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Stimulus Update
On Wednesday, March 4, Chris Whatley with the Council of State Governments appeared before the Senate Ways and Means Committee to review the impact of the American Recovery and Reinvestment Act of 2009 (federal stimulus) on Kansas. Whatley reviewed the background of the legislation, funding opportunities, and legislative priorities resulting from the passage of the stimulus.

The state of Kansas is eligible for over $1.27 billion in federal funding through FY 2011 and additional assistance could result through competitive grants. Up to $1.75 billion in total funding is available to Kansas. The state will receive over $483 million, through 2010, in flexible funding to supplant current state spending for Medicaid and the fiscal stabilization fund for education. Of the $483 million, 90 percent of the funds will go to Medicaid and the remaining will be put toward assisting with education funding.

Guidelines are still being formed but funding is included in the stimulus bill to hold state education funding steady. The Recovery Act requires states to appropriate no less than what was allocated for FY 2006 for education. Once stimulus money is accepted by a state, that money must be used to bring education funds back to FY 2008 or FY 2009 levels, whichever is higher.

To supplement current state formula funding, Kansas may receive over $1.27 billion for transportation, education, and other formula based programs. Additional funding opportunities are available for unemployment and energy efficiency, but both come with strings attached.

Included in the stimulus bill are the provisions of the Unemployment Modernization Act which requires states to make permanent changes to their unemployment standards. Specific details have yet to be released by the Department of Labor but this provision has resulted in several Governors refusing to accept unemployment funding. For states who abide by the modernization requirements, $68 million in funding is available for unemployment.

Kansas can get an additional $40 million in the form of energy efficiency grants if the state adopts a utility rate system that encourages energy conservation and implements energy efficiency standards in building codes while holding utility companies harmless for loss of revenue resulting from reduced energy rates.

Over $100 billion in competitive grant opportunities are available for states to apply for consideration of funds. However, there are more than 30 different grant categories with the largest amount dedicated to education incentive grants. The details are few, the programs are scattered, the requirements are confusing, and the impact of some programs will not be felt until after the expiration of the Recovery Act. Full guidelines for the grants are supposed to be posted at www.grants.gov by March 19.

One of the most problematic issues surrounding the stimulus package is the role of the legislature in the distribution of funds. Transportation dollars are required to be allocated by March 10 and the stimulus package is mute on the role of the legislatures. However, governors are given the power to handle certifications and requirements in distributing funds. This has caused a large amount of executive, legislative tension since several states require the legislature to allocate funding through appropriations to comply with the state constitution. Idaho, Maine, North Dakota, and Wisconsin have established procedures for legislative review or to appropriate stimulus funding. Governors have responded by issuing executive orders or by appointing “czars” to oversee the distribution of stimulus funds.

February Revenue Report

For the month of February, tax only revenues came in $12 million below projections. Revised consensus revenue estimates predicted tax receipts of approximately $251 million for February but the actual amount collected was $239 million.

Revised estimates predicted receipts from November 2008 to February 2009 would total $1.690 billion. However, the actual receipts for those four months were 1.5 percent below expectations with $1.665 billion collected.

For FY 2009, total receipts from July through February were $24.7 million below estimates. Tax only receipts for the fiscal year, through February, show collections below the same period in FY 2008 by $133.6 million. Tax only receipts through February are $82 million below expectations for the current fiscal year. Compensating use, retail sales, and liquor enforcement taxes exceeded the projections by more than $1 million. However, corporation income, severance, individual income, estate, insurance premiums, financial institutions, motor carriers, and cigarette taxes all fell below estimates by more than $1 million. The greatest disparities came from corporation income taxes, severance taxes, and individual income taxes which failed to meet projections by $60.1 million, $12.5 million, and $10.8 million respectively.

Deadline for bills to be out of committee
ALL BILLS must be passed out of committee and read into the Senate by the end of session on Friday, March 20.

SB 49- Mental Health and Alcoholism
SB 49 amends the Kansas Mental Health Parity Act to require health insurance policies to provide the same benefits for treatment of alcoholism, drug abuse, or other substance abuse disorders which are provided for mental health treatment. SB 49 passed 40 to 0 on Thursday, March 5.

