Kan. Admin. Regs. § 110-6-8

Current through Register Vol. 43, No. 46, November 14, 2024

Section 110-6-8 - Definitions

As used in this article and for purposes of administering HPIP, the following terms shall have the following meanings:

(a) "Alternative wage standard" means one and one-half times the state average wage and is updated annually on the department's web site, based on data maintained by the Kansas secretary of labor. An alternative wage standard may be used only after subtracting all employees with five percent equity in the business from all internal wage calculations, as provided by K.S.A. 74-50,131(e) and amendments thereto.

(b) "Applicant" means a legal entity seeking to certify a qualified firm through the HPIP application process.

(c) "Average internal wage" means the wage computed for the employees attached to a worksite and shall be calculated by one of the following methods:

(1) Dividing the average headcount of part-time plus full-time employees at the worksite as reported on the "quarterly wage report and unemployment tax return" or "multiple worksite report" for the measurement period into total payroll costs that have been paid over the same measurement period; or

(2) dividing the number of FTE employees into total payroll costs that have been paid over the same measurement period.

(d) "Back-office operation" means a wholly owned company worksite location that meets all of the following criteria:

(1) The main activities are functions that support the core focus of the business.

(2) Support activities are performed for other company-owned worksites in which the company has more than 50 percent equity.

(3) The worksite could have been geographically located anywhere.

(e) "Certificate of intent to invest" means a project description form.

(f) "Certification period" means the interval during which a worksite is eligible to receive HPIP benefits according to K.A.R. 110-6-11.

(g) "Combined worksite" means two or more worksites referenced on the same application according to K.A.R. 110-6-11.

(h) "Commence investment" means to make a formal commitment and to invest, with both actions being directly connected to the project description form previously submitted to the department.

(i) "Commercial customer" means an organized entity that engages in the manufacture or sale of products or the provision of services to other entities or individuals.

(j) "Core focus" means an activity that is designated by the NAICS code number assigned to a company and produces more than 50 percent of a company's revenue.

(k) "Department" means Kansas department of commerce.

(l) "Formal commitment to invest," for a company, means one or both of the following:

(1) The company relocates assets that it already owns to Kansas from an out-of-state location.

(2) The company enters into a written agreement that provides either party with legally enforceable remedies if the agreement is breached.

(m) "Fully operational," when used to describe a new worksite, means that the worksite is performing substantially all major core focus functions.

(n) "Full-time-equivalent employees" and "FTE employees," for purposes of calculating internal average wage during a measurement period, shall include leased employees and shall be computed by the following method:

(1) The number of hours worked by any permanent employees who normally work fewer than 40 hours per week shall be totaled and then divided by 2,080 hours, dropping any fractions.

(2) The result of paragraph (n)(1) then shall be added to the average number of employees who normally worked 40 or more hours per week during the measurement period.

(o) "Government customer," as used in the act, means an organization that is not a related taxpayer, as defined by K.S.A. 79-32,154(h) and amendments thereto, and meets one of the following conditions:

(1) Is classified in major NAICS code sections 922 through 928; or

(2) is a customer that is funded primarily with tax dollars and is not classified as a for-profit or a not-for-profit organization.

(p) "Gross revenues," as used in K.S.A. 74-50,131 and amendments thereto, means that term as commonly used in financial and accounting applications under generally accepted accounting principles (G.A.A.P) in the United States.

(q) "Headquarters," as used in K.S.A. 74-50,131(g)(6) and amendments thereto, means a worksite that meets all of the following conditions:

(1) The main activity at the worksite is providing direction, management, or administrative support for the operation of multiple company-owned worksites in which the applicant company has an ownership interest greater than 50 percent.

(2) The worksite is capable of being geographically located anywhere.

(r) "High-performance incentive program" and "HPIP" mean the department's incentive program that may provide tax benefits to a worksite pursuant to K.S.A. 74-50,131 and amendments thereto.

(s)

(1) "HPIP source-of-revenue requirement" means the requirement for the types of businesses listed in K.S.A. 74-50,131(b), and amendments thereto, that more than 50 percent of total revenue at the worksite shall be generated from sales to any of the following:

(A) Kansas manufacturers assigned to major NAICS categories 311 through 339;

(B) out-of-state government customers;

(C) out-of-state commercial customers; or

(D) any combination of paragraphs (s)(1)(A) through (C).

(2) Revenues that shall be specifically excluded as eligible revenues under the HPIP source-of-revenue requirement are the following:

(A) Revenues generated as payment for medical services from Medicare, Medicaid, or any related administrative organizations; and

(B) revenues generated from medical services or products delivered to or used by individual patients, regardless of the source of payment.

(t) "KIT" means Kansas industrial training, as defined in K.S.A. 74-5065(a) and amendments thereto.

(u) "KIR" means Kansas industrial retraining, as defined in K.S.A. 74-5065(b) and amendments thereto.

(v) "Leased employees" shall include employees who meet the following criteria:

(1) Are engaged at the worksite pursuant to an agreement with a third party;

(2) are filling positions that are one year or longer in duration; and

(3) receive wages and benefits that are paid either directly or indirectly by the worksite where the leased employees are engaged.

