Senate Commerce Committee approves changes to Star Bonds law, keeps final finance approval with Commerce

The Senate Commerce Committee on SB197 voted Thursday to extend the Star Bonds Financing Act's sunset date to July 1, 2030, and approved several amendments tightening transparency and limiting the state's involvement in repaying Star Bond obligations while withdrawing one proposal that would have required pre-approval by the State Finance Council.

The approvals came after a day of debate about eminent domain, what documents should be posted and when, how to count visitor origin data, and whether state general funds or federal revenues may be used to pay Star Bond obligations.

The bill extension was presented at the start of the session; an advisor summarized the change as setting the new sunset date to "07/01/2030." The committee then took up a multi-point amendment originally offered by Senator Blue and considered each bullet point in turn.

Why it matters: Star Bond districts are a financing tool cities and counties use to support large development projects. Changes to the law affect municipal powers, the flow of tax increment revenue, what information the public can access, and which funding sources may repay bonds.

Eminent domain: The committee approved language removing the Star Bonds-specific grant of eminent-domain authority for cities and counties. Kyle, an advisor to the committee, told members that Kansas law contains multiple, specific statutory grants of eminent-domain power and that the proposed change "aims to remove that specific grant of eminent domain authority" for Star Bond districts while leaving other condemnation powers intact where separately authorized. He cited KSA 26-501b, a post-2005 legislative restriction that generally limits use of eminent domain for economic development except in specified circumstances.

Transparency and document posting: Lawmakers debated a provision requiring that documents used to consider Star Bond approval be posted on the Kansas Department of Commerce website. Committee discussion produced several adjustments: the timeframe for making documents available was changed from 30 days to 90 days; the committee declined to add the limiting phrase "public" before documents after concerns that certain proprietary materials could harm negotiations; and revisers were given leeway to consolidate timing language so materials are posted both after municipal approval and again when bonds are sold, with ongoing updates when plans are modified. Committee staff pointed to statutory text that already lists required materials (feasibility studies, Star Bond project plans, and developer financial guarantees) and noted those items are often disclosed at municipal approval meetings.

Sales-tax reporting language: Members removed the phrase "sales tax revenue foregone" from the bill after several senators said the term risked confusing readers; instead the committee retained a requirement that the amount of incremental revenue be reported. Senator Korshen moved the change to strike the "foregone" references; the motion passed.

Visitor ZIP-code reporting: The committee changed a provision so that entities within a Star Bond district must report visitor ZIP codes quarterly instead of annually, and the department must publish that visitor data within 90 days of the quarter's end (the committee changed an earlier 30-day deadline to 90 days). Some members questioned the data's precision because multiple purchases by the same visitor could register repeated ZIP-code entries; proponents said the data are a common retail practice and yield useful information about whether visitors are from outside Kansas.

Funding sources for repayment: The panel approved a substitute amendment that keeps a ban on using state general funds to repay Star Bond obligations but removes an outright prohibition on using federal funds. Senator Korshen argued that federal funds could, in some circumstances, help retire bonds more quickly and restore taxing capacity sooner; the committee substituted language to prohibit state general fund pledges but leave federal funding available for consideration.

Failed finance-council preapproval amendment: Senator Tyson proposed an amendment requiring a majority vote of the State Finance Council before the secretary of commerce could approve a Star Bond project or subsequent additional financing. Supporters said it added an extra "set of eyes" on multimillion-dollar deals; opponents warned it could complicate negotiations and slow or derail prospects. The motion to require State Finance Council preapproval failed after a division and roll-call attempt.

Votes at a glance: - Bullet 1 (remove Star Bonds-specific eminent-domain authority): Mover Senator Blue; seconded by Senator Titus; outcome: passed (voice vote, motion carries). - Bullet 2 (document posting timing and ongoing updates; 30 days changed to 90 days; remove insertion of "public"): Mover Senator Blue (substitute); seconded by Senator Klime/Klimt; outcome: passed (voice vote, motion carries). Reviser given leeway to consolidate language and require both an initial posting after municipal approval and an updated posting when bonds are sold. - Bullet 3 (reporting of incremental revenue; remove "sales tax revenue foregone"): Mover Senator Korshen; seconded by Senator Owens; outcome: passed (voice vote, motion carries). - Bullet 5 (quarterly visitor ZIP-code reporting; publish data within 90 days of quarter): Mover Senator Blue (as amended); seconded by Senator Tyson; outcome: passed (committee counted five affirmative hands during division; chair announced motion passes). - Bullet 6 (prohibit pledge of state general funds; strike ban on federal funds): Substitute mover Senator Korshen; seconded by Senator Owens; outcome: passed (voice vote, motion carries). - Senator Tyson amendment requiring State Finance Council preapproval: Mover Senator Tyson; outcome: failed after division and roll call.

The committee recessed and scheduled further consideration for noon the following day. There was no final passage of SB197 on the floor; the committee's actions modify the committeelevel amendment package and will be reflected in the bill text as it moves forward.

Sources and attributions: Quotes and policy explanations in this report come from committee discussion and on-the-record staff remarks recorded in the committee transcript. Committee staff identified the relevant statutory cross-reference as KSA 26-501b and noted the statutory history that followed the U.S. Supreme Court's 2005 decision regarding public use and eminent domain.

What to watch next: The reviser will incorporate the committee's language (including the 90-day posting timeline and the adjusted funding prohibition) into the bill draft; the committee reconvenes at noon to continue consideration.