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HB 2292

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.

2025-2026 Regular Session

Creates STAR Bonds Food Sales Tax Revenue Replacement Fund to replace lost state food tax revenue for eligible STAR districts (pre-2022) and extends the STAR Bonds sunset to 2031.

Died in Committee
#bonds #economicdevelopment
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Bill Summary · HB 2292

Summary — HB 2292 (STAR bonds food sales tax revenue replacement; sunset extension)

Status: Referred to Committee on Commerce, Labor and Economic Development. Introduced: January 30, 2025.

Main purpose

Hold existing STAR bond project districts harmless from the state’s elimination/reduction of the state retail sales and compensating use tax on food and food ingredients by replacing the lost state food-sales tax revenue for eligible STAR bond districts, create a dedicated replacement fund, establish certification and monthly transfer procedures, and extend the STAR Bonds Financing Act sunset date.

Key provisions

  • Replacement payments
    • For STAR bond districts established prior to December 31, 2022, the Secretary of Revenue must calculate the amount of state sales/use tax revenue that would have been generated from sales of food and food ingredients if the state tax rate had remained at 6.5%.
    • Initial certification: certify (July 1, 2025) the amount attributable to January 2024–June 2025; Director of Accounts and Reports certifies to State Treasurer; Treasurer transfers aggregate amount from the State General Fund to a new fund; Treasurer pays amounts to the applicable city/county bond finance, debt service, or reserve fund by October 15, 2025.
    • Ongoing monthly process: Secretary certifies (by the 15th) the amount for the month two months prior; Director certifies (by the last day of the month); Treasurer transfers (by the 15th of the following month) from State General Fund into the STAR Bonds Food Sales Tax Revenue Replacement Fund and pays cities/counties.
  • New fund: establishes the "STAR Bonds Food Sales Tax Revenue Replacement Fund" in the state treasury, administered by the State Treasurer; expenditures made per appropriation.
  • Termination for a district: Secretary determines when revenues collected (including replacement transfers) are sufficient to pay all outstanding STAR special obligation bonds for that district; thereafter certifications/transfers for that district cease.
  • Sunset extension: extends the STAR Bonds Financing Act sunset from July 1, 2026 to July 1, 2031.
  • Applicability: targeted at STAR bond districts established prior to Dec. 31, 2022 (fiscal documents note the intent to exclude districts established after mid‑2022).

Fiscal and administrative impact (per the Division of the Budget / Dept. of Revenue)

  • Estimated reductions to the State General Fund (transfers to replacement fund):
    • FY 2026: $15.9 million (includes Jan 2024–June 2025 adjustment plus monthly transfers starting July 2025)
    • FY 2027: $8.2 million
    • FY 2028: $8.2 million
    • FY 2029: $8.3 million
    • FY 2030: $8.4 million
  • Administrative costs to the Department of Revenue and State Treasurer are described as negligible and absorbable within existing resources.
  • Extension of the STAR program may have additional, project‑dependent impacts on the State General Fund and the State Highway Fund (KDOT notes potential reductions to State Highway Fund revenues), but those amounts are not estimated.

Who is affected

  • Beneficiaries: cities and counties that established STAR bond project districts prior to Dec. 31, 2022 (their bond finance/debt service/reserve funds).
  • Payers: State General Fund (via statutory transfers).
  • State agencies involved: Department of Revenue (certifications), Director of Accounts and Reports, State Treasurer (fund administration/payments), Department of Commerce, KDOT (potential indirect impacts).

Timeline / procedural notes

  • July 1, 2025: initial Secretary of Revenue certification due.
  • On or before Sept 1, 2025: Director certifies to Treasurer and transfer from State General Fund to replacement fund.
  • Oct 15, 2025: initial payments to city/county bond funds.
  • Thereafter: monthly certification/transfer/payment cadence (Secretary by 15th; Director by last day; Treasurer transfers by 15th).
  • STAR Bonds Financing Act sunset date extended to July 1, 2031.

Prepared to clarify any specific clause, reconcile date inconsistencies, or produce a one‑page fact sheet for stakeholders.

Compiled from official sources — confirm details with the bill’s official record.

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