2025 Kansas Capitol Review – Week 07

28 Feb 2025 Kansas Capitol Review – Week 07

Entering the first week after the 2025 Kansas legislature’s Turnaround, lawmakers now only have four weeks remaining to wrap up any pertinent issues. The last day for most committees to meet this year is March 18. After which, the legislature will spend a few days debating passage of bills prior to their first adjournment on March 28.

Following a short break, the legislature will return on April 10 for a brief veto session to consider final action on bills and possibly take an override vote on any bills vetoed by Governor Laura Kelly. Feeling this pressure, committee chairs in both the Senate and House of Representatives have scheduled numerous bills for hearing and action in the session’s upcoming eighth week.

Heading into the final stretch, we appreciate the opportunity to continue to serve as your eyes and ears at the Kansas statehouse. Below is a brief summary of the notable events from the legislature’s seventh week.

Key 2025 Legislative Deadlines

• March 18 – Last day most committees meet
• March 21 – Last day for consideration of non-exempt bills
• March 28 – First Adjournment
• April 10 – Veto Session begins

Prohibiting Foreign Ownership of Real Property

On Monday, March 3, the House Committee on Commerce, Labor and Economic Development will hold a hearing on House Bill 2290. On an after the effective date of the legislation, the bill would prohibit identified “countries of concern” from directly or indirectly acquiring any interest (except a de minimis interest, as defined) in any real property located within 100 miles of the boundary of any military installation located in Kansas, or any adjacent state. Unlike legislation from 2024, the bill does not exempt CFIUS-approved or vetted properties.

Drone Critical Components and Procurement of Goods and Services

House Bill 2293 would prohibit Kansas governmental agencies from purchasing drones if their critical components were produced in designated countries of concern. The government agencies could continue to use drone equipment acquired before July 1, 2025, if maintained with previously acquired replacement parts. The bill also broadly prohibits state agencies from procuring any finished goods or services from these foreign principals, unless the entities have either received clearance indicating no unresolved national security concerns under U.S. Code, or the entities maintain active national security agreements with either the Committee on Foreign Investment in the United States or the Department of Defense as of July 1, 2025. After holding a hearing on the bill on February 26, the House Commerce Committee will likely take final action on the bill soon.

Prohibiting Lobbying by Foreign Adversaries

House Bill 2205 would prohibit lobbying for or by certain designated foreign adversaries. No hearing was scheduled and the bill is not longer a live bill this session.

KDHE Remediation Authority

House Bill 2340 would remove authority from any state regulatory agency to order the remediation of a specific property, located in Johnson County and previously owned by the U.S. Army, for the removal of pesticide residue in soil, groundwater, or surface water, when the U.S. Army had applied registered commercial pesticide products to land, at or near structures, for the control of pests, prior to 2005. The bill would only apply if the property was used for nonresidential purposes. After passing the House 94-29, the bill was referred to the Senate Commerce Committee.

Retailer Remittance Credit

Senate Bill 109 would provide Kansas retailers with a remittance credit for the collection of sales and compensating use tax from customers. If capped at $300 per month, the remittance would cost the state approximately $60M per year. The bill received a hearing in the Senate Tax Committee on February 4.

Neonicotinoid Prohibition

Senate Bill 235 was introduced by Sen. Marci Francisco (D-Lawrence) to make it unlawful sell, use, or distribute certain seeds coated with neonicotinoid pesticides in the state. The bill was referred to the Senate Committee on Agriculture but no hearing was scheduled and the bill is no longer a live bill this session.

Political Subdivision Legal Contracts

Senate Bill 242 was introduced on behalf of the Kansas Attorney General. The purpose of the bill is to assist local governments with contracting with outside legal counsel when pursuing tort litigation. The bill would allow a political subdivision to enter into a contingent fee contract for legal services, but would require a meeting to be called, a list to be provided as to why services are needed, and a contract would be approved in an open meeting. Before a contract would be effective, the political subdivision would be required to receive the Attorney General’s approval. The bill has been referred to the Senate Judiciary Committee which has scheduled the bill for hearing on March 3.

3^rd Party Litigation Funding

Senate Bill 54 would require disclosure of third-party litigation funding agreements and require reporting of such agreements to the Judicial Council. The Senate passed the bill 39-1, and it now goes to the House for consideration.

