Pub. 11 2022 Issue 6 19 While taxes will be a significant issue when the Kansas Legislature returns to Topeka in January, there will also be a discussion on environmental, social, and governance (ESG) legislation. This type of legislation can threaten the free market and negatively impact how banks and businesses currently do business. You may have read the article entitled “Will the ESG Pendulum Become a Wrecking Ball?” penned by Doug Wareham, KBA President & CEO, in the August issue of the Kansas Banker. Undoubtedly, our industry will be caught in the middle of conflicting state legislation and federal regulatory guidance that could affect the extension of credit to lawful businesses. Kansas lawmakers have their eyes set on addressing the ESG issue at the state level by looking at model legislation that would penalize banks and businesses for not doing business with specific industries and legislation that could require the state’s pension fund to divest from those companies that push an ESG agenda. While their intentions are well-placed, the unintended consequences of these policies are troubling. They could open our industry to significant liability or create burdensome government overregulation in the free market. But it remains that something needs to be done to address this issue that could hurt. While it is the legislature’s right to protect core sectors of our economy, we will work to ensure the policies implemented don’t put the banking industry in the middle of a political wrecking ball. While the issues mentioned above will undoubtedly consume much of the Capitol air, your KBA government relations (GR) team is dedicated to continuing to look for policies to modernize our Kansas trust code, develop guidance for implementing our state-level tax bill that exempts interest earned on agricultural real estate and rural housing loans from state taxation, and begin the discussion on the use of public funds and how they are invested in Kansas banks and Kansas communities. The 2023 Legislative Session is right around the corner and your team is eager to work on behalf of you and the industry. It is an honor to represent you in Topeka. It’s time to get to work! If you have any questions or want to know how to help with our GR efforts, please do not hesitate to contact Alex at aorel@ksbankers.com or call the KBA office at (785) 232-3444.
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