Community Bankers Association of Legislative Update

January 6, 2017

Overview The 2017 session begins on Monday, January 9th; the Governor’s State of the State will occur on Tuesday, January 10th, and the Governor’s budget recommendations will be presented sometime later that week. The session should begin quickly with a mid-session break scheduled for February 25-March 6 and the regular session concludes on April 7th. The veto session begins May 1. A 90-day session should conclude on May 14th. There is much work to be done and this session will likely be the longest and most difficult in memory.

New Leadership House of Representative In the House of Representatives, Democrats increased their numbers by twelve seats and a fair number of more conservative Republicans lost in the primary and general elections. The chamber has again elected a more conservative Speaker but the other leadership positions are fairly balanced between conservatives and moderate Republicans

The 2017 House will have 85 Republicans and 40 Democrats, a change from the 2016 division of 97-28.

Republicans: • House Speaker: Ron Ryckman Jr., (R-Olathe). • House Majority Leader: Rep. , (R-Dighton) • Assistant Majority Leader: Rep. , (R-Olathe). • Assistant Majority Leader: Rep. Tom Phillips, (R-Manhattan).

Democrats • Minority Leader: Rep. Jim Ward, (D-Wichita). • Assistant Minority: Leader: Rep. , (D- Kansas City).

Senate The Senate partisan split will be 31-9, with the Republican majority. The Democrat gain of one seat actually under-represents the amount of change in the Senate because fourteen incumbent conservative Republicans either chose not to run or were defeated. Senate President was re-elected with a new majority of more moderate Republicans.

Republicans • President: Sen. Susan Wagle, (R-Wichita). • Vice President: Sen. , (R-Emporia). • Majority Leader: Sen. , (R-Overland Park). • Assistant Majority Leader: Sen. , (R-Topeka).

1 Democrats • Minority Leader: Sen. , (D-Topeka). • Assistant Minority Leader: Sen. , (D-Topeka).

New Chairs and Committees The leadership elections impacted committee assignments. A full list of all committee assignments is included at the end of this report. In the House, Speaker Ryckman rewarded his more conservative supporters with Chair positions. Overall, however, the committee assignments demonstrate that in most committees there is a more moderate membership and the previous strong majority has been reduced. The Speaker’s majority is not as solid as the previous Speaker.

In the Senate, the change is much more significant. With a few exceptions, the committee chair assignments are more moderate. Without the very strong conservative caucus, the more moderate Republicans have increased their power and gained control of some key issues. The House remains more conservative but much more divided than the last six years. It is not accurate to say the moderate Republicans and Democrats will govern by a coalition. There may be specific issues where coalitions will form but it will not become the norm.

Finally, the greatest challenge to understand and predict committee action in 2017 will be the new legislators and chairs. Both chambers will have many new committee chairs and many new members. Everyone is trying to predict how votes will split in committees and what can pass and what cannot pass out of committees. It is clear many bills, if they can pass out of committees, have a good chance of passing the more divided and moderate chamber floors. We will need some experience with these new chairs and new members before we know.

Big Picture Session Issues The issues facing the 2017 Legislature are immense. With many new members, new committee chairs, and new leadership in key positions in the House and Senate, the regular transitions to a new session usually would be hard. When one considers the scope and scale of the big-picture issues the Legislature (and the Governor) face, the normal challenges become even more difficult.

Two factors are worth noting during the 2017 session. First, the Governor’s status has been diminished as a result of the continued failure of tax policy he supported and the 2012 and subsequent Legislatures implemented and sustained. Speculation regarding a potential departure to serve in the Trump administration further diminishes his influence. The 2016 primary and general elections significantly undercut the Governor’s political coalition.

Second, the demands of statewide issues on the attention and energy of legislators, and finances of the state, will result in very few additional legislative issues reaching resolution. There is finite time and attention available to the Legislature and smaller issues will suffer. Taxes, budgets, and school finance overwhelm most other issues. After the last six years, there is tremendous pressure and desire to address legislation passed or blocked. The problem to watch are the big picture issues that overwhelm and drowned out much other action.

Big picture 2017 factors include: • Reduced conservative legislative majorities and Governor with diminished legislative support. • Almost 40 percent new legislators. • $350 million revenue deficit in current year and $500 million in next fiscal year.

