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Minutes for SB124 - Committee on Commerce
Short Title
Amending STAR bonds by adding rural redevelopment projects and major business facilities, changing certain project financing, investment and sales provisions, adding a visitor tracking plan requirement and additional feasibility study requirements with oversight by the secretary, requiring approval by the secretary for real estate transfers, requiring district contiguity, making other amendments and extending the sunset date.
Minutes Content for Tue, Feb 9, 2021
Chairman Olson opened the hearing on SB124 and called on Charles Reimer for a Revisor of Statutes overview of the bill.
Chairman called upon David Soffer for primary proponent testimony. Mr. Soffer explained the purpose and functions of the Sales Tax Revenue (STAR) Bond program that under current law had a sunset of June 30, 2021. (Attachment 3)
Mr. Soffer proposed seven reforms and two enhancements:
Reforms:
1.) KDOC will commission a third party feasibility study.
2.) Cities/developers will be required to submit visitor tracking plan and data to KDOC.
3.) Restrictions would limit use of STAR Bond proceeds to only the land included in the attraction.
4.) Non-contiguous districts in MSAs would be prohibited.
5.) Capital investment and annual sales thresholds raised from $50 million to $75 million for urban projects.
6.) Cities/developers would be required to submit summary of community engagement and support.
7.) Ten percent of each dollar of sales tax for all existing businesses will go back to the taxing entities.
Enhancements:
1.) Eligibility should be extended to business facilities with potential to attract sizable out-of-state visitation, allowing for even greater economic impact for the region and state.
2.) A rural-only component to lower capital investment floor to $3 million allowing for vertical building and rehabilitation with pay as-you-go option where no bonds are issued.
Mr. Soffer concluded by suggesting that proposed changes would encourage the Kansas economy to grow larger and faster intending to create more opportunity for tourism and capital investment.
Chairman Olson called upon Trey Cocking who stated his chamber's support for the five year extension of the STAR Bonds program. (Attachment 4)
Chairman Olson called upon Kevin Walker for additional proponent testimony. Mr. Walker stated his city's full support for the bill that he predicted would cause more accountability and economic results. ((Attachment 5)
Chairman Olson called upon for Korb Maxwell who offered a single amendment to K.S.A. 12-17, 171(f) that he believed would "ensure that STAR Bonds are not restricted in such a way as to prevent the influx of capital necessary to get these projects done." (Attachment 6)
Chairman Olson called upon for John Jenks proponent testimony. Mr. Jenks explained why he believes the proposed 5 year extension of the STAR bonds to "signal that the state of Kansas is open for business." (Attachment 7)
Written-Only Testimony:
Clifford Illig, Realtor and Developer
Tim McKee, City of Olathe KS
Scot Rigsby, City of Wichita KS
James Zaleski, Travel Industry Association of Kansas
Daniel Yoza, City of Olathe KS
Ron Fehr, City of Manhattan KS
Nick Hernandez, City of Dodge City, KS
Michael Koss, City of Overland Park KS
Chairman Olson called upon Michael Austin for primary opponent testimony. Mr. Austin utilized a sports analogy to point out two issues he feels exists with the STAR Bonds program:
He stated that he thought the program lessens the objectivity of government to act as a fair referee. He also explained that in his opinion the program does not create activity but actually redirects it making it unlikely for there to be a level playing field for all parties. He also opined that STAR Bond projects grow a specific area, but many times to the expense of surrounding areas. (Attachment 16)
Chairman Olson called upon Elizabeth Patton to provide additional opponent testimony. Ms. Patton asserted that the STAR Bonds programs extend unfair advantages to certain businesses at the expense of other the taxpayers and other businesses. Ms.Patton suggested three improvements to the bill: (Attachment 17)
1.) Provide genuine transparency
2.) Establish more specific funding limits
3.) Cap the portion of sales tax used or eliminate the sales tax option for STAR Bond projects.
Discussion ensued and seeing no additional committee questions or comments, Chairman Olson closed the hearing on SB124.
