Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 adam.c.proffitt@ks.gov
Topeka, KS 66612 http://budget.kansas.gov
Adam C. Proffitt, Director Laura Kelly, Governor
Division of the Budget
February 6, 2024
The Honorable Renee Erickson, Chairperson
Senate Committee on Commerce
300 SW 10th Avenue, Room 546-S
Topeka, Kansas 66612
Dear Senator Erickson:
SUBJECT: Fiscal Note for SB 329 by Senator Holland
In accordance with KSA 75-3715a, the following fiscal note concerning SB 329 is
respectfully submitted to your committee.
SB 329 would discontinue the issuance of new Angel Investor Tax Credits after tax year
2024. Any remaining tax credits, including transferred tax credits that have been carried forward
would be forfeited after December 31, 2028.
The Department of Revenue estimates that SB 329 would increase State General Fund
revenues by $2.5 million in FY 2026 and by $2.8 million in FY 2027. To formulate these
estimates, the Department of Revenue reviewed data on Angel Investor Tax Credits. Using the
total amount of credits claimed and credits allowed, there is expected to be a carry forward of
$14.0 million remaining at the end of tax year 2024. The Department estimates $2.7 million of
the carried forward tax credits are expected to be claimed in both tax years 2025 and 2026. Under
current law, the Department estimates $5.2 million credits would be claimed in tax year 2025 and
$5.5 million in tax year 2026. The Department estimates that the bill would increase State General
Fund revenues by $2.5 million in tax year 2025 or FY 2026 with the difference in the amount of
tax credits allowed under current law ($5.2 million) minus that amount tax credits claimed under
the provisions of the bill ($2.7 million).
The Department indicates that the bill would require $1,500 from the State General Fund
in FY 2025 to implement the bill and to modify the automated tax system. The required
programming for this bill by itself would be performed by existing staff of the Department of
Revenue. In addition, if the combined effect of implementing this bill and other enacted legislation
exceeds the Department’s programming resources, or if the time for implementing the changes is
too short, additional expenditures for outside contract programmer services beyond the
Department’s current budget may be required.
The Honorable Renee Erickson, Chairperson
Page 2—SB 329
The Department of Commerce indicates that it is currently responsible for administering
the Angel Investor Tax Credit Program. The Governor’s budget includes continuing funding for
this program in FY 2025 to review applications from qualified investors and qualified businesses.
Though no new credits would be issued in tax year 2025 under the provisions of the bill, previously
issued credits may be carried over and each qualified business must maintain its headquarters and
qualifying operations in Kansas for a minimum period of five years (unless they are a bioscience
business; then they must remain in the state for ten years). The Department does not anticipate
immediate changes to agency workload as the existing program manager would be required to
review existing agreements, implement possible claw back plans, and satisfy tracking and
reporting requirements. Any cost savings resulting from enactment of this bill would be delayed
for at least three years as qualified businesses begin to meet the five-year benchmark to maintain
their headquarters and qualifying operations in Kansas. The Department collects approximately
$40,000 in application fees for this program each year. The Department estimates that $20,000 in
application fees would not be collected from this program during the last half of FY 2025 and
$40,000 in application fees would not be collected in FY 2026.
The bill is not expected to have a fiscal effect on the operations of the Insurance
Department. Under current law, insurance companies are able to claim the Angel Investor Tax
Credit, but none have claimed this tax credit in the last eight years. Any fiscal effect associated
with SB 329 is not reflected in The FY 2025 Governor’s Budget Report.
Sincerely,
Adam C. Proffitt
Director of the Budget
cc: Bobbi Mariani, Insurance Department
Sherry Rentfro, Department of Commerce
Lynn Robinson, Department of Revenue