2 • Anticipated state budget reductions in the current and next fiscal years. • Awaiting Supreme Court decision on school finance in the Gannon case. • Debate regarding corrective tax policy beginning with the elimination of the LLC and others’ exemption. • Write a school finance formula—how will money flow out to schools? • Fund a school finance formula—how will the state and locals fund the formula? • Medicaid expansion debate. • Address any number of federal changes (Medicaid and expansion, regulations including environmental, and others) from the new Trump administration.

Financial Institutions Issues During the 2017 session, we will be monitoring and keeping the CBAK updated on several key issues. Committees and Chairs: The significant changes in the Legislature membership have also changed the membership of the key committees with whom we work. • In the Senate, Jeff Longbine will continue as Chair of the Financial Institutions and Insurance Committee as well as serve as the newly elected Vice President of the Senate. o Financial Institutions and Insurance-Chair Jeff Longbine, R-Emporia, Vice Chair , R-Goodland, Ranking Minority , D-Wichita. Members , R-El Dorado, Anthony Hensley, D-Topeka, Rob Olson, R-Olathe, , R-Hiawatha, , R-Wichita, and , R-McPherson. • (R-Parker) will move up from Vice Chair to Chair Senate Taxation Committee. o Assessment and Taxation-Chair Caryn Tyson, R-Parker, Vice Chair , R-Garden Plain, Ranking Minority , D-Baldwin City. Members , R-Winfield, Jim Denning, R-Overland Park, , D-Lawrence, , R-Parsons, Julia Lynn, R-Olathe, and Mike Petersen, R-Wichita. • In the House, financial institutions and insurance have been separated and the Speaker has created a new Financial Institutions and Pensions Committee o Financial Institutions and Pensions-Chair Jim Kelly, R-Independence, Vice Chair Randy Powell, R-Olathe, Ranking Minority , D-Wichita. Members: , R-Independence, , R-Topeka, , R-Bonner Springs, Roger Elliott, R-Wichita, , R-Atchison, Daniel Hawkins, R- Wichita, , D-N. Newton, Russ Jennings, R-Lakin, , R- Topeka, , D-Winfield, , R-Iola, Jene Vickrey, R- Louisburg, , D-Topeka, and Brandon Whipple, D-Wichita. • House Taxation has a new chair in Steven Johnson (R-Assaria). o Tax-Chair Steven Johnson, R-Assaria, Vice Chair Tom Phillips, R-Manhattan, Ranking Minority Tom Sawyer, D-Wichita. Members: , D-Topeka, , D-Kansas City, , R-Beloit, , R- Topeka, , R-Olathe, John Eplee, R-Atchison, , R- Liberal, Jim Gartner, D-Topeka, Dan Hawkins, R-Wichita, Jim Kelly, R- Independence, , R-McPherson, KC Ohaebosim, D-Wichita, , R-Parsons, Abraham Rafie, R-Overland Park, , R-Agra, , D-Kansas City, Adam Smith, R-Weskan, , R-Cunningham, , R-Augusta, and , D-Kansas City. • The Office of the State Bank Commissioner has a new Director after Deryl Schuster retired on November 1, 2016. Judi Stork is serving as Acting Commissioner until the Senate confirms Governor Brownback’s nomination of Miki Bowman from Council

3 Grove. After two years re-codifying the state banking code, we do not anticipate much legislation or policy issues for the OSBC. • We will be monitoring tax policy as it has the potential to impact CBAK members as well as watching to determine if the Legislature again attempts to sweep regulatory agency fee funds to address the over $900 million revenue shortfall. • Most action is going to take place in Washington DC as the Trump Administration attempts to dismantle Dodd-Frank.

Wrap Up Committee meetings will begin slowly after the session begins and we will provide regular updates as the session begins.

