Seed to Silo - Winter 2023

Page 1

Winter 2023

Kansas Agribusiness Retailers Association

816 SW Tyler Topeka, KS 66612 (785) 234-0463

ksagretailers.org

ASSOCIATION STAFF

Ron Seeber President & CEO

Randy Stookey

Senior Vice President General Counsel

Staci Storey

Senior Vice President

Chief Financial Officer

Trae Green

Vice President

External Affairs

Lisa Anschutz

Senior Director

Internal Operations

Sidney Storey

Director of Event Planning

Clay Fagan

Director of Member

Investment and Training

Trisha Chalfant Administrative Assistant

BOARD LEADERSHIP

Dustin Kuntz Chairman

Kevin Dieckmann

Vice Chairman

Scott Morris

Second Vice Chairman

Lance Nelson

Immediate Past Chairman

Gary Beachner

Bryan Bucl

Yance Farney

Justin Foss

Jim Grilliot

Jeff Holling

Nick Krehbiel

Brian Laverentz

Jami Loecker

Roger Long

Warren Mayberry

Justin Ochs O.J. Pearl

Dave Spears

Tim Spector

Ron Telecky

Dave Tierney

Mark Vance

Mark Wegner

Toby Witthuhn

Winter 2023 Kansas Grain and Feed Association 816 SW Tyler Topeka, KS 66612 (785) 234-0461

ksgrainandfeed.org

ASSOCIATION STAFF

Ron Seeber President & CEO

Randy Stookey

Senior Vice President General Counsel

Staci Storey

Senior Vice President

Chief Financial Officer

Trae Green

Vice President

External Affairs

Lisa Anschutz

Senior Director

Internal Operations

Sidney Storey

Director of Event Planning

Clay Fagan

Director of Member

Investment and Training

Trisha Chalfant

Administrative Assistant

BOARD LEADERSHIP

Mark Paul Chairman

Andrew Fullerton

Vice Chairman

Ted Behring

Second Vice Chairman

Brent Emch

Immediate Past Chairman

Doug Biswell

Blake Connelly

Alex Gerard

David Helfrich

Dub Johnson

TJ Mandl

Matt Overturf

Troy Presley

Stan Remington

Devin Schierling

Mike Schmidt

Allen Williams

2 SEED to SILO | Encompassing Agribusiness in Kansas KANSAS AGRIBUSINESS RETAILERS ASSOCIATION | KANSAS GRAIN AND FEED ASSOCIATION
Advertising does not influence editorial decisions or content. Kansas Agribusiness Retailers Association and Kansas Grain and Feed Association reserve the right to refuse, reject, or cancel any ad for any reason at any time without liability. Editors: KARA & KGFA staff TABLE
CONTENTS
OF
the
funding
KARA and KGFA serve as the administrators of the Agricultural Chemical Remediation Reimbursement Program KARA and KGFA members gather in Topeka for the associations’ 2023 Legislative Action Day and leadership program The Kansas legislative session is nearly complete and we have a full recap of six months worth of legislation affecting agribusiness Updates on issues affecting you 03 08 19 20 14 04 PRESIDENT’S LETTER KGFA ANNUAL MEETING KARB PROGRAM AGRIBUSINESS ADVOCATES
STATEHOUSE INSIDER INDUSTRY NEWS
Associations lead
charge on rail improvement
KGFA held its 127th annual meeting in early April in Wichita
KANSAS
BOARD OF
DIRECTORS BOARD OF DIRECTORS

PRESIDENT’SMESSAGE

Ron Seeber was hired as president and CEO of Kansas Agribusiness Retailers Association and Kansas Grain and Feed Association in October 2017 after working for the associations since July 2008. An expert in state and federal legislative affairs, Seeber also worked for Senator Bob Dole in policy and political capacities, and has spent his entire career in the regulatory arena.

DEAR KARA and KGFA

MEMBERS

When you are paying your dues to Kansas Agribusiness Retailers Association (KARA) and/or Kansas Grain and Feed Association (KGFA), one of the many returns on your investment is the dedication of our associations’ government affairs team in Topeka.

In this issue of Seed to Silo, I am to pleased share how your association led the effort to revitalize a state costshare program allowing our membership financial access to enhance their rail infrastructure.

HB 2335, a bill your associations introduced and heavily advocated for this legislative session, was recently passed by an overwhelming bipartisan majority in both the Kansas House and Senate, and in late-April was signed into law by Governor Laura Kelly.

This bill will allow millions of transportation dollars to be utilized by our members for their short line rail infrastructure needs.

In recent history, during the 2020 legislative session, the legislature passed the Eisenhower Legacy Transportation Program which included a $15 million, three-year, cost-share grant program for qualified track maintenance and improvements to short line rail and rail siding. Kansas agribusinesses have greatly benefited from this program for the previous three years.

This year, in coordination with the Kansas Dept. of Transportation (KDOT), we jointly introduced HB 2335 to restructure the Short Line Rail Improvement Fund program and combine it with KDOT’s Rail Service Improvement Fund Program.

The bill dedicates $10 million annually from the state highway fund for the program.

Under the recently signed bill, grain shippers and other owners of rail siding adjacent to short line rail are able to apply for program funding.

Both chambers’ respective transportation committee chairmen, Representative Shannon Francis (R-Liberal) and Senator Mike Petersen (R-Wichita) were instrumental in this legislation being approved overwhelmingly. They should be commended for their support of our industry.

The measure passed the House 117-5, while the Senate passed it 38-2, with only Senators Alicia Straub (R- Ellinwood) and Mark Steffen (R-Hutchinson) standing in opposition.

We applaud Governor Kelly for swiftly signing the bill on April 20. We are also thrilled to report this law passed the entirety of the legislative process without receiving an expiration date. This is a big deal for the import and export needs of our industry and is a tool our members can take advantage of for the foreseeable future.

KDOT is in the midst of developing guidelines for applicants to apply for the funds and we will share the details as they become available.

In the meantime, please reach out to association staff if you have questions or suggestions on how we can be of assistance.

Sincerely,

3 WINTER 2023 SEED to SILO | Encompassing Agribusiness in Kansas
I am pleased to share how your membership investment has paid off tenfold ... This bill will allow millions of transportation dollars to be utilized by our members for their short line rail infrastructure needs.

