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Minutes for HB2464 - Committee on Taxation
Short Title
Providing a sales tax exemption for purchases to reconstruct, repair or replace certain fencing damaged or destroyed by wildfires.
Minutes Content for Wed, Jan 12, 2022
Chairperson Smith opened the hearing on HB2464.
Adam Siebers, Assistant Revisor provided an overview for HB2464 that provides for a permanent sales tax exemption for personal property and services necessary to reconstruct, repair or replace any fence that was damaged or destroyed by wildfires on or after January 1, 2021. (Attachment 1)
In response to a Committee question, Chairperson Smith noted there is an amendment to HB2464 to clarify the definition of a wildfire. He stated the language for the amendment is being reviewed by the Kansas Department of Revenue and the Adjutant General's office.
Kathleen Smith, Kansas Department of Revenue provided an overview on the fiscal note for HB2464 indicating the Department of Revenue estimated the 6.5 percent state sales tax rate would result in $1.4 million in state sales tax not received by the state for the December 2021 wildfires. She stated the Division of Emergency Management estimated 160,000 acres were burned in the December wildfires which impacts around twelve counties. That would be equal to over 250 square miles and around 6.4 miles of fence per square mile that could be over 1,600 miles of fencing to be replaced by the ranchers. The Department of Revenue also consulted with the Kansas Livestock Association to review the K-State University Land Use Survey Center and the building rates to rebuild agriculture fencing is estimated to be around $13,314 per mile which includes materials and installation. Based on the fence replacement cost and damaged areas are estimated to be $21.3 million at a state sales tax of 6.5 percent results in the $1.4 million in state sales tax not received by the state.
In response to a question, Ms. Smith noted there would be a Refund form and a Project Exemption Certificate which will be available on the Kansas Department of Revenue's website. The refund form would be used by those ranchers and farmers who have already incurred expenditures to replace their fencing. For those who have not made any expenditures, the rancher or farmer would use a Project Exemption Certificate that would enable them to purchase tax exempt materials.
Proponents:
Representative Waymaster , 109th District testified as a proponent noting the need for HB2464 for the four counties of Russell, Osborne, Rooks and Ellis which was a catastrophic disaster for many of the farmers and ranchers due to the wildfires December 15, 2021. Representative Waymaster and Senator Bowers met with families in their districts who lost not only their homes but their cattle, livestock, machinery, and buildings. He noted most of the recovery the ranchers and farmers receive will come from the federal government. One of the safeguards for HB2464 will be a permanent sales tax exemption to help those who loss fencing due to wildfires. He noted the fences are not insured but an asset to the land and subjected to property tax. No testimony submitted.
Keith Haberer, Russell and Ellsworth County Emergency Management testified as a proponent for HB2464. (Attachment 2)
Chris Pelton, Cattle Rancher, Paradise, Kansas testified as a proponent for HB2464. (Attachment 3)
Dean Klahr, Director of Stockgrowers Division, Kansas Livestock Association testified as a proponent for HB2464. (Attachment 4)
Senator Elaine Bowers, 36th District testified as a proponent for HB2464 stating the bill draft was similar to other wildfire bills in previous years noting this version has no expiration date. HB2464 prevents if there are future wildfires it will not have to go through the legislative process. The bill will be in place for the next wildfire so the Department of Revenue will be ready to start their work. Senator Bowers stated the Department of Revenue will replace all of the vehicle titles at no cost and the Bureau of Vital Statistic will replace at no charge marriage and birth certificates. (Attachment 5) Senator Bowers introduced the following guests from the Future Farmers Association who were here in Topeka attending a leadership conference at Washburn University:
- August Hulse, Minneapolis, North Central District, Sentinel
- Kirsten Kvger, Russell, Northwest District, President
- Chelsey Figge, Russell, Northwest District, Advisor
- Christina Wallace, Minneapolis, North Central District, Advisor
- Aidan Yoho, Yates Center, Southeast District, President
Written testimony was submitted by the following proponents for HB2464:
Derek Schmidt, Kansas Attorney General (Attachment 6)
Rich Felts, President, Kansas Farm Bureau (Attachment 7)
Chairperson Smith closed the hearing on HB2464.
Meeting adjourned at 4:28 pm.
