2011 Session: Week 10

A significant amount of work was accomplished in the tenth week of the 2011 legislative session. This week was the last full week most House committees had to consider legislation with Friday being the hard deadline for bills to be passed out of committee. In addition, Thursday became known as tax day in the Kansas House of Representatives as we debated major provisions of our comprehensive tax structure—which also consumed a major portion of our activity on Friday.

The next two weeks will conclude the first major portion of the legislative session. During this time a majority of our work will take place on the House floor debating legislation passed out of committee which must be considered before adjournment in early April. The House Appropriations Committee should have their work completed on the House version of the 2012 budget. Both the House and Senate will then spend a few days in conference committees negotiating over the differences to bring these various issues back to each body to attempt to reach approval. This is always difficult to do with the differences in the budget from each body and especially when we have another year where the economy is down and cuts will have to be made. This year we have worked to condense the regular portion of the legislative session and save extra days for Veto Session which will be at the beginning of May. Following adjournment the legislature will take its annual break and return to Topeka on April 27.

During veto session we’ll not only deal with bills the Governor has either approved or vetoed, but also the bulk of our work on the 2012 budget. By taking a break for the month of April, it allows our research and revenue staff time to review and present all the necessary budgetary information we’ll need to make informed decisions when we return to finish the year. By the way, the April break goes back early in Kansas Legislative history as the time legislator farmers returned home to plant their crops and then returned for final wrap up as we do now. The veto session is scheduled for the first two weeks in May, however the reality is that we will not leave Topeka until both chambers and the Governor reach a compromise on our spending package. This is obviously a daunting task, but the work must be done.

Next week the House will be on the floor debating bills until our legislative calendar is cleared off. On weeks like this, it’s common for us to debate and vote on over 60 bills. If you’d like to see the bills we’re debating, simply log onto the legislative website at www.kslegislature.org and scroll to the “calendars” tab near the top of the page where you will find our daily debate calendar listed under the heading “General Orders” and the bills we’ll be taking final votes on listed under “Final Action.”

As I mentioned, the bulk of our work this week revolved around tax policy. While the bulk of the attention was focused on the sales tax repeal bill, the reality is that our tax committee sends us a number of proposals that when cobbled together create our overall tax policy. Like so many issues, tax policy isn’t a black and white proposition. Change in one portion of the tax code can affect many different variables and change the balance of our tax policy. Because of this, many times we’ll have a number of different opinions on the same piece of policy, making tax debates some of our most difficult, and this week proved no different. One with particular interest to District #107 is the SB198 or the ROZ bill as we call it here. The Rural Opportunity Zone Bill, aims to help 50 rural Kansas counties experiencing population declines by providing an income tax exemption for certain out-of-state taxpayers who relocate to those counties. The bill also allows counties to participate in a state-matching program to repay student loans of up to $15,000 for Kansas students who move to counties designated Rural Opportunity Zones. This bill was one of Governor Brownback’s original legislative priorities and I think it is an excellent tool to help the rural areas of Kansas.

The counties designated as Rural Opportunity Zones are: Barber, Chautauqua, Cheyenne, Clark, Cloud, Comanche, Decatur, Edwards, Elk, Gove, Graham, Greeley, Greenwood, Hamilton, Harper, Hodgeman, Jewell, Kearny, Kingman, Kiowa, Lane, Lincoln, Logan, Marion, Mitchell, Morton, Ness, Norton, Osborne, Pawnee, Phillips, Pratt, Rawlins, Republic, Rooks, Rush, Russell, Scott, Sheridan, Sherman, Smith, Stafford, Stanton, Trego, Thomas, Wallace, Washington, Wichita, Wilson and Woodson.

This important piece of legislation was initially approved by the Kansas Senate in February and the House passed the bill on Friday by a vote of 102 to 18. SB 198 is good, aggressive public policy targeted to help our rural communities with shrinking populations. I look forward to Governor Brownback signing it into law.

Unemployment Insurance (SB 77)
At the start of 2009, the Employment Security Trust Fund in Kansas had a balance of $566.5 million. The recession hit Kansas hard in 2009 and thousands of Kansans found themselves without employment. Over the course of 2009, $766.8 million was paid out in unemployment benefits. In one short year, the trust fund balance shrunk to $65.2 million and the state had to borrow money from the federal government to ensure unemployed Kansans were paid their unemployment benefits. Since January 2010 the state has borrowed approximately $100.8 million to pay unemployment benefits. This year alone, estimates show the state must pay $6 to $9 million in interest on the loan to the federal government which is due September 30, 2011.

If the state is unable to pay the interest on the loan, Kansas employers might lose credits to offset the Federal Unemployment Tax Act (FUTA) and the federal government could directly collect the principle from Kansas employers through FUTA taxes. As a result, Senate bill 77 was introduced to help pay the owed interest and stabilize the trust fund. The bill revises current employment security law provisions on loan interest payments, the taxable wage base and the extension of tax rate caps on certain employers. It also creates the Employment Security Interest Assessment Fund, designed to pay interest and principal owed to the federal government. Starting in 2011, the measure requires 50 percent of the surcharge revenue from negative account employers to be deposited in the assessment fund and the remaining 50 percent into the Employment Security Trust Fund.

Over a period of three years, the bill increases the taxable wage base. For 2011 the taxable wage base remains $8,000 but the base increases to $9,000 in 2012 and $10,000 in 2013. Beginning in 2014 and for all years thereafter the base is set at $11,000. The number of rate groups for negative balance employers is increased from 10 to 20 and the surcharge rate applied to those employers is increased to four percent from two percent. Negative balance employers have contributed less to unemployment insurance than what their former employees have collected. Positive balance employers have contributed more to unemployment insurance than what their former employees have collected.

The House passed SB 77 on Monday, March 14 by a vote of 90 to 33. The bill previously passed the Senate on February 15 by a vote of 30 to 8.

This was the final week for committee work and the Grain Commodities presented their annual reports to the Agriculture and Natural Resources Committee. The different groups have funding through different sources but rely mainly on the check-off from grain harvested in the state. The rate varies from group to group but for instance the Corn Commission has a ½ cent check-off which is about two kernels per ear of corn with each ear producing about 800 kernels. These two kernels are used by the KS Corn Commission to fund research, market development, education and promotion. One initiative will be with NASCAR this year featuring Emporia native Clint Bowyer as the national spokesman for American Ethanol. The June 5th NASCAR race at Kansas Speedway will be the marquee event for the American Ethanol 2010 kickoff. Clint’s car (#33) will be using 15 percent ethanol fuel this year.

It was my pleasures to have Rev. David Redman give the opening prayer during Session on Thursday. You can read Rev. Redman’s prayer on the KLISS system - www.kslegislature.org and find the Journal for March 17th where it will be on the first page of the document.

I hope you are tracking the legislature’s work in Topeka and, if possible, take the time to visit this session. If you would like an individual meeting, I’d be happy to arrange one. In the meantime, I’m always anxious to hear your thoughts on how the issues discussed in Topeka affect you. Reliable feedback is very important in making sure I’m accurately representing my friends and neighbors here in the district. Please feel free to call or email and I’d be happy to discuss any topic you are interested in. Thank you for the honor of serving you.

Rep. Elaine Bowers
Kansas State Capitol Building
300 SW 10th St.
Room 54-S
Topeka, KS 66612
elaine.bowers@house.ks.gov
1-785-296-7642