Shawn P. Mitchell, President Stuart J. Little, Ph.D. Community Bankers Association of KS Little Government Relations, LLC 5897 SW 29th Street 800 SW Jackson, Ste. 1100 Topeka, KS 66614 Topeka, Kansas 66612 785-271-1404 Office 785-235-8187 Office [email protected] [email protected] www.cbak.com www.lgrkansas.com

4 House Committees 2017

• Agriculture-Chair , R-Coldwater, Vice Chair Kent Thompson, R-Iola, Ranking Minority , D-Manhattan. Members: Dave Baker, R-Council Grove, Doug Blex, R-Independence, , R-Junction City, Debbie Deere, D-Lansing, Ron Ellis, R-Meriden, , R-Toronto, , R-Wamego, Trevor Jacobs, R-Fort Scott, Jim Karleskint, R-Tonganoxie, Greg Lewis, R-St. John, Adam Lusker, D- Frontenac, , D-Shawnee, , R-Fowler, , D- Leavenworth, , R-Hesston, , R-Pretty Prairie, Tom Sloan, R- Lawrence, Eric Smith, R-Burlington, Virgil Weigel, D-Topeka, and John Wilson, D- Lawrence.

• Ag & Natural Resources Budget-Chair Don Schroeder, R-Hesston, Vice Chair Larry Hibbard, R-Toronto, Ranking Minority Sydney Carlin, D-Manhattan. Members: Tory Arnberger, R-Great Bend, Lonnie Clark, R-Junction City, Jim Gartner, D-Topeka, Steven Johnson, R-Assaria, , D-Merriam, and Tom Sloan, R-Lawrence.

• Appropriations-Chair , R-Luray, Vice Chair Erin Davis, R-Olathe, Ranking Minority Kathy Wolfe Moore, D-Kansas City. Members: John Alcala, D-Topeka, , D-Lawrence, Tom Burroughs, D-Kansas City, Larry Campbell, R- Olathe, Sydney Carlin, D-Manhattan, J.R. Claeys, R-Salina, Susan Concannon, R-Beloit, , D-Wichita, Kyle Hoffman, R-Coldwater, Steven Johnson, R-Assaria, , R-Wellsville, , R-Overland Park, Greg Lakin, R-Wichita, , R-Wichita, , D-Hays, Richard Proehl, R-Parsons, Bradley Ralph, R-Dodge City, Don Schroeder, R-Hesston, Bill Sutton, R-Gardner, and , R-Stilwell.

• Children and Seniors-Chair Stephen Alford, R-Ulysses, Vice Chair Linda Gallagher, R- Lenexa, Ranking Minority Jarrod Ousley, D-Meriam. Members: Dave Baker, R-Council Grove, , D-Kansas City, Debbie Deere, D-Lansing, Brenda Dietrich, R- Topeka, Mary Martha Good, R-El Dorado, Anita Judd-Jenkins, R-Arkansas City, , R-Olathe, Patty Markley, R-Overland Park, Leonard Mastroni, R-LaCrosse, and , D-Pittsburg.

• Commerce, Labor and Economic Development-Chair Les Mason, R-McPherson, Vice Chair Ken Corbet, R-Topeka, Ranking Minority Brandon Whipple, D-Wichita. Members: Dave Baker, R-Council Grove, John Carmichael, D-Wichita, J.R. Claeys, R-Salina, , R-Overland Park, Erin Davis, R-Olathe, Roger Elliott, R-Wichita, Jan Kessinger, R-Overland Park, Tom Phillips, R-Manhattan, Bradley Ralph, R-Dodge City, Louis Ruiz, D-Kansas City, Joe Seiwert, R-Pretty Prairie, , D-Prairie Village, Sean Tarwater, R-Stilwell, and Patsy Terrell, D-Hutchinson.

• Corrections & Juvenile Justice-Chair Russ Jennings, R-Lakin, Vice Chair John Whitmer, R- Wichita, Ranking Minority Boog Highberger, D-Lawrence. Members: , R- Buhler, Debbie Deere, D-Lansing, , R-Wichita, , R-Ottawa, , R-Wichita, Joy Koesten, R-Leawood, , D-Topeka, Eric Smith, R-Burlington, Susie Swanson, R-Clay Center, and Virgil Weigel, D-Topeka.

