2022 POLICY WATCH No. 5 February 4, 2022

Kansas Rural Center

Legislative Policy Watch

Issue No. 5, February 4, 2022

Legislative Policy Watch is a weekly online publication of the Kansas Rural Center (KRC) during the State of Kansas legislative session. KRC is a private, non-profit organization that promotes the long term health of the land and its people, through education, research and advocacy that advance an ecologically sound, economically viable, and socially just agriculture.

Policy Watch is produced by Paul Johnson, KRC Policy Analyst, pdjohnson@centurylink.net,

and Mary Fund, Editor, ksrc@rainbowtel.net

2022 Co-Sponsors

www.lwvk.org

League of Women Voters of Kansas

Kansas Natural Resource Council

Climate & Energy Project

www.climateandenergy.org

Kansas Farmers Union

www.kansasfarmersunion.com

Audubon of Kansas

www.audubonofkansas.org

Friends of the Kaw

www.kansasriver.org

Learn More about

KRC

www.kansasruralcenter.org

Kansas Legislature Website

For Legislative Committee and Hearing Information,

and how to contact your legislator, and viewing remotely, go to:

http://www.kslegislature.org/li/

THE REAL REDISTRICTING BATTLE BEGINS

Governor Kelly has vetoed the gerrymandered ‘Ad Astra 2’ map passed by the Republican dominated legislature, setting up a vote to override. The Governor issued her statement on Thursday stating that the Legislature ignored its own redistricting criteria that called for preserving the voting power of minority communities and protecting communities of interest. She also stated she is prepared to work with the Legislature in a bipartisan manner to pass a new Congressional map that addresses the Constitutional issues the map presents. It will take a vote of 84 Kansas House members and 27 Kansas Senators for an override. An override of her veto ensures court challenges will quickly follow.

Kansas House or Kansas Senate specific redistricting maps have not yet been presented. The House and Senate Redistricting committees have not been holding hearings yet on the state legislative redistricting maps.

https://www.cjonline.com/story/news/politics/elections/2022/02/03/laura-kelly-rejects-kansas-gop-authored-congressional-maps-redistricting-sharice-davids/6655705001/

HOUSING LEGISLATION PROPOSED

The Kansas Legislature is considering several housing initiatives. Senator Rob Olson has introduced three housing bills to be considered in the Senate Federal and State Affairs committee. The Governor proposed putting $20 million into the Moderate-Income Housing program administered by the state’s housing agency – Kansas Housing Resources Corporation (KHRC). The annual contribution for this program has been $2 million the last few years. The Governor’s Statewide Housing Needs Assessment - by consulting firm RDG of Omaha and the Office of Rural Prosperity in the Kansas Department of Commerce - should be unveiled soon. This report will have the latest demographic data on housing in Kansas and should provide policy recommendations from best practices by other states.

Senate Bill 369 concerns taxation and establishes the Kansas affordable housing tax credit providing a tax credit for ‘qualified low-income housing projects’. Kansas is given a certain quota of federal low-income housing tax credits provided by Section 42 of the federal internal revenue code. This bill would provide Kansas income tax credits to coincide with the federal low-income housing tax credits allocated. The program will be administered through the Kansas Department of Revenue.

KHRC will submit a written report to the Kansas Legislature before December 31 specifying the number of qualified developments and the total number of units supported by each development. KHRC will provide housing market and demographic information that show how the developments address the need for affordable housing in that community and the remaining disparities in the affordability of housing within that community.

Senate Bill 375 concerns economic development and enacts the Kansas housing tax credit act. This bill provides an income tax or privilege tax credit for the development of residential dwellings and apartment buildings in underserved rural and urban communities to accommodate new employees and facilitate economic growth.

To qualify a city must have less than 70,000 in population and a county with a population under 75,000. This program will be administered by the Kansas Department of Commerce Secretary. The Secretary is authorized to award tax credits for qualified housing projects to be issued to qualified investors who make cash investments in such qualified housing projects. The total amount of tax credits shall not exceed $18 million annually and may be carried over to award in succeeding fiscal years. On January 31, 2023, the Secretary shall transmit a report to the Governor and key economic development committees in the Kansas Legislature. This report will have an estimate of jobs facilitated by housing developed through such investments.

Senate Bill 376 concerns economic development relating to housing by establishing Kansas rural housing incentive districts and expanding the use of bond proceeds to include construction of residential dwellings, multi-family units and buildings in rural areas and in the city of Topeka. This bill expands the availability of loans or grants for moderate-income housing. City is defined as the City of Topeka or a population count under 60,000. County is defined as having a population under 80,000.

