Week of March 15 - 19,2010 Issue 11

This past week committees ended hearing and working bills. Several times a house bill was inserted into a Senate bill (the Gut and Go process). This maneuver assures movement of the bill however, I think the disguise requires members to pay closer attention to the contents of every bill. They are identified by the title: House substitute for SB___. Another frequently used procedure is to reintroduce a bill with the motion to Concur or non-Concur. If leadership agrees to the amendment made by the Senate, the motion will be to concur and a vote will be taken. On the other hand, if leadership does not like the changes, the motion is to non-concur resulting in the creation of a Conference Committee (3 House members assigned by the Speaker: by Committee topic, the Chairman, Vice Chairman and Ranking Minority and 3 Senate members selected in a similar manner). The six meet to negotiate the differences and submit the report to both Chambers. The report is debated but not amended before voting.

In the HOUSE

Bills that passed unanimously:

SB 508: concerning discount cards filed with Secretary of State
SB369: relating to open records act
SB386: concerning criminal procedures; inspections, certification of forensic exams; interactive videos for child witnesses
SB437: relating to filing requirements for resident agents with Secretary of State
SB439: relating to Kansas Register publication of notices electronically
SB441: relating to merger of limited partnerships
SB458: concerning crimes; punishment and criminal procedures
SB541: concerning number of appeals court judges (increase by 1 in 2014)
SB262: concerning emergency medical services; titles and scope of practice
SB387: concerning certain claims against the state
SB414: concerning the health care stabilization fund
SB491: concerning respiratory therapists licensure; special permits
SB500: concerning healing arts act; use of titles/degrees
SB513: concerning alternative project delivery building construction procurement act; to include district hospitals

Bills with fewer than 5 nay votes for which I voted yes

HB2463: creates legislative commission to study Kansas tax policies
HB2520: adopting the federal definition of ‘willfully’ as related to taxation
HB2621: concerning electronic filing of tax returns
HB2689: allows voter approved increase of county sales tax in Pottawatome and Kingman counties
SB430: tax credits for historic preservation projects; angel tax credits
SB415: regarding local government investments of bond proceeds into obligations guaranteed by U.S. government
SB475: regarding funeral director licensure

Bills passed; my vote explained

HB2519: relating to compliance with streamline tax compact. I voted YES because being a member of the compact has resulted in the voluntary collection of 30 to 36 million dollars in sales taxes.
HB2521: repeals unused or underused tax credits. I voted YES because we need to utilize the process of reviewing and eliminating tax credits and/or sales tax exemptions rather than granting these in perpetuity. SB463: allows Norton County to have a bond indebtedness limit of 30% of assessed value of tangible taxable property. I voted YES because two other counties have been granted this limit.
HB2729: creates an energy district; issuance of bonds by county; voluntary participation by district residents. I voted YES because this mechanism fosters communitywide participation in conservation through a financial incentive. SB544: expands the definition of metropolitan to 90 miles. I voted YES to this legislation which helps the Topeka public transit system expand in ways that other public transit systems already do.

Bills previously passed by the House; amended by the Senate; return to the House for a vote to concur

These bills are HB2415; HB2418; HB2468; HB2547.

I would like to share what happened to HB2549 that eliminates certain sales tax exemptions and fund raising sales. The bill was carried by Rep. Jeff King, Vice Chairman of the Taxation Committee. He proceeded to introduce four amendments:
Amendment #1: strike churches from list. Passed: 119-0.
Amendment #2: strike lottery, bingo from list. Passed: 121-0.
Amendment #3: to strike residential utilities from list. Passed: 120-0
Amendment #4: to strike all except coin-operated laundry machines. Passed:121-0
Motion made by Rep. Nile Dillmore to postpone action on HB2549 until May 3, 2010. Motion passed by a vote of 64-57. I voted YES because we need to leave all sources of revenue on the table until such time that we have a budget presented.

A draft budget prepared by the Appropriations Committee was distributed this week. It will be debated next week. The newspaper reports have described the major cuts to K-12 education as well as other programs.

My Committee Activities

Taxation

HB2695: concerning vacant lot property that a county wants to bid off for delinquent taxes and special assessment. During the hearing the sponsor described the need to sell vacant lots after one year (currently two years) to collect property taxes. The disruption of development during these economic times presents challenges to cities and counties.

HB2709: relating to determination of Kansas adjusted gross income (income tax returns); certain excess employer social security taxes paid on employee cash tips are deducted from federal gross income or taken as a tax credit. This is a complex topic with employer and employee contributions at the tip wage ($2.13/hr)level; tips to realize the minimum wage ($7.25/hr) for which both contribute to Social Security taxes; on excess tips the employer pays both the employer and employee Social security taxes (for federal purposes, the paid taxes on excess tips are a business expense) deducted from gross income or a tax credit; a deduction reduces federal gross income but cannot be a deduction on the Kansas return or taken as a tax credit to reduce tax liability. While the contributions to the Social Security account of the employee are important, I don’t know how easily this entire topic can be tracked. I hope you were able to follow my summary.

HB2740: relating to amnesty from assessment or payment of penalty and interest with respect to certain taxes due prior to December, 2009. This amnesty bill, sponsored by Rep. Marvin Kleeb, focuses on individuals or small business owners who fail to file income taxes. It was modeled on a similar bill passed in 2003. He contends that in 6 months (July-Dec, 2010) $10 million could be collected at a cost of $ 925,700 thereby a net gain in revenue of over 9 million dollars. Since then the Dept. of Revenue has a Collections team that aggressively pursues payment of delinquent taxes, Secretary Wagnon indicated that collected revenues would be less than anticipated. Going throughout the state to identify non-filers would have less return for effort than the collection team negotiating settlements with known delinquent taxpayers. Payment of taxes would likely be by installment plan (not in full) and thus such payments may not be credited to the 2011 fiscal year.

