Committee advances multiple amendments to Star Bond Financing Act; members debate visitor thresholds, data rules and developer guarantees

The Committee on Commerce, Labor and Economic Development spent substantial time on Substitute for Senate Bill 197, a set of amendments to the Star Bond Financing Act that would change project eligibility, transparency requirements and financing procedures for star bond districts.

Representative Christie Williams, who brought a large amendment package, summarized the proposal as adding guardrails, placing a sunset on certain vertical-construction authority, and limiting one project per county. Williams said the amendment creates separate rules for large metropolitan mall projects and other communities, and would require, broadly, that projects attract significant out‑of‑area visitation — at least 30% of visitors from a distance of 100 miles and at least 20% from outside Kansas — with a carved-out standard for specified rural projects.

Committee staff described multiple technical changes in the amendment. Those included removing eminent‑domain authority for star bond projects, extending the Star Bond Financing Act’s expiration to July 1, 2028, adding redevelopment-of-a-mall as eligible, raising transparency and reporting requirements for visitor data, and prohibiting direct State General Fund money from being used to pay star bonds. The staff member also summarized a provision that would require collection and reporting of visitor-origin data by entities designated by the secretary.

The committee voted in separate roll calls on pieces of the amendment rather than on the entire balloon package. Motions and outcomes recorded in the transcript include:

Votes at a glance

- Visitor-origin threshold (global): Representative Christie Williams moved to require that projects be likely to attract at least 30% of visitors from 100 miles away and at least 20% from outside Kansas (with a 20% 100‑mile-only carve‑out for rural projects). The motion was seconded by Representative Penn and passed on voice vote.

- Mall‑section guardrails: The committee adopted Williams’s mall‑specific changes, including sunset dates for vertical construction applications (metro applications by Dec. 31, 2025; rural mall projects by Dec. 31, 2026), an expanded minimum capital investment threshold for large metro mall projects ($50 million) and limits to one such project per county. The motion passed on voice vote.

- KDFA bond issuance: The committee adopted language authorizing the Kansas Development Finance Authority to issue star bonds on behalf of local entities (KDFA would issue special obligation bonds if approved by the secretary). The committee approved that portion of the amendment on voice vote.

- Visitor data collection: The committee replaced earlier ZIP‑code collection language with a data‑collection approach requiring the secretary, in collaboration with the project and local governing body, to collect visitor data using ticket‑sales tracking, reliable software or similar technology; the motion to adopt that language passed on voice vote.

- Purpose statement: The committee amended the act’s stated purpose to focus on “economic growth through tourism.” The motion passed on voice vote.

- Personal‑guarantee clawback: Representative Williams proposed a clause requiring a personal guarantee from primary/master developers that would proportionally repay the state’s portion of sales tax increment revenues if visitor thresholds were not met. Committee members raised concerns that such a clawback could chill projects, create lender complications and unfairly penalize projects with slow starts; Representative Williams withdrew the motion for further study.

- MSA/county carve‑out amendment: Representative King offered an amendment to make counties with populations under 100,000 eligible for the rural provisions even when they fall within a metropolitan statistical area; the committee approved a version limiting the change to counties under 100,000, with language to be placed in the rural development definition.

During debate members expressed concern about enforcement mechanics, lender responses and projects that take years to reach projected visitation (for example, projects that generate sales tax reserves during a long buildout before an anchor attraction opens). Representative Christie Williams said the intent of the visitor thresholds and any clawback is to prevent “cannibalization” — using sales tax that would otherwise be generated locally to subsidize projects that do not bring new visitors to the state. Revisor Reimer explained proposed compliance reporting and the secretary’s role in tracking aggregated visitor‑origin data without personally identifiable information.

What the changes mean: If enacted, the package would make visitor‑origin metrics a formal part of the star bond approval and reporting process, increase transparency requirements, authorize KDFA to issue financing for qualified projects and add procedural vetting by the State Finance Council prior to final approvals. The personal‑guarantee proposal was not advanced; committee members asked staff and sponsors to refine enforcement options that would hold developers accountable without stalling projects.

The committee adjourned with some amendment details to be resolved later and indicated it will continue consideration in subsequent sessions.