Housing development activities means the construction or rehabilitation of infrastructure necessary to support construction of new residential dwellings. The Kansas Department of Commerce Secretary will administer this program and KHRC shall report on the activities of the State Housing Trust Fund to the budget committees in the Kansas Legislature. On July 1, 2022 and July 1, 2023, $20 million will be transferred from the Economic Development Initiatives Fund (EDIF – lottery receipts) to the State Housing Trust Fund. 75% of the State Housing Trust Funds will be dedicated to rural areas and 25% to urban areas.

LEGISLATIVE FOOD & FARM BRIEFS

The raw milk dairy bill – SB 346 – was amended in the Senate Agriculture and Natural Resources committee and passed out. It now sits on General Orders for a Senate floor debate. The label was changed from ‘This product contains raw milk that is not pasteurized and could contain bacteria that may cause foodborne illness’ to either ‘Raw Milk’ or ‘Unpasteurized’.

This bill removes the prohibitions for off-farm advertising. Raw milk can only be sold at the farm. The sunset date on various milk and dairy fees was moved from 2023 to 2028. This bill would also subject processors that choose to import milk into Kansas to the same fees as in-state processors. The bill adds ‘other dairy products’ to include such imported Grade A milk to the list of milk inspected by KDA. The dairy inspection fee is lowered from $0.1 to $.0075 because of the fees from imported milk. This bill allows KDA’s Secretary to declare an imminent health hazard when necessary to protect the public health and allow KDA to assess a civil penalty for certain violations.

Food Sales tax bills remain in committee. Read more at: https://kansasreflector.com/2022/02/01/senate-panels-debate-on-ending-kansas-food-sales-tax-focuses-on-finances/

WHO CONTROLS KANSAS’ LARGEST ELECTRIC UTILITY (EVERGY)?

On November 12, 2021, Public Citizen and the Communications Workers of America (CWA) filed a joint protest petition at the Federal Energy Regulatory Commission (FERC) over EVERGY’s affiliation with Elliott Management and Bluescape Energy Partners. EVERGY is Kansas’ largest electric utility. Four of EVERGY’s thirteen board members were selected by these hedge funds. For the record, board members are paid $100,000 in cash and $140,000 in stock yearly by the ratepayers.

The new EVERGY Board of Directors’ Finance Committee was amended by Bluescape’s agreement with EVERGY. The Finance Committee is charged under its charter with sweeping authorities governing all EVERGY’s business operations including to review matters relating to the financial condition, financial plans, and financial strategies of the Company. There are five board members on the Finance Committee. Four of these members are from Elliott Management and Bluescape.

EVERGY failed in its October 22 response to FERC to document the extensive history of collaboration between Elliott Management and Bluescape. In January 2020, Elliott Management sent a letter to EVERGY demanding governance and operational changes. Elliott owned approximately 10.5 million shares worth about $637 million. EVERGY acquiesced to Elliott’s demand for $8.9 billion in selective rate base investments. Rate base investment should be driven by consumer demand for technological improvement and system maintenance requirements rather than an acquiescence to short-term, profit oriented demands of select investors. CWA’s research showed that utility companies targeted by Elliott Management paid increasing costs of capital while companies in the same sector that were not targeted by Elliott paid decreasing costs.

This protest petition demands that FERC must compel EVERGY to turn over all formal written agreements between Elliott Management and Bluescape Energy Partners related to their mutual investment in EVERGY. Elliott Management owns 23% of Peabody (coal) Energy’s outstanding common stock. In 2019, the year prior to Elliott’s intervention, EVERGY bought 4,191,109 tons of coal from Peabody. In 2020, - the year of Elliott’s intervention -, coal sales from Peabody to EVERGY increased to 5,996,647 tons. In 2021 up to August, Peabody sold 3,118,031 tons of coal to EVERGY.

Sophisticated financial firms like Elliott Management and Bluescape Energy Partners routinely employ the use of complex financial instruments, including various types of derivatives, to amplify their influence in target companies beyond directly owning voting shares. Derivatives are typically unregulated by the U.S. Securities and Exchange Commission for purposes of tracking ownership of public companies. FERC must act to ensure ‘just and reasonable electric rates’ by classifying Elliott Management and Bluescape Energy Partners as affiliates of EVERGY.

ENERGY & RENEWABLES UPDATE

Hearings were held on SB 323 week of Jan. 24 in Senate Utilities Committee. SB 323 would require lease agreements for wind and solar developers to meet what several opponents called unreasonable requirements that would in effect discourage private leasing and shut down development. Proponents primarily focused on the need to protect people who don't want to live near wind or solar development.

No further action yet.

Senate Utility Committee held hearings on SB 325 Jan. 25 & 27. SB 325 would require unzoned counties to have industrial zoning to host wind or solar arrays. About 60 counties are unzoned in Kansas. The bill would make it nearly impossible for a landowner to enter into a private contract to host such development. It also provided for a protest petition option if 10% of qualified voters with land contiguous to leased land wanting to protest the development of wind or solar arrays. Even neutral parties testified that while they supported the property rights of adjoining but nonparticipating landowners, they had serious concerns about mandating county zoning and other ramifications of that. Also, more than one conferee saw serious confusion in the petition option. Opponents argued that the bill effectively stops private individuals right to lease, mandates a potentially expensive planning and zoning process for counties, and effectively stops renewable energy development in the state. No further action yet.

