Tax conference committee previews range of bills, flags differences on income-tax cut formulas and housing credit transferability

The Committee on Taxation held a preliminary conference meeting in which staff outlined a slate of tax bills that are in conference or otherwise conferenceable, including proposals on personal exemptions, the homestead refund tax-freeze program, differing income-tax reduction formulas, and the transferability of a housing investor tax credit. There were no formal votes during the session; members agreed to reconvene at 1:30 p.m.

Eddie, research staff, told members they should have two handouts summarizing (1) bills and bill provisions and (2) fiscal information, and then reviewed the bills he placed in conference. "When I prepared this, there were two bills in conference, three bills pending motions to concur or nonconcur," Eddie said, and then described the bills and key differences among the chambers.

Among the items Eddie described in detail were HB 2231 (updates to personal exemption provisions, including treatment of the head-of-household status consistent with Department of Revenue practice and increasing the disabled veterans personal exemption to match last year’s dependent exemption under special-session SB 1), and Senate additions to that bill affecting the homestead refund tax-freeze program. Eddie summarized the Senate changes to the homestead refund program as: increasing the income eligibility threshold to $80,000 for tax year 2025; raising the maximum appraised-value threshold from $350,000 to $450,000 and providing a mechanism for future increases tied to the 10-year average change in residential real estate valuation; and specifying base years used for calculating valuation limits (2024 for newly eligible taxpayers; 2021 for those currently eligible).

Eddie also reviewed SB 35, which the Senate had moved to nonconcur earlier in the day. He said the Senate version would eliminate the state mill levies for the Educational Building Fund (1 mill) and the State Institutions Building Fund (0.5 mill) and replace them with demand transfers from the State General Fund to backfill those levies at specified amounts and growth rates. The House version of SB 35 included protest-petition procedures for certain municipal budgets that exceed a statutorily defined growth rate, requirements for notice and reimbursement of notification costs, required roll-call votes where governing bodies exceed the limit, limitations on untimely-filed budgets, creation of an "Astra Fund" with State General Fund transfers and payments to local taxing entities, repeal of revenue-neutral rate provisions, and reauthorization of a statewide school finance mill levy at 20 mills.

The committee discussed competing formulas for income- and privilege-tax rate reductions in SB 259 (Senate) and HB 2318 (House). Eddie explained the Senate formula would base the trigger on growth of all State General Fund tax receipts relative to an inflation-adjusted base year, while the House formula would focus on growth of SGF income-and-privilege tax receipts specifically and added a condition that the Budget Stabilization Fund balance must equal or exceed 20% of the prior year’s SGF tax receipts before a reduction would take effect. Eddie noted the floor differences on the target rate (Senate floor reduced rates to 4.5%; House floor took them to 4.0).

On housing tax credits, Representative Pishni and others asked for clarification about HB 2096. Eddie said HB 2096 applies only to the housing investor tax credit (a transferable credit), not to the Low-Income Housing Tax Credit covered separately in HB 2119. Eddie explained that under current law the housing investor tax credit can be carried forward up to five years; the bill would clarify that a transferred credit may be applied in the first year it is earned as well as years two through five. The committee discussed that related housing credit proposals have moved between the Tax Committee and the Commerce Committee in each chamber.

Other conferenceable bills Eddie listed included county sales-tax authorities (Finney, Pawnee, Seward, Jackson), a property-tax exemption for energy storage systems (HB 2083), an expansion/extension of the Bridging Opportunity Zone program with new eligible benefits for rural relocation and home down-payment/childcare assistance (SB 69), a Kansas Legal Tender Act and an income-tax subtraction for sales of specie (SB 39), an exemption-administration clarification for custom meat processing (sub for SB 33), revisions to board-of-tax-appeals fee application when appeals are pending (SB 269), and proposals addressing municipal budget deadlines, tax-statement mailing dates, and revenue-neutral-rate paperwork (Senate substitute for HB 2021).

Members asked for additional items to be included; Eddie said he would update the meeting document as conferee appointments or motions changed. When Senator Pack asked for the current Budget Stabilization Fund balance relative to the 20% threshold specified in the House floor language, Eddie provided staff estimates: FY2025 SGF tax receipts estimated at $9.65 billion and an estimated Budget Stabilization Fund balance of about $1.794 billion, which he said equates to roughly 18.6% of the FY2025 SGF tax receipts—below the 20% threshold the House language would require.

The meeting closed with scheduling logistics: members agreed to reconvene at 1:30 p.m. for further conference work and noted the committee had reserved the room for meetings all week.

The session was a staff-led briefing rather than a decision meeting; no committee motions or roll-call votes were recorded in the transcript.