Kansas 2023-2024 Regular Session

Kansas House Bill HB2334 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	Session of 2023
2	2	HOUSE BILL No. 2334
3	3	By Committee on Commerce, Labor and Economic Development
4	4	2-7
5	5	AN ACT concerning economic development; relating to the attracting
6	6	powerful economic expansion act; extending the deadlines for project
7	7	agreements under the act; enhancing incentives for qualified suppliers
8	8	by providing for up to 10% of refundable tax credits for up to 10 years
9	9	and increasing the training reimbursement to up to $500,000 per year
10	10	for five years; adding an employee relocation reimbursement incentive
11	11	for qualified suppliers of up to $250,000 per supplier per year; limiting
12	12	the corporate income tax rate reduction to only two rate reductions;
13	13	permitting qualified firms and qualified suppliers to participate in other
14	14	economic development programs for new projects; amending K.S.A.
15	15	2022 Supp. 74-50,312, 74-50,313, 74-50,317, 74-50,321, 74-50,322
16	16	and 74-50,323 and repealing the existing sections; also repealing
17	17	K.S.A. 2022 Supp. 74-50,324.
18	18	Be it enacted by the Legislature of the State of Kansas:
19	19	Section 1. K.S.A. 2022 Supp. 74-50,312 is hereby amended to read as
20	20	follows: 74-50,312. (a) There is hereby established the attracting powerful
21	21	economic expansion program to be administered by the secretary of
22	22	commerce. The purpose of the attracting powerful economic expansion
23	23	program is to attract large capital investments by businesses engaged in
24	24	specified industries in new business facilities and operations in Kansas, or
25	25	large capital investments in new national headquarters in Kansas by any
26	26	business, and to encourage the development of a Kansas-based supply
27	27	chain for such large enterprises.
28	28	(b) A qualified firm that makes a qualified business facility
29	29	investment of at least $1,000,000,000 in a qualified business facility
30	30	pursuant to the requirements of this act may be eligible for the following
31	31	incentives as approved by the secretary:
32	32	(1) The investment tax credit pursuant to K.S.A. 2022 Supp. 74-
33	33	50,313, and amendments thereto;
34	34	(2) reimbursement of a percentage of total payroll, pursuant to K.S.A.
35	35	2022 Supp. 74-50,315 and 74-50,316, and amendments thereto;
36	36	(3) reimbursement of a percentage of eligible employee training and
37	37	education expense pursuant to K.S.A. 2022 Supp. 74-50,317 and 74-
38	38	50,318, and amendments thereto;
39	39	(4) a sales tax exemption for construction costs of the qualified
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76	76	business facility pursuant to K.S.A. 79-3606, and amendments thereto, and
77	77	K.S.A. 2022 Supp. 74-50,319, and amendments thereto; and
78	78	(5) reimbursement of a percentage of relocation expenses and
79	79	incentives for relocation of employees to Kansas pursuant to K.S.A. 2022
80	80	Supp. 74-50,322 and 74-50,323, and amendments thereto.
81	81	(c) To be eligible to receive an incentive listed in subsection (b), a
82	82	qualified firm shall meet the requirements of this act, including any
83	83	requirements or provisions specific to each such incentive, and any rules
84	84	and regulations of the secretary pursuant to this act and shall:
85	85	(1) Submit an application to the secretary in the form and manner
86	86	prescribed by the secretary and including all information as required by the
87	87	secretary;
88	88	(2) if requested by the secretary, prior to making a commitment to
89	89	invest in a qualified business facility, submit a certificate of intent to invest
90	90	in the qualified business facility to the secretary in the form and manner
91	91	required by the secretary, including, if requested by the secretary, a date
92	92	investment will commence;
93	93	(3) commit to a qualified business investment of at least
94	94	$1,000,000,000 in the qualified business facility to be completed within
95	95	five years of the commitment to invest on such date specified in the
96	96	agreement pursuant to paragraph (5);
97	97	(4) complete the project and commence commercial operations within
98	98	five years of either the commitment to invest or the date of the agreement
99	99	with the secretary made pursuant to this section, as designated by the
100	100	secretary and on such date as specified in the agreement pursuant to
101	101	paragraph (5);
102	102	(5) if the application is approved by the secretary, enter into a binding
103	103	agreement with the secretary with such terms and conditions as required
104	104	by the secretary and including the commitments required by this act. The
105	105	agreement shall be entered into before any benefits may be provided under
106	106	this act. The agreement shall be subject to the approval of the state finance
107	107	council as provided in subsection (e). The secretary shall not enter into an
108	108	agreement with more than one qualified firm in calendar year 2022 and
109	109	shall not enter into an agreement with more than one qualified firm in
110	110	calendar year 2023. The secretary shall not enter into an agreement with
111	111	more than one qualified firm in calendar year 2024. The secretary shall
112	112	not enter into an agreement with any qualified firm after December 31,
113	113	2023 2024 and shall not enter into an agreement with any qualified
114	114	supplier after May 1, 2025;
115	115	(6) obtain and submit a bond to the secretary if required as follows:
116	116	The secretary shall determine a minimum investment grade rating
117	117	requirement for each project of a qualified firm seeking benefits under this
118	118	act. In determining the minimum investment grade rating, the secretary
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162	162	shall consider the aspects of the qualified firm and the qualified business
163	163	facility or project and shall consult ratings from three nationally
164	164	recognized rating agencies selected by the secretary that provide
165	165	investment grade ratings. A qualifying firm or qualifying business facility
166	166	that does not meet the minimum investment grade rating determined by the
167	167	secretary shall obtain and submit a bond in an amount, as determined by
168	168	the secretary, of the costs associated with the primary construction of the
169	169	building or buildings of the qualified business facility to a degree of
170	170	completion specified by the secretary. The bond shall be paid to the state
171	171	if, in the judgment of the secretary, the qualified business facility has not
172	172	been constructed to the degree specified; and
173	173	(7) commit to repayment of any benefit or benefits received,
174	174	connected to or associated with a term or a condition of the agreement that
175	175	has been breached as determined by the secretary and to the forfeiture of
176	176	any such earned benefits and the suspension or cessation of such future
177	177	benefits for as long as the breach is not corrected. The secretary shall
178	178	report any material breach of the terms and conditions of the agreement to
179	179	the state finance council within 14 calendar days of the secretary first
180	180	becoming aware of such breach.
