Session of 2023
HOUSE BILL No. 2334
By Committee on Commerce, Labor and Economic Development
2-7
AN ACT concerning economic development; relating to the attracting
powerful economic expansion act; extending the deadlines for project
agreements under the act; enhancing incentives for qualified suppliers
by providing for up to 10% of refundable tax credits for up to 10 years
and increasing the training reimbursement to up to $500,000 per year
for five years; adding an employee relocation reimbursement incentive
for qualified suppliers of up to $250,000 per supplier per year; limiting
the corporate income tax rate reduction to only two rate reductions;
permitting qualified firms and qualified suppliers to participate in other
economic development programs for new projects; amending K.S.A.
2022 Supp. 74-50,312, 74-50,313, 74-50,317, 74-50,321, 74-50,322
and 74-50,323 and repealing the existing sections; also repealing
K.S.A. 2022 Supp. 74-50,324.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 2022 Supp. 74-50,312 is hereby amended to read as
follows: 74-50,312. (a) There is hereby established the attracting powerful
economic expansion program to be administered by the secretary of
commerce. The purpose of the attracting powerful economic expansion
program is to attract large capital investments by businesses engaged in
specified industries in new business facilities and operations in Kansas, or
large capital investments in new national headquarters in Kansas by any
business, and to encourage the development of a Kansas-based supply
chain for such large enterprises.
(b) A qualified firm that makes a qualified business facility
investment of at least $1,000,000,000 in a qualified business facility
pursuant to the requirements of this act may be eligible for the following
incentives as approved by the secretary:
(1) The investment tax credit pursuant to K.S.A. 2022 Supp. 74-
50,313, and amendments thereto;
(2) reimbursement of a percentage of total payroll, pursuant to K.S.A.
2022 Supp. 74-50,315 and 74-50,316, and amendments thereto;
(3) reimbursement of a percentage of eligible employee training and
education expense pursuant to K.S.A. 2022 Supp. 74-50,317 and 74-
50,318, and amendments thereto;
(4) a sales tax exemption for construction costs of the qualified
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business facility pursuant to K.S.A. 79-3606, and amendments thereto, and
K.S.A. 2022 Supp. 74-50,319, and amendments thereto; and
(5) reimbursement of a percentage of relocation expenses and
incentives for relocation of employees to Kansas pursuant to K.S.A. 2022
Supp. 74-50,322 and 74-50,323, and amendments thereto.
(c) To be eligible to receive an incentive listed in subsection (b), a
qualified firm shall meet the requirements of this act, including any
requirements or provisions specific to each such incentive, and any rules
and regulations of the secretary pursuant to this act and shall:
(1) Submit an application to the secretary in the form and manner
prescribed by the secretary and including all information as required by the
secretary;
(2) if requested by the secretary, prior to making a commitment to
invest in a qualified business facility, submit a certificate of intent to invest
in the qualified business facility to the secretary in the form and manner
required by the secretary, including, if requested by the secretary, a date
investment will commence;
(3) commit to a qualified business investment of at least
$1,000,000,000 in the qualified business facility to be completed within
five years of the commitment to invest on such date specified in the
agreement pursuant to paragraph (5);
(4) complete the project and commence commercial operations within
five years of either the commitment to invest or the date of the agreement
with the secretary made pursuant to this section, as designated by the
secretary and on such date as specified in the agreement pursuant to
paragraph (5);
(5) if the application is approved by the secretary, enter into a binding
agreement with the secretary with such terms and conditions as required
by the secretary and including the commitments required by this act. The
agreement shall be entered into before any benefits may be provided under
this act. The agreement shall be subject to the approval of the state finance
council as provided in subsection (e). The secretary shall not enter into an
agreement with more than one qualified firm in calendar year 2022 and
shall not enter into an agreement with more than one qualified firm in
calendar year 2023. The secretary shall not enter into an agreement with
more than one qualified firm in calendar year 2024. The secretary shall
not enter into an agreement with any qualified firm after December 31,
2023 2024 and shall not enter into an agreement with any qualified
supplier after May 1, 2025;
(6) obtain and submit a bond to the secretary if required as follows:
The secretary shall determine a minimum investment grade rating
requirement for each project of a qualified firm seeking benefits under this
act. In determining the minimum investment grade rating, the secretary
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shall consider the aspects of the qualified firm and the qualified business
facility or project and shall consult ratings from three nationally
recognized rating agencies selected by the secretary that provide
investment grade ratings. A qualifying firm or qualifying business facility
that does not meet the minimum investment grade rating determined by the
secretary shall obtain and submit a bond in an amount, as determined by
the secretary, of the costs associated with the primary construction of the
building or buildings of the qualified business facility to a degree of
completion specified by the secretary. The bond shall be paid to the state
if, in the judgment of the secretary, the qualified business facility has not
been constructed to the degree specified; and
(7) commit to repayment of any benefit or benefits received,
connected to or associated with a term or a condition of the agreement that
has been breached as determined by the secretary and to the forfeiture of
any such earned benefits and the suspension or cessation of such future
benefits for as long as the breach is not corrected. The secretary shall
report any material breach of the terms and conditions of the agreement to
the state finance council within 14 calendar days of the secretary first
becoming aware of such breach.
