Brief(1)
S.B. 76 would expand the application of tax increment financing, including STAR Bond financing, to buildings designated as historic theaters. The bill would define "historic theater" as a building constructed prior to 1940, which was constructed for the purpose of staging entertainment, including motion pictures, vaudeville shows, or operas. The building must be owned and operated by a nonprofit corporation. Moreover, the building must be designated by the State Historical Preservation Officer as eligible to be enrolled on the Kansas Register of Historic Places or it must be a member of the Kansas Historic Theatre Association.
The bill would authorize a city to designate a building to be an historic theater if the city and the Secretary of Commerce and Housing agree that the building satisfies the definition of "historic theater" and will have a significant impact on the city and surrounding area.
Background
S.B. 76 was supported by the following proponents: Senator Ben Vidricksen; David Jenkins, President, Kansas Historic Theatres Association and Executive Director, Fox Theatre (Salina); Andrea Springer, Vice President, Kansas Historic Theatres Association and Executive Director, Fox Theatre (Hutchinson); Dr. Doug Jernigan, President, Jayhawk Theatre (Topeka) and Board Member, Kansas Historic Theatres Association; Gerald Cook, Executive Director, Salina Area Chamber of Commerce and Board Member, Fox Theatre (Salina); John Wall, Board Member, Downtown Topeka Incorporated; William Morris, representing American Institute of Architects in Kansas; Claudia Larkin, Director of Division of Travel and Tourism, Kansas Department of Commerce and Housing; and Chris McKenzie, League of Kansas Municipalities. Proponents noted they are seeking additional funding mechanisms, such as tax increment financing, to help finance the renovation of Kansas historic theaters.
The House Committee amended the definition of "historic theater" contained in the bill to require that the building either be designated as eligible to be on the Kansas Register of Historic Places or be a member of the Kansas Historic Theatre Association. The House Committee also made technical amendments.
The House Committee of the Whole amended the bill to specify that the State Historic Preservation Officer is the party that must designate the theater as eligible to be on the Kansas Register of Historic Places.
Tax increment financing enables a city to dedicate future increased revenues (i.e., the "increment") for a fixed period of years to finance improvements in connection with a redevelopment project. The acquisition of property and improvements may be financed through the issuance of special obligation bonds of the city, repayable from the tax increment generated from the redeveloped property. In addition to the local property tax increment, other revenue sources may be committed to repayment of the principal and interest on the bonds. For certain statutorily-prescribed projects, as well as historic theater restoration projects proposed in the bill, sales and use tax proceeds and transient guest tax proceeds may be applied to the repayment of bonds (STAR Bonds).
In its fiscal note, the Division of the Budget assumed that any state costs related to tax increment financing would be in the form of opportunity costs.
1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html.