thoroughly examine the issue through the
policy development process within our
organization.
COMPREHENSIVE TRANSPORTATION
PLAN
The multi-billion ten year
funding plan for highway projects across the
state is set to expire in 2009. Extensive
stakeholder efforts are underway to review
needs, establish priorities, and explore
future funding sources. KFB staff and
leaders are participating in working groups
to provide significant rural and ag input.
Discussions and debate in the Capitol will
begin in earnest next year. Rural access and
quality roads are vital to agriculture and
delivering products to market.
PESTICIDE and FERTILIZER LAW
The Kansas Department of
Agriculture has organized a working group to
begin a comprehensive review of current
fertilizer and pesticide statutes. KFB is
participating to ensure that any forthcoming
changes are reasonable and farmer and
rancher interests are protected. It is
anticipated that multiple bills will be
introduced next session from this effort.
COMMODITY CHECK-OFF
The Kansas Association of
Wheat Growers requested a bill authorizing
an increase in the wheat check-off.
Hearings were held, but the bill failed to
pass out of committee. It is anticipated
that further discussions among commodity
groups will occur over the next year and new
legislation will be introduced.
|
