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In The Mix


A LEGISLATIVE REPORT FROM KAPA-KRMCA
JANUARY 24, 2014  |  VOLUME 14, ISSUE #1 - WEEK #1

As the first week of the 2014 Kansas Legislative Session got underway, KAPA-KRMCA was just finishing up the 47th Annual Joint Convention in Overland Park, KS. The Associations were excited to have Governor Sam Brownback address industry members at the KAPA-KRMCA Annual Joint Convention’s Governmental Affairs Luncheon last Friday, January 17. In his address, Brownback briefed members on the current state of the economy in Kansas. He talked about transportation and the importance it plays in the economic status of the state as well as general safety initiatives that have proved to be successful. With an all-time low in 2013 for fatalities on Kansas’ Roads this has shown that continuing a transportation program even beyond the current T-Works, does make a difference.

Prior to Governor Brownback’s address, attendees had the opportunity to communicate one-on-one with the Kansas Department of Transportation in the popular “KDOT Q&A” Session. KDOT Deputy Secretary Jerry Younger addressed members and they also received an update on the new Specification V Manual changes that will be implemented very soon.

Other convention highlights included NASCAR Racer Jennifer Jo Cobb who spoke at the Sportsman’s Breakfast, Futurist Garry Golden at the Kick-Off Luncheon, beneficial networking during the Trade Show, and of course a plethora of valuable information at the Breakout Businessmeetings and General Sessions.
KAPA-KRMCA appreciates all the support that was shown by the attendees. Sponsors for the Annual Welcome Night Gala are especially appreciated as this event wouldn’t be possible without your support.
As stated earlier, Amanda and I returned to the office just as this year's Legislative session was getting underway. It appears everyone is doing well and gearing up for another successful year. This edition of In The Mix is the first in our series of legislative reports that will be sent weekly or as required during the session. The 2014 session of the Kansas Legislature convened on Monday, January 13. On Wednesday, January 15, Governor Brownback gave his fourth State of the State address, outlining his priorities for 2014, which were surprisingly tame considering some of his previous efforts. The only real initiative was his proposal to fund all-day Kindergarten. All in all, it appears he is concentrating on consolidating past gains and preparing for a reelection campaign.

School Finance vs. Transportation will continue to be the five hundred pound gorilla lurking in the back of the room as the session continues to adjournment. Everywhere we go there is a great deal of speculation as to when the Supreme Court will hand down its decision on Gannon v. State of Kansas case. Some estimate it could cost the state over $400 million in additional K-12 funding. If so, this will have tremendous ramification in T Works funding as the only place to go, without raising taxes, is the State Highway Fund. A $400 million hit would effectively decimate the program. Be sure to make yours concerns about Transportation funding the number one priority when visiting with your legislators.

With a two year budget already passed in the last session, your elected representatives are not finding much to do; however there is some activity gearing up in the halls of government, here is a rundown of where our issues are at:

Sales Tax Definition (HB 2378), the association sponsored sales tax bill continues to be in play. At the end of the 2013 session the House/Senate Tax Conference Committee amended HB 2378 our sales tax definition bill into HB 2060. Unfortunately, due to the extended wrangle between the House and Senate over taxation, the session finished with no action taken on the measure. HB 2378 is now in the Senate Assessment & Taxation committee. We will be in contact with the chair soon to get a hearing set on the bill. The bill seeks to codify the sales tax exemption on machinery and equipment used in the aggregate production.

After being absent for several sessions, River Dredging returned to the forefront with the introduction of SB 300. SB 300, introduced in Senate Natural Resources at the request of Sen. Marci Francisco (D-Lawrence) raises the royalty fee for removal of sand from state rivers from $.15 per ton to $.30 per ton. We will be in touch with the committee chair Sen. Larry Powell (R-Garden City) upon his return from the Republican Convention next week to see if he has any plans for the bill.

Both Lien Bills (SB 93 & HB 2173) carried over from last session remain in committee. We are expecting some activity on the issue this year as AGC has indicated they will be working on it in a recent newsletter and they have hired new lobbyists. The lien bills are important to our industry as they reduce the time to file a lien from 120 days to 21 days. We will be following any activity and keep you posted.

We also understand that AGC will be sponsoring a bill establishing a State Occupational Safety & Health Administration. If successful, this would establish a state agency in charge of OSHA law rather than the US Department of Labor. The bill has not been introduced. If introduced perhaps AGC’s focus will shift to it and we can possibly help them. Anything to keep their mind off of liens will do.

During the last session the House Taxation committee passed out, on a voice vote, HB 2285 the Machinery & Equipment Property Tax Definition bill. It is still on the House floor where it is being kept below the line (not eligible for debate). It has been apparent that enthusiasm for this bill is weak as many legislators are concerned about the property tax shifts contained in the bill. The Senate bill seeks to codify the intent of the 2006 Legislature, which overwhelmingly passed legislation exempting business machinery and equipment from personal property taxes. A bill is considered needed to resolve the adverse appraisals rendered in Montgomery and Neosho counties. Now several groups are scrambling to come up with alternate measures. Among them is HB 2456, sponsored by Ash Grove Cement, this bill would define personal vs real property as used in the cement industry. A hearing has been scheduled for next Thursday, January 30th in House Taxation. We also understand Sen. Jeff King (R- Independence) has a forthcoming bill in Senate Tax Committee, which sets up a statewide appraisal process for complex properties. The Coffeyville Refinery case, which triggered all of this activity, originated in his district. Another bill, also said to be in the works, is a measure sponsored by the Kansas Chamber of Commerce & Industry to codify existed Kansas Department of Revenue guidance and rules used in property valuation.

Late last session SB 227, enacting the Kansas Explosives Safety act, was introduced at the request of the State Fire Marshal. We were successful in getting this bill stopped. However we understand, a new form of the bill will be introduced by the fire marshal later this month. Your board considered an alternate association draft at its meeting last week. We are still working on this with the Heartland Chapter of ISEE and will keep you updated.

Bill Watcher: The following bills are currently being monitored by the association, clicking on the bill number will take you to the Kansas Legislative website for the latest information and status on the bill.

SB 93 - Civil Procedure: remote claims on commercial property; state construction registry.

SB 227 – Enacting the Kansas explosives safety act.

SB 234 - Sales tax exemption for sales of certain machinery and equipment used for surface mining activities.

SB 300 -Increasing the compensation rate for river sand.

HB 2173 - Civil Procedure: remote claims on commercial property; state construction registry.

HB 2285 - Defining "commercial" and "industrial" machinery and equipment

HB2378 - Sales tax exemption for sales of certain machinery and equipment used for surface mining activities.

HB 2456 - Defining “commercial” and “industrial” machinery and equipment for property tax purposes.



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