(d) A qualified supplier, that meets the requirements of paragraphs (1)
and (2), as determined by the secretary, may be eligible for the incentives
listed in subsection (b)(1), (3) or (4) or a partial retention of payroll
withholding taxes for employees as provided by K.S.A. 2022 Supp. 74-
50,314, and amendments thereto, upon designation by a qualified firm as
eligible for incentives pursuant to paragraph (1). No benefits under K.S.A.
2022 Supp. 74-50,314 or 74-50,317, and amendments thereto, shall be
awarded to the qualified supplier until the commencement of such
qualified firm's operations at the qualified business facility, as determined
by the secretary. If the qualified business facility fails to commence
operations as required by subsection (c)(4), all incentives that may have
been awarded to the qualified supplier under this act shall be forfeited and
the qualified supplier shall cease to be eligible for further benefits until the
requirements of this act are met with respect to the same qualified firm that
has entered into a new agreement with the secretary or a different qualified
firm. To be eligible to receive benefits, a qualified supplier shall meet the
requirements of this act, including any requirements or provisions specific
to each such incentive, and any rules and regulations of the secretary
pursuant to this act and shall:
(1) Be selected by the qualified firm as a qualified supplier eligible to
receive incentives under this act and identified to the secretary of
commerce. Not more than five qualified suppliers may be selected by any
one qualified firm. Such selection shall not be changed unless a qualified
supplier selected by the qualified firm breaches the terms of an agreement
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43 HB 2334 4
under this act and is disqualified by the secretary. In such case, the
qualified firm may select a replacement qualified supplier;
(2) within each period of one year for which incentives may be
earned, beginning with the year in which the qualified supplier was
designated as eligible for benefits by the qualified firm, have made sales,
as defined by the secretary, of more than $10,000,000 to the qualified
business facility. This requirement may be waived by the secretary upon a
showing of exceptional circumstances;
(3) submit an application to the secretary, in the form and manner as
designated by the secretary, and provide all information requested by the
secretary, including, but not limited to, evidence establishing sales of more
than $10,000,000 to the qualified firm for the qualified business facility as
required by paragraph (2). The qualified firm shall submit evidence to the
secretary as requested regarding the date operations at the qualified
business facility commenced and the sales to the qualified business facility
by the qualified supplier;
(4) if the application is approved by the secretary, enter into a binding
agreement with the secretary with such terms and conditions as required
by the secretary and the commitments required by this act, including, but
not limited to, providing the secretary with evidence showing the amount
of sales to the qualified firm for each year that an incentive is claimed. The
agreement shall be entered into before any benefits may be provided under
this act. The agreement shall be subject to the approval of the state finance
council, as provided in subsection (e); and
(5) commit to repayment of the amount of all benefits received under
this act in the event the qualified supplier breaches the terms and
conditions of the agreement entered into pursuant to paragraph (4).
(e) Any agreement with a qualified firm or qualified supplier pursuant
to this section shall not be effective unless reviewed and approved by the
affirmative vote of the governor and by a majority vote of the legislative
members of the state finance council prior to the finalization of the
agreement by the secretary. If the state finance council does not approve
the agreement, the secretary shall not enter into the agreement, but may
negotiate further with the firm and submit another proposed agreement for
review and approval by the council, until an agreement approved by the
council is finally executed or the secretary or the firm discontinues
negotiations. The state finance council shall also affirmatively approve,
prior to the finalization of an agreement by the secretary, any increase of
the total payroll benefit percentage, provided pursuant to K.S.A. 2022
Supp. 74-50,315, and amendments thereto, to be allowed a qualified firm
above 7.5%, or such percentage greater than 7.5% shall not be effective.