Agribusiness Applauds Governor’s Signature on Short Line Rail Infrastructure

Kansas Agribusiness Retailers Association’s (KARA) and Kansas Grain and Feed Association’s (KGFA) legislative efforts in 2023 have resulted in Kansas Governor Laura Kelly signing House Bill 2335, a bipartisan bill resulting in an annually dedicated $10 million from the state highway fund for maintenance and improvement of short line rail infrastructure.

“We are incredibly pleased Governor Kelly and the overwhelming majority of our state legislature supports our members and their need for reliable, safe and enhanced rail transportation,” KARA and KGFA President and CEO Ron Seeber said. “As it already has in its previous iterations, this critical legislation will bring improved rail service throughout the state for crop inputs and commodities to be efficiently and safely transported. We thank Governor Kelly and members of the Kansas legislature for passing this critical infrastructure legislation.”

In 2020, KGFA worked with the legislature to pass the Eisenhower Legacy Transportation Program which included a $15 million, three-year, cost-share grant program for qualified track maintenance and improvements to short line rail and rail siding.

Under the newly-restructured Rail Service Improvement Fund Program your association led the charge on passing, the program now has increased from $5 million to $10 million per year with an expansion of program eligibility to include grain shippers and other owners of rail siding adjacent to short line rail.

“By rehabilitating more short-line railroads across the state, we are making it easier and more efficient for local businesses to move food and fuel to market,” Governor Laura Kelly said. “These investments build on one of Kansas’ greatest strengthens – being a central part of supply chains throughout the country.”

Kansas Agribusiness Retailers Association’s (KARA) and Kansas Grain and Feed Association’s (KGFA) legislative efforts in 2023 have resulted in Kansas Governor Laura Kelly signing House Bill 2335, a bipartisan bill resulting in an annually dedicated $10 million from the state highway fund for maintenance and improvement of short line rail infrastructure.

EXPAND YOUR AUDIENCE

Advertise

Would you like to reach more than 900 businesses involved in the Kansas grain industry? Call the association office 785.234.0461 or email membership@kansasag.org to learn more about our advertising opportunities.

4 SEED to SILO | Encompassing Agribusiness in Kansas KANSAS AGRIBUSINESS RETAILERS ASSOCIATION | KANSAS GRAIN AND FEED ASSOCIATION INDUSTRYnews Built on trust and integrity. Focused on service, growth and efficiency. RETURNS GROWING LOCAL Grain Merchandising | Logistics Accounting | Risk Management Representing member-cooperatives in Oklahoma, Kansas & Texas. Reaching multiple markets utilizing 160 grain locations. Creating efficiency & reducing costs for members through shared personnel, resources, & industry expertise. KANSAS 316-542-3435 OKLAHOMA 580-242-0515 www.ceagrain.com
with KGFA

ACRC - Ag Container Recycling Acceptance Standards

The Ag Container Recycling Council (ACRC) is the trade association of the ag chemicals industry, responsible for supporting the collection and proper recycling of ag containers nationwide. The program currently operates in 46 states and collects all types of ag chemical containers including pesticides, animal health, specialty pest control, micronutrient, biologicals, fertilizer, and/or adjuvant product containers. Over the past 30 years, the ACRC program has collected and recycled over 240,000,000 pounds of container plastic. The program is fully funded by its member companies who are the manufacturers of these products. Collection of containers takes place through ACRCs network of contractors.

ACRC has recently seen concerns in various states with our container acceptance requirements. ACRC would like to stress that the container inspection and cleaning criteria used by ACRC contractors, is not the contractors standard, but is the ACRC standard which is ultimately the EPA standard. This standard was established in the EPA 2006 Container and Containment Rule, requiring 99.99 percent removal of each active ingredient. A simple way to articulate this standard is “Clean means clean, with no residue seen.” Staining is fine,

but residue is not.

ACRCs goal is and will continue to be, to enforce the above inspection standards, not lower them. Regarding caps and labels, removal and disposal of these has been the responsibility of the end user, not the contractor, throughout the life of the ACRC program. This requirement is critical to the efficiency of our collection and inspection process. Booklet labels and caps should be discarded but base labels may remain. Because ACRC contractors cannot be sure what type of product was in each container, all containers must be properly triple or pressure rinsed prior to collection. This includes non-pesticide products.

While the above may seem like difficult requirements to meet, we know from experience in states all across the country, that these standards are reasonable and readily achievable. ACRC has many collection sites that continually demonstrate the ability to meet these standards with minimal (0 – 10 percent) rejects. You will help foster the long term success of the ACRC program, by reinforcing our education and training efforts to achieve these same results at all collection sites in the coming season. We encourage you to check out the ACRC website for educational details about

rinsing. Several best practices include 1) rinsing at the time of use 2) triple or pressure rinsing until rinsate is water clear and 3) field applying the rinsate. Remember, CLEAN means CLEAN, with NO residue seen! Lastly, ACRC would like to recognize and thank all those who are already participating in the ACRC program. We hope that continues for many years to come. If you are not currently participating, we hope you will decide to join us as we seek to help take care of your land, family, and community, by giving new life to used plastic!.

SEED to SILO | Encompassing Agribusiness in Kansas INDUSTRYnews 2022 Apache Dealer of the Year Hays 888.228.3611 Ransom 800.235.5359 Great Bend 866.379.1426 Beloit 888.232.8558 Grand Island 866.218.5422 We know Kansas agribusiness. Our publications touch every aspect of Kansas ag retail. Call the association office 785.234.0463 or email membership@kansasag.org to learn more about our advertising opportunities. Advertise with KARA EXPAND YOUR AUDIENCE
The Ag Container Recycling Council (ACRC) is the trade association of the ag chemicals industry, responsible for supporting the collection and proper recycling of ag containers nationwide.

Associations Celebrate Third Year of Short Line Rail Funding

Kansas Agribusiness Retailers Association’s (KARA) and Kansas Grain and Feed Association’s (KGFA) legislative efforts in 2020 of including grain shippers and other owners of rail siding adjacent to short line rail in the Eisenhower Transportation Plan have again paid dividends as Governor Laura Kelly announced nearly $5 million for nine short line rail projects in February.

Project Sponsor

“When we successfully helped pass this legislation in 2020, we knew everyone would benefit from this program for many years to come,” KARA and KGFA President and CEO Ron Seeber said. “Farmers will see improved rail service to ship their crops and receive inputs to grow them. Rail and shipper employees receive improved safety. Our underserved Kansas communities welcome the economic development of bringing new business and construction to their towns and we experience a decreased need for overthe-road transportation.”

