Session of 2021
HOUSE BILL No. 2221
By Committee on Commerce, Labor and Economic Development
2-3

1 AN ACT concerning STAR bonds; relating to the financing of STAR bond
2 projects and rural redevelopment projects; eligible areas; major
3 business facility; real estate transfers; plan for tracking the number of
4 visitors; feasibility study requirements; capital investment and annual
5 sales requirements; STAR bond districts; contiguity; project costs;
6 sunset date; amending K.S.A. 2020 Supp. 12-17,162, 12-17,166, 12-
7 17,169, 12-17,171 and 12-17,179 and repealing the existing sections.
8
9 Be it enacted by the Legislature of the State of Kansas:
10 Section 1. K.S.A. 2020 Supp. 12-17,162 is hereby amended to read as
11 follows: 12-17,162. As used in the STAR bond financing act, the following
12 words and phrases shall have the following meanings unless a different
13 meaning clearly appears from the context:
14 (a) "Auto race track facility" means: (1) An auto race track facility
15 and facilities directly related and necessary to the operation of an auto race
16 track facility, including, but not limited to, grandstands, suites and viewing
17 areas, concessions, souvenir facilities, catering facilities, visitor and retail
18 centers, signage and temporary hospitality facilities, but excluding (2)
19 hotels, motels, restaurants and retail facilities, not directly related to or
20 necessary to the operation of such facility.
21 (b) "Commence work" means the manifest commencement of actual
22 operations on the development site, such as, erecting a building,
23 excavating the ground to lay a foundation or a basement or work of like
24 description which that a person with reasonable diligence can see and
25 recognize as being done with the intention and purpose to continue work
26 until the project is completed.
27 (c) "De minimus" means an amount less than 15% of the land area
28 within a STAR bond project district.
29 (d) "Developer" means any person, firm, corporation, partnership or
30 limited liability company other than a city and other than an agency,
31 political subdivision or instrumentality of the state.
32 (e) "Economic impact study" means a study to project the financial
33 benefit of the project to the local, regional and state economies.
34 (f) "Eligible area" means a historic theater, major tourism area, major
35 motorsports complex, auto race track facility, river walk canal facility,
36 major multi-sport athletic complex, major business facility or a major
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1 commercial entertainment and tourism area as determined by the secretary.
2 (g) "Feasibility study" means a feasibility study as defined in K.S.A.
3 2020 Supp. 12-17,166(b), and amendments thereto.
4 (h) "Historic theater" means a building constructed prior to 1940
5 which that was constructed for the purpose of staging entertainment,
6 including motion pictures, vaudeville shows or operas, that is operated by
7 a nonprofit corporation and is designated by the state historic preservation
8 officer as eligible to be on the Kansas register of historic places or is a
9 member of the Kansas historic theatre association.
10 (i) "Historic theater sales tax increment" means the amount of state
11 and local sales tax revenue imposed pursuant to K.S.A. 12-187 et seq., 79-
12 3601 et seq. and 79-3701 et seq., and amendments thereto, collected from
13 taxpayers doing business within the historic theater that is in excess of the
14 amount of such taxes collected prior to the designation of the building as a
15 historic theater for purposes of this act.
16 (j) "Major business facility" means a significant business
17 headquarters or office building development designed to draw a
18 substantial number of new visitors to Kansas.
19 (k) "Major commercial entertainment and tourism area" means an
20 area that may include, but not be limited to, a major multi-sport athletic
21 complex.
22 (k)(l) "Major motorsports complex" means a complex in Shawnee
23 county that is utilized for the hosting of competitions involving motor
24 vehicles, including, but not limited to, automobiles, motorcycles or other
25 self-propelled vehicles other than a motorized bicycle or motorized
26 wheelchair. Such project may include racetracks, all facilities directly
27 related and necessary to the operation of a motorsports complex,
28 including, but not limited to, parking lots, grandstands, suites and viewing
29 areas, concessions, souvenir facilities, catering facilities, visitor and retail
30 centers, signage and temporary hospitality facilities, but excluding hotels,
31 motels, restaurants and retail facilities not directly related to or necessary
32 to the operation of such facility.
33 (l)(m) "Major tourism area" means an area for which the secretary has
34 made a finding the capital improvements costing not less than
35 $100,000,000 will be built in the state to construct an auto race track
36 facility.
37 (m)(n) "Major multi-sport athletic complex" means an athletic
38 complex that is utilized for the training of athletes, the practice of athletic
39 teams, the playing of athletic games or the hosting of events. Such project
40 may include playing fields, parking lots and other developments including
41 grandstands, suites and viewing areas, concessions, souvenir facilities,
42 catering facilities, visitor centers, signage and temporary hospitality
43 facilities, but excluding hotels, motels, restaurants and retail facilities, not
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1 directly related to or necessary to the operation of such facility.
2 (n)(o) "Market study" means a study to determine the ability of the
3 project to gain market share locally, regionally and nationally and the
4 ability of the project to gain sufficient market share to:
5 (1) Remain profitable past the term of repayment; and
6 (2) maintain status as a significant factor for travel decisions.