181	181	(d) A qualified supplier, that meets the requirements of paragraphs (1)
182	182	and (2), as determined by the secretary, may be eligible for the incentives
183	183	listed in subsection (b)(1), (3) or (4) or a partial retention of payroll
184	184	withholding taxes for employees as provided by K.S.A. 2022 Supp. 74-
185	185	50,314, and amendments thereto, upon designation by a qualified firm as
186	186	eligible for incentives pursuant to paragraph (1). No benefits under K.S.A.
187	187	2022 Supp. 74-50,314 or 74-50,317, and amendments thereto, shall be
188	188	awarded to the qualified supplier until the commencement of such
189	189	qualified firm's operations at the qualified business facility, as determined
190	190	by the secretary. If the qualified business facility fails to commence
191	191	operations as required by subsection (c)(4), all incentives that may have
192	192	been awarded to the qualified supplier under this act shall be forfeited and
193	193	the qualified supplier shall cease to be eligible for further benefits until the
194	194	requirements of this act are met with respect to the same qualified firm that
195	195	has entered into a new agreement with the secretary or a different qualified
196	196	firm. To be eligible to receive benefits, a qualified supplier shall meet the
197	197	requirements of this act, including any requirements or provisions specific
198	198	to each such incentive, and any rules and regulations of the secretary
199	199	pursuant to this act and shall:
200	200	(1) Be selected by the qualified firm as a qualified supplier eligible to
201	201	receive incentives under this act and identified to the secretary of
202	202	commerce. Not more than five qualified suppliers may be selected by any
203	203	one qualified firm. Such selection shall not be changed unless a qualified
204	204	supplier selected by the qualified firm breaches the terms of an agreement
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248	248	under this act and is disqualified by the secretary. In such case, the
249	249	qualified firm may select a replacement qualified supplier;
250	250	(2) within each period of one year for which incentives may be
251	251	earned, beginning with the year in which the qualified supplier was
252	252	designated as eligible for benefits by the qualified firm, have made sales,
253	253	as defined by the secretary, of more than $10,000,000 to the qualified
254	254	business facility. This requirement may be waived by the secretary upon a
255	255	showing of exceptional circumstances;
256	256	(3) submit an application to the secretary, in the form and manner as
257	257	designated by the secretary, and provide all information requested by the
258	258	secretary, including, but not limited to, evidence establishing sales of more
259	259	than $10,000,000 to the qualified firm for the qualified business facility as
260	260	required by paragraph (2). The qualified firm shall submit evidence to the
261	261	secretary as requested regarding the date operations at the qualified
262	262	business facility commenced and the sales to the qualified business facility
263	263	by the qualified supplier;
264	264	(4) if the application is approved by the secretary, enter into a binding
265	265	agreement with the secretary with such terms and conditions as required
266	266	by the secretary and the commitments required by this act, including, but
267	267	not limited to, providing the secretary with evidence showing the amount
268	268	of sales to the qualified firm for each year that an incentive is claimed. The
269	269	agreement shall be entered into before any benefits may be provided under
270	270	this act. The agreement shall be subject to the approval of the state finance
271	271	council, as provided in subsection (e); and
272	272	(5) commit to repayment of the amount of all benefits received under
273	273	this act in the event the qualified supplier breaches the terms and
274	274	conditions of the agreement entered into pursuant to paragraph (4).
275	275	(e) Any agreement with a qualified firm or qualified supplier pursuant
276	276	to this section shall not be effective unless reviewed and approved by the
277	277	affirmative vote of the governor and by a majority vote of the legislative
278	278	members of the state finance council prior to the finalization of the
279	279	agreement by the secretary. If the state finance council does not approve
280	280	the agreement, the secretary shall not enter into the agreement, but may
281	281	negotiate further with the firm and submit another proposed agreement for
282	282	review and approval by the council, until an agreement approved by the
283	283	council is finally executed or the secretary or the firm discontinues
284	284	negotiations. The state finance council shall also affirmatively approve,
285	285	prior to the finalization of an agreement by the secretary, any increase of
286	286	the total payroll benefit percentage, provided pursuant to K.S.A. 2022
287	287	Supp. 74-50,315, and amendments thereto, to be allowed a qualified firm
288	288	above 7.5%, or such percentage greater than 7.5% shall not be effective.
