Nearly three months after Kansas farmers and ranchers saw 160,000 acres of land burned by wildfires, the Legislature has yet to pass a bipartisan sales tax relief bill.
Now, after more wildfires raged over the weekend, some lawmakers are again pushing for the proposal.
“This was something that Republicans, Democrats, the Legislature, the governor all agreed that this needed to be done quickly,” said Rep. Ken Rahjes, R-Agra. “And we also had more fires now this weekend in Reno County and others. So this needs to be done, within the next week or two.”
Rahjes, who is chair of the House Agriculture Committee, was one of the sponsors of a bill that would exempt agricultural fencing materials used to rebuild from a natural disaster from sales taxes.
The relief has been geared toward fencing because, unlike homes and other property, they aren’t covered by insurance.
The reason for the holdup is unclear. Spokespeople for House Republican leadership didn’t respond to a request for comment on when the legislation, House Substitute for SB 318, will be debated on the floor.
Sen. Rick Billinger, R-Goodland, who co-sponsored the Senate bill, said he is surprised by the holdup in the House.
“I thought it was going to get on it and get it done quick,” he said. “I need to check and see what’s going on.”
The bill passed the Senate 35-0 in emergency final action on Jan. 20, and the House Taxation Committee passed its own version in HB 2464 the same day. Last month, the committee placed the contents of the “clean” House version into the Senate bill, which had featured two add-ons.
“Folks are frustrated,” Rahjes said, acknowledging that much of the frustration was shared with the federal government, which “took forever” to approve a disaster declaration.
But even the federal government has moved faster than the state Legislature.
U.S. Department of Agriculture Secretary Thomas Vilsack on Feb. 9 approved a disaster designation for Ellis, Russell, Barton, Lincoln, Osborne, Rush, Ellsworth, Ness, Rooks and Trego counties. The move makes farmers eligible for certain Farm Service Agency assistance, including emergency loans.
Billinger has a second bill with broader disaster relief for Kansans. The Senate Assessment and Taxation Committee held a hearing last week on SB 509.
The bill would allow a state sales tax refund for purchases to “reconstruct, repair, or replace any residence, building, facility, structure, fixture, fence, other improvement, or household appliance damaged or destroyed by fire, flood, tornado, lightning, explosion, windstorm, ice loading and attendant winds, terrorism, or earthquake.”
Kansas lawmakers have enacted similar sales tax exemptions after past wildfires, but they set those statutes to expire. Under the new proposal, the law would be a permanent exemption with no need for renewals after future disasters.
Farmers and ranchers who have already purchased fencing materials would be able to get a refund on the taxes.
Fences are getting rebuilt with spring approaching, Rahjes said.
“I was out in Ellis County over the weekend. I did see some some tinges of green in some of that burned area,” he said. “So that’s exciting, that’s regrowth. But we need to make sure that the farmers and ranchers don’t need to worry. They can go ahead and build those fences but know they are going to get the relief that we can provide.”
Had it passed in January when lawmakers had first pushed for it, the relief would have already been in place for the latest wildfire.
The Hutchinson Fire Department reported that wildfire losses included one death, 35 homes, 92 outbuildings and 110 vehicles totally destroyed across 12,000 acres. Fire officials did not have a value estimate of the damage.
The fires are still burning and aren’t expected to be 100% contained before the end of the week, The Hutchinson News reported.
The bill was inspired by the Dec. 15 wildfire, dubbed the Four County Fire, which ravaged about 163,000 acres of mostly agricultural land primarily in Russell, Osborne, Rooks and Ellis counties. Two people died.
“Many livestock producers affected by this weather event saw substantial damage to their entire life’s work with loss of fence, forage, harvested feed resources, outbuildings, homes and livestock,” Dean Klahr of the Kansas Livestock Association previously told lawmakers. “Furthermore, the cow-calf producers whose cows perished in the fire will be without a calf crop and paycheck in 2022.”