Prior to the finalization of an agreement by the secretary, the state finance
council shall also affirmatively approve any additional portions or
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installments of the investment tax credit as provided by K.S.A. 2022 Supp.
74-50,315(h), and amendments thereto, otherwise such increase in the
portions or installments shall not be effective. This matter is hereby
characterized as a matter of legislative delegation and subject to the
guidelines prescribed in K.S.A. 75-3711c, and amendments thereto, except
that the state finance council is expressly granted the authority to act on
this matter at any time, including when the legislature is in session. The
secretary of commerce or any officer or employee of the department of
commerce shall appear before the state finance council to provide
testimony if requested by the state finance council. Notwithstanding the
provisions of the Kansas open meetings act, any review, testimony or
discussion of a proposed agreement shall not be open to the public. A vote
on approval of an agreement shall be made in open session. However, the
details of a proposed agreement need not be disclosed publicly. With
respect to the state finance council, the proposed agreement, and any
associated documentation or testimony pertaining to the proposed
agreement, shall be confidential and shall not be subject to the Kansas
open records act. The fact that a proposed agreement or its terms or
associated documents or testimony has been referenced or reviewed by the
state finance council shall not make the agreement or associated
documents or testimony subject to the Kansas open records act with
respect to any other agency. The provisions of this paragraph providing for
confidentiality of records shall expire on July 1, 2027, unless the
legislature acts to reenact such provisions pursuant to K.S.A. 45-229, and
amendments thereto.
(f) A qualified firm or qualified supplier that is approved by the
secretary for incentives under this act shall not be, with respect to the
project for which such incentives have been approved, eligible for
participation in any other economic development program or fund
administered by the secretary of commerce, including, but not limited to,
the STAR bond program, the promoting employment across Kansas
program, the high performance incentive program or the Kansas industrial
training or Kansas industrial retraining programs.
(g) As a condition of receiving an incentive under this act, a qualified
firm or qualified supplier shall agree to cooperate with any audit
undertaken by the secretary of revenue as provided by subsection (i) and to
provide the secretary of commerce:
(1) Information required for publication in the economic development
incentive program information database pursuant to K.S.A. 2022 Supp. 74-
50,226, and amendments thereto;
(2) information reasonably required for the secretary's report pursuant
to K.S.A. 2022 Supp. 74-50,320, and amendments thereto;
(3) information required by the secretary of commerce or the
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secretary of revenue pursuant to subsections (h) and (i); and
(4) reasonable access by the secretary or the secretary's agents to the
qualified business facility during business hours.
(h) (1) The secretary shall conduct an annual review of the activities
undertaken by a qualified firm or qualified supplier to ensure that the
qualified firm or qualified supplier remains in good standing with the state
and in compliance with the provisions of this act, any rules and regulations
adopted by the secretary with respect to this act under subsection (l) and
any agreement entered into made pursuant to this act and continues to
meet the requirements for the benefits provided under this act. The
secretary of commerce shall certify annually to the secretary of revenue
that the qualified firm or qualified supplier meets the criteria for
designation as a qualified firm or qualified supplier and is eligible for such
benefits. The secretary of commerce may obtain shall be provided any and
all information reasonably necessary to determine such eligibility by the
qualified firm or qualified supplier. Such information shall be confidential
to the same extent as information provided to the secretary to determine
eligibility pursuant to K.S.A. 74-50,131, and amendments thereto.
(2) Confidential financial information, any trade secret or other
information that, if known, would place the qualified firm at a
disadvantage in the marketplace or would significantly interfere with the
purposes of this act in the judgment of the secretary that is obtained under
this section shall not be subject to disclosure pursuant to K.S.A. 45-215 et
seq., and amendments thereto, but shall upon request be made available to
the legislative post audit division. The provisions of this paragraph shall
expire on July 1, 2027, unless the legislature reviews and reenacts such
provisions pursuant to K.S.A. 45-229, and amendments thereto.