289	289	Prior to the finalization of an agreement by the secretary, the state finance
290	290	council shall also affirmatively approve any additional portions or
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334	334	installments of the investment tax credit as provided by K.S.A. 2022 Supp.
335	335	74-50,315(h), and amendments thereto, otherwise such increase in the
336	336	portions or installments shall not be effective. This matter is hereby
337	337	characterized as a matter of legislative delegation and subject to the
338	338	guidelines prescribed in K.S.A. 75-3711c, and amendments thereto, except
339	339	that the state finance council is expressly granted the authority to act on
340	340	this matter at any time, including when the legislature is in session. The
341	341	secretary of commerce or any officer or employee of the department of
342	342	commerce shall appear before the state finance council to provide
343	343	testimony if requested by the state finance council. Notwithstanding the
344	344	provisions of the Kansas open meetings act, any review, testimony or
345	345	discussion of a proposed agreement shall not be open to the public. A vote
346	346	on approval of an agreement shall be made in open session. However, the
347	347	details of a proposed agreement need not be disclosed publicly. With
348	348	respect to the state finance council, the proposed agreement, and any
349	349	associated documentation or testimony pertaining to the proposed
350	350	agreement, shall be confidential and shall not be subject to the Kansas
351	351	open records act. The fact that a proposed agreement or its terms or
352	352	associated documents or testimony has been referenced or reviewed by the
353	353	state finance council shall not make the agreement or associated
354	354	documents or testimony subject to the Kansas open records act with
355	355	respect to any other agency. The provisions of this paragraph providing for
356	356	confidentiality of records shall expire on July 1, 2027, unless the
357	357	legislature acts to reenact such provisions pursuant to K.S.A. 45-229, and
358	358	amendments thereto.
359	359	(f) A qualified firm or qualified supplier that is approved by the
360	360	secretary for incentives under this act shall not be, with respect to the
361	361	project for which such incentives have been approved, eligible for
362	362	participation in any other economic development program or fund
363	363	administered by the secretary of commerce, including, but not limited to,
364	364	the STAR bond program, the promoting employment across Kansas
365	365	program, the high performance incentive program or the Kansas industrial
366	366	training or Kansas industrial retraining programs.
367	367	(g) As a condition of receiving an incentive under this act, a qualified
368	368	firm or qualified supplier shall agree to cooperate with any audit
369	369	undertaken by the secretary of revenue as provided by subsection (i) and to
370	370	provide the secretary of commerce:
371	371	(1) Information required for publication in the economic development
372	372	incentive program information database pursuant to K.S.A. 2022 Supp. 74-
373	373	50,226, and amendments thereto;
374	374	(2) information reasonably required for the secretary's report pursuant
375	375	to K.S.A. 2022 Supp. 74-50,320, and amendments thereto;
376	376	(3) information required by the secretary of commerce or the
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420	420	secretary of revenue pursuant to subsections (h) and (i); and
421	421	(4) reasonable access by the secretary or the secretary's agents to the
422	422	qualified business facility during business hours.
423	423	(h) (1) The secretary shall conduct an annual review of the activities
424	424	undertaken by a qualified firm or qualified supplier to ensure that the
425	425	qualified firm or qualified supplier remains in good standing with the state
426	426	and in compliance with the provisions of this act, any rules and regulations
427	427	adopted by the secretary with respect to this act under subsection (l) and
428	428	any agreement entered into made pursuant to this act and continues to
429	429	meet the requirements for the benefits provided under this act. The
430	430	secretary of commerce shall certify annually to the secretary of revenue
431	431	that the qualified firm or qualified supplier meets the criteria for
432	432	designation as a qualified firm or qualified supplier and is eligible for such
433	433	benefits. The secretary of commerce may obtain shall be provided any and
434	434	all information reasonably necessary to determine such eligibility by the
435	435	qualified firm or qualified supplier. Such information shall be confidential
436	436	to the same extent as information provided to the secretary to determine
437	437	eligibility pursuant to K.S.A. 74-50,131, and amendments thereto.
438	438	(2) Confidential financial information, any trade secret or other
439	439	information that, if known, would place the qualified firm at a
440	440	disadvantage in the marketplace or would significantly interfere with the
441	441	purposes of this act in the judgment of the secretary that is obtained under
442	442	this section shall not be subject to disclosure pursuant to K.S.A. 45-215 et
443	443	seq., and amendments thereto, but shall upon request be made available to
444	444	the legislative post audit division. The provisions of this paragraph shall
445	445	expire on July 1, 2027, unless the legislature reviews and reenacts such
446	446	provisions pursuant to K.S.A. 45-229, and amendments thereto.