Six SLRIF recipients will use the funds for major track rehabilitation and rail replacement; three projects were awarded funds for siding extensions and storage tracks.

These projects support rail enhancements to expand carload capabilities, reduce truck traffic, increase operating speeds, and

improve operating efficiencies.

“These nine rail improvement projects will strengthen Kansas’ agriculture supply chain, connecting our farmers and ranchers to regional, national, and international markets,” Governor Laura Kelly said. “My administration will continue to invest in needed and commonsense infrastructure improvements like these to maximize our state’s economic potential.”

State funding for the nine projects will be enhanced by a 30 percent match from each recipient, resulting in a total rail infrastructure investment of nearly $6.5 million. The program received 19 applications requesting more than $18 million in program funds in this third and final round of funding for the program through IKE, the state’s 10-year bipartisan transportation program. SLRIF made available $5 million each for state fiscal years 2021, 2022, and 2023.

Project Type Award

OSHA Revises Combustible Dust NEP

OSHA has issued a revised Combustible Dust National Emphasis Program (NEP). The purpose of the revised emphasis program is to continue OSHA inspections of facilities that generate or handle combustible dusts likely to cause fire, flash fire, deflagration and explosion hazards.

One of the six industries added to the program that is notable for agriculture is 424510 Grain and Field Bean Merchant Wholesalers. The revised NEP directive replaces the March 2008 directive and

remains in effect until OSHA issues a cancellation notice.

It does not replace another similar OSHA directive referred to as the grain handling facility directive, but it may cover operations involving grain processing that are outside the scope of the grain handling directive. Sample citations provided in the directive focus on housekeeping, electrical, personal protective equipment and the general duty clause.

Source: Asmark Institute

6 SEED to SILO | Encompassing Agribusiness in Kansas KANSAS AGRIBUSINESS RETAILERS ASSOCIATION | KANSAS GRAIN AND FEED ASSOCIATION INDUSTRYnews
Bestifor Farms in Republic County Siding extension $454,622.00 Cargill – Salina, in Saline County Storage tracks $1,252,530.94 Gavilon Grain in Sedgwick County Major rehabilitation with rail relay $421,664.64 Garden City Western Railroad in Finney County Major rehabilitation with rail relay $395,850.00 Hi-Plains Cooperative Association in Sheridan County Major rehabilitation with siding $276,716.90 Kansas-Oklahoma Railroad – Wichita South Yard in Sedgwick County Major rehabilitation $243,559.27 Scoular Grain – Pittsburg, in Crawford County Siding extension $580,098.44 South Kansas & Oklahoma Railroad in Elk County Rail replacement $700,000.00 V&S Railway in Barber and Harper counties Major rehabilitation $666,366.77 Total Awarded: $4,991,408.96
KARA and KGFA’s legislative efforts led to millions of dollars in cost-share investment for short line rail. One of the six industries added to the program that is notable for agriculture is 424510 Grain and Field Bean Merchant Wholesalers.

KGFA CELEBRATES 127th ANNUAL MEETING

Kansas Grain and Feed Association’s (KGFA) board of directors, and membership atlarge, selected Mark Paul of Cloud County Cooperative Elevator Association Inc., to serve as the historic trade association’s 89th chairman during its 127th annual meeting held April 10 –11, 2023 in Wichita.

8 SEED to SILO | Encompassing Agribusiness in Kansas KANSAS AGRIBUSINESS RETAILERS ASSOCIATION | KANSAS GRAIN AND FEED ASSOCIATION
More than 200 members attended Kansas Grain and Feed Association’s 127th annual meeting April 10 -11, 2023. Outgoing chairman Brent Emch (left) is presented a recognition plaque by incoming chairman Mark Paul. Greg Martinelli spoke to the KGFA membership on ways to become a trusted advisor. Jarrod Kieffer of Stinson LLP discussed strategies to reduce property taxes.

“It’s truly an honor and privilege to be selected by the Kansas Grain and Feed Association board of directors and membership to be the next chairman of this great association,” Paul said. “Kansas Grain and Feed Association is one of the most successful grain and feed associations across this country and I’m honored to continue to lead it to greater heights and accomplishments. KGFA’s continued success comes from the value it creates for its member-owners and I intend to ensure that with the amazing staff’s support, it continues to deliver results and flourish for its members.”

Native to the state, Paul started his career in western and southern Kansas working for cooperatives for more than 40 years. Paul is currently the General Manager for Cloud County Coop Elevator Association Inc. and President of Concordia Terminal LLC located in Concordia, Kan.

Along with its leadership elections, KGFA’s 127th annual meeting attracted nearly 150 of the association’s active capacity and associate members to learn from Stinson LLP partner and attorney Jarrod Kieffer on property tax valuations and how to effectively discuss grain marketing with producers from Ag Sales Professionals’ Greg Martinelli.

“We extend our sincere gratitude to each individual and organization who chose to attend our annual meeting this year and are thrilled to embark on the next two years under the leadership of Mark Paul,” KGFA President and CEO Ron Seeber said. “The main reason our association has survived to hold 127 annual meetings is the

quality guidance starting at the top with our chairman and board of directors, all the way to the contributions from each individual member company.”

KGFA also bestowed its most prestigious honor, the Sunflower Award, to longtime association supporter, Dave Warrington. Warrington served on the Kansas Grain and Feed Association board of directors in the 1990s, with a term as the association’s chairman from 1992-93.

The association also completed its formal annual business meeting consisting of a report on membership activities, board of director elections and financial status. KGFA membership re-elected Ted Behring

(Farmers Coop Equity at Isabel), Doug Biswell (Jackson Farmers Inc.) and Mike Schmidt (Pride Ag Resources) to its board of directors, while Stan Remington of Frontier Ag Inc. joined the board as a new nominee. Throughout the event, members enjoyed networking inside hospitality suites sponsored by: Ardent Mills; Cargill Inc.; ProValue Insurance; BarnesCo; Central States Fumigation; Drake, Inc.; Hammel Scale a Mettler Toledo Brand; McPherson Concrete Storage Systems; Norwood Contracting LLC; and Rolfes @ Boone.

The event wrapped up with a golf outing to Reflection Ridge Golf Course where more than 85 golfers participated in a tournament.