(i) The books and records concerning investments made, sales,
employment and wages of any employees for which the qualified firm,
qualified supplier or third party has retained any Kansas payroll
withholding taxes or any other financial, employee or other records that
pertain to eligibility for benefits or compliance with the requirements of
this act shall be available for inspection by the secretary or the secretary's
duly authorized agents or employees during business hours on at least 10
days' prior written notice. The secretary may request Upon request by the
secretary, the department of revenue to shall audit the qualified firm or
qualified supplier, or a third party if applicable, for compliance with the
provisions of this act.
(j) The secretary of revenue, in consultation with the secretary of
commerce, shall develop a form that shall be completed annually by any
qualified firm or qualified supplier that received any tax benefit pursuant
to this section and K.S.A. 2022 Supp. 74-50,313 or 74-50,314, and
amendments thereto. Such form shall request, at a minimum, the
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information required by K.S.A. 79-32,243(a)(1) through (a)(6), and
amendments thereto, and such other information as shall may reasonably
be required by the secretary of revenue and the secretary of commerce.
The contents of the completed form shall be confidential except as
provided in K.S.A. 79-3234, and amendments thereto.
(k) (1) In addition to the provisions of subsection (c)(7) and any other
repayment requirement pursuant to this act, as a condition of receiving
benefits under this act, a qualified firm that relocates its qualified business
facility operations outside this state in the 10
th
through the 15
th
year next
following the year the qualified firm entered into the agreement with the
secretary pursuant to subsection (c)(5), shall be subject to a benefit
repayment requirement to the state in the amount of:
(A) 100% of all benefits received if the relocation occurs in the 11
th
year;
(B) 80% of all benefits received if the relocation occurs in the 12
th
year;
(C) 60% of all benefits received if the relocation occurs in the 13
th
year;
(D) 40% of all benefits received if the relocation occurs in the 14
th
year; and
(E) 20% of all benefits received if the relocation occurs in the 15
th
year.
(2) The amount due to the state shall be paid pursuant to a repayment
schedule and with interest as determined by the secretary and set forth in
the agreement pursuant to subsection (c)(5), but in no event shall be paid
in more than 10 years. The repayment schedule shall require that
repayment be completed within a period of not more than 10 years.
(3) The benefit repayment requirement shall be waived if the
qualified firm sells the qualified business facility to another business and
the operations of the qualified business facility are substantially continued
in this state by such business, as determined by the secretary of commerce.
(l) The secretary of commerce or the secretary of revenue may adopt
rules and regulations for the implementation of this act.
Sec. 2. K.S.A. 2022 Supp. 74-50,313 is hereby amended to read as
follows: 74-50,313.(a) (1) For taxable years commencing after December
31, 2021, a qualified firm that makes a qualified business investment in a
qualified business facility and meets the requirements of K.S.A. 2022
Supp. 74-50,312, and amendments thereto, and of this section shall be
allowed a credit for such investment as provided by this section against the
tax imposed by the Kansas income tax act, the premium tax or privilege
fees imposed pursuant to K.S.A. 40-252, and amendments thereto, or the
privilege tax as measured by the net income of financial institutions
imposed pursuant to article 11 of chapter 79 of the Kansas Statutes
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Annotated, and amendments thereto. The credit shall be earned by the
taxpayer each taxable year based on the amount of the qualified
investment made in that taxable year as further provided in this section.
The amount of the credit that is earned each taxable year shall not be
claimed by the taxpayer in the taxable year that such credit is earned but
shall be divided into 10 equal portions or installments. A
1
/10 portion or
installment shall be claimed by the qualified firm commencing with the
taxable year after the credit is earned and an equivalent amount of such
portion or installment, respectively, shall be claimed in each of the next
successive nine taxable years.
(2) The amount of the tax credit earned in a taxable year pursuant to
this subsection shall be up to 15%, at the discretion of the secretary, of the
amount of the qualified investment that is invested during such taxable
year. In determining such percentage, the secretary shall consider factors
including the extent of prospective new employment, the quality of new
jobs and wage or salary levels, the total amount of investment, the
potential for development of the industry in this state and the potential for
ancillary industry development and indirect economic development. The
secretary shall also consider factors pursuant to subsection (d). Such
percentage shall be set forth in the agreement pursuant to K.S.A. 2022
Supp. 74-50,312, and amendments thereto. The total qualified investment
shall be completed within five years commencing from the date specified
in such agreement. The total amount of the qualified investment shall be at
least $1,000,000,000. The qualified firm shall repay to the state all tax
credits received if the total qualified investment is not completed.