SB 108- Economic Revitalization and Reinvestment Act
SB 108 amends the Economic Revitalization and Reinvestment Act by expanding the definition of an eligible aviation business and including wind or solar energy manufacturing businesses as eligible for benefits. Currently, aviation businesses must pay an average annual gross Kansas compensation of $300 million in order to be eligible to receive benefits under the Act. The bill expands the eligibility for aviation businesses so that those with an annual average gross Kansas compensation of at least $150 million can qualify for benefits.

The bill also allows wind or solar energy manufacturing businesses to qualify for the provisions in the Act if they are classified by the North American Industrial Classification System as being in the manufacturing sector and pay an average annual compensation minimum of $32,500 per employee. Projects performed by the energy companies must have a minimum cost investment in Kansas of $30 million and have at least 200 full-time employees within five years. If approved, the Secretary of Commerce must request that the Kansas Development Finance Authority (KDFA) issue bonds not exceeding $5 million for the single, eligible wind or solar energy project. SB 108 sets the statutory deadline for project approval as July 1, 2013.

In 2003, the Economic Revitalization and Reinvestment Act was approved by the Legislature to encourage product development and engineering for new jobs and manufactured projects in Kansas. The fiscal note estimates a $350,000 reduction to the State General Fund in FY 2010 if the bill is passed.

SB 108 was approved 40 to 0 on Thursday, March 5.

SB 147- HIV Screening for Pregnant Women and Newborn Children
SB 147 requires a physician or other authorized professional to administer HIV screenings for pregnant women and newborn children. The screening would take place during the first trimester of a pregnancy unless a woman decides to opt-out of the procedure. If deemed high risk for acquiring HIV, a second screening would be performed during the third trimester or at the time of labor and delivery. At any time, a pregnant woman has the right to refuse HIV screening.

If the mother’s HIV status is unknown because the mother did not submit to HIV screening while pregnant, the newborn would be screened for HIV once the child is suitable for testing after birth. Parental consent is not required to administer the HIV test but exceptions do exist to account for religious beliefs.

The Department of Health and Environment estimates 4,400 women would be eligible for HIV screening assistance at an approximate annual cost of $17,000. SB 147 was approved 37 to 3 on Thursday, March 5.

SB 153- Regulation of KCC Motor Vehicles
SB 153 amends existing law regarding carriers required to get a certificate, license, permit or file information with the Kansas Corporation Commission (KCC). Several definitions are amended to allow for the exemption of motor vehicles that do not meet the definition of a commercial motor vehicle. The bill has no fiscal note. SB 153 was approved 40 to 0 on Thursday, March 5.

SB 174- Group Life Insurance Requirements
SB 174 amends the governing policy requirements for group life insurers by deleting specific participation percentages required for covered employees in existing group life policies. Currently, group life insurance premiums are paid by the policyholder. The bill allows policy premiums to be paid by the policyholder, the insured employee, or both and deletes the requirement that group life policies must cover a certain number of individuals on the date of issuance. In addition, the limitation of coverage for dependents under an employee’s group life insurance is increased from 50 to 100 percent in the bill.

SB 174 was approved 40 to 0 on Thursday, March 5.

SB 253- Zoning
SB 253 modifies zoning regulations in all cities and counties. Currently, a planning commission must approve, by a simple majority, the rezoning proposal and recommend it to the governing body who can only override the decision of the commission by a two-thirds majority vote. The bill, on rezoning proposals for mining operations, requires a simple majority vote by the governing body instead of a two-thirds vote.

The bill also exempts mining operations from rezoning protest petitions that require a three-fourths majority vote from the governing body and instead requires a simple majority vote. In current law, a protest petition prohibits the governing body from approving a rezoning amendment unless three-fourths of the governing body votes in favor of the petition.

SB 253 has no fiscal note. SB 253 was approved 32 to 8 on Thursday, March 5.

SB 275- Implements of Husbandry
SB 275 amends the definition of a “non-highway vehicle” to exclude implements of husbandry from the definition. Also excluded in the bill are farm tractors from certificate of title provisions and notices of security interest on certificates of title.

Implements of husbandry are defined to mean vehicles designed or adapted and exclusively used for agricultural purposes. These vehicles are rarely moved or operated on highways. SB 275 was approved 40 to 0 on Thursday, March 6.

S. Sub. for Sub. HB 2014- Energy Conservation and Electric Generation
HB 2014 (S. Sub. for Sub.) creates new law involving energy efficiency standards of state-owned and leased spaces and equipment, amends law authorizing large electric cooperatives to be deregulated under certain situations, creates renewable energy standards, enacts the Net Metering and Easy Connection Act, and amends portions of the Kansas Air Quality Act concerning the decisions and powers of the Secretary of Health and Environment.

