Kansas Rural Center Action Alerts

Greetings!

Below is the most recent installment of KRC's Weekly
Policy Watch E-Updates.

Previous editions, covering the 2011 and 2012 Kansas State Legislative Session and federal Farm Bill actions, can be read here.

KRC will offer Policy Watch Weekly E-Updates throughout the State of Kansas Legislative Session January -May, and provide information of the federal farm bill throughout its renewed debate and discussion in 2013. The Updates are available to those who have contributed to KRC in 2012 or 2013. (Or this year, the Kansas Natural Resource Council is also making them available to its members.)

Paul Johnson, former lobbyist for a consortium of church groups, is working for a third year for KRC. He will offer information and analysis on state legislation affecting food and farming, marketing and food safety, natural resources, energy, and economic issues such as the overall budget process, school finance, and other merging issues of interest to rural Kansans and anyone interested in a sustainable future for Kansas.

If you have already signed up for the Weekly Updates, we thank you!

These reports are available to all contributors to the Kansas Rural Center. A donation of $35 is suggested.

You may register to receive the weekly E-Updates in 2013 here
or by contacting Mary Fund at 785-873-3431 or ksrc@rainbowtel.net

To see previous E-Updates, click here.

KANSAS RURAL CENTER WEEKLY E-UPDATE #5 FEBRUARY 15, 2013 by Paul Johnson In This Edition: - Tax Battle Part III - Budget Deliberations on Speed Dial - Renewable Energy Portfolio Standards - Local Enhanced Management Areas - More Climate Science Presentations - Kansas Bioscience Authority - Legislative Notes - Legislative Roundtable Feb. 21 - Federal Farm Bill

To Contact Your Kansas Congressman, State Representative or Senator, and for links to more information, see below.

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WELCOME to KRC's Weekly E-Report on agriculture, local foods and related topics!

Tax Battles- Part III
The tax battle continues on slowly. This week the Senate Taxation committee voted out an amended version of the Governor's Tax plan - SB 78. The House Taxation committee debated the Governor's tax plan for several days, but no consensus could be found on maintaining the state sales tax at 6.3% or the elimination of the mortgage interest deduction; thus no House version has made it out of committee.

The Senate will debate SB 78 on the floor of the Senate next week with multiple amendments expected. It is unclear what version has the 21 votes necessary for passage.

The political games on tax policy may well last the whole session. The 'mega-tax' bill that passed last year had a few technical errors and unintended consequences. The full House passed HB 2059 to clean up the errors and eliminate an unintended tax on banks. The fiscal note on this bill is the loss of $10 million in revenue to Kansas.

The Senate has now decided to move HB 2059 to the Senate Taxation committee as a back-up plan if the House will not pass any version of the Governor's tax plan. HB 2059 could be amended with tax revenues and sent back to the House for an up or down vote if the Speaker of the House would allow such a vote.

Right now the Governor's tax plan raises $550 million in new revenues over two years but reduces income taxes by only $170 million. Several House members are determined to fix the budget deficit solely with spending reductions. The survivability of essential state services will hang in the balance.

Budget Deliberations on Speed Dial
With a stark budget deficit facing the Governor - given the excessive income tax reductions - an arbitrary 10% reduction to most state programs was mandated to pay for the tax cuts. The word 'efficiency' is constantly thrown around but there is no debate on 'adequate staffing or program support'.

At what point does constant and relentless program cutting render key state services or programs unworkable? There are no accompanying measures of performance to see if Kansans are getting competent or adequate services. The Legislature is compounding this miserable budgetary review by rushing the process in 80 days instead of 90 days.

These arbitrary budgetary reductions are numerous. While Kansas is facing the worst drought in 60 years and water conservation/ planning is desperately needed, the Kansas Water Office budget is in free fall.

From a budget of $10.1 million in 2012, the Governor recommends a budget of only $6.8 million in 2015 - a 37% reduction. The State Water Plan fund has lost the $6 million transfer from the State General Fund and now has lost $2 million from lottery funds. Ten years ago, Kansas had a $25 million State water plan funds whereas by 2015 this plan is down to $12.5 million.

