Legislature sends governor tax bill with $50 million for small businesses hurt by COVID-19

GOP senator punctuates support for reform with attack on governor

by Tim Carpenter, Kansas Reflector

Topeka — The Legislature by a nearly unanimous margin voted Monday to send tax-reform legislation to Gov. Laura Kelly but not before a Senate Republican supporting the bill insisted the governor receive no credit for earmarking $50 million to reimburse small businesses that suffered in early stages of the COVID-19 pandemic.

Senate Democrats leapt to the governor’s defense as the Senate voted 35-0 and the House moved 120-1 to complete their work on House Bill 2136 on the annual session’s final day.

A key provision in the bill earmarked federal relief dollars for property tax refunds to businesses forced to reduce occupancy or temporarily close in 2020 when coronavirus erupted. Without a vaccine to counter the virus, which has now contributed to the death of more than 1 million Americans, the Kelly administration and county officials issued emergency orders forbidding mass gatherings at stores not viewed as essential.

For-profit businesses with documented losses in 2020 and 2021 related to pandemic mandates would be eligible for up to $5,000 in property tax refunds. Nonprofits and online companies would be ineligible as would companies that accepted more than $150,000 in federal, state and local government aid during the pandemic.

Weskan Rep. Adam Smith, chairman of the House Taxation Committee, said the retail storefront property tax relief bill delivered important amounts of compensation to businesses undercut by the government’s effort to stall COVID-19. Businesses that permanently closed could be eligible for assistance under the state initiative.

“We wanted to tailor this mostly to smaller businesses,” he said. “Not necessarily your large retail chain stores that predominantly did not have to shut down.”

Sen. Tom Holland, D-Baldwin City, said he was proud to work with GOP Sen. Mark Steffen of Hutchinson on the original outline of the tax policy. Their motivation, Holland said, was to target aid to rural and urban businesses unable to compete with larger companies for federal Paycheck Protection Program funds and other opportunities to secure government subsidies during the pandemic.

“We had a concern back two years ago that there were certain small businesses, sole proprietorships or whatever, that didn’t have access to the PPP money and other things that other better-connected businesses did,” Holland said.

Sen. Caryn Tyson, a Republican from Parker and a candidate for the GOP nomination for state treasurer, said during remarks about merits of the bill that Gov. Kelly would try to claim credit for delivering property tax relief to Kansas businesses. It is a safe assumption Gov. Kelly would sign the bill, given the extraordinary bipartisan support.

In her speech, Tyson predicted three times the Democratic governor would try to grab the spotlight on tax relief. Gov. Kelly, a former state senator, is seeking a second term as governor in 2022.

“She’s going to take credit for giving property tax relief,” Tyson said. “Guys, don’t buy into that narrative. It is a false narrative.”

Tyson then turned to her complaints about the Kelly administration’s awarding of a contract to overhaul the computer system used by the Kansas Department of Labor’s to process unemployment claims. The labor department’s antiquated computer system, which nominally did the job during periods of low unemployment, was overwhelmed during the pandemic when more than 12% of Kansans lost jobs. The delivery of unemployment benefits was delayed for thousands of people.

Senate Minority Leader Dinah Sykes, D-Lenexa, said the campaign-season monologue delivered by Tyson on the Senate floor was an example of what was wrong with politics.

“We must do better and it begins with not caring if you get the credit for something. The future of Kansas should be the driver — not credit,” Sykes said.

Sen. David Haley, a Democrat from Kansas City, Kansas, said Gov. Kelly and many other U.S. governors responded to the pandemic by adopting masking, social distancing, testing and other measures to soften the blow of the virus until a vaccine could be produced and distributed. Limiting public gatherings, even at stores, was an important public health policy, he said.

“It was the responsible thing to do. It was hard to see these businesses closed. But, now, it is the responsible thing to do to support this legislation to offset as much as we can losses sustained by our small businesses,” Sen . Haley said.

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Kansas legislative session closes with pair of overrides, calls for better drug policy

by Noah Taborda, Kansas Reflector

Topeka — Kansas lawmakers wrapped the 2022 legislative session Monday by overturning a series of vetoes from the governor, tying up loose ends on remaining bills and debating a resolution taking issue with proposed World Health Organization regulations.

