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HB 2211

Providing funding for STAR bond districts to replace lost food sales tax revenue.

2025-2026 Regular Session

HB 2211 would replace lost food sales tax revenue for pre-2022 STAR bond districts by monthly state transfers to fund bond payments, stabilizing local financing.

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Bill Summary · HB 2211

HB 2211 — Summary

Title: Providing funding for STAR bond districts to replace lost food sales tax revenue
Introduced: January 29, 2025
Hearing: Wednesday, February 26, 2025, 3:30 PM, Room 346-S
Primary sponsor: Representative Howerton (on behalf of the City of Derby)
Classification: Bill (Kansas)

Purpose / Intent

HB 2211 is intended to “hold harmless” existing STAR (State and Local Tourism) bond project districts established prior to December 31, 2022, from revenue lost when the State sales and compensating use tax on food and food ingredients was reduced. The bill directs the State to calculate and replace the amount of state food sales tax revenue those STAR districts would have generated if the state tax rate on food had remained at 6.5%.

Key provisions

  • Monthly certification and transfers:
    • Secretary of Revenue must certify (beginning July 15, 2025 and on the 15th of each month thereafter) the amount of revenue that would have been generated from sales of food/food ingredients in each eligible STAR district if the state tax rate had been 6.5%. The first July 15, 2025 certification also covers January 2024 through April 2025; the first monthly certification will include May 2025.
    • Director of Accounts and Reports certifies the amounts to the State Treasurer on or before the 25th of each month.
    • State Treasurer transfers the aggregate certified amount from the State General Fund to a newly created STAR Bonds Food Sales Tax Revenue Replacement Fund on or before the 1st day of the month (beginning August 1, 2025).
    • Treasurer pays from that replacement fund to the applicable city or county bond finance, debt service, or reserve funds to be used for STAR bond payments.
  • Applicability:
    • Applies only to STAR bond project districts established prior to December 31, 2022 (the bill expressly excludes project districts established after July 1, 2022).
  • End of payments:
    • For each district, once sales tax and other revenues (including these replacement transfers) are sufficient to satisfy principal and interest on special obligation bonds issued before Dec. 31, 2022 (until their maturity), no further certifications or transfers will be made for that district.
  • New fund and administration:
    • Establishes the STAR Bonds Food Sales Tax Revenue Replacement Fund in the State Treasury, administered by the State Treasurer. Expenditures require appropriation and standard voucher/warrant procedures.
  • Related statutory amendment:
    • Modifies STAR Bonds Financing Act definitions/provisions (K.S.A. 12-17,162) to reflect treatment of food sales tax in tax-increment calculations for eligible districts.

Fiscal impact

  • The Department of Revenue / Division of the Budget estimates net State General Fund reductions (transfers) of:
    • FY 2026: ($15.9 million) — includes retroactive amount for Jan 2024–Apr 2025 plus ongoing monthly transfers beginning 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 Revenue and Treasurer are estimated to be negligible and absorbable within existing resources.
  • The bill would increase expenditures from the replacement fund to local city/county bond funds by the amounts above.

Who is affected

  • Primary beneficiaries: STAR bond project districts (and their issuing cities/counties) established prior to Dec. 31, 2022 — they would receive replacement revenue to offset the food sales tax loss and help make STAR bond payments.
  • State General Fund: will fund the replacements via monthly transfers, reducing available SGF balances by the amounts noted.
  • Local bond finance/debt service/reserve funds: will receive transfers to apply toward STAR bond obligations.
  • Excludes STAR districts established after July 1, 2022.

Procedural / timeline notes

  • Secretary of Revenue certification: monthly, beginning July 15, 2025 (first certification includes Jan 2024–Apr 2025).
  • Director of Accounts and Reports certifies to Treasurer: monthly by the 25th.
  • Treasurer transfers and payments: monthly on or before the 1st, beginning August 1, 2025.
  • Payments stop for a district once its covered bonds are fully funded to maturity by collected/distributed revenues (including these transfers).
  • Fiscal note was prepared Feb. 25, 2025; stakeholders such as the League of Kansas Municipalities and Kansas Association of Counties indicated the measure would assist localities in paying STAR bonds and improve project viability.

Notes

  • The bill is narrowly tailored to earlier STAR districts and explicitly ties relief to the hypothetical continuation of a 6.5% state sales/compensating use tax on food and food ingredients for the specified periods.
  • Any appropriation or budgetary implementation would be executed under standard state accounting and appropriation procedures.

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

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