447	447	(i) The books and records concerning investments made, sales,
448	448	employment and wages of any employees for which the qualified firm,
449	449	qualified supplier or third party has retained any Kansas payroll
450	450	withholding taxes or any other financial, employee or other records that
451	451	pertain to eligibility for benefits or compliance with the requirements of
452	452	this act shall be available for inspection by the secretary or the secretary's
453	453	duly authorized agents or employees during business hours on at least 10
454	454	days' prior written notice. The secretary may request Upon request by the
455	455	secretary, the department of revenue to shall audit the qualified firm or
456	456	qualified supplier, or a third party if applicable, for compliance with the
457	457	provisions of this act.
458	458	(j) The secretary of revenue, in consultation with the secretary of
459	459	commerce, shall develop a form that shall be completed annually by any
460	460	qualified firm or qualified supplier that received any tax benefit pursuant
461	461	to this section and K.S.A. 2022 Supp. 74-50,313 or 74-50,314, and
462	462	amendments thereto. Such form shall request, at a minimum, the
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506	506	information required by K.S.A. 79-32,243(a)(1) through (a)(6), and
507	507	amendments thereto, and such other information as shall may reasonably
508	508	be required by the secretary of revenue and the secretary of commerce.
509	509	The contents of the completed form shall be confidential except as
510	510	provided in K.S.A. 79-3234, and amendments thereto.
511	511	(k) (1) In addition to the provisions of subsection (c)(7) and any other
512	512	repayment requirement pursuant to this act, as a condition of receiving
513	513	benefits under this act, a qualified firm that relocates its qualified business
514	514	facility operations outside this state in the 10
515	515	th
516	516	through the 15
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518	518	year next
519	519	following the year the qualified firm entered into the agreement with the
520	520	secretary pursuant to subsection (c)(5), shall be subject to a benefit
521	521	repayment requirement to the state in the amount of:
522	522	(A) 100% of all benefits received if the relocation occurs in the 11
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524	524	year;
525	525	(B) 80% of all benefits received if the relocation occurs in the 12
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527	527	year;
528	528	(C) 60% of all benefits received if the relocation occurs in the 13
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530	530	year;
531	531	(D) 40% of all benefits received if the relocation occurs in the 14
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533	533	year; and
534	534	(E) 20% of all benefits received if the relocation occurs in the 15
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536	536	year.
537	537	(2) The amount due to the state shall be paid pursuant to a repayment
538	538	schedule and with interest as determined by the secretary and set forth in
539	539	the agreement pursuant to subsection (c)(5), but in no event shall be paid
540	540	in more than 10 years. The repayment schedule shall require that
541	541	repayment be completed within a period of not more than 10 years.
542	542	(3) The benefit repayment requirement shall be waived if the
543	543	qualified firm sells the qualified business facility to another business and
544	544	the operations of the qualified business facility are substantially continued
545	545	in this state by such business, as determined by the secretary of commerce.
546	546	(l) The secretary of commerce or the secretary of revenue may adopt
547	547	rules and regulations for the implementation of this act.
548	548	Sec. 2. K.S.A. 2022 Supp. 74-50,313 is hereby amended to read as
549	549	follows: 74-50,313.(a) (1) For taxable years commencing after December
550	550	31, 2021, a qualified firm that makes a qualified business investment in a
551	551	qualified business facility and meets the requirements of K.S.A. 2022
552	552	Supp. 74-50,312, and amendments thereto, and of this section shall be
553	553	allowed a credit for such investment as provided by this section against the
554	554	tax imposed by the Kansas income tax act, the premium tax or privilege
555	555	fees imposed pursuant to K.S.A. 40-252, and amendments thereto, or the
556	556	privilege tax as measured by the net income of financial institutions
557	557	imposed pursuant to article 11 of chapter 79 of the Kansas Statutes
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601	601	Annotated, and amendments thereto. The credit shall be earned by the
602	602	taxpayer each taxable year based on the amount of the qualified
603	603	investment made in that taxable year as further provided in this section.
604	604	The amount of the credit that is earned each taxable year shall not be
605	605	claimed by the taxpayer in the taxable year that such credit is earned but
606	606	shall be divided into 10 equal portions or installments. A
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608	608	/10 portion or
609	609	installment shall be claimed by the qualified firm commencing with the
610	610	taxable year after the credit is earned and an equivalent amount of such
611	611	portion or installment, respectively, shall be claimed in each of the next
612	612	successive nine taxable years.
613	613	(2) The amount of the tax credit earned in a taxable year pursuant to
614	614	this subsection shall be up to 15%, at the discretion of the secretary, of the
615	615	amount of the qualified investment that is invested during such taxable
616	616	year. In determining such percentage, the secretary shall consider factors
617	617	including the extent of prospective new employment, the quality of new
618	618	jobs and wage or salary levels, the total amount of investment, the
619	619	potential for development of the industry in this state and the potential for
620	620	ancillary industry development and indirect economic development. The
621	621	secretary shall also consider factors pursuant to subsection (d). Such
622	622	percentage shall be set forth in the agreement pursuant to K.S.A. 2022
623	623	Supp. 74-50,312, and amendments thereto. The total qualified investment
624	624	shall be completed within five years commencing from the date specified
625	625	in such agreement. The total amount of the qualified investment shall be at
626	626	least $1,000,000,000. The qualified firm shall repay to the state all tax
627	627	credits received if the total qualified investment is not completed.
