SENATE BILL No. 15
AN ACT concerning employment; relating to persons with disabilities; increasing the
maximum yearly amount of income tax credits available for purchases under the
disability employment act from qualified vendors and continuing in existence such
credits beyond tax year 2023; defining qualifying vendors and eligible employees;
establishing a grant program administered by the secretary of labor to facilitate
transitions from sub-minimum to at least minimum wage employment for persons
with disabilities; creating the Kansas sheltered workshop transition fund; amending
K.S.A. 79-32,273 and repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. As used in sections 1 through 3, and amendments
thereto:
(a) "Kansas sheltered workshop employer" or "workshop
employer" means a private nonprofit, state or local government
institution that provides employment opportunities for individuals with
intellectual, developmental or physical disabilities and provides such
employment opportunities for all or a portion of such individuals under
a certificate issued by the United States secretary of labor under 29
U.S.C. § 214(c).
(b) "Secretary" means the secretary of labor.
New Sec. 2. (a) There is hereby created in the state treasury the
Kansas sheltered workshop transition fund. The secretary of labor shall
administer the fund. All expenditures from the fund shall be for the
purpose of facilitating transitions by Kansas sheltered workshop
employers away from employing individuals with disabilities under a
certificate issued by the United States secretary of labor under 29
U.S.C. § 214(c) and toward paying all such employees at least the
minimum wage. Such purpose shall be achieved by providing matching
grants from fund moneys to Kansas sheltered workshop employers that
commit to paying at least the minimum wage to all employees. A grant
shall be matched on a $1-to-$1 basis by the Kansas sheltered workshop
employer from nonstate sources.
(b) Applications for matching grants shall be made by Kansas
sheltered workshop employers to the secretary in the form and manner
required by the secretary. In determining whether applicants should be
approved and receive a grant, the secretary shall seek the assistance of
the secretary for children and families, the secretary for aging and
disability services or any other appropriate state agency. The secretary
for children and families, secretary for aging and disability services or
other state agency shall provide such assistance to the secretary as
requested by the secretary. The applicant shall provide a transition plan
to the secretary demonstrating how the applicant will use the grant and
other funding to transition away from use of a certificate issued by the
United States secretary of labor under 29 U.S.C. § 214(c). The Kansas
sheltered workshop shall commit to completing the plan to receive a
grant. If the secretary approves the transition plan, finds that the Kansas
sheltered workshop has sufficient nonstate funding to match the grant
with nonstate funds on a $1-to-$1 basis and approves the application,
the secretary shall award the Kansas sheltered workshop a matching
grant in the amount determined by the secretary. The secretary may
award subsequent additional grants to the same Kansas sheltered
workshop employer upon satisfactory progress shown by such
workshop employer pursuant to the workshop employer's transition
plan.
(c) Kansas sheltered workshop employers that receive a matching
grant shall provide such information to the secretary as requested,
excluding any information prohibited from disclosure under state or
federal law, regarding the use of grant funds, use of associated nonstate
funds and progress made toward achievement of the transition plan as
developed pursuant to subsection (b). Such information shall be utilized
by the secretary to analyze and monitor the use of grant funds and SENATE BILL No. 15—page 2
compliance with and progress toward completion of the transition plan
by workshop employers and to develop best uses of grant funds and
transition methods to attain the goal of sections 1 through 3, and
amendments thereto.
(d) On or before January 31, 2025, and annually on or before
January 31 thereafter, the secretary shall report to the house of
representatives standing committee on commerce, labor and economic
development or its successor committee and the senate standing
committee on commerce or its successor committee on the amount and
uses of grant funding by each Kansas sheltered workshop employer that
has received a matching grant and the progress made by each Kansas
sheltered workshop employer toward the goal of sections 1 through 3,
and amendments thereto.
(e) All expenditures from the Kansas sheltered workshop
transition fund shall be for the purpose described in subsection (a) and
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 labor or the secretary's designee.
(f) On July 1, 2024, and each July 1 thereafter, or as soon
thereafter as moneys may be available, the director of accounts and
reports shall transfer $1,000,000 from the state economic development
initiatives fund established by K.S.A. 79-4804, and amendments
thereto, to the Kansas sheltered workshop transition fund.
