Brief(1)
H.B. 2530 would amend statutes governing the Community Services Tax Credit Program. The bill would remove the requirement that qualified crime prevention activities be in an impoverished area. It would also expand the definition of "contribution" to include property or services as well as cash, and set out valuation guidelines for certain contributions.
Whereas under current law community service tax credits may be carried over until the total amount of the credit is used, these credits would be refundable under the bill. H.B. 2530 would also allow community services tax credits to be sold or transferred to other taxpayers. Limitations to transferability would include the requirement that the community service credit be transferred in its entirety and the provision that the credit may be transferred only once. Taxpayers who buy or are otherwise assigned a community service tax credit may carry forward unused credit amounts for up to five years. However, all carry forward amounts must be claimed within ten years following the tax year in which the contribution was made. (Community service tax credits that have been sold or otherwise assigned are not refundable.)
The bill would increase the total amount of tax credits that can be allowed in any one year from $5.0 million to $10.0 million. The bill would be effective upon publication in the statute book and its provisions would be applicable beginning in the 1999 tax year.
The bill also would provide refundable income tax credits for property taxes timely paid on certain low-producing oil and gas leases. Oil leases with an average daily production per well of 15 barrels per day or less would qualify for the credits, as would gas leases with average daily production of 90 mcf or less. Such credits would be retroactive to property tax year 1998. Credits would not be allowed for property taxes paid on oil and gas machinery and equipment to the extent that credits are claimed for commercial and industrial machinery and equipment under current law.
Background
The House Committee held hearings on this bill, at which time proponents included Representative Tony Powell and representatives of Hallmark Cards, Catholic Community Services, the Marian Clinic, and the Kansas Chamber of Commerce and Industry.
The House Committee amended H.B. 2530 to remove the requirement that qualified crime prevention activities be in an impoverished area and exclude used clothing from the list of qualified contributions as well as set out valuation guidelines for certain contributions. The House Committee also added the limitations to transferability and carry forward of the community service tax credits.
The House Committee of the Whole amended the bill to include the refundable income tax credit for property taxes paid on certain low-producing oil and gas leases. This provision is also contained in H.B. 2543.
According to the fiscal note on H.B. 2530, the Division of the Budget estimates that the bill would reduce revenues to the State General Fund by $4.5 million in FY 2000. The bill would authorize up to $10.0 million in credits each year, an increase of $5.0 million compared to current law. The House Committee of the Whole amendment would increase the fiscal note by $24.0 million in FY 2000. While the FY 2001 impact of this provision would be $12.0 million, half of the fiscal note for the oil and gas income tax credits for property taxes paid actually would affect FY 1999 receipts. Thus, the higher impact in FY 2000.
The Department of Commerce and Housing, which administers the current tax credit program states that the passage of H.B. 2530 would require the addition of 2.0 FTE positions to administer the increased workload.
1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html