Bill > HB2541

This bill establishes the Kansas Rural Business Growth Program Act, which aims to encourage capital investment in rural areas of Kansas by offering a premium tax credit to eligible investors. The program will be administered by the Kansas Department of Commerce, referred to as the "department." A "rural area" is defined as a location not within a city of over 50,000 people or an urbanized area adjacent to such a city. The act defines "capital investment" as equity investments made by a "rural investor" (any entity investing in a "rural fund," which is a fund certified by the department) into a rural fund, with specific requirements for how the fund must then use these funds for "qualified investments" in "eligible businesses." An "eligible business" generally has fewer than 250 employees and is located in a rural area, or if not, is in specific industry sectors or deemed beneficial to rural economic growth by the department. The program allows for a tax credit against an investor's "state tax liability," which includes premium and retaliatory taxes for insurance companies, with specific percentages of the investment becoming eligible for credit over several years. The bill outlines application processes for rural funds seeking certification, requirements for investors, limitations on the total amount of credits issued annually, and conditions under which credits can be recaptured by the state if the program's rules are violated, such as failing to invest the capital in eligible businesses or making prohibited distributions. The act also includes reporting requirements for rural funds and a process for them to exit the program after a compliance period.

Budget and Finance

Taxation (House)

https://kslegislature.gov/li/b2025_26/measures/hb2541/