What quality of life is lost with less monitoring of water pollution or reduced programs to slow soil sedimentation into critical reservoirs that store water for downstream municipalities?

The same budgetary pressure exists on the Kansas Department of Agriculture (KDA). The number of employees has been reduced from 353 in 2012 to 274 in 2015. KDA's Conservation division is reduced from $10.9 million in 2012 to $9.5 million as the State Water Plan funds continue to decline.

As these budgets are rushed through, thoughtful discussions on individual program performance is neglected. Can KDA adequately inspect and monitor the 90 small meat plants left in our state? With a simple goal of just cutting government period, the attitude seems to be why worry over the quality and adequacy of state services?

Renewable Energy Portfolio Standards
In 2009, Kansas adopted a renewable energy portfolio standard (RPS) of 10% of installed electric generation by 2011, 15% by 2016 and 20% by 2020. SB 82 would delay these standards by two years.

SB 82 has passed out of Senate Utilities and may be debated on the Senate floor next week. HB 2241 delays the 15% standard for three years and eliminates the 20% standard all together. HB 2241 is being debated in the House Energy and Environment committee and will be voted on in the committee next Thursday - February 21 at 9 am in Room 582-N.

By the end of 2013, Kansas will have more than 2,800 megawatts of installed wind energy at 19 wind farms equaling approximately $7 Billion in investment since 2001. More than 13,000 jobs have been created by the wind industry since the first utility scale wind farm was built in Kansas in 2001.

Kansas landowners receive $13 million in annual payments while counties receive more than $10 million annually. The Kansas Corporation Commission has reported that the RPS has had a minimal impact on rates of less than 1.7%. Utilities are signing power purchase agreements (PPA) and pay for only the wind power generated. Cost of these PPA's at a fixed cost for 20 years is $35 per megawatt hour (MWh) while new natural gas is $45.63/MWh. Infinity Wind Power has plans for 3,500 MW in western Kansas to export power to markets further east.

If Kansas slows or eliminates the RPS, several wind farms will not be built.

Local Enhanced Management Areas-- HB 2171

Local Enhanced Management Areas (LEMA's) are locally initiated, voluntary water conservation plans now available only in groundwater management districts in the western half of Kansas. This law passed in 2012.

HB 2171 will make this tool for locally-driven water conservation planning options available statewide. The bill allows a local plan to be developed and does not limit the persons or groups that may instigate such water conservation plans. This bill was developed by the Kansas Department of Agriculture.

The Kansas Farm Bureau opposed HB 2171 and testified this bill alters the landscape of well-established water law in Kansas. The Kansas Livestock Association opposed this bill and testified it needed a more thorough review by the various stakeholders. The Groundwater Management Districts testified in opposition to HB 2171 saying the broadness of this legislation is bad policy for the state and should be referred to an interim for further discussion.

More Climate Science Presentations Held
By Kim Bellemere, KNRC

On Feb. 12, the House Energy and Environment Committee heard a second round of presentations on climate change. Dr. John Reilly, an economist and co-chair of the MIT Joint Program on the Science and Policy of Global Change provided information and cited research that clearly indicate that man-made climate change is occurring. He outlined some of its potential economic impacts, including impacts to food production, as well as policy measures that could be taken to slow the increase in carbon pollution.

Reilly stated that of three policy options - cap and trade, carbon taxes, and regulatory approaches (including an RPS)- carbon taxes have the highest potential for impacting the amount of carbon pollution released and are the most efficient way to boost revenue. He also noted that regulatory uncertainty negatively impacts investment in renewable energy. He indicated that the largest increases in carbon pollution will come from countries with rapidly growing economies, primarily India and China.

While his information and projections were grim, he noted that it is in our best interest to lead the way in carbon reduction and set an example for other countries stating that if the United States ignores the problem, we will be unable to convince other countries to address it.