A bill approved before the House adjourned the session with minimal opposition would amend the Controlled Substances Act to allow some FDA-approved medications with ingredients derived from marijuana, critical for Kansans with epilepsy. A provision that would have decriminalized fentanyl test strips was removed from the bill at the behest of Republican senators late last month, before the legislature took a long break.

Fentanyl is a synthetic opioid frequently combined with heroin, cocaine, methamphetamine and MDMA. When people do not know if or how much of the powerful drug they are consuming, the risk of overdose increases.

Rep. Brenda Landwehr lamented needing to remove the provision but told colleagues the Senate would let the bill die if this version of the bill did not get representatives’ approval.

“The underlying bill will save lives and provide a better quality of life,” the Wichita Republican said.

But Rep. Jason Probst, a Hutchinson Democrat, said both measures were worthy causes, and the House should not have to decide between them as the Senate was forcing them to. He offered a motion to send the bill back to the committee, which GOP representatives rejected.

The Kansas Department of Health and Environment reported 338 overdose deaths in the state from Jan. 1, 2021, to June 30, 2021. Of that total, 149 were linked to fentanyl or fentanyl analogs. The total represented a 54% increase in overdose fatalities from the same six-month period in 2020.

“The idea that we can just tell kids not to do drugs and that will be enough has been proven ineffective,” Probst said. “If it was effective, we wouldn’t be dealing with what we’re dealing with today. We wrote a statute in 1981 thinking it would help. We’re dealing with different drugs. We’re dealing with poison, and it’s time to change the law.”

The bill now goes to Gov. Laura Kelly for approval.

Rep. Susan Ruiz, D-Shawnee, took the opportunity to note the contents of the bill would not be needed if the Senate had acted on a medical marijuana bill already approved by the House.

In a statement following adjournment of the Senate, Sen. Rob Olson, an Olathe Republican and chairman of the Senate Federal and State Affairs Committee, took responsibility for not getting the medical marijuana measure across the finish line this session.

“I look forward to doing substantial summer interim work with the primary objective of beginning the 2023 Legislative Session with a near-complete product ready to submit to both chambers for consideration and approval,” Olson said.

Both medical cannabis and fentanyl test strips were among a list of five priorities House Minority Leader Tom Sawyer demanded be addressed before the Legislature adjourned. The Wichita Democrat also called for a series of tax relief measures, a constitutional amendment on gerrymandering and additional money for special education.

“Despite much work left to be finished, Republicans are eager to adjourn so they can hit the fundraising trail and focus on re-elections,” Sawyer said “Their first priority needs to be completing the work left on the table. We are public servants, but their focus today is on serving themselves.”

Before adjourning, the Legislature did overturn a veto of a bill that will prevent the renegotiation of the state’s Medicaid contract and a prohibition on executive branch officials altering election rules without legislative input.

They also sent the governor a tax bill with relief for small businesses hurt by COVID-19.

Both chambers were prepared to have a full plate of work, but the decision by the Kansas Supreme Court to uphold recently drawn congressional and legislative maps lightened their load drastically.

The Senate also passed a resolution based on misinformation and claims that amendments the Biden administration is proposing to the WHO’s International Health Regulations would give its director-general far-reaching authority over U.S. health care decisions. Reading from the resolution, Sen. Mike Thompson said the WHO would make vaccination passports requirements for travel, job requirements and more.

“Such amendments would allow the WHO to unilaterally declare an international health emergency in a member nation,” Thompson said.

A fact check by the Associated Press showed the claims asserted in the resolution are untrue.

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Kansas Legislature’s final day of 2022 session may involve more than ceremonial activities

State lawmakers urge action on fentanyl, tax, automated vehicle issues

by Tim Carpenter, Kansas Reflector

Topeka — Hutchinson Rep. Jason Probst pleaded with legislative colleagues Sunday to repeal a 41-year-old state statute defining test strips as drug paraphernalia to enable Kansans to more easily test illegal drugs for presence of fentanyl that has fueled a wave of overdose deaths.

The 2022 Legislature returns to Topeka on Monday for what typically amounted to a brief ceremonial gathering to close out the annual session. There is potential, however, the Republican-led House and Senate could be interested in taking up tax or transportation legislation, which could open the door to a longer day and consideration of other issues.