Read Ks. Sierra Club’s Testimony SB 323:

http://kslegislature.org/li/b2021_22/committees/ctte_s_utils_1/misc_documents/download_testimony/ctte_s_utils_1_20220126_12_testimony.html

Ks. Sierra Club testimony on SB 325

http://kslegislature.org/li/b2021_22/committees/ctte_s_loc_govt_1/misc_documents/download_testimony/ctte_s_loc_govt_1_20220127_05_testimony.html

ENERGY BILLS TO WATCH:

SB 353 - Establishing certain setback and construction requirements for wind energy facilities and certain operating conditions for existing wind energy facilities. This bill would stop wind development in KS. It requires setbacks of 10 times the turbine height or 5,280 feet, whichever is greater, from non-participating landowners, public buildings, airport, federal wildlife refuge, public hunting or public park. Bill sponsor Senate Utilities Committee.

Hearings are set for: Weds. Feb. 9 (1:30 p.m. Room 548 S) Proponents and Thursday Feb. 10 same time/place) Opponents. (These hearings follow informational briefings in the same committee on Monday and Tuesday Feb. 7 & 8 on “Assessing Adverse Health Effects from Industrial Wind Turbines Noise Emissions” )

HB 2488 - Establishing the EV energy equity road repair tax act and providing for a road repair tax on electricity distributed from a public charging station for electric vehicles. 3 cents per KWh would be the assessed tax. Introduced by Representative Bill Riley (R-Wellington). Referred to Committee on Transportation. No hearing has been set.

SB 383 - Establishing the Kansas property value protection act to provide for compensation to nonparticipating landowners near wind and solar farms for diminution of real property value under certain conditions. Bill sponsor Senate Utilities Committee. No hearing has been set.

SB 374 - Discontinuing the property tax exemption for new developments of renewable energy resources. Introduced by Senator Mike Thompson. Bill sponsor Senate Committee on Federal and State Affairs. Referred to Committee on Assessment and Taxation. No hearing has been set.

HEARINGS Week of February 7

Note: Calendars are set by committee chair discretion so are subject to change. Check the daily calendar at http://kslegislature.org/li/b2021_22/chamber/calendars/

Hearings are also available remotely. See http://www.kslegislature.org/li/ Go to Audio/Video broadcast box on right side of page.

HOUSE

House Agriculture Committee 3:30 p.m. Room 112-N

Monday Feb. 7 State of Kansas Food System Informational Briefing by Ks. Food and Farm

Coalition

Tues. Feb. 8 Kansas Healthy Food Initiative – Presentation

House Energy, Utility & Transportation Committee 9 a.m. Room 582-N

Tues. Feb. 8 Advanced Energy Sources, Presentations by Savion, Kansas Power Alliance,

& Good Energy

House Commerce, Labor and Economic Development Committee 1:30 p.m. 346-S

SB 347 Monday Feb. 7 Establishing the Economic Expansion Act (allowing certain tax and incentives for business expansion)

House Elections Committee 3:30 p.m. Room 218-N

Tues. Feb. 8 Presentation on Elections Overview by Sec. of State Schwab

HB 2486 Thurs. Feb. 10 Addressing several election issues with electronic voting

HB 2555 Thurs. Feb. 10 Requiring county election officers to confirm addresses of those with no election related activity for 4 years.

SENATE

Senate Utility Committee 1:30 p.m. Room 548-S

Monday Feb. 7 and Tuesday Feb. 8

Informational Hearings on “Assessing Adverse Health Effects from Industrial Wind Turbine Noise Emissions”

SB 353 Weds. Feb. 9 (Proponents) & 10^th (Opponents). Establishing setbacks and construction requirements for wind facilities.

Senate Federal & State Affairs Committee 10:30 a.m. Room 144-S

SB 375 Monday Feb. 7 Enacting the Kansas housing tax credit act

SB 376 Monday Feb. 7 Establishing Kansas rural housing incentive districts and expanding the use of bond proceeds to include construction of residential dwellings, multi-family units and buildings in rural area

SB 369 Weds. Feb. 9 Establishes the Kansas affordable housing tax credit providing a tax credit for ‘qualified low-income housing projects’.

SB 388 Thurs. Feb. 10 Requiring use of US Postal Service for return of advanced ballot by mail

SB 389 Thurs. Feb. 10 Requiring all voting systems for elections to use individual voter-verified paper ballots

Senate Agriculture and Natural Resources Com. 8:30 a.m. Room 144-S

Budget Hearings all week for KDWP, KDA and KDHE

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