SESSION OF 2022
SUPPLEMENTAL NOTE ON SUBSTITUTE FOR HOUSE
BILL NO. 2686
As Recommended by House Committee on
Water

Brief*
Sub. for HB 2686 would amend the Kansas
Groundwater Management District Act to require groundwater
management districts (GMDs) to provide certain reports to
the Legislature. The bill would also distribute a portion of
retailers’ sales tax and compensating use tax revenue to the
State Water Plan Fund each year.

Groundwater Management District Reporting
(New Section 1)
Annual Financial and Activity Report
The bill would require, no later than January 31 of each
year, the board of each GMD (GMD board) to submit a written
report to the House Committee on Water, House Committee
on Agriculture, Senate Committee on Agriculture and Natural
Resources, and any other appropriate or successor
committees, on the finances and activities of the GMD from
the most recently audited calendar year. The bill would
require a GMD board representative to appear before each
committee upon request.
The bill would require the report to contain a detailed
financial statement and a description of activities undertaken
by the GMD board. The bill would require the report to be
____________________
*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
prepared according to generally accepted accounting
principles and would include, at minimum, the following:
● An itemized list of all income and the source from
which the income was received, including grants
and interest income earned;
● An itemized list of all expenditures by the GMD
board; and
● An accounting of all assets currently held by the
GMD board.
The bill would require the annual report to contain a
detailed statement that explains how the expenditures by the
GMD board served to further the:
● Conservation of groundwater;
● Prevention of economic deterioration;
● Stabilization of agriculture; or
● Otherwise supported implementation of the GMD’s
management program.
The bill would suspend the authority of a GMD board to
make any further expenditures for the calendar year when
there is a failure to timely provide the report with the required
information. The only expenditures allowed would be for costs
directly related to completion of the report.
One-time Report
The bill would require, by January 15, 2023, each GMD
board to submit a one-time report to the House Committee on
Water, House Committee on Agriculture, Senate Committee
on Agriculture and Natural Resources, and any other
appropriate or successor committees, that would include:

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 ● An itemized list of each resolution, program
established, or other action by the GMD board that
resulted in measurable conservation of water over
the last five years and the total cost of
implementation of each item listed;
● An itemized list of each resolution, program
established, or other action by the GMD board that
the GMD board believes may have encouraged
conservation but did not result in any measurable
conservation of water or an other quantifiable data
over the last five years and the total costs of
implementation of each item listed;
● The goals and priorities set by the GMD board for
any period over the next 20 years and any actions
taken by the GMD board to achieve such goals and
priorities; and
● A list of areas within each district that meet the
criteria set forth in the Kansas Groundwater
Management District Act, and any specific actions
taken to address the conditions in each area.
Tax Revenue to State Water Plan Fund (Sections 2–3)
The bill would amend the Kansas Retailers’ Sales Tax
Act and the Kansas Compensating Tax Act.
Retailers’ Sales Tax Revenue Deposit
The bill would require the State Treasurer to credit 1.538
percent of revenue collected and received from the retailers’
sales tax at the rate of 6.5 percent to be deposited into the
State Water Plan Fund beginning on July 1, 2022.


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Compensating Use Tax Deposit
The bill would require the State Treasurer to credit 1.538
percent of revenue collected and received from the
compensating use tax at the rate of 6.5 percent to be
deposited into the State Water Plan Fund beginning on July
1, 2022.
Technical Amendments
The bill would also make technical amendments.

Background
HB 2686 was introduced by the House Committee on
Appropriations at the request of Representative Highland.