Also presenting information was Christopher Horner, an attorney and senior fellow at the Competitive Enterprise Institute. Mr. Horner took the opposite viewpoint indicating that the evidence for man-made climate change isn't unequivocal, while attacking the economics of renewable energy. Mr. Horner stated that renewable energy has "never had a net impact on jobs" and that other countries, most notably Spain and Germany, are seeing significant negative consequences from their push to develop renewable energy.

The information presented by Dr. Reilly was largely supported by scientific evidence and took into account computer projections and models. Mr. Horner chose to "not present projections and theory" but relied instead mostly on anecdotal evidence and studies that have largely been discounted by the scientific community.

As we move forward in developing Kansas' renewable energy economy it will be important for our citizens and our legislature to look to reliable and fact-based evidence of its economic and environmental impacts.

Kansas Bioscience Authority
Started in 2006, the Kansas Bioscience Authority (KBA) has been on a tumultuous journey since that time. Governor Sam Brownback took a very hard look at KBA when first elected. The Governor requested a top down audit on KBA's activities and finances. The new CEO at KBA is Duane Cantrell, former director of Payless in Topeka, and has been on the job at KBA for 60 days. There are several new board members at KBA as well.

The KBA audit pointed out that KBA had a mentality of entitlement, the organization was not very responsive and that KBA was not always a good steward of the funds. CEO Cantrell has responded to all of the points in this audit. 25% of the staff at KBA has been replaced.

Since 2006, KBA has spent $135 million on bioscience projects and research. There have been an additional $134 million in commitments. CEO Cantrell has reviewed this commitment of $134 million and found that $76 million met the requirements while $57 million did not.

KBA funded a very costly incubator in Olathe that now has an 88% occupancy rate. This incubator has office space as well as state of the art laboratories. 36% of the dollars spent by KBA have gone to universities, 22% to companies, 16% for equity holdings, 17% for centers of innovation and 9% for KBA infrastructure.

From 2001 to 2010, 13,266 bioscience jobs were created in 761 companies in Kansas. Average salary is $62,000 in bioscience compared to the average manufacturing wage of $39,000.

The fastest growing bioscience jobs are in 'Drugs and Pharmaceuticals' as well as 'Research, Testing and Medical Laboratories'. Specialized bioscience employment will be found in 'Agricultural Feedstocks and Chemicals'. One-third of all global animal health companies are located in the Kansas City area. Bioscience is predicted to be the fourth leg of the employment stool in Kansas with agriculture, aviation and automobiles.

CEO Cantrell has been an equity adviser for venture capitalists around the world. For the future, Cantrell wants KBA to be an investor in promising technologies that will render benefits to Kansas for years to come. He wants a revolving KBA investment fund that continues to relend. He wants to build a market-driven investment model that is sustainable. He gave the example that of the leading 17 cancer drugs in the world - 8 were developed in Kansas but none are either owned by Kansas based firms or manufactured here.

He sees promise in animal health and food safety investments. Exports will be the key to future growth and KBA should develop and own the intellectual property rights to the genetic manipulation of wheat and sorghum. This goes hand in hand with the Kansas Department of Agriculture $2 million request with KSU and Pioneer Seed Company to develop a $6 million independent sorghum research company.

Going forward, KBA will develop a new investment strategy of loans and equity purchases and few grants offered. While existing law appropriates $35 million to KBA, the Governor's budget reduces that to $10 million for 2014.

Paul Johnson can be reached at pdjohnson@centurylink.net

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Legislative Notes

There have now been 355 bills filed in the Kansas House and 208 bills filed in the Kansas Senate. http://www.kslegislature.org/li/b2013_14/measures/bills/ 

• SB 193 - regulation of 'fracking' by the Kansas Corporation Commission
• SB 191 - repealing corporate farming restrictions in Kansas
• SB 146 - on farm sales of raw milk in Kansas
• SB 147 - regulation of anhydrous ammonia
• HB 2354 - governmental ethics commission: increase in fees
• HB 2332 - regulation of 'fracking' by Kansas Corporation Commission
• HB 2292 - nuisance lawsuits and agricultural practices

Federal Food and Farm Policy
Senate Budget Plan Includes Fix to Farm Bill Extension Fiasco
(From National Sustainable Ag Coalition, Feb. 14, 2013)

Washington, DC - The fiscal package announced today by Senate Majority Leader Harry Reid (D-NV) proposes to correct the disastrous farm bill extension measure agreed to by the White House and Senate Minority Leader behind closed doors at the end of last year as part of the New Year fiscal cliff deal.

