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Kansas Commerce official outlines incentives in AMK aviation bill to attract aerospace manufacturing
Summary
Deputy Secretary Joshua Jefferson told the Senate Commerce Committee that AMK would add tools to existing incentive programs, including workforce training, tax credits, sales tax relief and clawbacks tied to job and investment commitments.
Joshua Jefferson, deputy secretary of the Kansas Department of Commerce, told the Senate Commerce Committee on Feb. 20 that AMK (Aviation Innovative Manufacturing in Kansas) would slightly expand existing state incentives to help recruit aerospace and advanced-vehicle manufacturing projects.
Jefferson said the bill focuses on manufacturing, research and development in sustainable aviation fuel and hydrogen, headquarters recruitment, and component and aircraft assembly. "AMK...is a bill that really gives us a couple of new tools, but is really a slight enhancement to the Department of Commerce's incentive programs," he said.
Key elements described in committee testimony include: - Workforce training support with no-cost access to Kansas community and technical colleges and a reimbursement program with a $5,000,000 cap; - A payroll tax component that would allow companies to retain a portion of project-employee payroll withholding for up to 10 years (the testimony did not specify the precise percentage in the bill text presented to the committee); - A refundable capital investment tax credit of up to 10% of total project capital investment, paid over five years, with an automatic 10% credit for projects in nonmetropolitan Kansas; - A "Kansas first" procurement incentive: qualifying companies that buy at least $20 million in goods or services from Kansas businesses would be eligible for up to $1,000,000 in incentives; - Sales tax exemptions or abatements for construction materials for qualified projects, consistent with existing economic development programs.
Jefferson told the committee the program would include clawback provisions if companies failed to meet agreed investment or employment targets: "If the company fails to reach committed capital investment at project completion, the earned benefits of the program shall be revoked and reimbursed to the state...on a sliding scale of the shortfall," he said. He also noted a sunset in the bill.
Jefferson said the Commerce Department provided a return-on-investment study included with testimony and that the bill was not being drafted for a single project in the pipeline. He stood for questions after the informational briefing.
Ending: Jefferson emphasized that AMK is intended to keep Kansas competitive in aerospace recruitment while tying incentives to job and investment performance through clawbacks and other safeguards.