628	628	(b) (1) For taxable years commencing after December 31, 2021, a
629	629	qualified supplier that makes a qualified investment and meets the
630	630	requirements of K.S.A. 2022 Supp. 74-50,312, and amendments thereto,
631	631	and of this section shall be allowed a credit for such investment as
632	632	provided by this section against the tax imposed by the Kansas income tax
633	633	act, the premium tax or privilege fees imposed pursuant to K.S.A. 40-252,
634	634	and amendments thereto, or the privilege tax as measured by the net
635	635	income of financial institutions imposed pursuant to article 11 of chapter
636	636	79 of the Kansas Statutes Annotated, and amendments thereto. The credit
637	637	shall be earned by the taxpayer for up to two successive calendar years
638	638	commencing from the date that the qualified supplier enters into the
639	639	agreement with the secretary of commerce pursuant to K.S.A. 2022 Supp.
640	640	74-50,312, and amendments thereto, unless all qualifying investment that
641	641	is intended by the qualified supplier is completed before this date. The
642	642	credit shall be based on the amount of investment in each taxable year
643	643	within the two-calendar year period and shall be determined as provided
644	644	by paragraph (2) for each such taxable year. The credit shall be taken in
645	645	the earlier taxable year that would include either:
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688	688	43 HB 2334 9
689	689	(A) The tax year following the two-calendar year expiration from
690	690	entering into the agreement with the secretary; or
691	691	(B) the tax year after the calendar year that the qualified supplier
692	692	secretary determines completion of the tax credit eligible qualified
693	693	investment by the qualified supplier.
694	694	(2) For the taxable year commencing January 1, 2022, and ending
695	695	December 31, 2022, the amount of the tax credit shall be 5% for the first
696	696	$50,000,000 in qualified investment and an additional 1% credit for each
697	697	additional $10,000,000 in qualified investment up to a maximum of
698	698	$100,000,000 in qualified investment. For the taxable year commencing
699	699	January 1, 2023, and all taxable years thereafter, the amount of the tax
700	700	credit shall be up to 10% of the qualified investment up to a maximum tax
701	701	credit of $10,000,000. The amount of the credit that is earned shall be
702	702	divided into up to ten equal portions or installments. A
703	703	1
704	704	/10 portion or
705	705	installment shall first be claimed credited to the qualified supplier
706	706	commencing with the time frame set forth in as provided by paragraph (1).
707	707	Such The remaining portions or installments shall be claimed credited to
708	708	the qualified supplier, one portion or installment per taxable year, in each
709	709	of the next successive nine taxable years until each portion or installment
710	710	has been credited.
711	711	(3) Only the first five qualified suppliers designated by a qualified
712	712	firm pursuant to K.S.A. 2022 Supp. 74-50,312, and amendments thereto,
713	713	shall qualify for the credit unless a previously designated qualified
714	714	supplier breaches terms of an agreement with either the qualified firm or
715	715	department of commerce and is replaced by a succeeding qualified
716	716	supplier. The qualified supplier that serves as replacement shall be eligible
717	717	for the tax credit pursuant to this subsection.
718	718	(4) The qualified supplier shall repay to the state all tax credits
719	719	received if the total qualified investment is not completed as provided
720	720	pursuant to K.S.A. 2022 Supp. 74-50,312, and amendments thereto.
721	721	(c) The secretary of commerce shall set forth in the agreement with a
722	722	qualified firm or qualified supplier entered into pursuant to K.S.A. 2022
723	723	Supp. 74-50,312, and amendments thereto, a percentage of the earned tax
724	724	credit that may be refundable when claimed, as provided in subsection (a)
725	725	or (b). The percentage shall be determined as provided in subsection (d).
726	726	Such percentage of a tax credit installment may be refundable to such
727	727	taxpayer if the amount of the installment claimed for that taxable year
728	728	exceeds the taxpayer's tax liability for such year. The secretary shall set
729	729	forth in the agreement any additional provisions, if necessary, regarding
730	730	disposition of the earned tax credits. No earned tax credit shall be
731	731	refundable after the tenth last successive taxable year period that a portion
732	732	or installment of such credit may be claimed. An installment portion of an
733	733	earned tax credit that is not refunded shall be carried forward for
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776	776	43 HB 2334 10
777	777	application first against the taxpayer's tax liability in the next successive
778	778	tax year or for refund, as the case may be, within the ten successive taxable
779	779	year period that a portion or installment of the credit may be claimed. An
780	780	installment portion of an earned tax credit that has not been applied against
781	781	the taxpayer's tax liability or refunded at the end of the tenth last
782	782	successive taxable year period that installment portions of such earned tax
783	783	credit may be claimed shall be forfeited.