• Education-Chair Clay Aurand, R-Belleville, Vice Chair , R-Salina, Ranking Minority , D-Kansas City. Members: Tory Arnberger, R-Great Bend, Steve Crum, D-Haysville, Brenda Dietrich, R-Topeka, Willie Dove, R-Bonner Springs,

5 Mary Martha Good, R-El Dorado, Jarrod Ousley, D-Merriam, Randy Powell, R-Olathe, , R-Fairway, Mark Schreiber, R-Emporia, Jerry Stogsdill, D-Prairie Village, Bill Sutton, R-Gardner, Sean Tarwater, R-Stilwell, Ed Trimmer, D-Winfield, and Jene Vickrey, R-Louisburg.

• Elections-Chair Keith Esau, R-Olathe, Vice Chair , R-Derby, Ranking Minority , D-Topeka. Members: John Alcala, D-Topeka, , R-St. Marys, Pam Curtis, D-Kansas City, Pete DeGraaf, R-Mulvane, Randy Garber, R- Sabetha, Mary Martha Good, R-El Dorado, Boyd Orr, R-Fowler, , D- Overland Park, Jack Thimesch, R-Cunningham, and Kristey Williams, R-Augusta.

• Energy, Utilities and Telecomm-Chair Joe Seiwert, R-Pretty Prairie, Vice Chair Randy Garber, R-Sabetha, Ranking Minority Annie Kuether, D-Topeka. Members: Stephen Alford, R- Ulysses, John Carmichael, D-Wichita, Ken Corbet, R-Topeka, Tom Cox, R-Shawnee, Debbie Deere, D-Lansing, Leo Delperdang, R-Wichita, Blaine Finch, R-Ottawa, Jim Gartner, D-Topeka, Adam Lusker, D-Frontenac, Patty Markley, R-Overland Park, Les Mason, R-McPherson, Mark Schreiber, R-Emporia, Tom Sloan, R-Lawrence, and Jack Thimesch, R-Cunningham.

• Federal & State Affairs-Chair John Barker, R-Abilene, Vice Chair Ron Highland, R-Wamego, Ranking Minority Louis Ruiz, D-Kansas City. Members: Tory Arnberger, R-Great Bend, Francis Awerkamp, R-St. Marys, Blake Carpenter, R-Derby, Stephanie Clayton, R- Overland Park, Ronald Ellis, R-Meriden, , D-Kansas City, Boog Highberger, D-Lawrence, Michael Houser, R-Columbus, Susan Humphries, R-Wichita, Trevor Jacobs ,R-Fort Scott, Jim Karleskint, R-Tonganoxie, , D-Overland Park, Vic Miller, D-Topeka, Melissa Rooker, R-Fairway, Eric Smith, R-Burlington, Chuck Weber, R-Wichita, John Whitmer, R-Wichita, Kristey Williams, R-Augusta, John Wilson, D-Lawrence, and Valdenia Winn, D-Kansas City.

• Financial Institutions and Pensions-Chair Jim Kelly, R-Independence, Vice Chair Randy Powell, R-Olathe, Ranking Minority Gail Finney, D-Wichita. Members: Doug Blex, R- Independence, Brenda Dietrich, R-Topeka, Willie Dove, R-Bonner Springs, Roger Elliott, R-Wichita, John Eplee, R-Atchison, Daniel Hawkins, R-Wichita, Tim Hodge, D- N. Newton, Russ Jennings, R-Lakin, Fred Patton, R-Topeka, Ed Trimmer, D-Winfield, Kent Thompson, R-Iola, Jene Vickrey, R-Louisburg, Virgil Weigel, D-Topeka, and Brandon Whipple, D-Wichita.

• General Government Budget-Chair Bill Sutton, R-Gardner, Vice Chair Chuck Weber, R- Wichita, Ranking Minority Tom Burroughs, D-Kansas City. Members: Diana Dierks, R- Salina, Brenda Dietrich, R-Topeka, Tim Hodge, D-N. Newton, Anita Judd-Jenkins, R- Arkansas City, Mike Kiegerl, R-Olathe, and Cindy Neighbor, D-Shawnee.

• Government, Security and Technology-Chair Pete DeGraaf, R-Mulvane, Vice Chair Greg Lewis, R-St. John, Ranking Minority Pam Curtis, D-Kansas City. Members: Rafie Abraham, R-Overland Park, Dave Baker, R-Council Grove, Steven Becker, R-Buhler, Keith Esau, R-Olathe, Linda Gallagher, R-Lenexa, Mike Kiegerl, R-Olathe, Joy Koesten, R-Leawood, KC Ohaebosim, D-Wichita, Jeff Pittman, D-Leavenworth, and Patsy Terrell, D-Hutchinson.

