As Amended by House Committee on
Economic Development


H.B. 2590 would establish the Kansas Rural Housing Incentive District Act. The purpose of this Act would be to encourage the development and renovation of housing in rural Kansas cities and counties through the use of tax increment financing (TIF) to finance certain types of public improvement projects.

The bill includes the following provisions:


H.B. 2590 was recommended by the Joint Committee on Economic Development as a means of authorizing TIF to encourage affordable housing development in rural areas of Kansas. Chris McKenzie, the Executive Director of the League of Kansas Municipalities, spoke in support of the bill which was drafted by the League during the 1997 interim at the request of the Joint Committee on Economic Development. Mr. McKenzie outlined several notable differences between the provisions of the bill and existing TIF law, including: establishing a streamlined process for creation of rural housing incentive districts compared to the procedure for establishing TIF districts in existing law; preconditioning creation of rural housing incentive districts on attestation by the Secretary of Commerce and Housing that there is a viable local housing need (there is no such requirement in existing TIF law); limiting use of TIF to "rural" cities and counties with specified populations (no such population limitation currently exists in TIF law); not requiring the planning commission to certify that the TIF plan is compatible with the city comprehensive plan, as is required in existing TIF law (the bill would require a copy of the resolution providing notice of public hearing to be sent to the city or county planning commission); authorizing the use of special obligation bonds, but not general obligation bonds, for TIF projects (in existing TIF law, general obligation bonds may be used); authorizing TIF financing for a more limited array of public improvements than may be financed in existing TIF law; imposing a limit of 15 years for bonds to finance rural housing incentive projects compared to 20 years to finance projects authorized in existing TIF law; and adding certain assurances to the city's or county's project plans (not required for inclusion in existing TIF law).

Karen France, Director of Governmental Affairs, Kansas Association of Realtors, testified in support of the bill. Ms. France distributed written testimony in support of the bill from Butch Hardman, Hardman Real Estate (Parsons) and Delores Dalke, a realtor and Mayor of Hillsboro. Art Brown, spokesperson for Mid-America Lumbermens Association, also testified in support of the bill.

The House Committee amended the bill to: require the Secretary of Commerce and Housing to provide written justification for not agreeing with findings attesting to a shortage of quality housing; and remove language that would have authorized the use of school mill levy proceeds to repay bonds issued to fund projects in rural housing incentive districts. The Committee also made a technical amendment.

The Division of Budget's fiscal note indicates that the introduced version of the bill would have no fiscal impact upon state government. The Kansas Association of Counties and the League of Kansas Municipalities reported that any fiscal impact related to the bill would occur at the local level.

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