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HB 2066

Requiring business entities and public employers to register and use the e-verify program for employment purposes and prohibiting income tax deductions for wages and remuneration paid to unauthorized aliens.

2025-2026 Regular Session

All Kansas businesses and state/public employers must use E-Verify by 7/1/2025, ban knowingly hiring unauthorized aliens, and face license suspensions plus tax add-backs.

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Bill Summary · HB 2066

Summary — HB 2066 (Kansas, 2025 session)

Status: Referred to Committee on Federal and State Affairs. Introduced January 24, 2025. (Fiscal Note dated March 6, 2025.)

Note: The materials provided also include unrelated bill text from other states (Arizona, Illinois) that share the number HB 2066; this summary focuses on the Kansas bill described in the fiscal note and the introduced version.

Purpose

Require all Kansas business entities and public employers to register with and use the federal E-Verify employment-authorization system; make it unlawful to knowingly employ unauthorized aliens in Kansas; and prohibit state income tax deductions for wages/remuneration paid to unauthorized aliens by requiring add-back of such deductions when material misrepresentations occur.

Key provisions

  • E‑Verify requirement: All businesses and public employers must enroll in and use E‑Verify beginning July 1, 2025. Employers must retain all E‑Verify related documentation for three years and make records available to the Attorney General or the county/district attorney on request.
  • Contracting: State agencies may not enter into new contracts for services unless the contractor uses E‑Verify.
  • Prohibition on hiring unauthorized aliens: It is unlawful for an employer to knowingly hire, recruit, refer for a fee, or contract for the labor of an unauthorized alien in Kansas. Using independent-contractor arrangements to obtain unauthorized labor is prohibited.
  • Complaint and investigation process: The Attorney General must create a complaint form. Complaints are investigated by the AG or county/district attorneys; investigations must verify employment authorization with the federal government (per federal law). Complaints based solely on race, color, or national origin will not be investigated. Filing a knowingly false/frivolous complaint is a misdemeanor.
  • Court remedies and license sanctions: If a court finds a violation, it must order termination of the unauthorized workers and require an affidavit from the business. License suspensions escalate by violation:
    • 1st violation: suspend all state/local business licenses 1–30 days;
    • 2nd: suspend 30 days–1 year;
    • 3rd: permanent suspension of licenses and revocation of business registration (corporation/LLC/LP) in Kansas.
  • Tax reporting and add-back: Businesses must submit a signed affidavit to the Department of Revenue about use of deductions, payroll, E‑Verify usage, and status of independent contractors. If the Department finds a business knowingly made material misrepresentations, the business must add back deductions when computing state tax liability. The add-back is effective for tax year 2025 (first fiscal impacts in FY 2026).

Enforcement & procedural notes

  • Enforcement actions are civil and may be brought by county/district attorneys or the Attorney General; the AG must notify U.S. Immigration and Customs Enforcement if legal action is brought.
  • Officials are barred from independently determining immigration status; status verification must be through federal verification mechanisms.

Fiscal impact (per Kansas Division of the Budget / agencies)

  • Potential increase to State General Fund: Unknown. Using Pew and BLS-based estimates:
    • If wages for all estimated 55,000 unauthorized workers (~$2.2 billion) were added back, tax liability could rise by an estimated $144.8 million/year (the note characterizes this as unlikely).
    • A more conservative scenario — 1% of those wages added back (~$22.3 million) — would increase State General Fund revenues by about $1.4 million in FY2026.
  • Implementation costs:
    • Department of Revenue: $73,035 (FY2026) for system modifications (performed by existing staff; may require contract programmers if workload exceeds capacity).
    • Attorney General: $230,882 (FY2026) to add 2.0 FTE in the Civil Division (1 attorney, 1 legal assistant) and setup costs.
    • Judiciary: potential caseload increases and operational costs, amount unknown; potential additional docket fees/fines revenue unknown.
    • Department of Administration and local governments: participation in E‑Verify and minor procurement form changes; costs deemed negligible by agencies but could require staff time.
  • Any net revenue effects may be offset in part if employers stop hiring unauthorized workers (reducing wage-driven personal income tax receipts).

Who is affected

  • All Kansas business entities (including self-employed, corporations, LLCs, partnerships, nonprofits) and public employers.
  • Independent contractors and entities that engage contractors (the bill requires verification that independent contractors are registered and using E‑Verify).
  • State agencies and vendors seeking state contracts.
  • County/district attorneys, the Attorney General, and the Judiciary (investigations, enforcement, and hearings).

Timeline / effective dates

  • Mandatory E‑Verify use: begins July 1, 2025.
  • Tax add-back modification: effective tax year 2025; first impacts appear in FY2026.
  • Fiscal Note date: March 6, 2025.

Related bill

  • SB 394 (companion).

If you want, I can produce a concise one-page fact sheet or a side-by-side comparison of this bill with current Kansas law governing employer verification and tax deductions.

Compiled from official sources — confirm details with the bill’s official record.

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