784	784	(d) The base percentage that may be refundable in each taxable year
785	785	of the
786	786	1
787	787	/10 portion or installment of an earned tax credit that may be
788	788	claimed, as provided by subsection (a), shall be 50%. The secretary may
789	789	provide for an additional percentage that may be refundable up to 100% of
790	790	the total eligible earned credit. The secretary shall base the additional
791	791	percentage on the qualified firm or qualified supplier meeting specified
792	792	goals that shall be set forth in the agreement. Such goals shall include
793	793	targets for the:
794	794	(1) Creation of new jobs, including, with respect to qualified firms,
795	795	new jobs for suppliers;
796	796	(2) benefit to the local, regional or state economy, including the
797	797	development of suppliers or ancillary businesses in Kansas;
798	798	(3) amount of capital investment;
799	799	(4) benefit to the development of the qualified firm's industry in
800	800	Kansas;
801	801	(5) other measures or goals, if any, of the secretary consistent with the
802	802	purposes of this act; and
803	803	(6) employment, retention and attraction of employees to remain
804	804	residents of, or relocate to, Kansas.
805	805	(e) The qualified firm or qualified supplier shall meet the
806	806	requirements of this act, any rules and regulations of the secretary of
807	807	commerce under this act and the terms of the agreement to receive a credit
808	808	each year that a credit is earned or an installment portion of the earned
809	809	credit is claimed. No credit shall be issued by the secretary of revenue
810	810	unless the qualified firm or qualified supplier has been certified by the
811	811	secretary of commerce as eligible as provided by K.S.A. 2022 Supp. 74-
812	812	50,312, and amendments thereto, for each taxable year the credit is
813	813	claimed. The secretary of commerce shall provide such certifications to the
814	814	secretary of revenue.
815	815	(f) If the qualified firm or qualified supplier breaches the terms and
816	816	conditions of the agreement pursuant to K.S.A. 2022 Supp. 74-50,312, and
817	817	amendments thereto, the qualified firm or qualified supplier shall be liable
818	818	for repayment of the amount of the tax credits to the state as provided by
819	819	K.S.A. 2022 Supp. 74-50,312, and amendments thereto.
820	820	(g) As a condition for claiming credits pursuant to this section, any
821	821	qualified firm or qualified supplier shall provide information pursuant to
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865	865	K.S.A. 79-32,243, and amendments thereto, as part of the tax return in
866	866	which such credits are claimed. Such credits shall not be denied solely on
867	867	the basis of the contents of the information provided by the qualified firm
868	868	pursuant to K.S.A. 79-32,243, and amendments thereto.
869	869	(h) Prior to finalization of an agreement pursuant to K.S.A. 2022
870	870	Supp. 74-50,312, and amendments thereto, the state finance council may
871	871	allow for a qualified firm or qualified supplier to be allowed to take one or
872	872	more additional portions or installments of the tax credit that such
873	873	qualified firm or qualified supplier is entitled pursuant to this subsection,
874	874	as provided in K.S.A. 2022 Supp. 74-50,312(e), and amendments thereto.
875	875	No additional portions or installments of the tax credit shall be allowed in
876	876	any taxable year unless the requested increase in the portions or
877	877	installments has been so reviewed and approved by the affirmative vote of
878	878	the governor and by a majority vote of the legislative members of the state
879	879	finance council. This matter is hereby characterized as a matter of
880	880	legislative delegation and subject to the guidelines prescribed in K.S.A.
881	881	75-3711c, and amendments thereto, except that the state finance council is
882	882	expressly granted the authority to act on this matter at any time, including
883	883	when the legislature is in session. Upon an affirmative vote, the qualified
884	884	firm or qualified supplier shall be allowed to take the additional portions
885	885	or installments of the tax credit approved by the state finance council in
886	886	the taxable year in which such portions or installments were approved, as
887	887	shall be set forth in the agreement pursuant to K.S.A. 2022 Supp. 74-
888	888	50,312, and amendments thereto. The portions or installments remaining
889	889	on such credit shall decrease accordingly in the event that additional
890	890	portions or installments are taken by a qualified firm or qualified supplier.
891	891	Sec. 3. K.S.A. 2022 Supp. 74-50,317 is hereby amended to read as
892	892	follows: 74-50,317. (a) On and after July 1, 2022, a qualified firm or a
893	893	qualified supplier that meets the requirements of K.S.A. 2022 Supp. 74-
894	894	50,312, and amendments thereto, and this section and that has entered into
895	895	an agreement with the secretary, as provided by K.S.A. 2022 Supp. 74-
896	896	50,312, and amendments thereto, may be eligible for reimbursement of up
897	897	to 50% of training and education eligible expenses for training or
898	898	education completed for new employees in each year for up to five
899	899	successive years, as determined by the secretary and as provided by this
900	900	section. The maximum amount of reimbursement paid to a qualified
901	901	supplier shall be $250,000 $500,000 per year. The maximum amount of
902	902	reimbursement paid to a qualified firm shall be $5,000,000 per year. In
903	903	determining the percentage, the number of successive years and the
904	904	maximum annual amount as limited by this subsection, the secretary shall,
905	905	at a minimum, consider the factors set forth in K.S.A. 2022 Supp.74-
906	906	50,313(b) and (d), and amendments thereto, as applicable.