New Sec. 3. The provisions of sections 1 through 3, and
amendments thereto, shall expire on July 1, 2034. On July 1, 2034, the
director of accounts and reports shall transfer all unencumbered
moneys in the Kansas sheltered workshop transition fund to the state
general fund. After such transfer, the Kansas sheltered workshop
transition fund shall be abolished and all liabilities of the Kansas
sheltered workshop transition fund shall be transferred to and imposed
on the state general fund.
Sec. 4. K.S.A. 79-32,273 is hereby amended to read as follows:
79-32,273. (a) For tax years 2019 through 2023, The provisions of this
section shall be known and may be cited as the disability employment
act.
(b) A credit shall be allowed against the tax imposed by the
Kansas income tax act in an amount equal to 15% of the amount for
expenditures of goods and services purchased by the taxpayer from a
qualified vendor on and after January 1, 2019, and before January 1,
2024 including such expenditures made on and after January 1, 2024,
but prior to the effective date of this act, as certified by the secretary of
commerce as provided in subsection (c) (d). The amount of such credit
awarded for each taxpayer shall not exceed $500,000 per qualified
vendor per tax year. In no event shall the total amount of cumulative
credits allowed under this section exceed:
(1) $5,000,000 for tax years 2019 through 2023;
(2) $8,000,000 for all tax years that the credit remains in effect
2024 through 2028; and
(3) $8,000,000 for each consecutive five tax years thereafter
starting with tax year 2029.
(b)(c) The tax credit allowed by this section shall be deducted
from the taxpayer's income tax liability for the tax year in which the
expenditures were made by the taxpayer. If the amount of such tax
credit exceeds the taxpayer's income tax liability for such tax year, the
taxpayer may carry over the amount that exceeds such tax liability for
deduction from the taxpayer's liability in the next succeeding tax year
or years until the total amount of the tax credit has been deducted from
tax liability, except that no such tax credit shall be carried over for
deduction after the fourth tax year succeeding the tax year in which the SENATE BILL No. 15—page 3
expenditures were incurred.
(c)(d) The secretary of commerce shall annually certify that
expenditures for goods and services purchased by a taxpayer subject to
the tax credit provided in this section were made from a qualified
vendor, and provide such certification to the secretary of revenue. The
secretary of commerce is hereby authorized to promulgate rules and
regulations for establishing criteria based on the provisions of K.S.A.
75-3317 et seq., and amendments thereto, for evaluating whether
purchases by taxpayers from a qualified vendor should be certified as
provided in this section, with the assistance and approval of the
secretary of revenue.
(d)(e) As used in this section:
(1) "Certified business""Qualified vendor" means:
(A) Any business certified by the department of administration
that qualifies as a certified business pursuant to K.S.A. 75-3740, and
amendments thereto, and is a not-for-profit business that is a sole
proprietorship, partnership, association or corporation domiciled in
Kansas, or any corporation, even if a wholly owned subsidiary of a
foreign corporation, that:
(A)(i) Does business primarily in Kansas or substantially all of its
production in Kansas;
(B)(ii) employs at least 30% of its employees in an integrated
setting who are individuals with disabilities and reside in Kansas;
(C)(iii) offers to contribute at least 75% of the premium cost for
individual health insurance coverage for each eligible employee. The
department of administration shall require a certification of these facts;
and
(D)(iv) does not employ individuals under a certificate issued by
the United States secretary of labor under 29 U.S.C. § 214(c);
(B) qualifies as a qualified vendor pursuant to K.S.A. 75-3317,
and amendments thereto, and also:
(i) Employs at least 30% of its employees in an integrated setting;
(ii) offers to contribute at least 75% of the premium cost for
individual health insurance coverage for each eligible employee or
offers a qualified company-sponsored insurance plan under the
affordable care act or pays the required subsidy to the internal revenue
service for employees who purchase insurance through the open
market, if a company-sponsored plan is not offered. If any such
company is not covered under the affordable care act and does not
offer a company-sponsored insurance plan, such company must offer
assistance to the employee to cover at least 75% of their health
insurance costs through a health savings account or other legal and
appropriate methodology; and
(iii) does not employ individuals under a certificate issued by the
United States secretary of labor under 29 U.S.C. § 214(c); or
(C) a division within a Kansas not-for-profit organization that:
(i) Does business primarily in Kansas or substantially all of its
production in Kansas;
(ii) within such division, employs in an integrated setting at least
30% of its employees who are individuals with disabilities and reside in
Kansas;
(iii) within such division, offers to contribute at least 75% of the
premium cost for individual health insurance coverage for each
eligible employee or offers a qualified company-sponsored insurance
plan under the affordable care act or pays the required subsidy to the
internal revenue service for employees who purchase insurance
through the open market, if a company-sponsored plan is not offered. If
any such company is not covered under the affordable care act and
does not offer a company-sponsored insurance plan, such company SENATE BILL No. 15—page 4
must offer assistance to the employee to cover at least 75% of their
health insurance costs through a health savings account or other legal
and appropriate methodology; and
(iv) does not employ individuals under a certificate issued by the
United States secretary of labor under 29 U.S.C. § 214(c) and the
Kansas not-for-profit organization, including any other division within
the Kansas not-for-profit organization, does not employ individuals
under such a certificate.