In April before the Legislature took a long break, the Kansas Senate blocked a bill decriminalizing fentanyl test strips. Fentanyl is a synthetic opioid 100 times stronger than morphine. Dealers can be blend it with heroin, cocaine or methamphetamine, but consumers of those drugs can’t visually discern contents of those substances.

Sen. Kelli Warren, a Leawood Republican seeking the GOP nomination for attorney general, said passage of the bill could appear as if Kansas was creating a haven for consumption of illicit drugs. She said people should take personal accountability and shouldn’t take illegal drugs.

The Kansas Department of Health and Environment reported 338 overdose deaths in the state from Jan. 1, 2021, to June 30, 2021. Of that total, 149 were linked to fentanyl or fentanyl analogs. The total represented a 54% increase in overdose fatalities from the same six-month period in 2020.

Probst sent correspondence to House and Senate members seeking support for consideration of House Bill 2540 that could be amended to include the test-strip provision. If legislative leaders declined to take action, he said, a related provision rescheduling medication helpful to patients with epilepsy also would be lost in 2022.

“It is unfortunate that a handful of people have decided to force us to navigate a sort of hierarchy of good, and in effect sacrifice good policy for one group to realize good policy for another group,” Probst said. “It is also, in my opinion, not the sort of representation Kansans expect or deserve. I think most Kansans could recognize and support the idea of doing two good things at once.”

He said Kansas had a surging rate of overdose deaths and most of those were due to people unknowingly consuming fentanyl.

“This is happening far too often in our state, and we have an opportunity to intervene, to take a small and simple step to save lives. Doing nothing, or waiting another year while Kansans die, feels unacceptable,” he said.

House Speaker Ron Ryckman, R-Olathe, and Senate President Ty Masterson, R-Andover, control the debate calendar in their chambers.

The Senate and House could authorize votes on tax-cut legislation developed during the 2022 session but not signed by Gov. Laura Kelly. In addition, there have been pleas to amend a new state law allowing use of autonomous vehicles so the Kansas Corporation Commission, rather than the Kansas Highway Patrol, would be responsible for issuing rules and regulations for deployment of the computer-controlled vehicles.

The International Brotherhood of Teamsters, Kansas Trial Lawyers Association and Working Kansas Alliance opposed the transportation bill, but it was endorsed by the Kansas Chamber, Koch Industries and Alliance for Automobile Innovation.

Gov. Kelly, a Democrat seeking reelection, urged the Legislature to approve during the final day of the session a bill immediately ending the state’s 6.5% sales tax on groceries. She recently signed a bill adopted by the House and Senate gradually reducing the statewide sales tax on food until eliminated in 2025.

The Legislature is expected to consider a bill implementing a $10 million state mental health hotline. Also on the agenda is a bundled tax reform bill, which includes a $50 million property tax rebate to storefront businesses closed by the state early in the COVID-19 pandemic.

Lawmakers also plan to entertain veto overrides of bills related to limits on the government’s response to infectious diseases, a prohibition on executive branch officials altering election rules without legislative input and a ban on renegotiating the state’s Medicaid contract until 2023.

Sen. Mike Thompson, a Johnson County Republican, said he would propose the Senate vote on a nonbinding resolution denouncing President Joe Biden’s recommended changes to health policy at the World Health Organization.

Meanwhile, House Minority Leader Tom Sawyer, D-Wichita, said the Legislature ought to approve Gov. Kelly’s proposal for a $250 per-person tax refund to about 1 million Kansans. He also suggested legislators suspend until Jan. 1 the state’s tax on gasoline.

“Due to a confluence of factors, gas prices are skyrocketing,” he said. “A tax holiday on gas through January 1, 2023, will provide direct relief to families during a time they need it most.”

Rep. Sawyer further proposed the Legislature adopt bills legalizing medical marijuana and prohibiting gerrymandering of political districts.

On Friday, the Kansas Supreme Court added an item to the Legislature’s to-do list. The court decided a tax case in favor of businessman Gene Bicknell, who challenged the Kansas Department of Revenue’s claim that he owed millions of dollars in state income tax on sale of a company that at one time owned the world’s most Pizza Hut franchises.

The state Supreme Court declared Bicknell was a resident of Florida, not Kansas, during the tax assessment period. It meant the state could owe Bicknell a tax refund of more than $60 million.

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