Kansas House Bill HB2292

Kansas 2025-2026 Regular Session

• Introduced: 2/5/25
• Refer: 2/5/25

Caption

Providing for food sales tax revenue replacement for STAR bond districts established prior to December 31, 2022, establishing the STAR bonds food sales tax revenue replacement fund, providing for transfers from the state general fund to such revenue replacement fund and transfers from such revenue replacement fund in the amount of food sales tax revenues lost to the applicable cities or counties and extending the sunset date of the STAR bonds financing act to July 1, 2031.

Summary

HB 2292 makes two main changes to Kansas’s STAR bonds financing act. First, it creates a mechanism to replace sales tax revenue lost in certain STAR bond districts because of the state’s reduced sales tax rate on food and food ingredients. For STAR bond project districts established before December 31, 2022, the secretary of revenue must calculate the amount of food sales tax revenue that would have been generated at a 6.5% rate, and the state general fund must transfer that amount into a new STAR bonds food sales tax revenue replacement fund. The fund then pays the affected city or county bond finance, debt service, or reserve fund. These payments begin with a one-time retroactive certification for January 2024 through June 2025 and continue monthly going forward until the affected bonds are fully paid. Second, the bill extends the sunset date of the STAR bonds financing act from July 1, 2026 to July 1, 2031. It also updates statutory definitions and cross-references within the STAR bonds law, including definitions related to project types, tax increment calculations, and district eligibility. The bill preserves existing STAR bond structures while clarifying how food sales tax revenue is treated for older districts and how the replacement payments interact with bond repayment obligations.

Impact

The bill would shift state general fund dollars to local STAR bond districts that were established before December 31, 2022, effectively backfilling lost food sales tax revenue for those districts and protecting pledged bond repayment streams. It creates a new state treasury fund administered by the state treasurer and requires ongoing certifications and transfers by the secretary of revenue, director of accounts and reports, and state treasurer. The bill also amends the STAR bonds financing act’s definitions and extends the act’s expiration date, thereby continuing the legal authority for STAR bond projects for five additional years.

Sentiment

The bill appears generally supportive of existing STAR bond districts and their bondholders, with the policy goal of preventing revenue shortfalls caused by the food sales tax change. The caption and structure suggest it is intended as a technical and fiscal fix for local governments and districts that relied on food sales tax revenue in their financing plans. No committee transcript or vote record was provided, so there is no direct evidence of recorded support or opposition in the available context.

Contention

The most likely point of contention is the use of state general fund money to replace local STAR bond revenue losses, especially because the reimbursement is limited to districts established before December 31, 2022. Another possible issue is the extension of the STAR bonds financing act itself, which may draw scrutiny from critics of economic development incentives or from those concerned about long-term state exposure to bond-related obligations. Supporters are likely to be cities, counties, and bond-financing interests in affected STAR bond districts, while opponents would likely focus on state budget impacts and the fairness of subsidizing a limited set of districts.