Senate Begins Review of State Budget

After passing the House, the Senate began its review of the state budget bill Sub HB 2007. During its first few days of reviewing the budget, the Senate Ways and Means Committee cut an additional $132 million in various expenditures. The committee removed about $48 million in projects funded with lottery revenues, including about $27 million allocated to the Commerce Department. The committee also removed another roughly $40 million in higher education projects, and removed close to $4 million from the Department of Wildlife and Parks. As it was passed by the House, the budget contained nearly $10.6 billion in expenditures for state fiscal year 2026, which starts July 1. This was a reduction of $246 million from 2025. The budget eliminated funding for about 1,000 vacant positions and included a 1.5 percent cut in general operating expenses. The spending plan includes money for pay raises to bring some state employees up to market pay. While the state still has about $1.8 billion in its rainy-day fund, the House-approved budget is projected to run in the red by fiscal year 2028. In December, the revenue forecast showed the state spending down its ending balance as spending surpasses revenue. The revenue profile at that time showed the state’s ending balance dropping from $3.2 billion in fiscal year 2024 to $1.5 billion in 2026 and eventually falling to about $152 million in 2029. The state was predicted to spend about $1.3 billion more than it received in revenues in 2025, and about $416 million more than revenues in 2026.

State Budget Demand Transfers

Senate Bill 181 would limit the annual growth of expenditures and transfers from the State General Fund (SGF) that may be approved by the Kansas Legislature to the previous year’s SGF spending as adjusted for the Consumer Price Index (CPI) Midwest and Kansas population growth, starting in FY 2027. The bill was passed out of committee and will be debated by the full Senate.

House Water Committee Agenda

On March 4, the House Water Committee will receive an update on relevant water issues from the Kansas Farm Bureau. On Thursday, the committee will hold a hearing on SB 58, concerning changes to multi-year flex account statutes, and receive a presentation from KDHE on PFAS chemicals.

State Water Plan Funding and Soil Conservation District Funding

House Bill 2113 would increase the annual transfers from the state general fund into the state water plan fund from $35M currently, to $55M, on July 1, 2025; July 1, 2026, and July 1, 2027. The bill would sunset the water technical assistance fund and the water project grant fund on July 1, 2028.  The bill would also create a state conservation fund and make annual transfers of $2.5M into the fund from the state general fund. While HB 2113 would increase state water plan funding by about $20M, the proposed state budget bill (HB 2007) would only increase annual water plan funding by about $11M. Final funding for water projects will need to be reconciled between the House and Senate. The House passed the bill 106-15 and it is now with the Senate Committee on Agriculture. No hearing has been scheduled.

Water Program Task Force

House Bill 2172, as amended by the House, the bill would establish a 23-member water program task force to evaluate the state’s water programs and source of funding for the water plan. Task Force members would be appointed by April 30, 2025, and the task force would submit a report to the Legislature and the Governor on or before January 31, 2026. The House passed the bill 109-12 and the bill is now with the Senate Committee on Agriculture.

Conservation District Funding

Senate Bill 36 would make permanent a temporary increase in the current cap on moneys disbursed by the state division of conservation, to conservation districts across the state and increase the matching basis for state moneys disbursed to the districts. The Senate passed the bill 39-0. The House has referred the bill to the House Committee on Agriculture and Natural Resources, which has set a hearing for Tuesday, March 4.

New Conservation Funds

House Bill 2063 would seek to transfer $60 million from the state general fund to a new state conservation fund, working lands conservation fund, and wildlife conservation fund. After a hearing in the House Agriculture Committee, the bill received no further action and is no longer a live bill this session.

Muti-Year Flex Accounts

Senate Bill 58 would amend the muti-year flex account (MYFA) statutes to streamline enrollment calculations based on net irrigation requirement (NIR) allocation, plus 10 percent, rather than on average use. The bill would eliminate the potential to double-count overlapping acreage, and would align MYFA with participation in local enhanced management areas (LEMAs), intensive groundwater use management areas (IGUCAs), and water conservation areas. The Senate passed the bill 40-0, and it is now with the House Water Committee, which has scheduled a hearing on Thursday, March 6.

Conservation Reserve Enhancement Program

House Bill 2111 would amend existing conservation reserve enhancement program statutes to increase the state acreage cap from 40,000 acres to 60,000 acres. This change would also increase the number of eligible acres per county from 10,000 acres (currently) to 15,000 acres. The legislation would also seek to expand eligibility criteria and potentially allow for dryland farming practices if approved by USDA. The bill was amended in Committee to limit newly- enrolled acres to no more than 1,600 acres per county, per year. After passing out of committee, the bill was removed from the House calendar and referred to the Committee on Calendar and Printing.