907	907	(b) (1) Qualified firms shall be eligible commencing with the year in
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950	950	43 HB 2334 12
951	951	which the qualified firm enters into an agreement with the secretary, as
952	952	provided in K.S.A. 2022 Supp. 74-50,312, and amendments thereto,
953	953	commences construction of the qualified business facility or commences
954	954	commercial operations at the qualified business facility, as determined by
955	955	the secretary.
956	956	(2) Qualified suppliers shall be eligible commencing with the year in
957	957	which the qualified firm selected the qualified supplier for benefit
958	958	eligibility pursuant to K.S.A. 2022 Supp. 74-50,312, and amendments
959	959	thereto. Only training and education expenses for new employees
960	960	employed at a qualified business facility of the qualified supplier that is
961	961	located and operating in Kansas shall be eligible for reimbursement. A
962	962	qualified supplier shall not be awarded such benefits until the qualified
963	963	business facility of the qualified firm commences commercial operations.
964	964	(c) The qualified firm or qualified supplier shall submit an application
965	965	to the secretary in the form and manner required by the secretary and
966	966	provide all information requested by the secretary, as provided by K.S.A.
967	967	2022 Supp. 74-50,312, and amendments thereto. If approved by the
968	968	secretary, the qualified firm or qualified supplier shall enter into an
969	969	agreement with the secretary with such terms and conditions as may be
970	970	required by the secretary and commitments required by this act, as
971	971	provided pursuant to K.S.A. 2022 Supp. 74-50,312, and amendments
972	972	thereto. The agreement shall set forth the maximum amount of the
973	973	incentive that may be received each year, as limited by subsection (a), and
974	974	shall require an annual showing of eligibility, including evidence showing
975	975	the number of new hires and amount of eligible training and education
976	976	expense, for each year the incentive is claimed.
977	977	(d) Subject to appropriations therefor, reimbursement in the amount
978	978	approved by the secretary and pursuant to the terms of the agreement and
979	979	the limitations of subsection (a) shall be made by the secretary from the
980	980	attracting powerful economic expansion new employee training and
981	981	education fund established in K.S.A. 2022 Supp. 74-50,318, and
982	982	amendments thereto, in accordance with appropriation acts upon warrants
983	983	of the director of accounts and reports issued pursuant to vouchers
984	984	approved by the secretary of commerce or the secretary's designee.
985	985	(e) No reimbursement shall be issued unless the qualified firm or the
986	986	qualified supplier has been certified by the secretary, as provided in K.S.A.
987	987	2022 Supp. 74-50,312, and amendments thereto, as meeting all
988	988	requirements of this act, any rules and regulations of the secretary and the
989	989	agreement executed pursuant to K.S.A. 2022 Supp. 74-50,312, and
990	990	amendments thereto.
991	991	(f) If the qualified firm or qualified supplier breaches the terms and
992	992	conditions of the agreement pursuant to K.S.A. 2022 Supp. 74-50,312, and
993	993	amendments thereto, reimbursements shall be repaid to the state as
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1036	1036	43 HB 2334 13
1037	1037	provided by K.S.A. 2022 Supp. 74-50,312, and amendments thereto.
1038	1038	Sec. 4. K.S.A. 2022 Supp. 74-50,321 is hereby amended to read as
1039	1039	follows: 74-50,321. (a) Commencing with fiscal year 2022, in any fiscal
1040	1040	year that a qualified firm enters into an agreement with the secretary of
1041	1041	commerce for the first time pursuant to K.S.A. 2022 Supp. 74-50,312, and
1042	1042	amendments thereto, and commences construction on a qualified business
1043	1043	facility under this act, the secretary of commerce shall certify such fact to
1044	1044	the secretary of revenue, the director of the budget and the director of
1045	1045	legislative research. Such certification shall be made when such fact is
1046	1046	known to the secretary, but in any event on or before June 30 of such fiscal
1047	1047	year. The secretary of commerce shall make only two such certifications,
1048	1048	one for fiscal year 2022 and one for fiscal year 2023.
1049	1049	(b) Upon receipt of such certification, the secretary of revenue shall
1050	1050	adjust the corporate income tax rate imposed pursuant to the provisions of
1051	1051	K.S.A. 79-32,110, and amendments thereto, to go into effect for the next
1052	1052	tax year by reducing the rate by 0.5%. The maximum reduction to be
1053	1053	applied for one taxable year shall be 0.5% regardless of the number of
1054	1054	eligible qualifying firms that may have satisfied the conditions of
1055	1055	subsection (a). Only two such rate reductions shall be permitted. After two
1056	1056	rate reductions have been made as provided by this section, no further
1057	1057	rate reductions shall occur as a result of an agreement as provided by (a).
1058	1058	(c) The rate reduction of 0.5% shall be applied to reduce the normal
1059	1059	tax on corporations imposed pursuant to K.S.A. 79-32,110, and
1060	1060	amendments thereto, until reduced to 0% 3%.
1061	1061	(d) The secretary of revenue shall report any reduction in corporate
1062	1062	income tax rates pursuant to this section to the chairpersons of the senate
1063	1063	standing committees on assessment and taxation and commerce, the
1064	1064	chairpersons of the house of representatives standing committees on
1065	1065	commerce, labor and economic development and taxation and the
1066	1066	governor, and shall cause notice of any such reduction to be published in
1067	1067	the Kansas register prior to September 15 of the calendar year immediately
1068	1068	preceding the tax year in which such reduction takes effect.