7 (o)(p) "Market impact study" means a study to measure the impact of
8 the proposed project on similar businesses in the project's market area.
9 (p)(q) "Museum facility" means a separate newly-constructed
10 museum building and facilities directly related and necessary to the
11 operation thereof, including gift shops and restaurant facilities, but
12 excluding hotels, motels, restaurants and retail facilities not directly related
13 to or necessary to the operation of such facility. The museum facility shall
14 be owned by the state, a city, county, other political subdivision of the state
15 or a non-profit corporation, shall be managed by the state, a city, county,
16 other political subdivision of the state or a non-profit corporation and may
17 not be leased to any developer and shall not be located within any retail or
18 commercial building.
19 (q)(r) "Project" means a STAR bond project.
20 (r)(s) "Project costs" means those costs necessary to implement a
21 STAR bond project plan, including costs incurred for:
22 (1) Acquisition of real property within the STAR bond project area;
23 (2) payment of relocation assistance pursuant to a relocation
24 assistance plan as provided in K.S.A. 2020 Supp. 12-17,173, and
25 amendments thereto;
26 (3) site preparation including utility relocations;
27 (4) sanitary and storm sewers and lift stations;
28 (5) drainage conduits, channels, levees and river walk canal facilities;
29 (6) street grading, paving, graveling, macadamizing, curbing,
30 guttering and surfacing;
31 (7) street light fixtures, connection and facilities;
32 (8) underground gas, water, heating and electrical services and
33 connections located within the public right-of-way;
34 (9) sidewalks and pedestrian underpasses or overpasses;
35 (10) drives and driveway approaches located within the public right-
36 of-way;
37 (11) water mains and extensions;
38 (12) plazas and arcades;
39 (13) parking facilities and multilevel parking structures devoted to
40 parking only;
41 (14) landscaping and plantings, fountains, shelters, benches,
42 sculptures, lighting, decorations and similar amenities;
43 (15) auto race track facility;
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1 (16) major multi-sport athletic complex;
2 (17) museum facility;
3 (18) major motorsports complex;
4 (19) rural redevelopment project, including costs incurred in
5 connection with the construction or renovation of buildings or other
6 structures;
7 (20) related expenses to redevelop and finance the project, except that
8 for a STAR bond project financed with special obligation bonds payable
9 from the revenues described in K.S.A. 2020 Supp. 12-17,169(a)(1), and
10 amendments thereto, such expenses shall require prior approval by the
11 secretary of commerce; and
12 (20)(21) except as specified in paragraphs (1) through (19) (20)
13 above, project costs shall not include:
14 (A) Costs incurred in connection with the construction of buildings or
15 other structures;
16 (B) fees and commissions paid to developers, real estate agents,
17 financial advisors or any other consultants who represent the developers or
18 any other businesses considering locating in or located in a STAR bond
19 project district;
20 (C) salaries for local government employees;
21 (D) moving expenses for employees of the businesses locating within
22 the STAR bond project district;
23 (E) property taxes for businesses that locate in the STAR bond project
24 district;
25 (F) lobbying costs;
26 (G) any bond origination fee charged by the city or county;
27 (H) any personal property as defined in K.S.A. 79-102, and
28 amendments thereto; and
29 (I) travel, entertainment and hospitality.
30 (s)(t) "Projected market area" means any area within the state in
31 which the project is projected to have a substantial fiscal or market impact
32 upon businesses in such area.
33 (u) "Rural redevelopment project" means a project that is in an area
34 outside of a metropolitan statistical area, as defined by the federal office
35 of management and budget, that is of regional importance, with capital
36 investment of at least $3,000,000 and that will enhance the quality of life
37 in the community and region.
38 (t)(v) "River walk canal facilities" means a canal and related water
39 features which flow through a major commercial entertainment and
40 tourism area and facilities related or contiguous thereto, including, but not
41 limited to, pedestrian walkways and promenades, landscaping and parking
42 facilities.
43 (u)(w) "Sales tax and revenue" are those revenues available to finance
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1 the issuance of special obligation bonds as identified in K.S.A. 2020 Supp.
2 12-17,168, and amendments thereto.
3 (v)(x) "STAR bond" means a sales tax and revenue bond.
4 (w)(y) "STAR bond project" means an approved project to implement
5 a project plan for the development of the established STAR bond project
6 district with that:
7 (1) Has at least a $50,000,000 $75,000,000 capital investment and
8 $50,000,000 $75,000,000 in projected gross annual sales; or
9 (2) for areas outside of metropolitan statistical areas, as defined by
10 the federal office of management and budget, the secretary finds:
11 (A) The project Is an eligible area as defined in subsection (f), and
12 amendments thereto; and
13 (B) would be of regional or statewide importance; or
14 (3) is a major tourism area as defined in subsection (l), and
15 amendments thereto (m); or
16 (4) is a major motorsports complex, as defined in subsection (k) (l);
17 or
18 (5) is a rural redevelopment project as defined in subsection (u).