(b) (1) For taxable years commencing after December 31, 2021, a
qualified supplier that makes a qualified investment and meets the
requirements of K.S.A. 2022 Supp. 74-50,312, and amendments thereto,
and of this section shall be allowed a credit for such investment as
provided by this section against the tax imposed by the Kansas income tax
act, the premium tax or privilege fees imposed pursuant to K.S.A. 40-252,
and amendments thereto, or the privilege tax as measured by the net
income of financial institutions imposed pursuant to article 11 of chapter
79 of the Kansas Statutes Annotated, and amendments thereto. The credit
shall be earned by the taxpayer for up to two successive calendar years
commencing from the date that the qualified supplier enters into the
agreement with the secretary of commerce pursuant to K.S.A. 2022 Supp.
74-50,312, and amendments thereto, unless all qualifying investment that
is intended by the qualified supplier is completed before this date. The
credit shall be based on the amount of investment in each taxable year
within the two-calendar year period and shall be determined as provided
by paragraph (2) for each such taxable year. The credit shall be taken in
the earlier taxable year that would include either:
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(A) The tax year following the two-calendar year expiration from
entering into the agreement with the secretary; or
(B) the tax year after the calendar year that the qualified supplier
secretary determines completion of the tax credit eligible qualified
investment by the qualified supplier.
(2) For the taxable year commencing January 1, 2022, and ending
December 31, 2022, the amount of the tax credit shall be 5% for the first
$50,000,000 in qualified investment and an additional 1% credit for each
additional $10,000,000 in qualified investment up to a maximum of
$100,000,000 in qualified investment. For the taxable year commencing
January 1, 2023, and all taxable years thereafter, the amount of the tax
credit shall be up to 10% of the qualified investment up to a maximum tax
credit of $10,000,000. The amount of the credit that is earned shall be
divided into up to ten equal portions or installments. A
1
/10 portion or
installment shall first be claimed credited to the qualified supplier
commencing with the time frame set forth in as provided by paragraph (1).
Such The remaining portions or installments shall be claimed credited to
the qualified supplier, one portion or installment per taxable year, in each
of the next successive nine taxable years until each portion or installment
has been credited.
(3) Only the first five qualified suppliers designated by a qualified
firm pursuant to K.S.A. 2022 Supp. 74-50,312, and amendments thereto,
shall qualify for the credit unless a previously designated qualified
supplier breaches terms of an agreement with either the qualified firm or
department of commerce and is replaced by a succeeding qualified
supplier. The qualified supplier that serves as replacement shall be eligible
for the tax credit pursuant to this subsection.
(4) The qualified supplier shall repay to the state all tax credits
received if the total qualified investment is not completed as provided
pursuant to K.S.A. 2022 Supp. 74-50,312, and amendments thereto.
(c) The secretary of commerce shall set forth in the agreement with a
qualified firm or qualified supplier entered into pursuant to K.S.A. 2022
Supp. 74-50,312, and amendments thereto, a percentage of the earned tax
credit that may be refundable when claimed, as provided in subsection (a)
or (b). The percentage shall be determined as provided in subsection (d).
Such percentage of a tax credit installment may be refundable to such
taxpayer if the amount of the installment claimed for that taxable year
exceeds the taxpayer's tax liability for such year. The secretary shall set
forth in the agreement any additional provisions, if necessary, regarding
disposition of the earned tax credits. No earned tax credit shall be
refundable after the tenth last successive taxable year period that a portion
or installment of such credit may be claimed. An installment portion of an
earned tax credit that is not refunded shall be carried forward for
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43 HB 2334 10
application first against the taxpayer's tax liability in the next successive
tax year or for refund, as the case may be, within the ten successive taxable
year period that a portion or installment of the credit may be claimed. An
installment portion of an earned tax credit that has not been applied against
the taxpayer's tax liability or refunded at the end of the tenth last
successive taxable year period that installment portions of such earned tax
credit may be claimed shall be forfeited.