1069	1069	Sec. 5. K.S.A. 2022 Supp. 74-50,322 is hereby amended to read as
1070	1070	follows: 74-50,322. (a) On and after July 1, 2022, a qualified firm or
1071	1071	qualified supplier that meets the requirements of this section and K.S.A.
1072	1072	2022 Supp. 74-50,312, and amendments thereto, and that has entered into
1073	1073	an agreement with the secretary, as provided by K.S.A. 2022 Supp. 74-
1074	1074	50,312, and amendments thereto, shall be eligible for annual
1075	1075	reimbursement of up to 50% of relocation incentives and expenses
1076	1076	provided by the qualified firm or qualified supplier to incentivize
1077	1077	employees who are not Kansas residents to relocate their primary
1078	1078	residence to this state and become Kansas residents. Reimbursement for
1079	1079	such eligible incentives and expenses shall not exceed an annual
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1122	1122	43 HB 2334 14
1123	1123	reimbursement amount of $1,000,000 to the a qualified firm and shall not
1124	1124	exceed an annual reimbursement amount of $250,000 to a qualified
1125	1125	supplier, as determined by the secretary. Reimbursement for such eligible
1126	1126	incentives and expenses may be provided for up to ten successive years, as
1127	1127	determined by the secretary.
1128	1128	(b) The qualified firm or qualified supplier shall submit to the
1129	1129	secretary a Kansas residency incentive plan for which it will seek
1130	1130	reimbursement and the expected costs for each component of the plan. The
1131	1131	reimbursement percentage shall be subject to the qualified firm or
1132	1132	qualified supplier meeting goals for incentivizing employees to become
1133	1133	new Kansas residents as determined by the secretary. If the secretary
1134	1134	approves the plan, the qualified firm or qualified supplier and the secretary
1135	1135	shall enter into an agreement that requires the qualified firm or qualified
1136	1136	supplier to provide annual documentation of the relocation incentive
1137	1137	expenditures and the results of such expenditures to the secretary. No
1138	1138	reimbursement shall be made unless the secretary of commerce has
1139	1139	certified, for each year for which a reimbursement is claimed, that the
1140	1140	qualified firm or qualified supplier meets all requirements of this act, the
1141	1141	rules and regulations of the secretary and the agreements entered into
1142	1142	pursuant to this section and K.S.A. 2022 Supp. 74-50,312, and
1143	1143	amendments thereto.
1144	1144	(c) The qualified firm or qualified supplier shall remit to the state an
1145	1145	amount equal to the amount of benefits provided to the qualified firm or
1146	1146	qualified supplier pursuant to this section upon any breach by the qualified
1147	1147	firm or qualified supplier of the terms and conditions set forth in the
1148	1148	agreement entered into pursuant to this section or K.S.A. 2022 Supp. 74-
1149	1149	50,312, and amendments thereto. The agreement between the secretary of
1150	1150	commerce and the qualified firm or qualified supplier entered into
1151	1151	pursuant to this section and K.S.A. 2022 Supp. 74-50,312, and
1152	1152	amendments thereto, shall specify such repayment requirements in such
1153	1153	agreement.
1154	1154	(d) Subject to appropriations therefor, the allowable amount of
1155	1155	reimbursement shall be paid to the qualified firm or qualified supplier
1156	1156	from the attracting powerful economic expansion Kansas residency
1157	1157	incentive fund, established by K.S.A. 2022 Supp. 74-50,323, and
1158	1158	amendments thereto. No interest shall be allowed on any payment made to
1159	1159	a qualified firm or qualified supplier pursuant to this section.
1160	1160	Sec. 6. K.S.A. 2022 Supp. 74-50,323 is hereby amended to read as
1161	1161	follows: 74-50,323. There is hereby established in the state treasury the
1162	1162	attracting powerful economic expansion Kansas residency incentive fund
1163	1163	to be administered by the secretary of commerce. All moneys credited to
1164	1164	the attracting powerful economic expansion Kansas residency incentive
1165	1165	fund shall be used by the Kansas department of commerce for
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1208	1208	43 HB 2334 15
1209	1209	reimbursement to qualified firms or qualified suppliers for expenses
1210	1210	incurred in a Kansas residency incentive plan for employees pursuant to
1211	1211	the provisions of K.S.A. 2022 Supp. 74-50,312 and 74-50,322, and
1212	1212	amendments thereto. All expenditures from the attracting powerful
1213	1213	economic expansion Kansas residency incentive fund shall be made in
1214	1214	accordance with appropriation acts upon warrants of the director of
1215	1215	accounts and reports issued pursuant to vouchers approved by the
1216	1216	secretary of commerce or the secretary's designee.
1217	1217	Sec. 7. K.S.A. 2022 Supp. 74-50,312, 74-50,313, 74-50,317, 74-
1218	1218	50,321, 74-50,322, 74-50,323 and 74-50,324 are hereby repealed.
1219	1219	Sec. 8. This act shall take effect and be in force from and after its
1220	1220	publication in the Kansas register.
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