Brief ⁽¹⁾

HB 3010 would amend the statutes governing the High Performance Incentive Program (HPIP) in the following ways.

• �Implement the North American Industry Classification System (NAICS) to replace the current Standard Industrial Classification (SIC) code as the standard in determining that a company pays a higher than average wage to qualify for participation in the program.



• �Clarify that businesses are to use a 40-hour work week when converting part-time employees to full-time equivalents.



• �Require disclosure, upon request, of pertinent information regarding wage and other confidential information provided by businesses participating in the program to the Legislative Division of Post Audit.



• �Require the taxpayer to file a certificate of intent to invest in a qualified business facility in a form satisfactory to the Secretary of Commerce and Housing.

Background

The HPIP program was enacted in 1993 with the intent of retaining Kansas' existing high performance businesses, encouraging investment in worker training and education, and spurring the attraction of new, high quality firms to the state. The incentives offered under the program are limited to manufacturers, export oriented service sector firms, and corporate headquarters and back-office operations of national or multi-national corporations. To qualify, a firm must pay above average wages for their industry in the county in which it is located, and either invest an amount equal to 2 percent of its total payroll on employee training or participate in either the Kansas Industrial Training (KIT) Program, the Kansas Industrial Retraining (KIR) Program, or the State of Kansas Investment in Lifelong Learning (SKILL) Program. Firms wishing to use this credit must be certified by the Kansas Department of Commerce and Housing (KDOCH).

Two income tax credits are available through the HPIP program. The first is a 10 percent investment tax credit against corporate income tax on any investment exceeding $50,000. This credit may be taken over a ten-year period subject to annual requalification by KDOCH. The second is a workforce training tax credit on training expenditures above an amount equal to 2 percent of total payroll. The credit is limited to $50,000 with no carry-over provision provided.

The House Committee held a hearing on HB 3010 at which time a representative from KDOCH testified in favor of the bill. The Committee made several technical amendments to the bill and also removed a section which would have required that a business make an investment over $50,000 higher than the business' annual average investment in order to qualify for a tax credit.

An updated fiscal note for the bill as amended by the House Committee was not available upon publication of this supplemental note.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html