(d) The base percentage that may be refundable in each taxable year
of the
1
/10 portion or installment of an earned tax credit that may be
claimed, as provided by subsection (a), shall be 50%. The secretary may
provide for an additional percentage that may be refundable up to 100% of
the total eligible earned credit. The secretary shall base the additional
percentage on the qualified firm or qualified supplier meeting specified
goals that shall be set forth in the agreement. Such goals shall include
targets for the:
(1) Creation of new jobs, including, with respect to qualified firms,
new jobs for suppliers;
(2) benefit to the local, regional or state economy, including the
development of suppliers or ancillary businesses in Kansas;
(3) amount of capital investment;
(4) benefit to the development of the qualified firm's industry in
Kansas;
(5) other measures or goals, if any, of the secretary consistent with the
purposes of this act; and
(6) employment, retention and attraction of employees to remain
residents of, or relocate to, Kansas.
(e) The qualified firm or qualified supplier shall meet the
requirements of this act, any rules and regulations of the secretary of
commerce under this act and the terms of the agreement to receive a credit
each year that a credit is earned or an installment portion of the earned
credit is claimed. No credit shall be issued by the secretary of revenue
unless the qualified firm or qualified supplier has been certified by the
secretary of commerce as eligible as provided by K.S.A. 2022 Supp. 74-
50,312, and amendments thereto, for each taxable year the credit is
claimed. The secretary of commerce shall provide such certifications to the
secretary of revenue.
(f) If the qualified firm or qualified supplier breaches the terms and
conditions of the agreement pursuant to K.S.A. 2022 Supp. 74-50,312, and
amendments thereto, the qualified firm or qualified supplier shall be liable
for repayment of the amount of the tax credits to the state as provided by
K.S.A. 2022 Supp. 74-50,312, and amendments thereto.
(g) As a condition for claiming credits pursuant to this section, any
qualified firm or qualified supplier shall provide information pursuant to
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43 HB 2334 11
K.S.A. 79-32,243, and amendments thereto, as part of the tax return in
which such credits are claimed. Such credits shall not be denied solely on
the basis of the contents of the information provided by the qualified firm
pursuant to K.S.A. 79-32,243, and amendments thereto.
(h) Prior to finalization of an agreement pursuant to K.S.A. 2022
Supp. 74-50,312, and amendments thereto, the state finance council may
allow for a qualified firm or qualified supplier to be allowed to take one or
more additional portions or installments of the tax credit that such
qualified firm or qualified supplier is entitled pursuant to this subsection,
as provided in K.S.A. 2022 Supp. 74-50,312(e), and amendments thereto.
No additional portions or installments of the tax credit shall be allowed in
any taxable year unless the requested increase in the portions or
installments has been so reviewed and approved by the affirmative vote of
the governor and by a majority vote of the legislative members of the state
finance council. This matter is hereby characterized as a matter of
legislative delegation and subject to the guidelines prescribed in K.S.A.
75-3711c, and amendments thereto, except that the state finance council is
expressly granted the authority to act on this matter at any time, including
when the legislature is in session. Upon an affirmative vote, the qualified
firm or qualified supplier shall be allowed to take the additional portions
or installments of the tax credit approved by the state finance council in
the taxable year in which such portions or installments were approved, as
shall be set forth in the agreement pursuant to K.S.A. 2022 Supp. 74-
50,312, and amendments thereto. The portions or installments remaining
on such credit shall decrease accordingly in the event that additional
portions or installments are taken by a qualified firm or qualified supplier.
Sec. 3. K.S.A. 2022 Supp. 74-50,317 is hereby amended to read as
follows: 74-50,317. (a) On and after July 1, 2022, a qualified firm or a
qualified supplier that meets the requirements of K.S.A. 2022 Supp. 74-
50,312, and amendments thereto, and this section and that has entered into
an agreement with the secretary, as provided by K.S.A. 2022 Supp. 74-
50,312, and amendments thereto, may be eligible for reimbursement of up
to 50% of training and education eligible expenses for training or
education completed for new employees in each year for up to five
successive years, as determined by the secretary and as provided by this
section. The maximum amount of reimbursement paid to a qualified
supplier shall be $250,000 $500,000 per year. The maximum amount of
reimbursement paid to a qualified firm shall be $5,000,000 per year. In
determining the percentage, the number of successive years and the
maximum annual amount as limited by this subsection, the secretary shall,
at a minimum, consider the factors set forth in K.S.A. 2022 Supp.74-
50,313(b) and (d), and amendments thereto, as applicable.
