New legislation could mean more money for Kansas businesses

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WICHITA, Kan. (KSNW) – New legislation could mean more money for Kansas businesses that were shut down and restricted during the pandemic.

It started as a lawsuit. Ryan Floyd, Fitbody Bootcamp and Omega Bootcamps Inc. owner, filed a lawsuit against the state of Kansas in December of 2020.

After filing, Kansas Attorney General Derek Schmidt stated that the lawsuit raises public policy questions that extend beyond the individual case and that it would be better answered by the legislature, rather than the courts.

Floyd’s lawyer, Ryan Kriegshauser, and his partner, Josh Ney, presented the compensation package to the Tax Senate Committee Tuesday.

“The Kansas Emergency Management Act currently allows for businesses and individuals to seek compensation from the government,” said Ney. “The intent of this legislation is to quickly and efficiently resolve potential Kansas Emergency Management Act claims, using a combination of federal COVID funds and state income and property tax credits.”

Ney said this business compensation package would have two ways to pay businesses.

“First, the bill would cordon off federal funds to resolve these claims through a process determined by the Attorney General, based on the availability of funds and the named number of claims and other factors,” Ney continued. “Claims must be submitted within a limited claim period and hard-hit business owners would then receive federal dollars as compensation for their disproportionate burden born on behalf of the general public.”

“Second, the bill creates a formula by which a business or individual will be assigned a compensation amount based on the length of the government shutdown or other government restrictions, the compensation amount is determined by a formula based on the claimants 2019 state income tax liability and the length of the government use,” Ney continued.

“After being assigned this compensation amount claimants may use the amount as a credit against their current income tax liability for a short period of time or against the property tax liability over a longer period of time,” Ney said.

Ney stated that other ways to be compensated would be through forgiving loans. He said it is not a perfect solution, but it is a proposal for lawmakers to amend and continue to work on.

All this bill does is create an alternative compensation approach to give businesses streamline claims and a procedure that may limit potential exposure to taxpayers,” said Kriegshauser. “Every day we continue to field calls from businesses struggling to find ways to deal with business restrictions, and we’ll continue to field those calls, but at least this bill gives a framework for some relief to be granted.”

The bill is supported by the Kansas Restaurant and Hospitality Association. Representative Scott Schneider said it’s what his advocacy group has been fighting for.

“Ryan Kriegshauser and Ney have introduced a bill today that would help alleviate some of the COVID stress that our members have been under,” said Schneider. “We believe, we testified a few weeks ago that the government has overused its police power, not taking into account the stress and difficulties that the small businesses are under.”

The Kansas Senate Majority Leader Gene Suellentrop was in support as well.

“At this time, it’s a beginning, it’s a start and we can put together something that’s in an orderly fashion to help these small businesses, revive and survive — this is truly a much larger problem than people even realize, folks livelihoods have been damaged, individuals have been decimated by some of these past regulatory issues,” he said.

The Kansas Chamber of Commerce, representative Eric Stafford spoke in support.

“They work diligently to find a reasonable solution and we appreciate their efforts,” said Stafford.

Other Wichita area businesses have filed a lawsuit over the city, county, and state coronavirus restrictions, but claiming it violates the U.S. Constitution.

“Never in my wildest dreams did I expect this to get this far. I wanted to raise awareness to allow our government to step in and do what they thought was right but with the bill being brought up to question is big deal,” Floyd weighed in.

Floyd’s lawsuit is different from other lawsuits filed in the state. Others claim it is unconstitutional to restrict businesses and order a shutdown. Floyd is asking for payments that align with the Kansas Emergency Management Act provision. His attorney said the people and businesses that help with disasters during an emergency declaration should be compensated for assisting the government.

If the compensation package presented by Kreigshauser passes through the Kansas legislature, it would likely help businesses like bars, restaurants, and other businesses that filed other lawsuits and those that had to close during the pandemic.

It was introduced into the Senate Tax Committee. Legislators can make amendments, and if successful, they will be introduced onto the Senate floor. It likely won’t be a quick process, but Floyd hopes businesses hang tight because the compensation could come soon.

“Don’t give up and hang in there,” said Floyd. “I can’t promise help is on the way, but you’re never out of the fight until you quit.”

Copyright 2021 Nexstar Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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