9 WINTER 2023 SEED to SILO | Encompassing Agribusiness in Kansas Check out our timely and relevant Knowledge Exchange agribusiness reports, videos and industry insights. Key Points: Growers and retail input suppliers face one of the worst inflationary environments in decades, driven by a continued parabolic rise in fertilizer prices. Nitrogen production shocks, tight global supplies, rising natural gas input costs, and steady demand are pushing up prices. While the situation will eventually correct itself, our analysis suggests that high fertilizer costs will persist into the spring 2022 planting season at minimum. We base this conclusion in part on a recent farmer survey and university study, both of which place the odds of high prices persisting at 70% or above. n Farm supply cooperatives appear to be better managing risk today compared to 2008-09, when sudden drop in fertilizer prices forced some cooperatives to write down fertilizer inventory. In an environment of volatile crop and natural gas prices, the key, of course, is for retailers to match selling prices to the farmer with rising wholesale costs. Introduction U.S. crop farmers and the farm supply cooperatives serving them are facing operational anxiety heading into 2022, driven by high fuel prices, shortages of agrochemicals (herbicides, fungicides, insecticides) due to COVID-related disruptions and, most importantly, the recent parabolic rise in fertilizer prices. Three issues are behind the rise in fertilizer prices and the further tightening of global fertilizer supplies relative to demand: CoBank ACB, Inside… Introduction .......................................1 Soybeans Will Not Overtake Corn Acres in 2022 Fertilizer Prices Will Remain Elevated Next Spring What’s Different Versus 5 Conclusion ......................................... References.........................................5 December 2021 Fertilizer Inflation Likely to Persist into Spring Planting Kenneth Scott Zuckerberg Lead Economist, Grain and Farm Supply Executive Summary Effects from the pandemic and Ukraine war continue to reverberate through the global economy. Food and energy prices remain high, though prices for underlying commodities have lost upward momentum as economic fears rise. The Federal Reserve is poised to raise rates until it believes inflation has been tamed. Unfortunately, the risk of over- or under-doing is high given that the lag time between action and reaction in monetary policy can be long. Supply chains are still a mess. Warehouse capacity is still hard to come by and inventory is expensive. But transportation costs have slipped since Q1, offering a cheaper but conditions for agricultural transport are mixed. Rail, truck, barge, and While agricultural and energy commodity supplies remain tight, shifts in speculative sentiment have brought prices down from their peaks. For agriculture, replenishing grain and oilseed supplies globally will require two growing seasons. And there is no relief in sight for natural gas supplies, ensuring power prices will remain high as well. The remainder of 2022 will be far from ordinary, and particularly hard to forecast. The Fed’s job will become harder and its influence greater. But the U.S. economy and rural Clouds are Forming Fears of higher rates and weakening economic conditions linger over the year’s second half. Topics In this Issue: - Architecting an Economic Slowdown - Market Volatility Whips Grain Prices - Electricity Consumers Should Brace for Big Summer Bills © CoBank ACB, 2022 THE QUARTERLYDedicated to the industries financed by CoBank July 2022 800-542-8072 www.cobank.com Visit: CoBank.com/GoKED1
KGFA bestowed the Sunflower Award to Dave Warrington.

THANK YOU, SPONSORS

“Each year Hannebaum Grain is proud to sponsor KGFA’s commitment to promoting and protecting its members who work every day to feed the world. We recognize and truly appreciate KGFA’s storied history of advocating on behalf of Kansas agribusiness, while providing services to continually educate and develop our workforce so our industry can be as safe and productive as possible.”

UNDERWRITER SPONSOR

ProValue Insurance is an independent agency providing comprehensive insurance products and business services to organizations in need of risk protection. Delivering unparalleled knowledge and experience, ProValue helps protect against more than organizational risk, offering coverages for personal assets to individuals throughout Mid-America.

No funds from commodity partners are used for advocacy efforts.

FOUNDER SPONSOR BENEFACTOR SPONSORS

PATRON SPONSORS

BUILDER SPONSORS DONOR SPONSORS GIVER SPONSORS

Ag Partners Cooperative Inc.

Bartlett Grain Company L.P.

Beachner Grain Inc.

Conestoga Energy Partners LLC

Farmers Coop Equity Co.

First National Bank

INTRUST Bank, N.A.

Irsik & Doll Feed Service

Morrill Elevator, Inc.

Skyland Grain LLC

Agri Trails Coop

BRC Bearing Co. Inc. CHS Inc.

D. E. Bondurant Grain Co.

Korol Financial Group LLC

Midland Marketing Coop Inc.

Midway Coop Association

WindRiver Grain LLC

AgTrax

BarnesCo

Central States Fumigation & Services

Central Valley Ag Cooperative

Cline Wood A Marsh and McLennan Agency LLC Company

Cloud Co. Coop Elev. Assn.

Concordia Terminal LLC

Cornerstone Ag LLC

Drake Inc.

Farmers Union Merc. & Shpg. Assn. HABCO Inc.

Kansas Coop Council

KC Supply Co. Inc.

Offerle Coop Grain & Supply Co.

Pride Ag Resources

Rolfes @ Boone

COMMODITY PARTNERS CRN K ANSAS C OMMISSION EA T WH KANSAS Redisco r Wheat ®
$3,600 $2,200 $1,300 $800
$20,000+ $7,500 $5,000

UNDERWRITER SPONSOR

ProValue Insurance is an independent agency providing comprehensive insurance products and business services to organizations in need of risk protection. Delivering unparalleled knowledge and experience, ProValue helps protect against more than organizational risk, offering coverages for personal assets to individuals throughout Mid-America.

FOUNDER SPONSORS

BENEFACTOR SPONSORS

PATRON SPONSORS

BUILDER SPONSORS DONOR SPONSORS GIVER SPONSORS

Beachner Grain Inc.

Heartland Ag Systems

Interchem

JB Pearl Sales & Service

Morrill Elevator Inc.

Nutrien

Skyland Grain LLC

Ag Partners Cooperative Inc.

Agrilead, Inc.

CHS

Fairbank Equipment

Farmers Coop Equity Co.

Helm Fertilizer Corp.

Alliance Ag & Grain LLC

American Implement, Inc.

Bondurant Crop Service

Central Prairie Co-op

Central Valley Ag Cooperative

Farmers Coop Elevator Co.

Kansas Coop Council

Midwest Laboratories Inc.

