Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 adam.c.proffitt@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Adam Proffitt, Director Laura Kelly, Governor


March 6, 2023


The Honorable Adam Smith, Chairperson
House Committee on Taxation
300 SW 10th Avenue, Room 346-S
Topeka, Kansas 66612
Dear Representative Smith:
SUBJECT: Fiscal Note for HB 2233 by House Committee on Taxation
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2233 is
respectfully submitted to your committee.
Under current law, tax credits for the restoration and preservation of certain commercial
structures and the installation of fire suppression materials or equipment under the Historic Kansas
Act are capped at $10.0 million each tax year. HB 2233 would remove this cap retroactively
beginning in tax year 2022.
The Department of Revenue estimates that HB 2233 would decrease State General Fund
revenues by unknown amounts beginning in FY 2024. The Department of Revenue’s Property
Valuation Division indicates that there are currently 77,354 commercial buildings in the State of
Kansas which are over 50 years of age which could qualify for the tax credit. The possible fiscal
effect under different scenarios that taxpayers could claim this 10.0 percent tax credit could be as
follows:
Percent of Buildings Level of
Claiming Tax Credit Expenditures Tax Credit Fiscal Effect
5.0% $25,000 (minimum) $2,500 (minimum) $9,670,000
5.0% $500,000 (maximum) $50,000 (maximum) $193,400,000
10.0% $25,000 (minimum) $2,500 (minimum) $19,337,500
10.0% $500,000 (maximum) $50,000 (maximum) $386,750,000
33.3% $25,000 (minimum) $2,500 (minimum) $64,462,500
33.3% $500,000 (maximum) $50,000 (maximum) $1,289,250,000
100.0% $25,000 (minimum) $2,500 (minimum) $193,385,000
100.0% $500,000 (maximum) $50,000 (maximum) $3,867,700,000
The Honorable Adam Smith, Chairperson
Page 2—HB 2233

The Department has no data to estimate the fiscal effect of the 10.0 percent tax credit on
the installation of fire suppression materials or equipment, so the overall fiscal effect of the bill
would likely be higher. Under current law, the Department assumes that $10.0 million in tax
credits would be claimed in in each tax year. The Department indicates that the administrative
costs associated with implementing the provisions of the bill would be negligible and could be
absorbed within existing resources. Any fiscal effect associated with HB 2233 is not reflected in
The FY 2024 Governor’s Budget Report.


Sincerely,

Adam Proffitt
Director of the Budget

cc: Lynn Robinson, Department of Revenue
Matthew Chappell, Historical Society


Statutes affected:
As introduced: 79-32