(b) (1) Qualified firms shall be eligible commencing with the year in
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which the qualified firm enters into an agreement with the secretary, as
provided in K.S.A. 2022 Supp. 74-50,312, and amendments thereto,
commences construction of the qualified business facility or commences
commercial operations at the qualified business facility, as determined by
the secretary.
(2) Qualified suppliers shall be eligible commencing with the year in
which the qualified firm selected the qualified supplier for benefit
eligibility pursuant to K.S.A. 2022 Supp. 74-50,312, and amendments
thereto. Only training and education expenses for new employees
employed at a qualified business facility of the qualified supplier that is
located and operating in Kansas shall be eligible for reimbursement. A
qualified supplier shall not be awarded such benefits until the qualified
business facility of the qualified firm commences commercial operations.
(c) The qualified firm or qualified supplier shall submit an application
to the secretary in the form and manner required by the secretary and
provide all information requested by the secretary, as provided by K.S.A.
2022 Supp. 74-50,312, and amendments thereto. If approved by the
secretary, the qualified firm or qualified supplier shall enter into an
agreement with the secretary with such terms and conditions as may be
required by the secretary and commitments required by this act, as
provided pursuant to K.S.A. 2022 Supp. 74-50,312, and amendments
thereto. The agreement shall set forth the maximum amount of the
incentive that may be received each year, as limited by subsection (a), and
shall require an annual showing of eligibility, including evidence showing
the number of new hires and amount of eligible training and education
expense, for each year the incentive is claimed.
(d) Subject to appropriations therefor, reimbursement in the amount
approved by the secretary and pursuant to the terms of the agreement and
the limitations of subsection (a) shall be made by the secretary from the
attracting powerful economic expansion new employee training and
education fund established in K.S.A. 2022 Supp. 74-50,318, and
amendments thereto, in accordance with appropriation acts upon warrants
of the director of accounts and reports issued pursuant to vouchers
approved by the secretary of commerce or the secretary's designee.
(e) No reimbursement shall be issued unless the qualified firm or the
qualified supplier has been certified by the secretary, as provided in K.S.A.
2022 Supp. 74-50,312, and amendments thereto, as meeting all
requirements of this act, any rules and regulations of the secretary and the
agreement executed pursuant to K.S.A. 2022 Supp. 74-50,312, and
amendments thereto.
(f) If the qualified firm or qualified supplier breaches the terms and
conditions of the agreement pursuant to K.S.A. 2022 Supp. 74-50,312, and
amendments thereto, reimbursements shall be repaid to the state as
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provided by K.S.A. 2022 Supp. 74-50,312, and amendments thereto.
Sec. 4. K.S.A. 2022 Supp. 74-50,321 is hereby amended to read as
follows: 74-50,321. (a) Commencing with fiscal year 2022, in any fiscal
year that a qualified firm enters into an agreement with the secretary of
commerce for the first time pursuant to K.S.A. 2022 Supp. 74-50,312, and
amendments thereto, and commences construction on a qualified business
facility under this act, the secretary of commerce shall certify such fact to
the secretary of revenue, the director of the budget and the director of
legislative research. Such certification shall be made when such fact is
known to the secretary, but in any event on or before June 30 of such fiscal
year. The secretary of commerce shall make only two such certifications,
one for fiscal year 2022 and one for fiscal year 2023.
(b) Upon receipt of such certification, the secretary of revenue shall
adjust the corporate income tax rate imposed pursuant to the provisions of
K.S.A. 79-32,110, and amendments thereto, to go into effect for the next
tax year by reducing the rate by 0.5%. The maximum reduction to be
applied for one taxable year shall be 0.5% regardless of the number of
eligible qualifying firms that may have satisfied the conditions of
subsection (a). Only two such rate reductions shall be permitted. After two
rate reductions have been made as provided by this section, no further
rate reductions shall occur as a result of an agreement as provided by (a).
(c) The rate reduction of 0.5% shall be applied to reduce the normal
tax on corporations imposed pursuant to K.S.A. 79-32,110, and
amendments thereto, until reduced to 0% 3%.