• Health & Human Services-Chair Dan Hawkins, R-Wichita, Vice Chair Susan Concannon, R- Beloit, Ranking Minority John Wilson, D-Lawrence. Members: Rafie Abraham, R- Overland Park, John Barker, R-Abilene, Doug Blex, R-Independence, Steve Crum, D-

6 Haysville, Willie Dove, R-Bonner Springs, Ronald Ellis, R-Meriden, John Eplee, R- Atchison, Broderick Henderson, D-Kansas City, , D-Overland Park, Jim Kelly, R-Independence, Greg Lakin, R-Wichita, Monica Murnan, D-Pittsburg, Les Osterman, R-Wichita, and Randy Powell, R-Olathe.

• Higher Education Budget-Chair Kevin Jones, R-Wellsville, Vice Chair Susie Swanson, R-Clay Center, Ranking Minority Eber Phelps, D-Hays. Members: Shelee Brim, R-Shawnee, Blake Carpenter, R-Derby, Pete DeGraaf, R-Mulvane, Patty Markley, R-Overland Park, Patsy Terrell, D-Hutchinson, and Brandon Whipple, D-Wichita.

• Insurance-Chair Jene Vickrey, R-Louisburg, Vice Chair Willie Dove, R-Bonner Springs, Ranking Minority Cindy Neighbor, D-Shawnee. Members: Elizabeth Bishop, D-Wichita, Ken Corbet, R-Topeka, Tom Cox, R-Shawnee, Roger Elliott, R-Wichita, John Eplee, R- Atchison, Gail Finney, D-Wichita, Dan Hawkins, R-Wichita, Tim Hodge, D-N. Newton, Jim Kelly, R-Independence, Boyd Orr, R-Fowler, Brett Parker, D-Overland Park, Fred Patton, R-Topeka, Randy Powell, R-Olathe, and Adam Smith, R-Weskan.

• Judiciary-Chair Blaine Finch, R-Ottawa, Vice Chair Fred Patton, R-Topeka, Ranking Minority John Carmichael, D-Wichita. Members: Stephen Alford, R-Ulysses, Steven Becker, R- Buhler, Elizabeth Bishop, D-Wichita, Tom Cox, R-Shawnee, Pam Curtis, D-Kansas City, Roger Elliott, R-Wichita, Randy Garber, R-Sabetha, Boog Highberger, D-Lawrence, Tim Hodge, D-N.Newton, , R-Valley Center, Susan Humphries, R-Wichita, Russ Jennings, R-Lakin, Annie Kuether, D-Topeka, Greg Lakin, R-Wichita, Leonard Mastroni, R-LaCrosse, Vic Miller, D-Topeka, Les Osterman, R-Wichita, Bradley Ralph, R-Dodge City, John Wheeler Jr., R-Garden City, and John Whitmer, R-Wichita.

• K-12 Education Budget-Chair Larry Campbell, R-Olathe, Vice Chair Steve Huebert, R-Valley Center, Ranking Minority Ed Trimmer, D-Winfield. Members: Clay Aurand, R- Belleville, Henry Helgerson, D-Wichita, Kyle Hoffman, R-Coldwater, Kevin Jones, R- Wellsville, Jim Karleskint, R-Tonganoxie, Brenda Landwehr, R-Wichita, Nancy Lusk, D-Overland Park, Fred Patton, R-Topeka, Melissa Rooker, R-Fairway, Tom Sawyer, D- Wichita, Scott Schwab, R-Olathe, Adam Smith, R-Weskan, Jene Vickrey, R-Louisburg, and Valdenia Winn, D-Kansas City.

• Local Government-Chair Kristey Williams, R-Augusta, Vice Chair Jack Thimesch, R- Cunningham, Ranking Minority John Alcala, D-Topeka. Members: Francis Awerkamp, R-St. Marys, Elizabeth Bishop, D-Wichita, Blake Carpenter, R-Derby, Tom Cox, R- Shawnee, Gail Finney, D-Wichita, Greg Lewis, R-St. John, Patty Markley, R-Overland Park, Boyd Orr, R-Fowler Eber Phelps, D-Hays, and Kent Thompson, R-Iola.

