SESSION OF 2020
SUPPLEMENTAL NOTE ON SUBSTITUTE FOR HOUSE
BILL NO. 2416
As Recommended by House Committee on
Commerce, Labor and Economic Development

Brief*
Sub. for HB 2416 would create the Kansas Targeted
Employment Act (Act), establishing a tax credit for businesses
that employ individuals with intellectual and developmental
disabilities (I/DD).
For tax years 2020 through 2025, a tax credit could be
claimed by a “targeted employment business,” as that term
would be defined by the bill, or by a taxpayer outsourcing
work to such a business. For every hour of work provided by
an “eligible individual,” as that term would be defined by the
bill, the qualified business would earn a tax credit equal to
50.0 percent of the wages paid, not to exceed $7.50 per hour.
The annual total of tax credits would be capped at $5.0
million. The tax credit would be nonrefundable and could not
be carried forward. To qualify for the tax credit, a business
would apply to the Secretary of Revenue by providing the
names of the eligible individuals, the hourly wage rate, hours
worked, and the gross wages excluding leave compensation.
The Secretary of Aging and Disability Services
(Secretary) would measure and analyze the I/DD individuals’
employment, their quality of life while employed, and the
impact upon taxpayer savings and government programs.
The Secretary would be required to annually report findings to
the House Committee on Commerce, Labor and Economic
Development and the Senate Committee on Commerce. To
assist with the evaluation, the Secretary could stipulate the
____________________
*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.kslegislature.org
release of certain tax data as a condition of a business’
participation in the tax credit program. The bill would require
confidential tax information to remain confidential. The
secretaries of Revenue and Aging and Disability Services
would be authorized to adopt rules and regulations necessary
to administer the bill.
The bill would sunset on January 1, 2026.

Background
The bill was introduced during the 2019 Session by the
House Committee on Taxation at the request of
Representative Johnson on the behalf of Representative
Finch.
In the House Committee on Commerce, Labor and
Economic Development hearing in February 2020,
representatives of COF Training Services, Integrated
Employment Enterprises, and Interhab spoke in support of
the bill, stating the legislation would encourage greater
employment choices for I/DD individuals. A representative of
the Overland Park Chamber of Commerce provided written-
only proponent testimony. No opponent testimony was
provided.
Individuals and representatives of the Disability Rights
Center of Kansas and the Kansas Council on Developmental
Disabilities provided neutral testimony, expressing
appreciation for the concept but suggesting possible
amendments to clarify the bill. Written-only neutral testimony
was provided by the KU Life Span Institute.
Prior to recommending a substitute bill be passed, the
House Committee amended the introduced bill to:
● Revise the purpose of the Act;


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 ● Clarify that in addition to being competitive
employment, an I/DD individual’s work would be in
an integrated setting;
● Include governmental agencies in the definition of
“community service provider”;
● Clarify the definition of an “eligible individual”;
● Define “developmental disability” by using the
existing definition found at KSA 39-1803;
● Delete definitions for “intellectual disability,”
“integrated setting,” and “sheltered workshop”;
● Revise the definition for “targeted employment
business” to omit reference to an I/DD individual
having to work full time;
● Limit the terms and duration of the tax credit;
● Specify the data that businesses must provide to
qualify for the tax credit; and
● Require the Secretary to evaluate and report the
bill’s results and provide rule and regulation
authority as necessary.
According to the fiscal note prepared in 2019 by the
Division of the Budget on the bill as introduced, the
Department of Revenue (Department) indicated there would
be a decrease of revenue to the State General Fund (SGF),
but data were not available to determine the number of
employers and employees eligible to participate. The
Department indicated at that time it would cost $889,912 from
the SGF to pay for the modifications to the automated tax
system. The Kansas Department of Health and Environment
indicated the bill would have an unknown fiscal effect.


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