Kansas Governor Laura Kelly signed into law an economic recovery bill that could increase parity at the state level between banks and the Farm Credit System.
The Senate Bill 15 allows banks to offer low-interest agricultural loans, creating a targeted tax exemption for bank interest income from ag real estate loans. The bill also includes a tax exemption for rural housing loans in communities with a population of 2,500 or fewer.
The measure also creates an Economic Recovery Loan Deposit Program, which enables Kansas banks to access low-cost state idle funds for the purpose of making low-cost loans to small businesses affected by the pandemic. It also modifies the state’s credit union field of membership statutes to reflect the current federal standard.
“The adoption of the tax equity provisions in Senate Bill 15 is the culmination of three years of perseverance, tough negotiations and the thoughtful leadership from state legislative leaders of both political parties here in Kansas,” said Doug Wareham, president and CEO of the Kansas Bankers Association.
“At the end of the day, our state policymakers supported creating a level playing field for agricultural real estate and rural housing borrowers and they recognized the need to maintain access to local credit provided by the strong community banking network we have in Kansas.”