Commerce committee advances SB197 after debate over Star Bonds reporting and limits on bond-funded construction

TOPEKA — The Committee on Commerce, Labor and Economic Development voted to pass Senate Bill 197 favorably as amended after lawmakers debated changes to the state's Star Bond program, including new reporting requirements and limits on certain bond-funded vertical construction.

Mike Ditch of the Legislative Research Department opened the meeting with a review of statutory changes since 2021, noting the program's scheduled sunset and several new requirements for feasibility studies and reporting. "I'll cover changes to the star bonds program since 2021," Ditch said, summarizing higher capital-investment and gross-sales thresholds and new disclosure rules.

The measure's most prominent amendment, introduced by Rep. Christy Williams, directs the Department of Commerce to include an annual report showing the number of businesses moving into and out of each Star Bond district and a net-impact accounting of jobs reported as Kansas filers versus out-of-state filers. Williams framed the change as a transparency effort to capture businesses that leave a district and force the state to backfill lost base sales tax. "We would like to know what they are and the impact of them," Williams said.

Department of Commerce officials answered members' statutory questions about additional bond issuances and district baselines. Rachel Willis said a new project may be created inside an established district "as long as it doesn't exceed the original 20 years," and Amber Cabrara, a Department attorney, clarified that "the amount cannot be exceeded" for a project: any new project would require its own revenue study and an authorization of bonds appropriate to remaining capacity.

Committee members also debated whether to tighten the statute's allowances for bond-funded vertical construction, arguing over whether taxpayer funds should be used to finance private hotels, restaurants and retail within a district. Williams said the change would restore equity for businesses outside districts: "Let's keep the Starbonds District for what it was intended," she said. Other members warned the language could be overly prescriptive and complicate project-by-project review.

The chair moved to strike mall-related language and a temporary vertical-construction authorization that had been handled by the budget bill; that motion passed on a voice vote. Williams' reporting amendment likewise passed on a voice vote after discussion and reviser flexibility to finalize language.

The committee also approved a separate amendment removing port-authority provisions from the bill after the chair said adding port authority raised concerns about creating additional local taxing power. Representative Ward moved to pass SB197 favorably as amended and to give revisers latitude to reconcile amendment language; the motion passed on a voice vote.

Next steps: Revisers will finalize bill text to reflect the committee's instructions; committee members said the bill will be returned to the floor with the agreed changes pending that technical work.

The committee adjourned at the end of the session.