Senate Bill Provides Quarter-Million-Dollar Loans To Kansas Businesses Hurt By Pandemic

By Noah Taborda, the Kansas Reflector

February 1, 2021

TOPEKA — Kansas senators moved without opposition Monday to pass a measure using state idle funds to provide low-interest loans to businesses financially hobbled by the pandemic.

A second element of the bill would expand credit union field of membership from 500,000 to 2.5 million people, said Sen. Jeff Longbine, R-Emporia.

“The third component of the bill eliminates the privilege tax on ag real estate loans and residential loans in communities of less than 2,500 people,” Longbine said.

The Senate quickly passed the financial bundle and six other bills, all without opposition. Other approved bills ranged from reinsurance company regulations to storage tanks to the COVID-19 relief fund.

The funds would be provided in the form of up to $250,000 loans to Kansas businesses — primarily commercial and agricultural — employing 200 people or fewer.

Similar legislation was proposed last year and passed through both chambers. The measure was vetoed by Gov. Laura Kelly, but Longbine said this bill made a few key changes thanks in part to feedback from Kansas state Treasurer Lynn Rogers, the governor’s former lieutenant.

In a hearing earlier this month, Rogers recommended the addition of a residency requirement clarifying that loans be used for Kansas residents with Kansas business. He also recommended farm credit unions have at least one branch in Kansas.

Both suggestions were adopted in the new bill.

“I strongly believe this program would provide an excellent opportunity to offer support to Main Street Kansas businesses and agriculture operations that have been financially impacted by COVID-19,” Rogers said in testimony before the Senate Financial Institutions Committee.

The legislation passed 39-0 and will progress to the House.

Another bill from the Longbine-led insurance committee will change two provisions of Kansas insurance statute to ensure a smooth accreditation process with the National Association of Insurance Commissioners, or NAIC, a U.S. standard-setting and regulatory insurance organization.

“SB28 is important to the state of Kansas as we go through the NAIC accreditation process later this year and ensures we maintain Kansas authority over Kansas companies,” said Lee Modesitt, testifying earlier this month on behalf of the Kansas Insurance Department.

The Senate also passed a bill that would extend access to funds used to replace storage tanks.

The bill extends the Kansas Underground and Aboveground Storage Tank Trust Fund that would sunset on July 1, 2024, by 10 years to July 1, 2034. It would also increase the fund liability maximum from $1 million to $2 million.

“Many facility owners would not be able to absorb those costs without the redevelopment fund,” said Sen. Dan Kerschen, R-Garden Plain.

Proponents of the bill said by providing reimbursements to replace single-walled tanks with the EPA-approved double-walled tanks, Kansans would be better protected from petroleum contamination. The bill had no opponents during the hearing in the Senate Committee on Agriculture and Natural Resources.

While not discussed on the floor Monday, Senators passed a bill providing the Kansas Department of Revenue with additional consumer protection tools. Supporters of the Kansas Taxpayer Protection Act say these tools will help KDOR identify and stop fraudulent tax return preparers.

The Kansas Reflector seeks to increase people's awareness of how decisions made by elected representatives and other public servants affect our day-to-day lives. We hope to empower and inspire greater participation in democracy throughout Kansas.