Pride Ag Resources

Purple Wave Auction

ServiTech Inc.

$7,500 $5,000 $3,600 $2,200 $1,300 $800
$20,000+
JEFF HOLLING

Statehouse INSIDER

By the time the Winter issue of Seed to Silo hits your inbox the Kansas legislature will have adjourned Sine Die for the remainder of 2023. Lawmakers returned to Topeka in January and worked throughout the proceeding 90 days to evaluate numerous pieces of legislation affecting the grain and agricultural retail industries. The text on the following pages reflects the legislature’s work leading up to its first adjournment on Friday, April 7, 2023.

14 SEED to SILO | Encompassing Agribusiness in Kansas KANSAS AGRIBUSINESS RETAILERS ASSOCIATION | KANSAS GRAIN AND FEED ASSOCIATION

The final week of the 2023 regular legislative session in Kansas ended on Friday, April 7. Legislators returned on Monday, April 24 for a few days to consider bills vetoed by Governor Laura Kelly and take final action on other remaining bills of interest.

Throughout the session, Kansas Agribusiness Retailers Association (KARA) and Kansas Grain and Feed Association (KGFA) testified and lobbied on nearly 100 bills in furtherance of the associations’ respective policies.

ANNUAL PERSONAL PROPERTY RENDITION FILING

Senate Bill 8 would reduce statutory penalties for the late filing, or failure to file, of personal property renditions to the county appraiser. KGFA testified in support of the measure and explained its importance to our industry following the 2022 Kansas Court of Appeals decision finding that grain elevator machinery and equipment should be classified as personal property rather than as fixtures to the realty. KGFA

successfully amended the bill to: (1) allow county appraisers to waive late penalties, (2) require such penalties to be waived if the machinery and equipment was previously classified as real property, and (3) remove the requirement to annually file the personal property rendering unless there is a change in the property list. The Senate adopted the proposed amendments and passed the bill on a unanimous vote. The House amended the bill to add language from House Bill 2411 that would decrease penalties for failing to timely remit employee withholding taxes. The House passed Senate Bill 8, as amended, 122-2. The bill was then sent to a conference committee where contents of about a dozen other tax bills were added to it to create Conference Committee Report on Senate Bill 8.

Unfortunately, one bill that was added to Senate Bill 8 a bill known as the government competition bill, received strong opposition and barely passed the Senate 24-16, short of the 26 votes needed for a veto override. With the addition of this bill, the House

passed CCR SB 8 on a vote of 76-43, well short of the 83 votes necessary for a likely veto by the Governor Laura Kelly.

While the Senate did not take final action on CCR SB 8 before adjourning, they could vote on the bill during the Veto Session on April 26, 2023.

SHORT LINE RAIL GRANT PROGRAM

In 2020, the legislature passed the Eisenhower Legacy Transportation Program which included a $15 million, three-year, cost-share grant program for qualified track maintenance and improvements to short line rail and rail siding. Kansas agribusinesses have greatly benefited from this program. This year, in coordination with KDOT, KGFA introduced House Bill 2335 to restructure the Short Line Rail Improvement Fund program and combine it with KDOT’s Rail Service Improvement Fund Program. The bill dedicates $10 million annually from the state highway fund for the program. Under the bill, grain shippers and other owners of rail siding adjacent to short line rail would be able to

Continued on page 16

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apply for program funding. The measure was passed by the House 117-5, and by the Senate, 38-2. The governor has signed this legislation.

MAXIMUM TRAIN LENGTH AND MINIMUM SET BACK ON ROLLING STOCK

Senate Bill 271 would limit the length of trains on any main line or branch line to 8,500 feet and establish a minimum distance for stored rolling stock of 250 feet from the edge of a crossing. While the bill drew opposition from Class 1 rail and rail customers, the Senate Transportation Committee chairman testified as a proponent. The committee amended the bill to: (1) clarify that the 250-foot setback only applies at crossings without electronic warning signals, (2) remove KDOT’s duties under the bill, and (3) sunset the maximum train length provision on July 1, 2027. The full Senate passed the bill 27-13, but the bill was not heard in the House. The associations stressed to legislators that we would oppose the maximum train length provisions of the bill as they would disrupt the rail transportation network and that this must remain a federally regulated issue. The legislature could take further action on the

bill next year.

REQUIRED PROPERTY VALUATION METHODOLOGY FOR GRAIN ELEVATORS

Senate Bill 274 would require the use of the cost approach for valuing special purpose property for property tax valuation purposes. The bill specifically includes grain elevators in its definition of special purpose properties. The Senate Tax Committee held a hearing on the bill. KGFA testified with its concerns on the legislation, and the committee did not take further action on the legislation. KGFA will meet with the proponents of the bill to amend it as necessary for next year.

FLAT SINGLE RATE TAX BILL

House Sub for Senate Bill 169 is the legislature’s major tax reduction bill this session, and makes various changes to income, sales, and residential property taxes. The bill decreases state revenues by $300 million in FY 2024, $570 million in FY 2025, and $480 million in FY 2026. The bill creates a single 5.15 percent individual income tax rate, removes the state sales tax on food, lowers the corporate income tax rate, increases the individual income tax standard deduction with a cost-of-living adjustment, removes the social security income tax cliff, lowers the bank privilege tax, and increases the amount of appraised value of residential property exempt from the statewide 20 mill school finance levy. The House passed the bill 85-38, and the Senate 24-13. The bill has been presented to the Governor for consideration, where it is likely to face a veto.

MAXIMUM PROPERTY VALUATION ANNUAL INCREASE

SCR 1611 would amend section 1 of article 11 of the Kansas Constitution to limit annual increases in real property valuations to four percent. The bill was introduced as a means to help control increases in ad valorem property taxes.

The bill would require a ballot question for voters during the next state-wide election. The Senate passed the resolution on a vote of 28-11 and it is now with the House for consideration.

PROPERTY TAX VALUATION NOTICE AND APPEALS

House Bill 2002 was introduced to extend reimbursement from the taxpayer notification costs fund for printing and postage costs for county clerks for 2024. The bill would also modify and prescribe the contents of the revenue neutral rate hearing notice. The House passed the bill 114-7. The Senate amended the bill to allow property owners to make payments under protest appeals even if the property owner taxpayer had previously appealed their property valuation through an informal equalization appeal. After passing the Senate 34-6, the bill was sent to a conference committee which added in the contents of a few other bills. On April 7, the Senate passed Conference Committee Report on HB 2002 on a vote of 37-0. The House may take final action on the bill during the Veto Session on April 26, 2023.

