As business owners in the state recover from the economic fallout from COVID-19, there is one route they have yet to take: filing suit against the state for lost revenue associated with pandemic-related business shutdowns.
But Attorney General Derek Schmidt told lawmakers Wednesday that he wouldn’t be surprised if that changes in the future.
He added that the matter could be one for lawmakers to look into as they review potential options for bolstering the state’s economic recovery, as well as revise emergency management statute, in the wake of the pandemic.
"It's probably something worth taking a look at from a business economic recovery standpoint: Should there be as a matter of public policy, some mechanism for public compensation for those private entities, commercial entities, whatever, that bore a disproportionate amount of the financial cost of fighting this pandemic," Schmidt told members of the Special Committee for Economic Recovery.
One way of doing that, floated by Rep. Les Mason, R-McPherson, was to allow business owners to receive a property tax credit for when their operations were shut down.
Current statute allows for residents affected by disaster response to seek compensation — but only in narrow circumstances.
Schmidt used the example of a farmer whose field is used by personnel coping with a wildfire as someone who might go to court to seek compensation for damaged crops.
Most concern over lawsuits related to COVID-19 has been directed at giving businesses and health care providers liability shields under the logic that they are at risk for suits from patrons who may have contracted the virus.
And Schmidt said after the hearing that he was unaware of cases in which business owners had sought damages for shutdown-related losses.
As things return to normal in the state, he said he expected some sort of challenge to come as businesses regain some sense of stability.
"I would expect, as time passes, more people will focus on that," Schmidt said, although he said the narrow manner in which state law is written might discourage such suits.
More broadly, Schmidt again urged lawmakers to take a closer look at refining the state’s emergency management law in order to grant more clarity for future politicians, as well as for businesses and Kansans.
Schmidt blamed the structure of the Kansas Emergency Management Act for contentious debates over the state’s pandemic response.
That includes a heated three-hour State Finance Council meeting over whether to extend the state’s emergency declaration, which members broadly agreed was necessary to seamlessly continue the state’s emergency response operations.
But Gov. Laura Kelly and Republican lawmakers clashed on the merit of including language preventing the governor from closing businesses.
If legislators, either via statute or constitutional amendment, were to restrict what powers were granted via the emergency declaration, Schmidt said, that debate will likely be less acrimonious in the future.
"There's no reason that, you know, (statute) can't say that once you get through the gate to the garden, there are further limitations on whether you pick the pumpkins or the beans or whatever it may be," Schmidt said.
Other legislators objected to the degree to which the state has leaned on the State Finance Council during the response.
Because the Legislature hasn’t been in session, lawmakers have used the SFC as a check on the governor’s powers when that wasn’t necessarily its initial function.
Under House Bill 2016, a compromise over executive powers between Kelly and Republicans passed in June, the SFC has purview over a variety of areas, including extending the disaster declaration.
But some lawmakers believe that they could use that power to take actions that should be subject to review by the full Legislature.
"We have issues of representation," said Rep. Stephanie Clayton, D-Overland Park. "When I cast my vote in favor of HB 2016 I gave the power to the State Finance Council to make an up or down vote, not to make any changes."
Clayton proposed exploring the feasibility of allowing the Legislature to meet remotely via a video conferencing platform. Other states have used a similar system, which has allowed for votes during the pandemic.
Schmidt said his office was formulating a legal ruling on the matter to determine whether that would be possible going forward.
Parsing out constitutional questions involving modern technology wasn’t easy, he said.
"We’re trying to interpret with a blank slate what words written 150 years ago might mean today," Schmidt said.