HB2687 relating to income tax refunds; penalties. This bill, sponsored by Arlen Siegfreid, adds a penalty of 1 percent to a delayed payment of a refund due to overpayment of taxes after Dec. 2009. This monthly penalty would be capped at 24 months. The working of this bill led to an understanding of how the state handles refunds. For paper returns, processing of the return leading to a refund may take up to two months. For electronic returns, refunds are made within a week. If the refund is mailed after two months, interest (currently the rate is 8 percent) is paid retroactively to April 15. This penalty proposal would be activated on June 15 (raising the total interest return to 9 percent). The motion to insert HB2687 into SB 429 and pass out of committee FAILED. I voted NO because the state’s payment of interest on refunds (currently 8 percent) seems sufficient. Taxpayers should be made aware of the interest paid by the state when refunds are delayed beyond 60 days.

SB100 exempting from sales tax any fees or charges for participation in guided and non-guided hunts; sales of game birds. This bill was heard but not worked. I learned a sales tax would yield nearly $500,000 in additional revenue.

HB2578 (passed out of Committee and passed by the House) is now identified as H substitute for SB312.

HB2689 (passed out of Committee and passed by the House) is now identified as H substitute for SB255.

Health & Human Services

HB2288 was inserted into SB249 and is now identified as H substitute for SB249. This bill enacts healthcare price transparency. During the hearings, several pointed out the complexity and limitations of healthcare pricing. After 40 minutes of working the bill, the motion to pass the bill out of committee FAILED. I voted NO because I was convinced that this statute, as written, is too general and does nothing about controlling the costs of medical care.

HB2575 was inserted into SB83 and is now identified as H substitute for SB83. This bill was passed out of committee and passed by the House. The Senate added an amendment and passed the amended bill.

HB2590 was inserted into SB44 and is now identified as H substitute for SB44. This bill prohibits the repair, maintenance or inspection of medical gas piping systems by persons who are not licensed or meet qualifications for city or county certification. City or county also set minimum qualifications for medical gas installers.

HB2610: enacts the medical marijuana act for the legal use of marijuana for certain debilitating medical conditions, providing for the registration and functions of compassion centers; issuance of identification cards; administered by Dept of Health and Environment. This was an informational presentation (not a hearing) with a number of persons testifying on the need for legal access. The benefits for alleviating pain and other symptoms were described by several participants.

SB447 concerns the licensure of family child care homes in Kansas and for the elimination of the category: registered facilities; requiring all family child care homes to be licensed. At this hearing we heard about frequency of inspections (currently licensed facilities are inspected annually). To inspect the 2600 currently registered facilities will take 3 years during which time self evaluations would be submitted by facilities currently licensed. There were many specifics discussed: provider qualifications, licensure of providers, provider education and risk assessment measures. We heard from parent consumers as well as a licensed provider. The hearing was not closed and may be resumed next week if schedules allow.

Aging & Long Term Care

HB2673 creates a provider assessment tax on all licensed beds within skilled nursing care facilities in Kansas; establishes the Kansas Health Policy Authority (KHPA) as the state agency to calculate and implement/establish a Quality Care Fund where all tax and penalties collected through this assessment program would be deposited; establishes a Quality Care Improvement Plan. Exempted from this tax are the Kansas Soldiers Home and Kansas Veteran’s Home. I do NOT support this bill. The minimum annual tax per bed is currently set at $1335 which will generate over 30 million dollars as the state match to draw about 70 million dollars creating a Quality Care Fund with 100 million dollars (the maximum could be as high as $2550 per bed per year). In committee, I argued that such an added charge would hasten the depletion of assets in the private pay group and push more residents onto Medicaid. While the current federal match is 70 percent, this will revert to 60 percent or, in my opinion, even less in the not too distant future. The assessments would be due quarterly and a delinquent penalty of the $500 or 2% of the assessment per day (the lesser amount); no refunds for reducing the bed number; and there is no guarantee that a facility will have increased reimbursement to offset this expenditure (the formula requires that there be winners and losers). I am not confident that the Fund would not be swept should a shortfall in State revenues occur. This year the state match for Medicaid was cut 10 percent with the accompanying loss of federal match. I do not think that this type of need is limited to 2010. The depletion of assets last year prompted the passage of legislation the permits transfer of life insurance to the state to cover cost of skilled nursing care. The cost of living longer will become increasingly more important to Baby Boomers who are pursuing healthy life styles, expect quality services and find asset preservation a challenge.

Economic Development & Tourism

HB2616 concerns revisions to the Kansas professional regulated sports act (martial arts); pertaining to violations, civil penalties, fees, rules and regulations as well as the powers of the state’s Athletic Commission. All revenues (violation fines, fees on gross receipts) would be credited to the Athletic Fee Fund (previously 20% ($ 25,000) went to State General Fund. This bill passed out of committee by voice vote.

Upcoming Events

While in Overland Park next weekend, on Saturday I will be speaking at the Eggs & Issues breakfast sponsored by the Overland Park Chamber. At 10 a.m. I will be at the Matt Ross Community Center to participate in the community forum organized by Senator Owens.

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As always, you can contact me by e-mail (dfurtado08@gmail.com ) or by phone (913-341-3072) or in Topeka (785-296-7677). You can leave a comment on the web page: www.doloresfurtado.org