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Minutes for HB2499 - Committee on Taxation
Short Title
Providing for a refund of sales and compensating use taxes paid on sales of property used in video, internet access and telecommunications services.
Minutes Content for Thu, Feb 10, 2022
Chairperson Smith opened the hearing on HB2499.
Adam Siebers, Assistant Revisor, provided an overview on HB2499 that would provide a Kansas sales and compensating use tax refund of tax paid on sales of property used in video, internet access and telecommunications services. (Attachment 1) Mr. Siebers stood for questions from Committee members.
Kathleen Smith, Kansas Department of Revenue, provided an overview on the fiscal note for HB2499 stating the bill would decrease state revenues by $40.0 million in FY2023. Of that total, the State General Fund is estimated to decrease by $33.5 million and the State Highway Fund by $6.5 million. Ms. Smith stood for questions from Committee members.
Proponents:
Michael J. Ruffin, Regional Vice President, AT&T, Kansas, testified as a proponent for HB2499 stating the bill will make Kansas more competitive with our neighboring states by providing a limited tax refund for state sales and use taxes paid on equipment used to expand and improve communications networks. The networks allow all Kansans with wireline and wireless connectivity, broadband internet access and video services. The tax refund established by HB2499 would be capped at $40.0 million and is available to all communications providers. (Attachment 2) (Attachment 3) Mr. Ruffin stood for questions from Committee members.
John Federico, President, Kansas Cable Telecommunications Association, testified as a proponent for HB2499 and introduced Megan Bottenberg, Director of Government and Regulatory Affairs in Kansas for Cox Communications. (Attachment 4) Mr. Federico stated cable operators in Kansas provide more broadband services to Kansas homes and businesses than anyone else. HB2499 is important in the state-by-state fight for scarce dollars available to our member companies to invest in infrastructure and system upgrades in Kansas. The Kansas Cable Telecommunications Association (KCTA) offered an amendment for HB2499. (Attachment 5) Mr. Federico stood for questions from Committee members.
Committee questions and discussion ensued regarding upgrading the network for Kansans in unserved and under-served areas to gain access to the internet and distribution of the funding.
Ms. Bottenberg stated in the year 2020, Cox Communication received a Cares Act Grant in the amount of approximately $1.3 million. The funds were used to expand broadband infrastructure to build fiber to 450 unserved homes in Kansas.
Written only testimony was submitted by the following as proponents for HB2499:
Eric Stafford, Kansas Chamber, (Attachment 6)
Jason Watkins, Wichita Regional Chamber of Commerce, (Attachment 7)
David Soffer, WANRack, Private Fiber Networks, (Attachment 8)
Daniel Friesen, IdeaTek, (Attachment 9)
Patrick Fucik, T-Mobile, (Attachment 10)
John Cmelak, Verizon (Attachment 11)
Curtis S. Sneden, Greater Topeka Chamber of Commerce (Attachment 12)
Written testimony was submitted by the following as an opponent to HB2499:
Dave Trabert, Kansas Policy Institute, (Attachment 13)
Chairperson Smith closed the hearing on HB2499.
Chairperson Smith adjourned the meeting at 4:35 p.m.