Energy Efficiency
The bill requires the Secretary of Administration to develop rules and regulations to:

• Establish energy efficiency guidelines for state agencies regarding the purchase of products and equipment and requires the purchases to be as energy efficient as similar Energy Star ® products if it is cost effective to do so;
• Establish energy efficiency standards for state-owned and leased property and to collect data on energy consumption at these properties and submit an annual report to the Legislature which identifies properties that use an excessive amount of energy; and
• Develop energy efficiency performance standards for state buildings under construction that are at least the levels specified by the American Society of Heating Refrigeration and Air-Conditioning Engineers or the International Energy Conservation Code.

Deregulation of Large Electric Cooperatives
The bill allows large electric cooperatives to remove themselves from the regulatory rate jurisdiction of the KCC. The deregulation option is expanded in the bill to cover electric cooperatives with over 15,000 members who mainly sell retail power, limited liability companies/corporations who provide wholesale electric service and who are owned by at least four electric cooperatives that provide retail service in Kansas, and any member-owned corporation formed before 2004.

For generation and transmission cooperatives that decide to deregulate, a petition must be signed by a minimum of 20 percent of the cooperative’s membership or five percent of the cooperative’s retail customers in order to have the KCC review a rate charge. Also, cooperatives who opt to deregulate must notify their customers of their right to request a review of rate charge by the KCC.

Renewable Energy Standards
HB 2014 requires electric public utilities, except electric utilities owned by municipalities, to generate or purchase specified amounts of electricity produced from renewable resources. For each public utility, the nameplate capacity of the renewable generation facilities included in the utility’s portfolio must be at least:

• 10 percent of the 2009, 2010, and 2011 calendar year’s three year peak load average by 2013
• 15 percent of the three year average peak load by 2017
• 20 percent of the three year average peak load by 2021

Net Metering and Easy Connection Act
The bill creates the Net Metering and Easy Connection Act and amends the parallel generation statute. The Act requires any municipal electric utility, electric cooperative, or electric public utility to make net metering available to customer-generators under specific conditions.

In the Act, customer-generators are given the opportunity to utilize the parallel generation statute or the Net Metering Act. If a supplier provides the customer-generator with more power during a billing period than what is produced by the customer-generator, the customer will be billed for the net amount supplied by the supplier. If the electricity produced by the customer-generator in a billing period is more than the amount provided by the supplier, the customer will be billed for applicable customer or demand charges, or both. Excess electricity generated by the customer for a billing period will be retained by the supplier to help recover the fixed costs associated with providing electric service to the customer.

Customer-generators are limited to using equipment with the maximum capacity of 100 kilowatts. The generating equipment of the customer-generators must meet specified standards. If the meter equipment does not meet the requirements, the customer-generator may be charged by the retail electric supplier for the purchase and installation of additional equipment. In instances where the damages to property or persons is caused by the customer-generators generation unit, the supplier cannot be held liable unless clear and convincing evidence shows the supplier is at fault.

Kansas Air Quality Act Amendments
HB 2014 prohibits the Secretary of Health and Environment from approving rules and regulation that are more rigorous than what is required by the federal Clean Air Act. The Secretary is also banned from denying or delaying the issuance of a permit required by the State Act if the requirements of the Act have been met by the applicant. If requested by the applicant, the Secretary is required to reconsider an action on a permit filed after January 1, 2006 if the permit is still pending administrative or judicial review. Applications for reconsideration must be filed within 60 days of the effective date of the bill and gives the Secretary 15 days to act on the request. If the Secretary fails to act within 15 days, the party can seek a writ of mandamus from the Court of Appeals.

Procedures to handle air pollution emissions that pose an imminent and substantial danger to public health, welfare, or the environment are to be established with passage of HB 2014. The Secretary of Health and Environment is authorized to issue a temporary order directing the owner or operation or the pollution source to take necessary steps to prevent or eliminate the offending act or practice. With the issuance of the temporary order, the Secretary must file and action in district court detailing the violation. The Secretary can opt to request the Attorney General or the appropriate county or district attorney to file an injunction in lieu of the temporary order. If the Secretary can prove a violation exists, the court can issue a temporary or permanent injunction.