• Social Services Budget-Chair Brenda Landwehr, R-Wichita, Vice Chair Stephanie Clayton, R- Overland Park, Ranking Minority Barbara Ballard, D-Lawrence. Members Keith Esau, R-Olathe, Linda Gallagher, R-Lenexa, Anita Judd-Jenkins, R-Arkansas City, Nancy Lusk, D-Overland Park, Monica Murnan, D-Pittsburg, and Chuck Weber, R-Wichita.

• Tax-Chair Steven Johnson, R-Assaria, Vice Chair Tom Phillips, R-Manhattan, Ranking Minority Tom Sawyer, D-Wichita. Members: John Alcala, D-Topeka, Tom Burroughs, D-Kansas City, Susan Concannon, R-Beloit, Ken Corbet, R-Topeka, Erin Davis, R- Olathe, John Eplee, R-Atchison, Shannon Francis, R-Liberal, Jim Gartner, D-Topeka, Dan Hawkins, R-Wichita, Jim Kelly, R-Independence, Les Mason, R-McPherson, KC Ohaebosim, D-Wichita, Richard Proehl, R-Parsons, Abraham Rafie, R-Overland Park, Ken Rahjes, R-Agra, Louis Ruiz, D-Kansas City, Adam Smith, R-Weskan, Jack

7 Thimesch, R-Cunningham, Kristey Williams, R-Augusta, and Kathy Wolfe Moore, D- Kansas City.

• Transportation-Chair Richard Proehl, R-Parsons, Vice Chair Shannon Francis, R-Liberal, Ranking Minority Adam Lusker, D-Frontenac. Members: Stephen Alford, R-Ulysses, Barbara Ballard, D-Lawrence, Shelee Brim, R-Shawnee, Linda Gallagher, R-Lenexa, Ron Highland, R-Wamego, Michael Houser, R-Columbus, Trevor Jacobs, R-Fort Scott, Leonard Mastroni, R-LaCrosse, KC Ohaebosim, D-Wichita, Jeff Pittman, D- Leavenworth, Ken Rahjes, R-Agra, Mark Schreiber, R-Emporia, Ponka-We Victors, D- Wichita, and John Wheeler Jr., R-Garden City.

• Transportation & Public Safety Budget-Chair J. R. Claeys, R-Salina, Vice Chair Michael Houser, R-Columbus, Ranking Minority Henry Helgerson, D-Wichita. Members: Gail Finney, D-Wichita, Francis Awerkamp, R-St. Marys, Leo Delperdang, R-Wichita, Jan Kessinger, R-Overland Park, Joy Koesten, R-Leawood, and Brett Parker, D-Overland Park.

• Veterans & Military-Chair Les Osterman, R-Wichita, Vice Chair Lonnie Clark, R-Junction City, Ranking Minority Virgil Weigel, D-Topeka. Members: Shellee Brim, R-Shawnee, Pete DeGraaf, R-Mulvane, Leo Delperdang, R-Wichita, Diana Dierks, R-Salina, Keith Esau, R-Olathe, Jim Gartner, D-Topeka, Tom Phillips, R-Manhattan, Jeff Pittman, D- Leavenworth, Jerry Stogsdill, D-Prairie Village, and John Wheeler Jr., R-Garden City.

• Water & Environment-Chair Tom Sloan, R-Lawrence, Vice Chair Ken Rahjes, R-Agra, Ranking Minority Ponca-We Victors, D-Wichita. Members: Doug Blex, R-Independence, Steve Crum, D-Haysville, Shannon Francis, R-Liberal, Randy Garber, R-Sabetha, Larry Hibbard, R-Toronto, Cindy Holscher, D-Overland Park, Annie Kuether, D-Topeka, Greg Lewis, R-St. John, Les Mason, R-McPherson, Mark Schreiber, R-Emporia, Joe Seiwert, R-Pretty Prairie, Susie Swanson, R-Clay Center, Patsy Terrell, D-Hutchinson, and Kent Thompson, R-Iola.

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