Single Sales Factor Apportionment of Corporate Income Tax

House Bill 2336 would require corporate taxpayers to use a single factor sales method to apportion income for tax purposes, rather than the current three-factor system for apportioning incomes. The bill allows a three-year phase-in period and will also include market-based sourcing provisions to replace the cost of performance requirements. During a hearing in the House Tax Committee this week, the estimated fiscal cost to the state from the legislation was stated as $115M in FY 2026, $90M in FY 2027, and $73M in FY 2028. As a compromise to reduce the cost to the state, there will be an amendment to the bill to pass a mandatory single sales factor method into law that would delay the effective date for all taxpayers until 2028 (tax year 2027). When fully implemented, there is expected to be a positive return to the state of around $10M.

Income Tax Rate Trigger

Modeled on laws passed in other states, House Bill 2318 would add a trigger to automatically decrease individual and corporate income tax rates when state revenues increase. The bill was referred to the House Tax Committee and a hearing is scheduled for Monday, March 3. A hearing on Senate companion bill Senate Bill 259 is scheduled in the Senate Tax Committee for Tuesday, March 4.

Property Tax Relief

• Senate Bill 35 would discontinue state property tax levies which are currently used for the Kansas educational building fund and the state institutions building fund. Beginning in tax year 2026, the measure would eliminate the statewide mill levies of 1 mill for the state educational building fund, and 0.5 mills for state institution buildings. Beginning in fiscal year 2027, it would create demand transfers from the State General Fund to the Kansas Educational Building Fund and to the State Institutions Building Fund. In fiscal year 2027 the transfer to the EBF would be $56 million and the transfer to the SIBF would be $25 million. The Senate passed the bill 38-2. The House Taxation Committee held a hearing on the bill on February 27.
• Senate Bill 280 Sen. Stephen Owens (R-Hesston) introduced this bill that requires approval by a majority of electors voting at an election in order for the governing body of any taxing entity to increase its total amount of property tax by more than the annual rate of inflation. A hearing is scheduled in the Senate Tax Committee on March 6.
• House Bill 2011 as amended, would increase the amount of the appraised value of residential property exempt from the statewide school finance levy from $75,000 to $100,000, and reduce the statewide school finance mill levy from 20 mills (currently) to 18.5 mills in tax years 2025. Beginning in tax year 2026, the mill levy would float each year and be set at that rate which generates the same revenue as in 2025. The bill would require an annual transfer from the State General Fund (SGF) to the State School District Finance Fund (SSDFF) in the amount of any reduction of revenue to the SSDFF caused by the reduced mill levy. After passing out of the House Tax Committee, the full House has not taken further action.
• SCR 1603 would amend the Kansas Constitution to limit annual increases in real property valuations to 3 percent. As a constitutional question, the bill requires passage of a 2/3 supermajority of the legislature. The measure would be included as a ballot question on a special state-wide election in 2025 and become effective in 2026. After passing from the Senate on a vote of 28-11, the House has not scheduled the bill for hearing.
• HCR 5011 House Republicans crafted their own proposed constitutional amendment to limit residential appraisal increases by utilizing a rolling six-year average of home property values, with a goal of smoothing out spikes in property valuations. On February 27, the House Tax Committee amended the bill to make it applicable to commercial and industrial properties and then passed it out of committee favorably. In addition, HB 2394 was introduced to define the number of years in the rolling average to six years.

Energy Storage Systems Property Tax Exemption

House Bill 2083 would amend Kansas personal property tax law on machinery and equipment to provide a 10-year property tax exemption for new energy storage systems that are installed after January 1, 2026. Stakeholders of smaller scale, non-utility ESS equipment are working with bill proponents to ensure this type of equipment would qualify for the property tax exemption. The House passed the bill 90-29, and it now goes to the Senate Tax Committee.

Personal Property Tax Exemptions

Senate Bill 10 would exempt certain personal property, such as ATVs, watercraft, and certain trailers from personal property taxation. The Senate passed the bill 37-3, and the House Tax Committee held a hearing on February 10.

Property Tax Task Force

Senate Bill 195 would establish a property tax task force to study the Kansas property tax system and develop recommendations for changes. The Senate Tax Committee will hold a hearing on the bill on March 3.

