TIF Overview for Kansas Municipal Financial Advisors

Kansas’s Taxpayer Agreement Act (HB 2737) introduces instruments that materially change the risk analysis for TIF-supported projects. For municipal financial advisors evaluating bond structures, this overview covers the key statutory provisions under both the existing TIF Act and the new legislation.

Kansas TIF Framework at a Glance

Special obligation bonds under KSA 12-1774(a) are payable from ad valorem increment, local sales and use tax increment, franchise fees, and redevelopment agreement payments. The 20 mills for school districts and 1.5 mills for the state are excluded from capture. Eligible areas include blighted areas, conservation areas (50%+ structures 35+ years old), buildings 65+ years old, and several specialized categories. A feasibility study and two-thirds supermajority vote are required.

What HB 2737 Adds

Taxpayer agreements create binding developer guarantees enforceable as delinquent real estate taxes. Written consent from existing mortgage holders is required before execution. Conduit bonds are payable solely from pledged security with no city obligation to advance funds. These instruments do not constitute public debt or count against statutory debt limitations. For your analysis, this means developer-backed TIF bonds under HB 2737 carry zero municipal recourse, with enforceable security that traditional special obligation bonds lacked.

Key Modeling Considerations

Your projections should model ad valorem increment, any pledged sales tax and franchise fee revenue, development timeline risk, assessment appeals, and the developer’s financial capacity to honor the taxpayer agreement guarantee. Coverage ratios should account for the multi-revenue-stream nature of Kansas TIF. The feasibility study requirement provides a formal framework for documenting these projections.

Hageman Capital as a Technical Resource

We work alongside Kansas financial advisors as a specialized TIF resource at no cost. Connect with our team for a technical consultation.