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Minutes for HB2416 - Committee on Taxation
Short Title
Providing a sales tax exemption for area agencies on aging.
Minutes Content for Thu, Mar 2, 2023
Chairperson Smith opened the hearing for HB2416.
Adam Siebers, Revisor, provided an overview on HB2416 that would provide a sales tax exemption for not-for-profit corporation operating as Area Agency on Aging for coordinating and providing seniors and those living with disabilities with services that promote person-centered care. (Attachment 1) Mr. Siebers stood for questions from Committee members.
Kathleen Smith, Kansas Department of Revenue, presented an overview on the fiscal note for HB2416 stating the bill would decrease state revenue by $337,000 in FY 2024. Of that total, the State General Fund is estimated to decrease by $280,000 and the State Highway Fund by $57,000. In subsequent fiscal years, the estimate would go down to around $132,000 in FY 2025. Ms. Smith stood for questions from Committee members.
Proponents:
Representative Titus, House District 51, testified as a proponent for HB2416 and brought to the Committee's attention the area is represented by the North-Central Flint Hills Area Agency on Aging which consists of seventeen counties. Ten House Representatives have signed a letter in support of HB2416. Agencies located in urban areas do not pay sales tax and are able to put the money back into their programs, while rural agencies do not. The good and necessary work the agencies perform, the relatively small fiscal note, and the existing disparity between urban and rural agencies, they ask for support of HB2416 and increase support for their older constituents. (Attachment 2) Representative Titus stood for questions from Committee members.
Michele Morgan, Northwest Kansas Area Agency on Aging, testified by Webex as a proponent for HB2416 stating the Northwest Kansas Area Agency is a private non-profit organization with the responsibility of serving Older Americans Act programs in 18 counties of northwest Kansas. Ms. Morgan stated there are eight non-governmental, nonprofit Area Agencies on Aging that pay sales tax and three county government Area Agencies on Aging in Kansas that are exempt from state sales tax. In northwest Kansas they anticipate paying an average of $48,000 in state sales tax per year noting if they were tax exempt the money could be used to provide 2,900 more hours of attendance care or homemaker service to help older adults live in the setting of their choice. (Attachment 3
Julie Covert Walter, North Central Flint Hills Area Agency on Aging, testified as a proponent for HB2416 stating the agency serves more than 67,000 older Kansans and their caregivers in 18 counties. Currently, the only direct expenditure of food costs under the Friendship Meals program is exempt from sales tax; however, other expenses essential for carrying out the wider service mission are not exempt from sales tax. Ms. Walter noted if the agency was exempt from sales tax, approximately $35,000 would be available next year to address service needs for older people and individuals living with disabilities. (Attachment 4)
Leslie Anderson, Kansas Association of Area Agencies on Aging and Disabilities, testified as a proponent for HB2416 that will provide a sales tax exemption for eight non-governmental organizations. She noted Area Agencies on Aging are a vital partner to divert older Kansans from expensive care. The state sales tax exemption would redirect resources and services with a cost avoidance to the state general fund of at least $7.15 million. (Attachment 5)
Chuck Schmidt, Kansas Silver Haired Legislature, testified as a proponent for HB2416 that will help Area Agencies on Aging to provide more services to the elderly in their homes through the Senior Care Act. The tax savings of $337,000 can be applied to in home services to allow the elderly Kansans to stay in their homes. HB2416 will would bring equity among the eleven Area Agencies on Aging noting the exempt agencies are in large urban areas and the current non-exempt agencies are in multi-county rural areas. (Attachment 6)
The conferees stood for questions from Committee members.
Written testimony as a proponent for HB2416 was submitted by Karen Wilson, Northeast AAA Kansas Area Agency on Aging. (Attachment 7)
Chairperson Smith closed the hearing for HB2416.