Prohibiting Guaranteed Income Programs

House Bill 2101 would prohibit cities and counties from adopting an ordinance or enforcing a resolution that establishes or provides for the operation of a guaranteed income program. The House passed the bill on a vote of 86-37. The bill has been referred to the Senate Committee on Government Efficiency.

Construction Sales Tax Exemption

House Bill 2162 would create a sales tax exemption for the service of installing tangible personal property for the reconstruction, restoration, remodeling, renovation, repair, or replacement of a building or facility. The bill was referred to the House Committee on Taxation, but no hearing was scheduled.

Childcare Income Tax Credit

House Bill 2078 would create an income tax credit for contributions to a childcare provider. The bill was referred to the House Committee on Taxation, but no hearing was scheduled.

Milk Producers Trust Fund

On February 13, the House Committee on Agriculture held a hearing on House Bill 2254, a bill that would require milk processors to hold payments in trust for milk producers until the processors received payment in full, with funds in escrow considered held in trust, and would specify that funds held in escrow are the property of the milk producer. The House passed the bill 123-0, and the bill has been referred to the Senate Committee on Agriculture and Natural Resources.

Weights and Measures

The state department of agriculture requested introduction of House Bill 2255, a lengthy bill that would make comprehensive changes to the state’s weights and measures law. Most of the changes are focused on new licensing and training requirements for licensed scale service companies. The House Agriculture Committee amended the “scale ticket” section of the bill to say that the scale ticket requirements were only necessary for scales used for commercial purposes. The House passed the bill 120-2, and the bill was referred to the Senate Committee on Agriculture and Natural Resources.

Livestock Theft Penalty Enhancement

House Bill 2253 was introduced at the request of Representatives Megan Steele (R-Wamego) and Kevin Schwertfeger (R-Turon) to enhance criminal penalties for the theft of “livestock” as defined in K.S.A. 22-4807a, or implements of husbandry, to a severity level 5, nonperson felony. During a hearing on February 13 before the House Judiciary Committee, stakeholders requested an amendment to add theft of “grain” to the bill. The committee took no further action on the bill and it is no longer a live bill for this session.

Gross Truck Weight Exemption for Ag Commodities

Senate Bill 17 exempts haulers of grain and certain other agricultural goods from gross weight limitations during the harvest season. Following a hearing in the Senate Transportation Committee, no further action was taken and the bill is no longer a live bill this session.

New Duty of Caution for Stationary Vehicles

Senate Bill 8 would create a duty of caution for drivers when approaching stationary vehicles displaying hazard warning lights. After passing the Senate 39-0, the bill was referred to the House Transportation Committee and a hearing was held on February 27.

Immigration

• SCR 1602 was introduced to “encourage the Governor to cooperate with federal enforcement of immigration laws.” After the Senate passed the bill 31-9, it was referred to the House Committee on Federal and State Affairs. The committee held a hearing on February 13, and passed the bill out of committee on February 14.
• SB 178 would require law enforcement agencies to enter into agreements with US immigration and customs enforcement. A hearing is scheduled for March 6 in the Senate Committee on Federal and State Affairs.
• SB 196 would require business entities and public employers to register and use E-verify for their employees. It is anticipated this bill will be scheduled for hearing. House Bill 2066 is the House companion bill.

Rural Opportunity Zones Extension

Senate Bill 69 would extend the rural opportunity zone loan repayment and income tax credit program by five years. The Senate Tax Committee advanced the bill out of favorably, and it is on the Senate calendar for further action.

County Home Rule

SCR 1605 proposes an amendment to article 9 of the Kansas Constitution to grant counties home rule powers. The bill was referred to the Senate Committee on Federal and State Affairs, but no hearing has been scheduled.

Fast Tracking of Construction Permits

House Bill 2088 would enact the fast-track permits act to require local governments to meet specified deadlines for issuing building permits and other required approvals for residential real estate development. Specifically, the bill requires local government authorities to approve or deny a building permit within 60 days of receiving the application. If the authority fails to provide written notice of an application’s approval or denial, the application must be deemed approved by the authority. After passing the House 82-39, the bill was referred to the Senate Commerce Committee.

Kansas Promise Scholarship Program

Senate Bill 44 would expand the Kansas promise scholarship program to allow private postsecondary educational institutions to participate. The bill passed the Senate 37-3, and a hearing is scheduled for March 5 in the House Education Committee.

