TOPEKA, Kan. — State tax and revenue bonds, STAR Bonds, are why the Kansas Speedway and Children's Mercy Park exist.
The bonds are a tool to fund major commercial, tourist or entertainment attractions in Kansas.
Municipalities use STAR Bonds to fund the building of the attraction. Then, the new sales tax generated by the attraction goes toward paying back the bonds used.
Currently, STAR Bonds can be used to fund up to 50% of the project and are 20-year bonds.
House Bill 2663 proposes a "temporary, targeted" change to STAR Bond language to hopefully attract two professional sports teams (NHL, MLB, NBA or NFL) into the Sunflower State.
The bill was not votedon before the legislature adjourned late Tuesday, but it could be revisited if it returns for a special session.
HB 2663 breaks away from the current STAR Bond outlines.
Bonds used for the stadiums could fund up to 100% of the project and would be 30 years. A $1 billion investment would be required, along with building a stadium with a minimum of 30,000 seats and a practice facility.
Another difference, according to the Kansas Department of Commerce and Rep. Sean Tarwater (R-District 27), is that local authorities would not be required to use their sales tax revenue to repay the bond.
"The fact that that flexibility exists does not necessarily mean that that's how any particular project would be financed. And we like to involve our local partners to the extent possible on these projects," said Chief Counsel Robert North, with the commerce department.
Rep. Tarwater said during Monday's committee meeting that Kansans would not see an increase in taxes if the bill passed.
"Kansas is still not on the hook for the bonds, the investors that purchase the bonds would be at risk," he said.
The STAR Bond Act was enacted in 1999 along with the Tax Increment Financing Act. The two were separated in 2007.
Kansas reports there are currently 16 STAR Bond projects at various stages throughout the state.
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