PVD DIRECTIVES IN AGENCY REGULATIONS

Senate Bill 263 would require all KDOR valuation directives to be set forth in agency rules and regulations. KGFA testified in support of the measure as it adds transparency to the guide revision process. The Senate Tax Committee amended the bill to give PVD more time to place its directives into regulations and then passed the bill out favorably. The bill remains on the Senate calendar where no further action has been taken.

CORPORATE INCOME TAX APPORTIONMENT

House Bill 2110 would allow corporate taxpayers, based on NAICS codes included in the bill, to elect to use a single-factor apportionment formula, based on sales in the state, to determine their income tax liability. The bill is estimated to cost the state $20 million. The House Tax Committee held a hearing on the bill, where KGFA joined the Kansas Chamber of Commerce as the only proponents. The committee declined to take further action on the bill while it considered whether to adopt an amendment requested by the Kansas Dept. of Revenue that would require all corporations in the state to use the

Continued on page 18

16 SEED to SILO | Encompassing Agribusiness in Kansas KANSAS AGRIBUSINESS RETAILERS ASSOCIATION | KANSAS GRAIN AND FEED ASSOCIATION

sales single-factor apportionment formula. Most states already require use of this apportionment methodology. The bill may be taken up for further action next year.

TRANSMISSION DELIVERY CHARGES ON ENERGY

Kansas has the highest energy rates in our region. Your associations supported multiple bills aimed at lowering those rates or stemming any increase in the rates while ensuring reliable service. House Bill 2225 was introduced to limit Evergy’s direct recovery of costs related to electric public utility transmission delivery projects. The House passed the bill with an agreed amendment between Evergy and rate payer stakeholders. The bill (1) reduces Evergy’s authorized return on equity (ROE) on local transmission projects, (2) sets up a project review process at the KCC, and (3) requires Evergy to submit testimony on competitive rates and impacts on economic development during any rate case. It is estimated the bill will provide ratepayer savings of $40 million to $45 million over three years. KARA and KGFA testified in support of this bill which passed the House and Senate overwhelmingly and was signed into law by Governor Laura Kelly.

APPRENTICESHIP TAX CREDIT ACT

House Bill 2292 would establish a three-year Kansas apprenticeship tax credit to encourage the development of apprenticeship programs by participating

businesses. The tax credit would be up to $2,500 for each apprentice so employed and may be awarded to up to 20 apprentices per year. The program would be administered by the Kansas Department of Commerce. KGFA joined other stakeholders in support of the measure which passed the House 115-7. The Senate amended the bill to place a cap on the amount of the grant provision per year and added a provision that any unused balance in the fund would be transferred to the state general fund. The bill passed the Senate 30-7 and has been presented to the governor for consideration.

RIGHT OF FIRST REFUSAL

Senate Bill 68 was introduced by large state-regulated utility generating companies, such as Evergy, to allow these companies a Right-of-First-Refusal to build out new electric transmission line assets in the state. KGFA joined other utility rate payers in opposing the measure during multi-day hearings, arguing that the bill would remove competition from the build process and result in higher electric energy rates. The Senate Utilities Committee advanced the bill out of committee, but the bill was not brought up for debate by the full Senate. The bill is still alive for next year, and the Senate may schedule an interim committee this summer to discuss the matter.

UNEMPLOYMENT INSURANCE

House Bill 2401, as introduced, would (1) define the “benefit year” and “temporary

unemployment” in the employment security law, (2) require electronic filing of reports for employers with 25 or more employees, and (3) extend the time required for establishment of a new account due to a business acquisition. The House Commerce Committee amended the bill by adding in language that would allow for extensions of temporary unemployment for up to 12 weeks. The House passed the bill, as amended, on a vote of 119-4. Further action may still be taken on the bill this year.

WORKERS COMPENSATION PERMANENT DISABILITY BENEFIT

Senate Bill 38 would increase the maximum Kansas workers compensation benefits payable by an employer for permanent total disability suffered by an injured employee. Under current law, the maximum workers compensation benefit payable to an employee for permanent total disability is $155,000. SB 38 would increase the amount to $350,000. Permanent total disability is paid out over time using an average weekly wage up to the statutory cap. The bill was intended to initiate conversations between labor and industry, and further action is likely to be taken on the bill next year.

STATE WATER PLAN FUNDING

House Bill 2302, as introduced, would have created a new funding mechanism for the state water plan fund (SWPF) by crediting 1.23 percent of state sales tax revenues (approximately $53 million) directly to the fund. The House passed the bill 119-3. The bill directs funds to two new programs for three years: $5 million to a water technical assistance fund, and $15 million to a water projects grant fund. The Senate amended the bill to pay off debt on two state reservoirs in fiscal year 2023 using a $52 million transfer from the state general fund (SGF). The Senate also removed the sales tax funding mechanism and replaced it with annual transfers of $35 million to the SWPF from SGF. This transfer is in addition to the $8 million the SWPF currently receives from SGF and EDIF, and the $12 million in fees collected annually from agricultural and municipal water users – providing for total SWPF funding of $55 million annually for five years. The bill sunsets in 5 years. The Senate passed the bill 39-1. In a conference committee, the House concurred with most of the Senate’s amendments. Both the House and Senate passed CCR on HB 2302.

Continued on page 22

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Ag Chemical Remediation Reimbursement Program

The Agricultural Chemical Remediation Reimbursement Program (Program) provides financial reimbursement of expenses incurred while conducting remediation (cleanup) activities for agricultural chemical and fertilizer contamination.

The Program is financed by various fees on the commercial grain storage, ag-chemical, and fertilizer industries. The Program is administered by the Kansas Agricultural Remediation Board (KARB).

In March of this year, Chairman Kamyar Nikoomanesh resigned from the Board after more than twenty years of service holding the “agricultural processor” seat on the KARB. Our industry is tremendously appreciative of Kamyar’s leadership and dedication in both developing this program and ensuring its success for so many years.

Other current industry Board members include Jami Loecker, Syngenta, Manhattan; Kevin Dieckmann, Brandt, Olathe; Jodi Guetterman, Guetterman Family Farms, Bucyrus; and Laura Pearl, J.B. Pearl Sales & Service, Saint Marys, who will become the new Board Chair. We thank these members as well for their service and dedication to our industry.