House Committee on Water
In the House Committee hearing, proponent testimony
was provided by Representative Blex, three private citizens,
and representatives of the City of Wichita, Climate and
Energy Project, Friends of the Kaw, Kansas Municipal
Utilities, Kansas Sierra Club, Regional Economic Area
Partnership, and WaterOne. Generally, the proponents stated
that water issues in the state need more attention and funding
and should be elevated to a cabinet-level agency.
Written-only proponent testimony was provided by three
private citizens and representatives of the City of Hutchinson,
Heartland Conservation Alliance, Kansas Farm Union, and
The Nature Conservancy.
Opponent testimony was provided by one private
citizen and representatives of the Kansas Association for
Conservation Districts, Kansas Corn Growers Association,
Kansas Farm Bureau, Kansas Livestock Association, Kansas
Water Congress, GMD No. 2, GMD No. 3, GMD No. 4, GMD
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No. 5, and WaterPACK. Generally, the opponents stated that
water should continue to be controlled at the local level with
no additional fees or increases.
Written-only opponent testimony was submitted by three
private citizens and representatives of the Kansas Agriculture
Alliance and Southwest Kansas Irrigation Association.
Neutral testimony was presented by representatives of
the City of Garden City, Kansas Biological Survey, and
Kansas Society of Professional Engineers.
No other testimony was provided.
The House Committee deleted the contents of the bill,
added provisions that would require certain reports from each
GMD board and direct certain tax revenues to the State
Water Plan Fund, and recommended a substitute bill be
passed.

Fiscal Information
The fiscal note prepared by the Division of the Budget
on the bill, as introduced, no longer reflects the contents of
the bill. An updated fiscal note was not immediately available.
Any fiscal effect associated with the bill is not reflected in The
FY 2023 Governor’s Budget Report.
State Water Plan Fund; groundwater management districts; tax; reporting; Kansas
Groundwater Management District Act; Kansas Retailers’ Sales Tax Act; Kansas
Compensating Tax Act; conservation


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Statutes affected:
As introduced: 2-1903, 2-1904, 2-1915, 2-1933, 2-3302, 2-3318, 2-3317, 2-3702, 2-3703, 2-3704, 2-3708, 2-3709, 75-3223, 2-3710, 12-541, 12-636, 12-761, 12-766, 12-2707, 12-2713, 19-27a03, 19-27a12, 19-27a17, 19-2963, 19-3704, 24-407, 24-418, 24-656, 24-659, 24-1202, 24-1204, 24-1211, 24-1212, 32-1152, 65-165, 32-1154, 32-1403, 32-1420, 42-701, 42-725, 47-1214, 47-1511, 65-161, 65-171h, 48-1603, 48-1606, 48-1608, 49-403, 49-511, 49-512, 49-513, 49-515, 49-517, 49-603, 49-618, 49-621, 49-623, 55-153, 55-1, 55-527, 65-153f, 65-156, 65-157, 65-159, 65-162a, 65-163, 65-163c, 65-163d, 65-163g, 65-164, 65-166, 65-166a, 65-166b, 65-167, 65-169, 65-170, 20-2801, 65-170b, 65-170d, 65-170e, 65-170g, 65-171a, 65-171b, 65-171c, 65-171d, 65-171e, 65-171f, 65-171l, 65-171m, 65-171n, 65-171o, 65-171p, 65-171q, 65-171r, 65-171t, 65-171u, 65-171v, 65-180, 65-1, 8-1001, 41-727, 65-1629, 65-3002, 65-3003, 65-3005, 65-3011, 65-3018, 65-3022, 65-3027, 65-3303, 65-3308, 65-3309, 65-3310, 65-3311, 65-3312, 65-3313, 65-3321, 65-3329, 74-8905, 65-3330, 65-3401, 65-3402, 65-3419, 65-3423, 65-3424d, 65-3424i, 65-3426, 65-3427, 65-3425, 65-3430, 65-3446, 65-3458, 65-3491, 65-34, 65-4501, 65-5301, 65-7003, 68-1414, 68-1413, 68-2203, 74-2608, 74-2609, 74-2622, 74-99f04, 75-3036, 75-3084, 75-3089, 75-37, 75-5133, 75-5601, 75-5608, 75-5608a, 75-5609a, 75-5657, 75-5672, 79-201g, 10-116a
Sub: 79-3620, 79-3710