Utilities

Utility ROE. House Bill 2032 would authorize the KCC to amend electric public utility return on equity based on whether the utility’s average retail rate has increased or decreased. No further action will happen on the bill. The Committee Chairman supports the intent of the bill and will work with proponents to find other ways to control electric utility rates.

Transmission Line Permits. House Bil 2040 extends the time in which the state corporation commission must make a final order on a transmission line siting application. The House passed the bill 116-2. The Senate Utilities Committee held a hearing on February 27.

Communication Asset Relocation Reimbursement Senate Bill 57 would require state agencies and political subdivisions to reimburse communication facilities for costs to relocate assets for road projects. Following a hearing in the Senate Utilities Committee the bill was referred to the Senate Ways and Means Committee to survive Legislative Turnaround.

EV Charging Station Fees Senate Bill 167 would prohibit electric public utilities from recovering from ratepayers the costs associated with electric vehicle charging stations and requiring electric public utilities to establish electric vehicle charging service rate schedules. The measure was strongly opposed by utility companies during a February 11 hearing.

Large Transmission Lines. Senate Bill 266 would require legislative approval to build large, high-impact electric transmission lines. The bill was introduced by Senator Caryn Tyson in the Senate Tax Committee and then referred to the Senate Utilities Committee.

Nuclear Energy Feasibility SB 274, requesting the state corporation commission to engage a consulting firm to study new nuclear energy generation currently resides in the Senate Utilities Committee. No hearing has been scheduled.

Water Pollution Control Permits

House Bill 2085 extends the renewal period for water pollution control permits from five to 10 years. After passing the House on a unanimous vote, the bill was referred to the Senate Committee on Agriculture and Natural Resources.

Executive Branch Agency Regulations

• Senate Bill 77 would require state agencies to provide notice of revocation of admin regulations and remove certain state agencies from the required agency review. After passing the Senate on a unanimous vote, the bill is now scheduled for a March 3 hearing in the House Committee on Legislative Modernization.
• Senate Bill 222 would prohibit deference to state agency’s interpretation of statutes and regulations by a court or administrative hearing officer. The bill seeks to adopt recent administrative law from a 2024 U.S. Supreme Court decision. After passing the Senate 31-9, the bill was referred to the House Judiciary Committee.
• Senate Bill 229 would terminate all occupational licensing after five years. Following a hearing in the Senate Commerce Committee, the bill was referred to a blessed committee to survive Legislative Turnaround, but no further action has been taken.
• HB 2279 was introduced to exempt the state department of wildlife and parks from current restrictions and requirements on executive branch agencies when adopting regulations. The House Committee on Federal and State Affairs held a hearing on February 17, but no further action has been taken.
• HB 2291 would create a regulatory relief division of the attorney general and a regulatory sandbox program for start-up businesses. After passing the House 90-28, the bill was referred to the Senate Commerce Committee and awaits a hearing.
• HCR 5008 would amend Art. 2 of the Kansas constitution to provide the legislature with direct oversight of regulations of executive branch agencies. The House passed the bill 86-37 and a hearing has been scheduled in the Senate Judiciary Committee for March 6.

Critical Infrastructure Facilities

House Bill 2061 would add aboveground and belowground lines, cables, and wires in the definition of critical infrastructure facility used for telecommunications or video services for the crimes of trespassing on a critical infrastructure facility and criminal damage to a critical infrastructure facility. After passing the House 104-14, the bill was referred to the Senate Judiciary Committee which held a hearing on February 26.

Construction Wages

House Bill 2264 was introduced to restore local government control over wages, compensation, and benefits for construction projects. The bill was referred to the House Committee on Local Government. The House did not take action on the bill, and it is no longer a live bill this session.

EV Registration Fees

House Bill 2121 would increase annual license fees of electric and hybrid passenger vehicles and trucks. After passing the House 99-20, the bill was referred to the Senate Transportation Committee.

Local Government Eco-Devo Program Reporting

House Bill 2304 would require local governments to report certain local eco devo incentive program information to the secretary of commerce. After passing the House 97-26, the bill was transferred to the Senate Committee on Government Efficiency.

Other Relevant Legislation Surviving Turnaround

• SB 148 Excluding from sales taxation the installing or applying tangible personal property for the reconstruction, repair or replacement of a building
• SB 223 Providing Russell county retailers’ sales tax authority
• HB 2189 income tax credit for taking land by eminent domain
• HB 2275 Providing Finney county sales tax