SESSION OF 2021
SUPPLEMENTAL NOTE ON SENATE BILL NO. 66
As Amended by House Committee on
Commerce, Labor and Economic Development

Brief*
SB 66, as amended, would revise certain tax credits
pertaining to angel investors and home renovations for
disabled family members.

Angel Investor Tax Credit
The bill would revise the Kansas Angel Investor Tax
Credit Act (Act) by extending the sunset on the program from
tax year 2021 to tax year 2026, amending applicable
definitions, removing certain program restrictions, and
increasing program tax credit amounts and annual program
limits.
Program Sunset
The bill would extend the sunset on the angel investor
tax credit from tax year 2021 through tax year 2026.
Definitions
The bill would amend the definition of “qualified
securities” with respect to the use of debt instruments as
qualifying forms of investment. Debt instruments permitted to
be used as a form of investment would include any debt that:

____________________
*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
 ● Is subordinate to the creditors of the business
receiving the investment;
● Requires no payment by such business; and
● Will convert to some form of equity before the
business receives any additional funds.
Tax Credit Limits
The bill would make the following changes to limits on
tax credit dollar amounts:
● Increase single-year tax credit amounts:
○ From $50,000 to $100,000 for a single
Kansas business; and
○ From $250,000 to $350,000 for a single
qualified investor;
● Change the maximum value of the tax credit from
equal to 50 percent, to up to 50 percent of the
qualifying investment; and
● Set annual tax credit limits at $6.0 million in tax
years 2021 and 2022, with a $0.5 million increase
each tax year after that through tax year 2026.
○ Any unused tax credits for a given year would
be carried over for use in future tax years
through tax year 2026.
Restrictions on Investments and Investors
The bill would remove or modify certain restrictions on
investments and investors:
● Venture capital companies would be permitted to
receive tax credits;

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 ● Investments in Kansas Venture Capital, Inc., would
be permitted;
● In order to receive a transferable credit, the bill
would require an investor to have no current tax
liability at the time of investment, rather than no tax
liability for the preceding three years;
● The recipient of a transferable credit would not
need to be an accredited investor as defined by
federal regulation (17 CFR 230.501(a)); and
● Provided that an investment was made lawfully,
investors would not lose any tax credits if the
business in which the investment was made were
to lose its designation as a qualified business.
Clawback Provision
The bill would modify the clawback provision in the Act.
Currently, any business receiving financial assistance under
the Act is required to make repayment to the Kansas
Department of Commerce if the business ceases to be a
qualified business or moves its operations outside of Kansas
within ten years. The bill would require businesses to meet
these qualifications for a minimum of:
● Ten years for bioscience businesses; and
● Five years for any other business.
Home Renovation Tax Credit for Disabled Family
Members
The bill would increase the maximum tax credit, from
$9,000 to $15,000, for home renovations made for a disabled
family member’s access. Under current law, the tax credit that
may be claimed is equal to the lesser of either $9,000 or the
applicable percentage of construction expenditures, which

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decreases as the taxpayers’ federal adjusted gross income
(FAGI) increases; a taxpayer with an FAGI no greater than
$25,000 has an applicable percentage of 100.0 percent. The
bill would allow taxpayers with an FAGI of $60,000 or less to
be eligible for the tax credit of $15,000. The bill would phase
out the credit by increments of 10.0 percent for each $10,000
increase in FAGI. The bill would also distinguish tax credits
eligible for married individuals filing jointly and all other
individual taxpayers, who would be eligible for the maximum
credit if their FAGI is no greater than $40,000.
Under current law, if a taxpayer’s liability is less than
$2,250, then portions of the credit may be refundable in the
first, second, and third years equal to one-fourth, one-third,
and one-half, respectively. The bill would increase the
taxpayer’s liability threshold from $2,250 to $3,750.
Starting in tax year 2022 and for all subsequent tax
years, the bill would adjust the maximum tax credit and the
tax liability threshold by a cost-of-living amount determined
under Internal Revenue Code section 1(f)(3).

Background
The bill was introduced by the Senate Committee on
Commerce at the request of the Kansas Department of
Commerce.

Senate Committee on Commerce
In the Senate Committee hearing, proponent testimony
was provided by Representative Stephen Owens and
representatives of Biokansas, Enterprise Center in Johnson
County, and the Kansas Department of Commerce. The
proponents generally stated the Kansas Angel Investor Tax
Credit Act is important for new business development within
Kansas.

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 Neutral testimony was provided by a representative of
the Kansas Legislative Division of Post Audit.
No opponent testimony was provided.
The Senate Committee recommended the bill be placed
on the Consent Calendar.

House Committee on Commerce, Labor and Economic
Development
In the House Committee hearing, no testimony was
provided. The chairperson noted he requested conferees not
provide testimony, in the interest of time, due to the contents
of the bill being substantially similar to those of HB 2045, as
introduced.
The House Committee adopted amendments to make
technical changes and clarify that investors would not lose tax
credits if the investment was made lawfully, even if the
business invested in were to lose its designation as a
qualified business, and to add provisions related to tax credits
for home renovations for disabled family members.

Fiscal Information
According to the fiscal note prepared by the Division of
the Budget on the bill as introduced, the Department of
Revenue (Department) indicates enactment of the bill would
require expenditures of $6,445 from the State General Fund
for FY 2022 to implement the bill and modify the automated
tax system. The Department estimates enactment of the bill
would decrease State General Fund revenues in the following
amounts:
● $1,900,000 in FY 2022;
● $6,000,000 in FY 2023;

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 ● $6,500,000 in FY 2024;
● $7,000,000 in FY 2025; and
● $7,500,000 in FY 2026.
Any fiscal effect associated with the bill is not reflected
in the The FY 2022 Governor’s Budget Report.
Tax credits; Angel Investors; Disabled Access


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Statutes affected:
As introduced: 74-8132, 74-8133, 74-8136, 74-8131
As Amended by House Committee: 74-8132, 74-8133, 74-8136, 79-32, 74-8131
Enrolled: 74-8132, 74-8133, 74-8136, 79-32, 74-8131