Budget & Taxes (Economic Development)

SB 536 changes how Kansas taxpayers can benefit from the High Performance Tax Credit Program by converting the existing income tax credit into a direct rebate payment. The bill applies to businesses investing in qualified facilities located outside of metropolitan counties and establishes specific rebate amounts based on the number of jobs created and the size of the investment. Under the new rules, businesses in nonmetropolitan regions receive $2,500 per job plus $1,000 for every $100,000 invested, while other qualifying businesses receive $1,500 per job plus the same investment bonus. The legislation also sets a maximum cap on the rebate amount and ends eligibility for new investments starting January 1, 2027.

HB 2737 creates a new "Taxpayer Agreement Act" for Kansas cities, allowing them to enter binding agreements with property developers for economic development projects. These agreements require developers to make payments (in lieu of or alongside tax increment revenues) to secure project financing, with a lien on the property that takes priority over most other liens except prior tax liens. The bill ensures cities aren’t liable for financing, bonds issued under it don’t count toward debt limits, and developers can’t challenge the lien or tax assessments. It provides an optional alternative to traditional tax increment financing but doesn’t require cities or developers to use this method.