Jill's Journal

June 29, 2009

Lenexa Community Days Parade---July 4, 10am

You can tell by the weather, if not the calendar, that the 4th of July is approaching!  Once again, I’ll be in the parade and supporters will be passing out fans and candy along the route.  If you are willing to brave the weather to walk in the Lenexa parade with me, simply reply to this email and I’ll get back to you with details. It’s a good way to get your exercise, see friends, and help me at the same time.  There will be t-shirts for you to wear and plenty of water to keep you hydrated!  Hope you’ll join me!

‘09 BUSINESS & ECONOMIC DEVELOPMENT LAWS

This newsletter summarizes some of the legislation passed during the 2009 legislative session that impacts business and economic development.  For more details on any of these bills, go to www.kslegislature.org and enter the bill number in the Quick Search, Full Text of Bills section.  I supported each of these bills.

State Minimum Wage 

SB 160 increases the state’s minimum wage from $2.65 an hour to $7.25. The wage increase takes effect on January 1, 2010.  Employees and employers covered under the federal Fair Labor Standards Act are still exempt from this law as is current practice.  (Details on the minimum wage issue can be found in my March 9th, 17th, and 30th newsletters on-line at www.jillquigley.com).

Unemployment Insurance Compensation 

By making three changes in our unemployment law, HB 2374 gives the State an additional $69.0 million dollars from American Reinvestment and Recovery Act (ARRA)/stimulus funds. 

• The first change allows use of an alternate wage base period when calculating benefits. Under current law, claimants must use the first four of the last five completed calendar quarters, ignoring the last completed quarter or lag quarter, in determining benefits. The new law will allow claimants to use the last four completed quarters including the most recent quarter, thus, eliminating the lag quarter provision. Claimants can calculate benefits using either methodology and choose the option that provides the greater benefit.  (According to the Department of Labor, the original wage base period calculation was necessary when unemployment compensation applications were processed by hand; modern techniques eliminate the need for delays and lag quarters.)  This modification allows the State to access $23.0 million in ARRA/stimulus funding.

• The second change puts into statute the current Department of Labor’s practice of allowing traditional part-time workers to claim part-time unemployment insurance compensation benefits, assuming they would be otherwise qualified to receive benefits. Since this is current practice there is no added cost to the State. 

• The third change provides extended benefits for the unemployed who are in training programs.  Those persons who are otherwise qualified to receive unemployment compensation and are enrolled in a state-approved training program, a shared work program, or a job training program authorized under the Workforce Investment Act of 1998 can receive an additional 26 weeks of unemployment insurance coverage. The job training programs will be managed by the Department of Commerce.  Kansas currently provides a maximum of 26 weeks of coverage for individuals enrolled in approved training programs. 

The last two changes qualify Kansas for an additional $46.0 million dollars in ARRA. 

NEW PROGRAMS

Community Investment District Act

HB 2324 creates a new economic development finance tool.  CIDs can be used to finance capital improvements, infrastructure, and certain operational costs. Projects may be funded by the use of special obligation bonds, full faith and credit bonds, or on a pay-as-you-go basis. 

The bill authorizes a city or county to create a CID after receiving a petition that is signed by either: 

• all landowners within the proposed district who seek financing solely by assessment and not by the issuance of full faith and credit bonds. If all landowners petition for a CID, then the city or county may proceed with its creation and assessments without notice or hearing; or 
• more than 55 percent of the landowners within the proposed district and also signed by landowners collectively owning more than 55 percent of the assessed value of the land area within the proposed district. If this second petition method is utilized, then a city or county must give public notice of a hearing concerning the creation and financing of the CID. 

Under the second petition method, the bill allows for funding to come from any combination of the following means: 

• Special assessments, either paid in full or by installments;  
• A CID sales tax, in any increment of 0.1 percent or 0.25 percent, that may not exceed 2 percent. Collected by the Department of Revenue, revenue from this sales tax would go either for the repayment of bonds or on a pay-as-you-go basis.  If bonds are repaid, the CID sales tax would expire no later than the date the bonds matured. On a pay-as-you-go basis, the sales tax would expire 22 years after the date the sales taxis levied or when the pay-as-you-go costs have been paid; 
• A city or county’s ad valorem taxing authority for the repayment of full faith and credit bonds; or
•  Any other funds appropriated by the governing body. 

The Department of Revenue will retain 2 percent of the sales tax revenue collected within all CIDs, up to a maximum of $60,000, to be used for the administration of the program. 

Promoting Employment Across Kansas Act (PEAK) 

SB 97 authorizes a diversion of employee withholding taxes under certain circumstances to “qualified” companies.  Qualified companies include those that have: 

• closed down an existing business entity outside the state,
• relocated the entity in Kansas, and 
• made available to full-time employees adequate health insurance for which the companies will pay at least 50 percent of the premiums. 

Companies meeting these requirements also will be able to qualify if they have contracted with third parties to perform services as the legal employer of newly relocated employees. Business entities that do not qualify include:

• certain industry groups and sectors (including bioscience companies, gambling entities, religious organizations, retailers, and utilities),
•  companies delinquent in payment of non-protested taxes to any governmental entity,
• companies which have filed for bankruptcy or announced their intention to do so, and
• companies participating in other withholding tax diversion programs. 

A company re-locating in a metropolitan county (Douglas, Johnson, Sedgwick, Shawnee, or Wyandotte) that, within two years, hires at least 10 new employees at 100% of the average county wage can retain 95% of new employee withholding taxes for five to seven years.  A company re-locating in a non-metropolitan county must meet the same requirements except it must hire five new employees within two years.

Regardless of location, certain “high-impact” projects where at least 100 new employees are hired within five years can qualify for withholding tax diversions of 95% for seven to 10 years, provided such employees are compensated at a rate equal to at least 100% of the county average wage.