(w) "Main activity" means an activity that utilizes more than 50 percent of the total square feet at a worksite or more than 50 percent of the total number of employees at a worksite.

(x) "Measurement period" and "MP" mean the four consecutive calendar quarters that a company shall use to meet and document satisfaction of the HPIP eligibility requirements.

(1) For a worksite expansion with an existing workforce, the MP shall be the four calendar quarters that immediately precede the selected certification period.

(2) For a new worksite with a new workforce, the MP shall be the first full four consecutive calendar quarters of operation at the new worksite.

(y) "Multinational corporation" and "multinational firm" mean a legal entity with at least one permanent worksite in the United States and one or more additional permanent worksites established in one or more other countries, with attendant personnel and owned or leased facilities, equipment, and infrastructure.

(z) "NAICS designation" means a six-digit designation in the North American industry classification system that identifies the main activities performed at a worksite. The NAICS designation is initially assigned to a worksite by the Kansas department of labor. At the request of the applicant, the Kansas department of labor's NAICS designation may be reviewed and adjusted by the secretary, if deemed appropriate, based upon the actual activity at the worksite.

(aa) "National corporation" and "national firm" mean a legal entity that has operations covering a broad geographical area within the U.S., with multiple permanent worksites wholly owned or affiliated with other legal entities, with attendant personnel and owned or leased facilities, equipment, and infrastructure.

(bb) "Nonmanufacturing business" means any commercial enterprise other than a manufacturing business assigned to major NAICS categories 311 through 339.

(cc) "On-the-job training" and "OJT" mean training situations during which a product or service that can be sold or used in internal operations is generated.

(dd) "Project description form" and "PD form" mean a form required as the first step to be able to access HPIP benefits. This form provides proof of foreknowledge of the HPIP program and shall be completed, signed, and submitted to the department before any formal commitment to invest.

(ee) "Qualified business facility investment" has the meaning specified in K.S.A. 79-32,154, and amendments thereto.

(ff) "Related taxpayer" has the meaning specified in K.S.A. 79-32,154, and amendments thereto.

(gg) "Sales to Kansas manufacturers," as used in the act, means sales to organizations that are not related taxpayers, in which the purchased goods or services are paid for by the purchasing organization or its designated agent and the purchased goods or services are delivered within Kansas to a worksite assigned to major NAICS categories 311 through 339 by the Kansas department of labor. Sales orders and payments may originate from either inside or outside Kansas.

(hh) "Secretary" means secretary of commerce.

(ii) "Total payroll cost" means the payroll amount defined by the Kansas department of labor as "total wages" on line 12 of the "quarterly wage report and unemployment tax return" or the "multiple worksite report." For a worksite, total payroll cost during the appropriate measurement period may be combined with any pretax earnings in which an employee has elected to direct to one of the following:

(1) A flexible-spending plan;

(2) a deferred compensation plan; or

(3) a retirement plan that includes earnings the employee would otherwise have received in the form of taxable wages had it not been for the voluntary deferral.

This term shall not include company-paid costs for health insurance, dental insurance, and any other employee benefits that are not reported to the Kansas department of labor on the employer's quarterly wage report or the multiple worksite report.

(jj) "Training and education eligible expense" means the amount actually paid for training and education of the group of employees, or portion thereof, that is used to determine the average wage at the worksite location, and from which the worksite expects to derive increased productivity or quality. The determination of expenditures that constitute training and education eligible expenses shall include the following:

(1) Eligible training and education expenditures shall include instructor salaries, curriculum planning and development, travel, materials and supplies, textbooks, manuals, minor training equipment, certain training facility costs, and any other expenditure that is eligible under KIT or KIR.

(2) The following other expenditures shall be allowable but shall be subject to maximum caps:

(A) Wages of employees during eligible training, up to a maximum of 400 percent of the applicable HPIP alternative wage standard hourly wage;

(B) employee instructors' salaries, subject to a maximum of 400 percent of the applicable HPIP alternative wage standard hourly wage; and

(C) training-related travel expenses, with a maximum meals allowance of $120 per day and lodging costs of $300 per night.

(3) Expenditures for the following shall be excluded as training and education eligible expenses:

(A) Compensation paid to an employee trainee who is receiving on-the-job training;

(B) compensation paid to an employee during self-training, except for time in which the employee is involved in activities related to an approved computerized course of study;

(C) bonus pay received as compensation related to the company's financial performance or the employee's job performance, or both;

(D) overtime pay, unless the employee is being paid at an overtime rate while participating in eligible training;

(E) operations manuals and reference manuals. However, training-specific manuals shall be allowable; and

(F) training and education costs covered by monies or grants obtained from state, federal, or other government-sponsored workforce training programs.

(kk) "Wage standard" means the average wage information developed for the department for the appropriate NAICS designation using all worksites located within a geographical area as defined by the secretary that are required to provide the Kansas department of labor with a "quarterly wage report and unemployment tax return" or a "multiple worksite report."

(ll) "Worksite" has the same meaning as that specified for "qualified business facility" in K.S.A. 79-32,154, and amendments thereto.

Kan. Admin. Regs. § 110-6-8

Authorized by and implementing K.S.A. 2012 Supp. 74-50,131; effective Sept. 13, 2013.