On Thursday, March 5 the Senate debated S. Sub. for Sub. HB 2014. During the floor debate the following amendments were attached to the bill:

• Include a fuel economy requirement for State vehicles purchased in 2011;
• Create a process for determining and certifying that equipment used to generate wind in Kansas also was manufactured in Kansas;
• Base renewable energy standards on peak retail load; Require the Joint Committee on Energy and Environmental Policy to conduct a two-year study and make recommendations regarding expenditure of federal stimulus funds for energy efficiency and related purposes;
• Authorize KETA to charge fees to beneficiaries of certain services it provides and to clarify the KETA Act regarding inclusion of KETA projects in the plans of the Southwest Power Pool;
• Establish a timeframe for KCC action on certificates of convenience;
• Amend current law regarding underground hydrocarbon storage wells;
• Enact the Compressed Air Energy Storage Act;
• Create access by municipal and cooperative electric utilities to new baseload electric generation capacity;
• Create a requirement for certain electricity generation plants to purchase Kansas coal; and
• Create the Kansas Energy Resources Commission.

HB 2147- Removal of Vehicles from the Highway
HB 2147 requires the driver or owner of a vehicle involved in a non-injury, non-fatal accident to make a reasonable effort to move the vehicle out of the roadway if the vehicle can be safely removed without causing damage to the vehicle, roadway, other vehicles, or persons. Violators of the bill would receive a warning until July 1, 2010. After July 1, 2010, those who do not comply will be fined $60.

The fiscal note from the Department of Transportation estimates approximately $47,360 will be needed from the State Highway Fund for signage and educational pamphlets. In addition, the Department believes an increase in expenditure authority is needed for agency operations from the State Highway Fund. No estimate of the revenue generated from the fine is available.

HB 2147 was approved 40 to 0 on Thursday, March 5.

Agriculture
On Tuesday, March 3, the Senate Agriculture Committee met to continue work on SB 256 regarding the pesticide safety education fee fund. The committee continues to work on SB 231, proposing the transfer which of powers and duties of the animal health department and the state conservation commission to the Department of Agriculture.

Assessment and Taxation
On Wednesday, March 4, the Senate Assessment and Taxation Committee held a hearing on HB 2079 regarding sales tax refunds on certain purchases of machinery and equipment. HB 2172 on permanently excluding certain cash rebates on sales or leases of new motor vehicles from sales taxes received a committee hearing on Thursday, March 5.

Commerce
The Senate Commerce Committee held hearings on SR 1828 a resolution urging the Kansas Congressional Delegation to oppose legislation that removes the right of workers to have a private ballot for union elections and SB 258 which proposes to raise the cap on workers compensation benefit caps.

SB 108, SR 1828, and HB 2142 all passed favorable out of the Committee. SB 108 was debated and passed in the Senate by a vote of 40 to 0 on Thursday, March 5. SR 1828 and HB 2142 are up for consideration by the Senate.

Education
This week the Senate Education Committee held hearings on HB 2003 on the determination of enrollment with military children, HB 2007 about waving undergraduate and graduate fees and tuition at state educational institutions, HB 2197 regarding admission standards of state educational institutions, HB 2003 pertaining to the update in terminology in the funding formula for career and technical education, and SB 290 on including teachers at the schools for the deaf and blind under the professional negotiation act.

Ethics and Elections
The Senate Ethics and Elections Committee met on Wednesday, March 4 and Thursday, March 5, to conduct hearings on SB 267 regarding voter identification brought forth by the Secretary of State’s Office and HB 2158 concerning the Kansas Highway Patrol and allowing officers to hold elective and appointed offices.

Federal and State Affairs
The Federal and State Affairs Committee held hearings on a variety of bills this week including HB 2085 on the service eligibility requirements of the Veterans Claims Assistance Program, SB 75 concerning the consolidation and reorganization of political and taxing subdivisions, and SB 54 proposing a mural recognizing Brown v. Board of Education in the statehouse.

The following bills were favorably passed out of the committee and are now up for consideration by the Senate: SB 223 on the subpoena authority of the Emergency Medical Services Board, SB 262 concerning the scope of practice by certain emergency medical services attendants, HB 2068 regarding the licensure of real estate brokers and salespersons; Sub for HB 2339 pertaining to the licensure of certified public accountants, SB 212 about the shipment of wines, and SB 213 on the consumption of alcohol in public places.

SB 76 failed to pass out of the committee on Thursday, March 5. The bill proposed allowing certain retailers to sell full strength beer.