The Board meets four times annually to consider applications for reimbursement. There is currently no back-log of applications to the fund and applications are generally able to be reimbursed in the quarter in which they are submitted.

In calendar year 2022, the program reimbursed 49 applicants a total of $626,203.52. During the March 2023 board meeting, KARB reimbursed 12

applicants a total of $159,912.96. The next KARB meeting will be held on Friday, June 16, 2023, and the deadline to submit applications for that meeting is Friday, May 19, 2023.

If your facility is conducting agricultural chemical remediation activities either ordered by the Kansas Department of Health and Environment or agreed to under the state

Voluntary Program or Cooperative Program, please file an application to the program for reimbursement of those costs. The application form and additional information about the program are available at www.karb.org. For more specific information or for assistance in applying to the program, please reach out to KARB staff at 785-234-0461 or randy@ kansasag.org.

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Agribusiness Leaders ADVOCATE

In late January, through the Tomorrow’s Agribusiness Leaders program and annual Legislative Action Day, newcomers and seasoned professionals alike participated in outreach and advocacy efforts for Kansas Agribusiness

Retailers Association and Kansas Grain and Feed Association.

Leading Off

The 2023 class of Tomorrow’s Agribusiness Leaders officially completed the first of three sessions of agribusiness’ premier leadership development course in mid-January.

Session I encompasses associations 101, in addition to an introduction to lobbying.

The 10 individuals chosen by their peers to complete the 25th class included: Andrew Breese (Kansas Grain Inspection Service); Todd Dingler (ProValue Insurance); Jeff Ellis (Syngenta); Brandi Hartley (Farmers Coop Equity at Isabel); Blake Malcolm (AgMark LLC); Jed Miller (Ag Partners Cooperative Inc.); Kent Nichols (MKC); Todd Schultz (Producer Ag, LLC); Jack Vincent (The Scoular Company) and Ed Zahn (Heartland Ag Systems).

Associations 101

The class convened for two days at the association office in Topeka where it learned more about each other, the state government and the associations who serve their organizations.

Kansas Agribusiness Retailers Association (KARA) and Kansas Grain and Feed Association (KGFA) President and CEO Ron Seeber provided a 30-minute presentation discussing the history of each association and the importance of member input toward the success of the organizations.

Speakers and Experiences

The class had the opportunity to converse with several Kansans who hold distinguished spaces in public service.

First, Kansas Secretary of Agriculture

Mike Beam joined the group for lunch prior to discussing the role the Kansas Dept. of Agriculture plays in implementing and enforcing rules and regulations on agribusiness.

Beam also encouraged continued communication between the department and its stakeholders to ensure the regulated entities are aware of rules and regulations and the department is cognizant of how its actions are affecting KARA and KGFA members.

Prior to meeting with Kansas legislators, the class was able to discuss an overview of lobbying with three longtime government affairs professionals: Aaron Popelka of the Kansas Livestock Association; Josh Roe of

20 SEED to SILO | Encompassing Agribusiness in Kansas
Photo captions: (Top left) The 2023 class of Tomorrow’s Agribusiness Leaders enjoys a photo on the floor of the Kansas House of Representatives; the TAL class at a breakfast with House Agriculture Committee Chairman Ken Rahjes (R-Agra); and the TAL class on the floor of the Kansas Senate during its inaugural session in January of 2023.

the Kansas Corn Growers Association and Shahira Stafford of Stafford Public Affairs.

Current chairman of the Kansas Legislature’s House Agriculture Committee Ken Rahjes (R-Agra) spoke to the class over breakfast on the legislative process and how to be effective advocates for agribusinses.

Rounding out the speaker slate, the class met with Associated Press reporter John Hanna inside the Kansas Statehouse. Hanna provided valuable insights on fostering productive working relationships with the media.

Prior to participating in the associations’ annual legislative action day the class received a tour of the Kansas Statehouse including featured photos inside the House of Representatives, Senate and Governor Laura Kelly’s ceremonial office.

The 2023 class of Tomorrow’s Agribusiness Leaders will reconvene in July in Washington, D.C., where class members will lobby the Kansas congressional delegation on issues important to agribusiness.

Legislative Action Day

Coinciding with the TAL program, KARA and KGFA hosted their annual Legislative Action Day on Jan. 25, 2023.

“On the heels of the election in November of 2022 and brand-new members of the House of Representatives, it

was incredibly important for our members to join us at our 2023 Legislative Action Day,” KARA and KGFA President and CEO Ron Seeber said. “Historically, our industry has had a strong presence with lawmakers and we are on track to continue those positive relationships.”

Attendees were treated to remarks from Kansas Secretary of Agriculture Mike Beam who discussed the department’s initiatives

and priorities during the 2023 legislative session.

Members then visited the capitol in Topeka where they had the opportunity to meet with their individual legislators on issues pertinent to the associations including: water regulation, property taxes, short line rail funding, workforce development, and electric rates among other individual member-specific issue points.

21 WINTER 2023 SEED to SILO | Encompassing Agribusiness in Kansas
Left: Jim Minnix (R-Scott City), chairman of the House Water Committee met with MKC chairman Allan Wegner and MKC Executive Vice President and CMO Dave Spears during the associations’ Legislative Action Day. Beneath: More than 100 KARA and KGFA members met in Topeka on Jan. 25, 2023 for the associations’ annual Legislative Action Day.

Governor Kelly has signed this bill into law.

KANSAS PROMISE SCHOLARSHIP EXPANSION FOR CDL TRAINING

House Bill 2132 would expand the Kansas Promise Scholarship Act to add new eligible fields of study, including transportation and commercial driver license training. Scholarships could total $8 million this academic school year, with the program likely reaching a statutory cap of $10 million next year as interest and demand for scholarships builds. A conference committee report has been sent to the governor for consideration.

MOTOR CARRIER INDEPENDENT DRIVER STATUS

House Bill 2020 was introduced to clarify that the employment status of a driver of a motor carrier does not change as a result of the inclusion of safety improvements made to the vehicle. The House passed the bill 122-0. The Senate amended the bill and passed it 35-1. The House and Senate placed the bill into Conference Committee Report on HB 2020 which was signed by the governor.