An estimated 5,000 miles of fencing were damaged or destroyed by the Four County Fire, according to testimony from Rep. Troy Waymaster, R-Bunker Hill, and Keith Haberer, the emergency management director for Russell and Ellsworth counties.
Haberer estimated the sales tax cost at $1,000 per mile of fencing.
“You even have stone posts that have been there for decades, maybe even 100 years, knocked over,” Waymaster said. “And you have wooden posts that were just burned.”
Chris Pelton, a Paradise area rancher and volunteer firefighter, lost his home and business. He testified about driving through pastures, finding the scorched bodies of heifers who had been burned alive.
“Euthanizing the critically injured was a job that I couldn’t face alone and thankfully had help from fellow ranchers,” Pelton said.
His ranch had 28 miles of fence, with a cost of about $20,000 per mile to rebuild.
“Today I stand before you broken,” Pelton said, appearing to fight back tears. “Everything I had worked for burned to flames. But humbly knowing I have to ask for help.”
‘Picking the bones over a piece of barbed wire’
With the December wildfires fresh on their minds, lawmakers prioritized the issue when the legislative session started in January. The Senate unanimously passed a bill before the end of the month. A House committee also approved a bill — but months later, the full chamber has yet to take up an issue that many considered to be an emergency.
The lack of action in the House comes after representatives argued in the tax committee last month that controversial amendments in the Senate plan would delay the process.
“You go into the negotiation and you tell the Senate these people have been waiting for their sales tax exemption and getting their fences up, and you keep delaying them,” said Rep. Henry Helgerson, D-Eastborough.
Rep. Ken Corbet, R-Topeka, appeared supportive of the Senate proposals and suggested the House was the reason for the delay.
“You saw the videos of everybody that’s lost everything out there, and here we are picking the bones over a piece of barbed wire,” Corbet said. “Seems kind of crazy really.”
The House Taxation Committee ultimately stripped out the Senate add-ons and sent the bill to the full chamber, where it has yet to be debated.
A Department of Revenue fiscal note indicates the original bill would reduce state sales tax receipts by $1.4 million in connection to the December wildfires. The state can afford such a tax break. The projected budget surplus is about $3 billion.
The Senate bill included a property tax abatement championed by Sen. Caryn Tyson, R-Parker and the chair of the chamber’s tax committee.
The provision was intended to help people who lost non-home property during a disaster and was originally inspired by the May 28, 2019, tornado that tracked through portions of Douglas and Leavenworth counties. Current law allows county commissions to abate property taxes on homesteads, but not other assets, such as barns.
Such proposals have been made in past years — most recently with SB 23 last session.
The full Senate narrowly approved an amendment from Sen. Virgil Peck, R-Havana, that would permanently exempt agricultural fencing products from the sales tax. Opposition in the Senate centered around the unknown fiscal cost and the singling out of one industry for tax benefits.
“We’ve got an issue where they’re going to be building fences and making Johnson County pay for it,” said Rep. Stephanie Clayton, D-Overland Park, who led the charge against the Senate proposal. “If we could possibly gut this bad boy and put our version into it, I would be amenable.”
This week is Severe Weather Preparedness Week. Lawmakers previously allowed Wildfire Awareness Week — Feb. 15-19 — to pass without passing the wildfire relief.
“This is one small part we can do,” Rahjes said. “We’re going to be right in fire territory as well, we need moisture in this state. That’s a concern too, is will we have a big wildfire season.”
Klahrs, of the livestock association, said the bill is a priority, especially after the weekend fires.
“It’s an important and imperative issue to get passed and get relief for those producers who were affected by those fires,” he said.
Rep. Jason Probst, D-Hutchinson, said lawmakers should act with “urgency and help people get back on their feet” for “whatever relief they need.” He said lawmakers should also reconsider recommendations made in a previously-ignored audit on wildfire management.
“It’s time to go back and look at those things and start listening to fire chiefs and fire officials about how we can do a better job of managing things like this,” he said.
As reported in the Topeka Capital Journal.
