Committee hears bill to expand Commerce database for economic development incentives and tighten reporting

The Committee on Government Efficiency held a hearing on House Bill 2304, a measure that would expand reporting and transparency for economic development incentive programs and require the Kansas Department of Commerce to maintain a comprehensive, searchable database of incentive awards.

David Weese, the reviser, summarized the bill for the committee. He said the bill would amend statutes to add certain local-government incentive programs to the statutory definition of economic development programs and to require the Department of Commerce to collect data from local governments and publish it on a searchable website. The database would allow searches by program, county and recipient, provide downloadable reports and summary reports, and disclose the most recent three years of incentive claims and the total amount of funds claimed over the life of each incentive. The reviser said recipients of incentives exceeding $50,000 would be required, as a condition of an award, to provide the information required for publication. The House committee also amended the bill to require the database to calculate total incentives by category and year and to permit summary reports to the House and Senate Commerce committees by Jan. 31 each year. The reviser also said the bill allows the secretary to impose an administrative fee equal to 1% of the total incentive amount not to exceed $1,000 per recipient to pay the costs of administering and maintaining the database. The reviser reported the House passed the bill on Feb. 4 by a vote of 97 to 26.

Representative Christie Williams testified in support and described a multi-year effort dating to 2017 to implement a transparency portal. "The law was good, but it took 5 years for it to be 80% implemented," Williams said, describing gaps found by a legislative post audit and missing totals and year-based searchability in the current Commerce portal. Williams said some incentives (she cited the High Performance Incentive Program/HPIP in her written comments) had encumbered credits and that the lifetime totals of credits can compound across years; she said Commerce reported $464 million in incentives in 2022 and that, when combined with other changes, state incentives could amount to about $1 billion per year. She urged the committee to close remaining gaps and provide better summary calculations and year-by-year reporting.

Opponent testimony included Michael Koss, city attorney for Overland Park, who identified several areas he said could produce unintended or burdensome reporting requirements. Koss noted the bill's definition would require reporting grants, loans, leases, land acquisition, site prep, utilities, workforce development or other incentives accepted by a recipient when over $50,000; he said that threshold would still capture items such as special alcohol funds, opioid settlement funds distributed to nonprofits, and federal CDBG funds distributed by cities. He warned the draft language could force disclosure of complex corporate ownership structures for recipients and raised a confidentiality concern tied to statutes that protect certain CID/TDD revenue from disclosure. He asked the committee to consider tightening definitions and to extend the current 30-day reporting window to 45 or 60 days to allow local governments to gather complex ownership and contracting information.

Committee members asked whether the municipal concerns could be addressed by requiring additional information at application time or by allowing more time to compile disclosure; Koss said some details (collateral assignments, partners) often arise after agreement execution and that local governments lack authority to compel a private developer to provide all corporate breakdowns. The committee noted neutral written testimony from Spencer Duncan (Government Affairs, League of Kansas Municipalities) and Rachel Willis (Director of Legislative Affairs, Kansas Department of Commerce) was on file.

The hearing record in the transcript contains no committee vote. The reviser said the House passed HB 2304 (reported as 02/2004) by a vote of 97 to 26; the committee took testimony and questions but did not record a committee action in the provided transcript.