May 22, 2006

Sebelius signs tax check-off for military families
Governor called for measure to help military families in State of the State address

Kansans will be able to help military families in need simply by checking a box on their tax returns as a result of a measure signed into law by Governor Kathleen Sebelius today.

Sebelius called for the military families tax check-off in her State of the State address earlier this year.

“Kansas has a long, proud military tradition, and Kansans are strong supporters of our military men and women. Now, every Kansan will have the option of assisting military families in need simply by checking a box on his or her tax return,” said Sebelius. “This is a great way for us to say ‘thank you’ to the men and women who defend our nation.”

Proceeds will be used for helping military families defray the costs of food, housing, utilities and medical services incurred when a member is on active military duty.

SB 432 also allows income tax credits for employers who hire returning members of the Kansas Army and Air National Guard or members of a Kansas reserve unit who were federally activated and deployed after August 7, 1990. Due to the parameters of this bill, it only applies with a new hire and not to someone previously working for the employer.

The bill Sebelius signed today includes also includes a check-off for breast cancer research and a doubling of the adoption tax credit.

“Kansans will be able to support research into this deadly disease simply by checking a box,” said Sebelius, referring to the research at the University of Kansas Cancer Center that will be supported through this check-off.

“Additionally, the doubling of the adoption tax credit will encourage loving families to bring adopted children into their homes, which will help more children find caring parents,” said Sebelius.

The bill enhances the current Kansas income tax credit for certain adoption expenses beginning in tax year 2006 by increasing the state credit to 50% (currently 25%) of the federal credit for adoptions of children who are Kansas residents and to 75% of the federal credit for adoptions of special needs children who are Kansas residents, and allows taxpayers to carry forward unused portions of the tax credit for more than five years.

The bill, which contains several other tax-related provisions, will take effect after publication in the statute book.

In addition, Governor Sebelius signed six other bills into law today. During the 2006 Legislative session, the Governor has signed 203 bills and vetoed four. She will sign the removal of the property tax on business machinery and equipment later this afternoon, in Wichita.

Phase-out of Kansas estate tax

SB 365 de-couples the Kansas estate tax from federal tax law, effective for the estates of decedents dying on and after January 1, 2007. Estates valued at $1 million and below would be exempt from the tax. For tax year 2007, rates would range from 3 to 10 percent. For tax year 2008, rates would range from 1 to 7 percent. And for tax year 2009, rates would range from 0.5 to 3 percent. The tax would sunset, effective for the estates of decedents dying on and after January 1, 2010. This bill will take effect on January 1, 2007 after publication in the statute book.

Increasing the Rural Business Development Tax Credit and the Kansas Community Entrepreneurship Tax Credit

SB 324 increases the Rural Business Development Tax Credit and the Kansas Community Entrepreneurship Tax Credit from 50% to 75%, not to exceed $2 million, applicable to all taxable years beginning after December 31, 2004. The bill moves the Kansas Community Entrepreneurship Fund to the Kansas Center for Entrepreneurship and allows the Fund to receive contributions of cash or property other than used clothing in an amount or value of $250 or more. The Center would be permitted to create a revolving loan fund. The bill also changes the eminent domain requirements for tax increment financing (TIF) and sales tax and revenue (STAR) bond statutes to require that any property acquired by use of eminent domain that is sold, transferred or leased to a developer for a specific redevelopment project could only be used for that specific approved project. Any transfer by the redevelopment project developer of property acquired by eminent domain would require a two-thirds majority vote of the elected governing body of the city. Finally, the bill would also require the Department of Commerce to provide workforce training to every older adult Kansan who qualifies for the training programs. The Secretary of Commerce is directed to prepare a strategic plan in coordination with the Area Agencies on Aging and the Older Kansans Employment Program, and present it to the Legislature by August 1, 2006. This will take effect after publication in the statute book.

New sales tax exemptions for several organizations

SB 404 enacts a variety of new sales tax exemptions for: Special Olympics Kansas, Inc.; certain dietary supplements purchased pursuant to prescription orders issued by licensed or mid-level practitioners; organizations exempt from federal income taxation pursuant to Section 501(c)(3) of the Internal Revenue Code; TLC for Children and Families; Catholic Charities; Youthville; certain homeless shelters; Community Housing of Wyandotte County, Inc.; Cross-Lines Cooperative Council; the Lyme Association of Greater Kansas City, Inc.; the Kansas Specialty Dog Service, Inc.; the DreamsWork, Inc.; the Marillac Center, Inc.; the West Sedgwick County-Sunrise Rotary Club and Sunrise Charitable Fund; cash rebates granted by a manufacturer to a purchaser or lessee of a new motor vehicle; county law libraries; the Kansas Children’s Service League; certain purchases by nonprofit museums; and public libraries. The bill also expands the food sales tax rebate program by providing that the rebate amounts be indexed for inflation beginning in tax year 2006. This will take effect after publication in the statute book.

Establishing the Water Supply Storage Assurance Fund in the Kansas Water Office

SB 503 permanently creates the Water Supply Storage Assurance Fund in the Kansas Water Office, allowing for expenditures for the following purposes: payment to the federal government for the annual capital costs of water storage in federal reservoirs; payment and reimbursement to the Water Marketing Fund, State General Fund, or State Water Plan Fund for water supply storage space for which payment was previously paid; payment to the federal government for annual operations, maintenance and repair costs associated with water supply storage space; and payment and reimbursement to the Water Marketing Fund and the State General Fund for costs incurred by the state for the administration of the Water Assurance Program. The bill also requires KWO to place one stream flow measurement device on the Smoky Hill River below the dam on Cedar Bluff Reservoir. This bill will take effect after publication in the statute book.

Revising the Kansas Code for Care of Children

HB 2352 revises the Kansas Code for Care of Children. Major provisions include: disability of a parent would not constitute a basis for a determination that a child is in need of care or for termination of parental rights; complying with the Federal Adoption and Safe Families Act to continue receiving federal funds; new provisions related to permanency planning to assure delays are avoided to ensure the development of healthy emotional relationships; and technical and organizational changes. This bill will take effect on January 1, 2007 after publication in the statute book.

Restoring uniformity to local sales tax provisions

SB 55 restores uniformity to local sales tax provisions relating to cities by reducing the number of classes of cities to one. All cities in that class would be granted authority to levy sales taxes of up to 2% for general purposes and up to 1% for special purposes, for a maximum rate of 3%. Any special purpose taxes levied would be required to sunset after 10 years. Sales taxes imposed by cities as of July 1, 2006 would remain in effect. Additionally, cities not levying development excise taxes as of January 1, 2006, would be prohibited from doing so. Cities already levying such taxes on that date would be prohibited from increasing the tax rates without having the proposed increases approved via elections. All cities would be granted authority to levy excise taxes on tickets for admissions to concerts, theatrical performances, sports contests, or other similar performances which occur on property owned by the cities. This will effect after publication in the statute book.