SESSION OF 2023
SUPPLEMENTAL NOTE ON HOUSE BILL NO. 2275
As Recommended by House Committee on
Commerce, Labor and Economic Development
Brief*
HB 2275 would make several changes to a tax credit
available for certain purchases from qualifying vendors
employing individuals with disabilities. Changes would include
naming the credit, modifying the duration and extent of the
credit, expanding the definition of “individuals with
disabilities,” and restructuring and expanding the definition of
“qualified vendor” from whom purchases may be made.
Name Change
The provisions of the tax credit would be named the
Disability Employment Act (Act).
Duration and Extent of Credit
The bill would eliminate the provision specifying the
credit to expire after tax year 2023. The bill would provide for
a cap on the aggregate amount of credits under the Act to be
$5.0 million in tax years 2019 through 2023, $10.0 million in
tax years 2024 through 2028, and $10.0 million for each
successive five tax years starting in tax year 2029.
Individuals with Disabilities Definition
The bill would expand the definition of “individuals with
disabilities” to include individuals who are certified by a
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org healthcare provider, as determined by the Department of
Revenue, who can substantiate an individual as having a
physical or mental impairment that constitutes a substantial
barrier to employment. The bill would also eliminate a
requirement that individuals with disabilities work a minimum
number of hours per week to qualify for health insurance
coverage.
Qualified Vendor Definition
The bill would provide for three options by which an
entity may qualify as a qualified vendor:
●A not-for-profit business qualifying as a certified
business pursuant to KSA 75-3740 that:
○Does business primarily in Kansas or
substantially all of its production in Kansas;
○Employs at least 30.0 percent of its
employees in an integrated setting;
○Offers to contribute at least 75.0 percent of
the premium cost for health insurance
coverage for each eligible employee; and
○Does not employ individuals under a
certificate issued by the U.S. Secretary of
Labor under 29 U.S. Code section 214(c).
●A qualified vendor pursuant to KSA 75-3317 that:
○Employs at least 30.0 percent of its
employees in an integrated setting;
○Offers to contribute at least 75.0 percent of
the premium cost for health insurance
coverage for each eligible employee, offers a
company-sponsored insurance plan under the
Affordable Care Act, pays the required
subsidy to the Internal Revenue Service for
employees to purchase insurance through the
open market, or offers assistance to
2- 2275 employees to cover at least 75.0 percent of
their health insurance costs through legal and
appropriate methodology; and
○Does not employ individuals under a
certificate issued by the U.S. Secretary of
Labor under 29 U.S. Code section 214(c).
●A division of a Kansas not-for-profit organization
that:
○Does business primarily in Kansas or
substantially all of its production in Kansas;
○Within such division, employs at least 30.0
percent of its employees in an integrated
setting;
○Within such division, offers to contribute at
least 75.0 percent of the premium cost for
health insurance coverage for each eligible
employee, offers a company-sponsored
insurance plan under the Affordable Care Act,
pays the required subsidy to the Internal
Revenue Service for employees to purchase
insurance through the open market, or offers
assistance to employees to cover at least
75.0 percent of their health insurance costs
through legal and appropriate methodology;
and
○Within such division, does not employ
individuals under a certificate issued by the
U.S. Secretary of Labor under 29 U.S. Code
section 214(c).
Current law limits qualified vendors to not-for-profit
businesses qualifying as certified businesses pursuant to
KSA 75-3740 and qualified vendors pursuant to KSA 75-3317
and prohibits any employment by the vendor under a
certificate issued by the U.S. Secretary of Labor under 29
U.S. Code section 214(c).
3- 2275 Background
The bill was introduced by the House Committee on
Commerce, Labor and Economic Development at the request
of Representative Mason.
House Committee on Commerce, Labor and Economic
Development
In the House Committee hearing, proponent testimony
was provided by representatives of Cerebral Palsy Research
Foundation of Kansas, Goodwill Industries of Kansas, and
Interhab. The proponents generally stated the bill would
extend and expand a program that helps facilitate
employment opportunities for individuals with disabilities who
would otherwise likely be dependent on public support.
Written-only proponent testimony was provided by
Representative Mason and representatives of Envision, Multi
Community Diversified Services, and the Wichita Regional
Chamber of Commerce.
Opponent testimony was provided by representatives of
Disability Rights Center of Kansas, Kansas Council on
Developmental Disabilities, and the Self Advocate Coalition of
Kansas. The opponents generally stated changes in the bill
would extend the benefits of the tax credit to organizations
who pay less than minimum wages to individuals with
disabilities.
Written-only opponent testimony was provided by
representatives of the Self Advocate Coalition of Kansas and
a private citizen.
Fiscal Information
According to the fiscal note prepared by the Division of
the Budget on the bill, the Department of Revenue estimates
4- 2275 enactment of the bill would reduce state revenues by
approximately $500,000 per year beginning in fiscal year
2025. Any fiscal effect associated with the bill is not reflected
in The FY 2024 Governor’s Budget Report.
Taxation; income tax; tax credit; Disability Employment Act
5- 2275