(d) The secretary of revenue shall report any reduction in corporate
income tax rates pursuant to this section to the chairpersons of the senate
standing committees on assessment and taxation and commerce, the
chairpersons of the house of representatives standing committees on
commerce, labor and economic development and taxation and the
governor, and shall cause notice of any such reduction to be published in
the Kansas register prior to September 15 of the calendar year immediately
preceding the tax year in which such reduction takes effect.
Sec. 5. K.S.A. 2022 Supp. 74-50,322 is hereby amended to read as
follows: 74-50,322. (a) On and after July 1, 2022, a qualified firm or
qualified supplier that meets the requirements of this section and K.S.A.
2022 Supp. 74-50,312, and amendments thereto, and that has entered into
an agreement with the secretary, as provided by K.S.A. 2022 Supp. 74-
50,312, and amendments thereto, shall be eligible for annual
reimbursement of up to 50% of relocation incentives and expenses
provided by the qualified firm or qualified supplier to incentivize
employees who are not Kansas residents to relocate their primary
residence to this state and become Kansas residents. Reimbursement for
such eligible incentives and expenses shall not exceed an annual
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reimbursement amount of $1,000,000 to the a qualified firm and shall not
exceed an annual reimbursement amount of $250,000 to a qualified
supplier, as determined by the secretary. Reimbursement for such eligible
incentives and expenses may be provided for up to ten successive years, as
determined by the secretary.
(b) The qualified firm or qualified supplier shall submit to the
secretary a Kansas residency incentive plan for which it will seek
reimbursement and the expected costs for each component of the plan. The
reimbursement percentage shall be subject to the qualified firm or
qualified supplier meeting goals for incentivizing employees to become
new Kansas residents as determined by the secretary. If the secretary
approves the plan, the qualified firm or qualified supplier and the secretary
shall enter into an agreement that requires the qualified firm or qualified
supplier to provide annual documentation of the relocation incentive
expenditures and the results of such expenditures to the secretary. No
reimbursement shall be made unless the secretary of commerce has
certified, for each year for which a reimbursement is claimed, that the
qualified firm or qualified supplier meets all requirements of this act, the
rules and regulations of the secretary and the agreements entered into
pursuant to this section and K.S.A. 2022 Supp. 74-50,312, and
amendments thereto.
(c) The qualified firm or qualified supplier shall remit to the state an
amount equal to the amount of benefits provided to the qualified firm or
qualified supplier pursuant to this section upon any breach by the qualified
firm or qualified supplier of the terms and conditions set forth in the
agreement entered into pursuant to this section or K.S.A. 2022 Supp. 74-
50,312, and amendments thereto. The agreement between the secretary of
commerce and the qualified firm or qualified supplier entered into
pursuant to this section and K.S.A. 2022 Supp. 74-50,312, and
amendments thereto, shall specify such repayment requirements in such
agreement.
(d) Subject to appropriations therefor, the allowable amount of
reimbursement shall be paid to the qualified firm or qualified supplier
from the attracting powerful economic expansion Kansas residency
incentive fund, established by K.S.A. 2022 Supp. 74-50,323, and
amendments thereto. No interest shall be allowed on any payment made to
a qualified firm or qualified supplier pursuant to this section.
Sec. 6. K.S.A. 2022 Supp. 74-50,323 is hereby amended to read as
follows: 74-50,323. There is hereby established in the state treasury the
attracting powerful economic expansion Kansas residency incentive fund
to be administered by the secretary of commerce. All moneys credited to
the attracting powerful economic expansion Kansas residency incentive
fund shall be used by the Kansas department of commerce for
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reimbursement to qualified firms or qualified suppliers for expenses
incurred in a Kansas residency incentive plan for employees pursuant to
the provisions of K.S.A. 2022 Supp. 74-50,312 and 74-50,322, and
amendments thereto. All expenditures from the attracting powerful
economic expansion Kansas residency incentive fund shall be made in
accordance with appropriation acts upon warrants of the director of
accounts and reports issued pursuant to vouchers approved by the
secretary of commerce or the secretary's designee.
Sec. 7. K.S.A. 2022 Supp. 74-50,312, 74-50,313, 74-50,317, 74-
50,321, 74-50,322, 74-50,323 and 74-50,324 are hereby repealed.
Sec. 8. This act shall take effect and be in force from and after its
publication in the Kansas register.
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