 Qualified companies will submit applications for the revenue-diversion program to the Secretary of Commerce. 

REVISIONS TO CURRENT LAW

Economic Revitalization and Reinvestment Act ---Includes Wind and Solar

SB 108 revises the Economic Revitalization and Reinvestment Act by expanding the definition of an eligible aviation business and by allowing wind or solar energy manufacturing businesses to qualify for benefits. The bill defines an eligible wind or solar energy business as a person or entity that is engaged in the wind or solar energy manufacturing industry in Kansas and satisfies other conditions stipulated by the Secretary of the Department of Commerce which may include: 

•  Pay a minimum of $32,500 of average annual compensation per Kansas employee; and 
•  Classified by the North American Industrial Classification System as being in the manufacturing sector. 

An eligible wind or solar energy project is defined as a project relating to the research, development, engineering, or manufacturing of a business component or product for either the wind or solar energy industries.An eligible project must invest a minimum of $30 million of the proposed project costs in Kansas. The project also has to employ a minimum of 200 full-time employees within five years. 

Once a project’s application is approved, the Secretary of Commerce will request the Kansas Development Finance Authority (KDFA) to issue bonds not to exceed $5 million for a single eligible wind or solar energy project.  No new project could be approved after July 1, 2013.

Investment in Major Projects and Comprehensive Training Program  (IMPACT)

Background information:  The IMPACT program (within the Department of Commerce) is designed to respond to the training and capital requirements of major business expansions and locations in the state. Under certain circumstances, IMPACT may also be used for job retention projects. IMPACT has two major components: SKILL (State of Kansas Investments in Lifelong Learning) and MPI (Major Project Investment). SKILL funds may be used to pay for expenses related to training a new, and under certain instances, an existing workforce. MPI funds may be used for other expenses related to the project, such as the purchase or relocation of equipment, labor recruitment, or building costs.

IMPACT costs are financed through tax exempt, public purpose bonds issued by the Kansas Development Finance Authority. These bonds are retired through the revenue received from statewide employer withholding taxes.

 SB 120 allows program costs under the IMPACT Program to include wages for new or retained employees during education or retraining. 

OF INTEREST TO SPECIFIC PROFESSIONS

Board of Technical Professions  

SB 29 amends the Board of Technical Professions statute to:

• expand the issuance of a certificate of authorization to any business entity which includes corporations, limited liability companies and partnerships, corporate partnerships, or any other legal entities created by law,
• allow the Board to issue intern certificates for geologists, engineers, and land surveyors,
• clarify the definition of “land surveying” to include planning; mapping; and locating or laying out of alignments, positions, or elevations for the construction of engineering or architectural works,
• change the renewal cycle for a certificate of authorization to a two year cycle, 
• allow the Board to develop rules and regulations exempting persons from continuing education requirements for license renewal or reinstatement, and
• allow the Board to use other disciplinary options that are less severe than suspension or revocation of a license of a business entity. 

Real Estate Brokers and Salespersons  

HB 2068 amends the Kansas Real Estate Brokers’ and Salespersons’ License Act by:

• changing the definition of “office” to include any permanent location where one or more licensee(s) regularly conduct(s) real estate business,
• authorizing the Kansas Real Estate Commission to designate a course of study to fulfill any specific education requirements,
• allowing  the Commission to pursue disciplinary action for violations of the Act even if a licensee is not engaged in a real estate transaction,
• authorizing the Commission to expand the list of persons who could be subject to threats or are the victims of physical abuse or harassment from a licensee,
• allowing another broker to act as a supervising broker or branch broker when the license of an existing supervising broker or branch broker is either voluntarily or involuntarily deactivated. If another broker is not authorized to act as a supervising broker or branch broker, then all licensees supervised by the deactivated supervising broker or branch broker must be returned to the Commission within five days. 

Trades and Crafts—Continuing Education 

HB 2142 deals with the licensure and continuing education requirements of certain trades and crafts, such as plumbers, electricians, and mechanical heating, ventilation and air conditioning contractors by cities and counties.

Current law required not less than 12 hours biennially of continuing education. This bill specifies that the hours be taken six hours annually. Further, there must be not less than six hours biennially or three hours annually of code education. Such education can be provided by an expanded list of educational providers to include community colleges, technical schools, technical colleges, or any other approved provider. Cities and counties will not be able to impose restrictions on the number of continuing education providers. 

Certified Public Accountants 

Sub. for 2339 deals with certified public accountants (CPAs) regarding two main issues, namely (1) powers of the Board of Accountancy, and (2) the mobility of practice privilege for CPAs which would allow out-of-state CPAs to practice in Kansas without having to be individually licensed. 

JILL’S ACTIVITIES:

Women in Government Conference on Healthcare Information Technology in Chicago addressing stimulus money available for HIT, electronic health records, privacy issues, and systems currently in place.  There are great resources at the Institute for e-Health Policy and The Healthcare Information and Management Systems Society (HIMSS).  Leaders in implementation of electronic health records include Multicare Health Systems in Tacoma, WA and the systems associated with the Indiana-based Regenstrief Institute.  Google any of these for more information.

Women in Government 16th Annual Midwestern Regional Conference in Chicago with presentations on health (telemedicine, barriers to health, health literacy, adolescent well visits, rheumatoid arthritis, endometriosis), the economy (Midwest forecast, stimulus money) and other topics (wind energy, leadership, domestic violence). 

I’m home until January so contact me with questions or comments at:

jill@jillquigley.com

Home phone:  913-541-9645

Legislative Hotline number:  800-432-3924

Representing you,

Jill Quigley

Representative 17th House District

Lenexa and Shawnee 

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