The farm bill component of the new "American Family Economic Protection Act" proposal is part of a larger package of spending cuts and revenue increases proposed as an alternative to the meat ax approach to deficit reduction known as sequestration.

The Reid proposal would end direct payments and restore the farm bill programs that were left out of the farm bill extension portion of the fiscal cliff deal. Those programs - for renewable energy, rural small businesses, value-added agriculture, new and beginning farmers, conservation, specialty crops, organic farming, minority farmers, and local food producers - were all thrown under the bus in the fiscal cliff deal in order to preserve every last dollar of unneeded, untargeted, and antiquated direct subsidies. The Reid proposal would right that wrong. It would also provide immediate funding for livestock disaster assistance, another item left out of the fiscal cliff deal.
Read more here.

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CONTACT INFO AND RESOURCE LINKS

To contact your Kansas State Senator, see the  Senate Roster
It provides telephone numbers for their Topeka offices and e-mail addresses.

To contact your Kansas State House Representative, see the House Roster
It provides telephone numbers for their Topeka offices and e-mail addresses.

If you are unclear as to who your Senator or Representative is, the Institute for Policy and Social Research website has a "How to Find Your Legislator" interactive map.

For a complete directory of U.S. Congressional Senators and Representatives (D.C. offices and state offices), Kansas State Legislators and Committees, CLICK HERE.

Kansas' U. S. Congressional Delegation and their Washington D.C. phone numbers
Senator Pat Roberts: 202-224-4774		Senator Jerry Moran: 202-224-6521
Rep. Tim Huelskamp (District 1) 202-225-2715	Rep. Lynn Jenkins (District 2) 202-225-6601	Rep. Kevin Yoder (District 3) 202-225-2865	Rep. Mike Pompeo (District 4) 202-225-6216

KANSAS LEGISLATIVE RESEARCH DEPARTMENT
Supplement ll to Preliminary Summary of Legislation: 2012 Kansas Legislature was completed on June 3. This supplement contains summaries of selected bills from May 20 through adjournment. This supplement contains information on water bills, land-spreading of 'fracking wastes', the state budget, KPERS omnibus bill and the mega-tax bill - Senate Sub. for HB 2117. The first summary came out on April 29 while Supplement 1 came out on May 2. These three publications cover all of the major legislation passed by the 2012 Kansas Legislature.

KANSAS HEALTH INSTITUTE (KHI)
KHI will have the latest reporting on the progress of KanCare. Check KHI's recent reporting on the problems with managed care plans in Kentucky. They will also have detailed reporting on the United States Supreme Court's decision on the President's 'Affordable Care Act' when that decision is released this month. KHI is the best source of reporting on medical and social service issues in Kansas.

CITIZEN UTILITY RATEPAYER BOARD (CURB)
CURB intervenes in utility rate increase cases for residential and small business customers before the Kansas Corporation Commission (KCC). There are major rate requests by the large electric and natural gas companies now before the KCC. You can sign up for the newsletter from CURB that gives you detailed background information on Westar, KCP&L and Kansas Gas Service rate requests being heard by the KCC. CURB also tracks legislation before the Kansas Legislature to determine its impact on residential and small business customers.

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On behalf of the board and staff of the Kansas Rural Center, I want to thank those who have contributed to this project. We look forward to working with you in 2013 to help build a food and farming system that cares for the land and people. Your participation and your donation in support of KRC's 2013 Legislative and Policy Watch Program will make this possible.

Please join us today!

Mary Fund, Kansas Rural Center
ksrc@rainbowtel.net 
785 873 3431
Kansas Rural Center | 304 Pratt Street | PO Box 133 | Whiting | KS | 66552

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