Financial Institutions and Insurance>
This week the Senate Financial Institutions and Insurance Committee held hearings on HB 2185 regarding the reciprocal deposit program, SB 260 on the recovery of loss for uninsured motor vehicles, HB 2092 proposing to prohibit transfer fee covenants, and HB 2091 concerning the exemption of modular homes for the Kansas Manufacturing Housing Act.

On Wednesday, March 4, Michael Tanner with the CATO Institute gave a presentation on Health Care Reform to the committee.

Judiciary
The Senate Judiciary Committee had another busy week holding hearings on a variety of bills including; SB 277 pertaining to funding the Recodification Commission from Judicial Council funds, SB 272 concerning release procedures for those deemed incompetent to stand trial, SB 92 and SB 94 regarding children in need of care.

On Wednesday, March 4, the Senate Judiciary Committee voted to send SB 208 to the interim for further study. However, on Thursday, March 5, on a motion to reconsider, the committee voted 6 to 5 to favorably pass the bill out of committee. Also, passed out of the Judiciary Committee was SB 278 creating the Kansas Highway Safety Commission. Both bills are now up for consideration by the Senate.

Local Government
The Senate Local Government Committee held hearings on SB 198 regarding the creation of a consolidation commission to study the reduction of counties in Kansas, SB 271 concerning increasing the bidding threshold for certain counties, and SB 257 pertaining to the requirements of public improvements by cities outside of city limits.

Committee discussion continued on SB 144 regarding blanket easements, SB 253 about zoning amendments, and SB 254 on the subject of urban area counties.

SB 257 and SB 254 passed favorably out of committee and are up for consideration by the Senate.

Natural Resources
The Senate Natural Resources Committee met on Thursday, March 5 and Friday, March 6 to continue work on SB 184 regarding the Surface Owner Notice Act and to hold hearings on SCR 1610 encouraging the Environmental Protection Agency to authorize higher blends of ethanol and HB 2050 adjusting water rights fees.

Public Health and Welfare
On Monday, March 2, an informational briefing on Health Information Technology and Health Information Exchanges and the Impact of the federal stimulus was held by the Senate Public Health and Welfare Committee. The committee held a second information briefing on Tuesday, March 3 on the topic of Medical Debt.

In addition, hearings were held on HB 2221 regarding the disclosure of certain child care information, HB 2297 on loan programs for postgraduate geriatric medicine training for the KU Medical School, and HB 2162 concerning the educational requirements for marriage and family therapists and fees for psychologist applications.

Transportation
This week the Senate Transportation Committee continued discussion and work on the Comprehensive Transportation Plan. On Wednesday, March 4, the committee held hearings on SB 274, enacting the Kansas Scenic and Heritage Backroads Act and HB 2023 on enforcement of KCC orders for motor carriers.

The committee held hearings on HB 2130 authorizing the Support Kansas Arts license plate, HB 2131 concerning disabled veterans license plates, and HB 2134 exempting In God We Trust license plates from startup fees on Thursday, March 5. Also, Secretary Deb Miller provided the committee with a report of the Department of Transportation’s plans for transportation projects funded by the Federal Stimulus.

On Friday, March 6, Mike Johnston, President and CEO of the Kansas Turnpike Authority provided an overview of the Authority. In addition, Mark Chinery, President of Concrete Pipe Resources, Inc. gave a presentation on the Kansas Reinforced Concrete Pipe Manufacturing Industry.

Utilities
On Monday, March 2, the Senate Utilities Committee conducted hearings on SB 217 concerning the Retail Suppliers Act and state education institutions authorized to enter into certain energy generation agreements.

Presentations were given on electric rates by David Springe with CURB and on the federal stimulus package energy and rate making requirements by Joe Harkins, Commissioner of the Kansas Corporation Commission.

Ways and Means
This week the Senate Ways and Means Committee continued receiving subcommittee reports for the fiscal year 2010 budget. On Wednesday, March 4, Chris Whatley with the Council of State Governments presented an overview of federal stimulus funds to the committee. The committee also participated in a video conference on the federal stimulus package with the National Council of State Legislators on Friday, March 6.

In addition, hearings were held on SB 21 pertaining to the special capital outlay levy for insurance and utility services for school districts and SB 204 concerning the disposition of food safety and lodging moneys.

The committee passed SB 196 pertaining to reemployment after retirement and SB 93 about the membership of the Joint Committee on Special Claims Against the State. Both bills are up for consideration by the Senate.