(2) "individuals with disabilities" or "individual with a disability"
means any individual who:
(A) Is certified by the Kansas department for aging and disability
services or by the Kansas department for children and families, which
administers the rehabilitation services program or by a healthcare
provider determined by the secretary of revenue, that shall include, but
is not limited to, medical doctors, doctors of osteopathy, physician
assistants, nurse practitioners, physical therapists, occupational
therapists and optometrists who can substantiate an individual as
having a physical or mental impairment that constitutes a substantial
barrier to employment; and
(B) works a minimum number of hours per week for a certified
business necessary to qualify for health insurance coverage offered
pursuant to subsection (d)(1); and
(C) (i) is receiving services, has received services or is eligible to
receive services under a home and community based services program,
as defined by K.S.A. 39-7,100, and amendments thereto;
(ii) is employed by a charitable organization domiciled in the state
of Kansas and exempt from federal income taxation pursuant to section
501(c)(3) of the federal internal revenue code of 1986, as amended; or
(iii) is an individual with a disability pursuant to the disability
standards established by the social security administration as
determined by the Kansas disability determination services under the
Kansas department for children and families; and
(3) "qualified vendor" means an entity that:
(A) Is a "qualified vendor" pursuant to K.S.A. 75-3317, and
amendments thereto, or is a "certified business" that is also a nonprofit
organization pursuant to K.S.A. 75-3740, and amendments thereto;
(B) pays minimum wage or above to all their employees in a
manner that meets the definition of "competitive employment" pursuant
to K.S.A. 44-1136, and amendments thereto;
(C) meets the definition of employing all of their workers in an
"integrated setting" pursuant to K.S.A. 44-1136, and amendments
thereto; and
(D) offers a qualified company-sponsored insurance plan under
the affordable care act or pays the required subsidy to the internal
revenue service for employees who purchase insurance through the
open market, if a company-sponsored plan is not offered. If any such
company is not covered under the affordable care act, and does not
offer a company-sponsored insurance plan, such company must offer
assistance to the employee to cover at least 75% of their health
insurance costs through a health savings account or other legal and
appropriate methodology.
(e)(f) The secretary of revenue shall report to the house committee
on taxation and the senate committee on assessment and taxation on or
before February 1, 2021, 2022, and 2023, concerning the
implementation and effectiveness of the credit provided in this section.
Sec. 5. K.S.A. 79-32,273 is hereby repealed. SENATE BILL No. 15—page 5
Sec. 6. This act shall take effect and be in force from and after its
publication in the Kansas register.
I hereby certify that the above BILL originated in the
SENATE, and passed that body
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SENATE adopted
Conference Committee Report ________________
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President of the Senate.
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Secretary of the Senate.
Passed the HOUSE
as amended _________________________
HOUSE adopted
Conference Committee Report ________________
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Speaker of the House.
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Chief Clerk of the House.
APPROVED _____________________________
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Governor.