Hearing on SB 197: bill would expand Star Bonds to mall redevelopment, tighten transparency and add visitor reporting

A legislative committee heard testimony and questions on substitute Senate Bill 197 on SB 197 on [date not specified], which would amend the Star Bond Financing Act to add mall redevelopment as an eligible project, tighten transparency requirements for the Secretary of Commerce and local governments, require quarterly visitor-data reporting from point-of-sale systems within Star Bond districts, prohibit use of state general funds to pay Star Bonds and extend the statute’s sunset to July 1, 2028.

The bill’s sponsor and the reviser briefed the committee on multiple changes, including a temporary allowance for vertical construction in cities with populations under 60,000 provided the Star Bond Project District is approved by Dec. 31, 2025, and a requirement that unions of cities or counties and the Secretary publish feasibility studies and related documents within 90 days of adoption or bond sales. The reviser summarized those provisions: “It prohibits financial assistance from the state or state general fund monies to be used for the purpose of paying Star Bonds,” and said the bill “extends the Star Bond Financing Act's expiration date…to 07/01/2028.”

Why it matters: Star Bonds are a state tool that lets municipalities use new sales-tax revenue generated by a tourism or entertainment attraction to pay bonds issued for large development projects. Supporters argued extending the law and adding transparency will help rural and smaller communities attract investment; critics and some witnesses warned proposed data-collection requirements could be burdensome for small businesses and intrusive for customers.

Key provisions and discussion

Mall redevelopment: The substitute adds a new eligible-project category, defined as an enclosed mall with multiple interior-facing businesses. The bill requires a mall Star Bond project to have combined capital investment of at least $10,000,000 and that 50% or more of the mall’s total leasable area be unoccupied. The reviser explained the mall definition and the threshold: “Mall facility means an area containing a mall located within the state of Kansas,” and the bill sets out capital and vacancy conditions for eligibility.

Vertical construction deadline: An amendment from the Senate Committee of the Whole would permit vertical construction in cities with population under 60,000, but only if the Star Bond Project District is approved by Dec. 31, 2025. Committee members asked repeatedly whether that deadline meant a single one-time allowance; the reviser said the deadline applies specifically to projects that include vertical construction and that the Act’s overall sunset is extended to July 1, 2028.

Eminent domain and state funds: The bill strikes language that allowed eminent domain for Star Bond projects and adds an explicit prohibition: no city or county shall exercise eminent domain power to acquire real property for a Star Bond project. It also adds language that state general funds may not be used to pay Star Bonds.

Transparency and visitor data: The substitute requires more frequent publication and transmission of project materials. Feasibility studies, project plans, financial guarantees and subsequent modifications must be placed on the Department of Commerce website within 90 days of adoption or bond sales. The bill also requires entities in a Star Bond district that use a point-of-sale system — including nonprofits — to collect aggregated visitor ZIP-code data for quarterly transmittal to the Secretary; that data must be provided in aggregate without personally identifiable information. The Secretary would calculate quarterly in-state and out-of-state visitor counts and publish them on the department website.

Business and stakeholder testimony

Rachel Willis, Director of Legislative Affairs for the Department of Commerce, testified as a proponent and said the department supports extension of the sunset to 2028 and would comply with increased transparency requirements, but urged reconsideration of the quarterly, district-wide point-of-sale reporting. Willis said Commerce is exploring cell-phone-based products to estimate visitation and that “it might be duplicative and, again, overburdensome for every entity in that particular district to report those visitation numbers.”

Pat Warren, president of Kansas Speedway, testified that large ticketed attractions can and do provide ZIP-code data through ticketing systems and urged the committee not to require concession- and merchandise vendors to collect ZIP codes at the register. Warren said the requirement would slow lines and harm customer experience: “I would like to avoid having someone who buys a hot dog at the racetrack have to provide their zip code data.”

Trade groups including the Kansas Chamber and Kansas Restaurant and Hospitality Association likewise urged narrowing data-collection duties or giving Commerce the authority to collect visitation measures via cell-phone data or ticketing rather than forcing every retail vendor in a district to report.

Questions from lawmakers and clarifications

Committee members pressed for technical clarifications: whether the “50% unoccupied” measure includes current tenants in the base; whether the tax-increment portion described in the bill refers to new sales above the established base; whether the visitor-data requirement would be retroactive to existing districts; and whether the mall definition was too broad. The reviser noted that base sales remain the current collections in a district and that only increases above that base are available to pay bonds. On retroactivity the reviser said the language starting “on and after 07/01/2026” suggests implementation timing but that he would confirm applicability to existing districts.

No committee vote: The transcript records a lengthy hearing with proponents and neutral testimony and follow-up questions, but the committee did not take a formal vote on SB 197 during the session.

Ending

Supporters, including local economic-development advocates from rural areas, urged that the tool remain available to spur redevelopment in smaller Kansas communities. Opponents or those expressing caution asked that the visitor-reporting mandate be narrowed — for example, to require ticketed attractions, or to permit Commerce to collect visitation estimates by commercially available cell-phone data — to avoid placing reporting burdens on small businesses.

Provenance (transcript evidence): The hearing opened with notice of SB 197 and a summary by the reviser; the committee closed the SB 197 hearing before discussing Senate Bill 166.