WATER POLICY BILL PLACING NEW REQUIREMENTS ON GMDS

House Bill 2279 would amend the groundwater management district act to place new annual reporting and conservation action plan requirements on the GMDs. The House passed the bill 116-6. The Senate amended the bill before passing it on a vote of 35-5. The House and Senate placed the bill into Conference Committee Report on HB 2279 before passing it and sending it to the Governor for consideration.

WATER BANK PARTICIPATION IN MYFA

Senate Bill 205 would amend the Kansas water banking act to authorize certain water rights in a water bank to temporarily participate in multi-year flex accounts. The proposed language would address an issue from a Kansas Attorney General’s opinion during the 2022 calendar year. The bill was necessary when the 2022 drought created challenges for water users within GMD5 who had utilized the water bank in prior years and had exceeded their water right’s authorized annual quantity. Those irrigators then filed applications to enroll into a multi-year flex account. After passing the Senate on a vote of 39-0, the House Water Committee amended the bill to remove criteria that a bankable water right must not currently be enrolled in an active MYFA. The amendment would allow a water right to be bankable even if the water right is currently enrolled in a MYFA. The House passed the bill, as amended, 39-0. The Senate concurred with the House amendments, and the bill was sent to the governor for consideration.

HEMP GRAIN

House Bill 2168 would add industrial hemp seed to the statutory definition of grain in the Kansas grain warehouse law. Hemp has not been federally approved for use in animal feed and it is unknown whether hemp ingredients are safe for animals or can be utilized as a source of nutrition when consumed over periods of

time. These questions should be answered before hemp is used for commercial feed purposes to ensure the safety of the public, animals, and the agricultural industry. KGFA opposed the measure in a hearing before the House Agriculture Committee, and the bill did not advance further.

SCRAP METAL THEFT REDUCTION ACT EXTENSION

House Bill 2326 extends the sunset date on the current scrap metal theft reduction act and clarify that catalytic converters are covered by the act. KGFA joined other affected industries in supporting the measure. Agribusiness groups supported the initial passage of the measure when it was passed five years ago. The House passed the bill 120-1. The Senate amended the bill and passed it on a vote of 39-1. The House concurred with the Senate amendments. The bill was signed into law by Governor Laura Kelly.

PROHIBITING FOREIGN OWNERSHIP OF REAL PROPERTY

Senate Bill 283, as introduced, would prohibit the future conveyance of real property in Kansas to “foreign adversaries”, as the term is defined by federal law, beginning on July 1, 2023. This issue is a high priority item of new Kansas Attorney General Kris Kobach, who stood as a proponent to the bill. The Senate Judiciary Committee held a hearing on the bill and amended it before putting the contents of the bill into House Bill 2069, creating Senate Substitute for House Bill 2069. The bill did not advance further this session.

THIRD-PARTY FUNDED LITIGATION

Senate Bill 74 would provide for joint liability of costs for third-party funded litigants and also allow for sanctions on third-party funded litigants. The bill would also require certain discovery disclosures and payment of certain costs for nonparty subpoenas. The bill was heard in the Senate Judiciary Committee, but because it has not passed either chamber, it will not advance further this session.

LEGISLATIVE UPDATES

This edition of the Kansas Statehouse Insider is up-to-date as of April 21, 2023. To view a complete recap of the 2023 Kansas legislative session visit ksgrainandfeed.org or ksagretailers.org. For questions, contact Randy Stookey (randy@kansasag.org).

22 SEED to SILO | Encompassing Agribusiness in Kansas KANSAS AGRIBUSINESS RETAILERS ASSOCIATION | KANSAS GRAIN AND FEED ASSOCIATION

OSHA’s New Enforcement Guidance

Associations Partake in Federal Congressional and Cabinet-Level Outreach

Bartlett’s President Bob Knief and members of the organization’s leadership team, who with the assistance of Kansas Grain and Feed Association’s Ron Seeber and Clay Fagan and individuals from the National Grain and Feed Association, opened up their facility to a tour for OSHA Assistant Secretary Doug Parker and several United States Dept. of Labor regional administrators on March 28. The two-hour tour featured basic and in-depth explanations on basic grain grading, safety, storage, rail infrastructure and much more.

KARA and KGFA President and CEO Ron Seeber accompanied members of the associations’ leadership team to Washington, D.C. in February to meet with members of the Kansas congressional delegation on issues affecting agribusiness. Pictured with Congresswoman Sharice Davids, Congressman Ron Estes, Congressman Tracey Mann and Senator Roger Marshall are: Ron Seeber (KARA and KGFA President and CEO), Dustin Kuntz (KARA Chairman | Harveyville Seed Company), Kevin Dieckmann (KARA Vice Chairman | Brandt Inc.), Dave Spears (KARA Board Member | MKC), Troy Coon (Previous KARA Board Member | MacroSource LLC) and representatives from the associations national affiliate organizations.

KARA Commends Governor Laura Kelly’s Signature on Water Investment

Kansas Agribusiness Retailers Association (KARA) commends Kansas Governor Laura Kelly’s signature on Senate Sub for HB 2302 as the association successfully worked to secure increased funding for the State Water Plan and agricultural water conservation projects.

Kansas Agribusiness Retailers Association (KARA) commends Kansas Governor Laura Kelly’s signature on Senate Substitute for HB 2302 as the association successfully worked throughout the 2023 Kansas legislative session to secure increased funding for the State Water Plan and agricultural water conservation projects.

“As one of the main proponents behind the final form of this legislation, our membership, board of directors and water subcommittee are appreciative Governor Kelly and a bipartisan majority of our state’s elected officials recognize the importance of dedicated funding to address water quantity and quality issues,” KARA President and CEO Ron Seeber said.

The bill designates $35 million in additional annual funding toward the state water plan fund. This funding is in addition

to the current $18 million directed annually to the fund. The additional funding will run annually through state fiscal year 2027.

“We must protect the water that has powered our booming farming economy for generations,” Governor Laura Kelly said. “I’m proud that Republicans and Democrats were able to come together to make progress on this pressing crisis, investing a historic level of resources into major water storage projects.”

KARA met with House and Senate leadership to express our support for the additional funding for agricultural water conservation projects. KARA is grateful the final version of the bill uses state general funds to pay off $52 million in state reservoir debt, rather than using state water plan funds as was initially proposed by the House bill.

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Kansas Agribusiness Retailers Association

816 SW Tyler, Suite 100

Topeka, Kansas 66612

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