Adam Siebers, Office of Revisor of Statutes, provided an overview for HB2469 that expands the income tax credit for qualified railroad track maintenance expenditures to include credits against premium taxes, privilege fees and privilege taxes.  (Attachment 1)

Mr. Siebers stood for questions from Committee members.

Chairperson Smith stated HB2469 would have no fiscal effect on State General Fund revenues.

Proponents:

Ross Lane, Assistant Vice President, Kyle Railroad Company, testified as a proponent for HB2469 that will expand the income tax credit for qualified railroad track maintenance expenditures to allow credits against certain premium taxes, privilege fees and privilege taxes and allowing the transfer of unused credits to any individual or entity subject to such taxes. The Kyle railroad is a Class III short line railroad that operates 471 miles in the state of Kansas and an additional 84 miles in Colorado.  Like other short line railroads in Kansas, Kyle has and continues to invest in tens of millions in private capital to overcome generations of deferred maintenance with the goal of recreating a 25 mph, 286,000 lb rated railroad. HB2469 would allow the short line railroad tax credit to operate like the R&D tax credit by expanding the pool of taxpayers eligible to receive transferred credits.  (Attachment 2)

Mr. Lane stood for questions from Committee members.

Laura McNichol, WATCO, testified as a proponent via WEBEX for HB2469 noting the bill brings parity to the short line credit with other tax credits available in Kansas.  This will allow WATCO to drive greater investment in their short lines.  Kansas credits like the R&D Credit and the Historic Preservation Credit are freely transferable, whereas the short line tax credit has restrictions resulting in less investment. HB2469 would allow short line credit to be treated like other credits that have a transferability feature in Kansas. (Attachment 3)

Ms. McNichol stood for questions from Committee members.

Jeff Van Schaick, Cimarron Valley Railroad testified as a proponent for HB2469 noting the railroad is a Kansas short line based in Satanta serving rural communities and agricultural and industrial shippers by transporting commodities such as grain, fertilizer, petroleum products and aggregates.  The Kansas short line railroad tax credit is well intended but more restrictive than most other incentives.  Current law limits the universe of taxpayers to whom a railroad may transfer credit, reducing its practical value.  HB2469 address the issue by transferability of the short line railroad tax credit, allowing railroads to transfer credits to a broader group of taxpayers and making the credit more usable. (Attachment 4)

Mr. Van Schaick stood for questions from Committee members.

Proponent written only testimony for HB2469 was submitted by the following:

Ryan Pidde, Mickelson & Company KKC, (Attachment 5)

Shahira Stafford, Kansas Cooperative Council, (Attachment 6)

Randy Stookey, Kansas Grain and Feed Association, Kansas Agribusiness Retailers Association, (Attachment 7)

No Opponent or Neutral testimony for HB2469 was submitted.

Chairperson Smith closed the hearing for HB2469.

Chairperson Smith adjourned the meeting at 5:00 p.m.