19 (x)(z) "STAR bond project area" means the geographic area within
20 the STAR bond project district in which there may be one or more
21 projects.
22 (y)(aa) "STAR bond project district" means the specific area declared
23 to be an eligible area as determined by the secretary in which the city or
24 county may develop one or more STAR bond projects. A "STAR bond
25 project district" includes a redevelopment district, as defined in K.S.A. 12-
26 1770a, and amendments thereto, created prior to the effective date of this
27 act for the Wichita Waterwalk project in Wichita, Kansas, provided, the
28 city creating such redevelopment district submits an application for
29 approval for STAR bond financing to the secretary on or before July 31,
30 2007, and receives a final letter of determination from the secretary
31 approving or disapproving the request for STAR bond financing on or
32 before November 1, 2007. No STAR bond project district shall include
33 real property which has been part of another STAR bond project district
34 unless such STAR bond project and STAR bond project district have been
35 approved by the secretary of commerce pursuant to K.S.A. 2020 Supp. 12-
36 17,164 and 12-17,165, and amendments thereto, prior to March 1, 2016. A
37 STAR bond project district in a metropolitan statistical area, as defined by
38 the federal office of management and budget, shall be a contiguous parcel
39 of real estate and shall be limited to those areas being developed by the
40 STAR bond project and any area of real property reasonably anticipated to
41 directly benefit from the redevelopment project.
42 (z)(bb) "STAR bond project district plan" means the preliminary plan
43 that identifies all of the proposed STAR bond project areas and identifies
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1 in a general manner all of the buildings, facilities and improvements in
2 each that are proposed to be constructed or improved in each STAR bond
3 project area.
4 (aa)(cc) "STAR bond project plan" means the plan adopted by a city
5 or county for the development of a STAR bond project or projects in a
6 STAR bond project district.
7 (bb)(dd) "Secretary" means the secretary of commerce.
8 (cc)(ee) "Substantial change" means, as applicable, a change wherein
9 the proposed plan or plans differ substantially from the intended purpose
10 for which the STAR bond project district plan was approved.
11 (dd)(ff) "Tax increment" means that portion of the revenue derived
12 from state and local sales, use and transient guest tax imposed pursuant to
13 K.S.A. 12-187 et seq., 12-1692 et seq., 79-3601 et seq. and 79-3701 et
14 seq., and amendments thereto, collected from taxpayers doing business
15 within that portion of a STAR bond project district occupied by a project
16 that is in excess of the amount of base year revenue. For purposes of this
17 subsection, the base year shall be the 12-month period immediately prior
18 to the month in which the STAR bond project district is established. The
19 department of revenue shall determine base year revenue by reference to
20 the revenue collected during the base year from taxpayers doing business
21 within the specific area in which a STAR bond project district is
22 subsequently established. The base year of a STAR bond project district,
23 following the addition of area to the STAR bond project district, shall be
24 the base year for the original area, and with respect to the additional area,
25 the base year shall be any 12-month period immediately prior to the month
26 in which additional area is added to the STAR bond project district. For
27 purposes of this subsection, revenue collected from taxpayers doing
28 business within a STAR bond project district, or within a specific area in
29 which a STAR bond project district is subsequently established shall not
30 include local sales and use tax revenue that is sourced to jurisdictions other
31 than those in which the project is located. The secretary of revenue and the
32 secretary of commerce shall certify the appropriate amount of base year
33 revenue for taxpayers relocating from within the state into a STAR bond
34 district.
35 (ee)(gg) "Taxpayer" means a person, corporation, limited liability
36 company, S corporation, partnership, registered limited liability
37 partnership, foundation, association, nonprofit entity, sole proprietorship,
38 business trust, group or other entity that is subject to the Kansas income
39 tax act, K.S.A. 79-3201 et seq., and amendments thereto.
40 Sec. 2. K.S.A. 2020 Supp. 12-17,166 is hereby amended to read as
41 follows: 12-17,166. (a) One or more projects may be undertaken by a city
42 or county within an established STAR bond project district. Any city or
43 county proposing to undertake a STAR bond project, shall prepare a STAR
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1 bond project plan in consultation with the planning commission of the city,
2 and in consultation with the planning commission of the county, if any, if
3 such project is located wholly outside the boundaries of the city. Any such
4 project plan may be implemented in separate development stages.
5 (b) Any city or county proposing to undertake a STAR bond project
6 within a STAR bond project district established pursuant to K.S.A. 2019
7 Supp. 12-17,165, and amendments thereto, shall prepare a feasibility study
8 to be conducted by one or more consultants selected and approved by the
9 secretary, and the costs shall be paid by the developer or the city or
10 county. The secretary shall have control and oversight authority over the
11 scope, conduct and methodology of the study. The secretary may establish
12 a list of preapproved consultants and approved study parameters and
13 meth