Committee hears HB2757 to repeal dozens of income tax credits, alters HPIP and extends angel investor credit

The Committee on Commerce, Labor and Economic Development heard testimony on House Bill 2757, a broad measure that would repeal or discontinue numerous income tax credits, revise the High Performance Incentive Program (HPIP) and extend certain investor and aviation credits.

Revisor Reimer told the committee HB2757 would remove a long list of largely underused tax credits — including the agritourism liability insurance credit, employer health insurance contribution credit, assistive-technology/individual development account credit, regional foundation credits, biomass-to-energy property tax exemption, disabled access income tax credit, alternative-fuel vehicle credit, swine facility improvement credit, abandoned oil or gas well plugging credit, and a petroleum refinery environmental compliance credit — and discontinue the carbon dioxide capture amortization deduction. The bill also alters HPIP standards and transfer rules and prolongs the angel investor tax credit to 2031, Reimer said.

The bill would reduce the HPIP wage threshold from 150% to 125% of the aggregate average wage beginning Jan. 1, 2026, and establish an alternative rural wage benchmark for nonmetropolitan employers, to be determined by the secretary of commerce. The measure would also relax annual certification for credit carry-forward years, making certification ongoing if wage requirements remain satisfied, and expand transferability of unused credits, including a provision that would allow certain S corporations to transfer up to 100% of unused credits for projects placed in service on or after Jan. 1, 2026.

Supporters, including Eric Stafford, vice president of government affairs for the Kansas Chamber, said a working group reviewed state incentives and recommended repealing roughly 20–21 underutilized credits while proposing targeted HPIP reforms and alternatives for rural programs. "We wanted to clean up our statute books on income tax credits and analyze where we can improve what's not working," Stafford said. He told the committee the Chamber coordinated the work with the governor’s office and remains open to amendments.

Dusty Freeze of engineering firm Black & Veatch described a specific problem for employee-owned companies (ESOPs), arguing ESOP trustees currently cannot fully monetize HPIP benefits under the 50% transferability rule. "The amendment here would allow us effectively to transfer up to a 100% of the full HPIP benefits so that we can fully monetize the whole entire amount," Freeze said, urging parity for employee-owned structures relative to C corporations.

Representative Sutton raised the bill's fiscal note, noting a projected negative impact of about $170.1 million in state general fund revenue in 2028. Mike Ditch of legislative research confirmed that the table in the fiscal note lists a -$170,100,000 figure in general fund revenues, explaining that greater eligibility and transferability could allow previously unclaimable credits to be used and thus reduce net revenues in that year.

Opponents included Jessica Lucas, president of the Friends of Cedar Crest Association, who asked that repeal language affecting a tax credit used to encourage donations for preservation of the governor’s residence be removed. Lucas said the program helped attract donors and offered to provide the committee donation figures for the five years the credit was available. Mike Ditch cited Department of Revenue reporting showing 12 filers and $12,003.35 in total expenditure for the Friends of Cedar Crest credit in process year 2024.

Committee members pressed for more detail on which credits are still active, how HPIP thresholds and transfer rules affect eligibility, and whether changes would undercut other tax policy goals, such as income tax rate reductions. Representative Poskin urged retaining the residential portion of the disabled access credit, citing high personal costs for accessibility modifications; proponents said they would consider targeted amendments where usage and need are demonstrated.

The committee closed the public hearing on HB2757 and indicated additional follow-up and coordination with the tax committee would be necessary before further action.

What’s next: the committee closed the hearing on HB2757 and moved to other business; staff were asked to provide a list of credits that remain active and additional technical clarifications requested during the hearing.