Economic Development Initiatives Fund Overview

The statutes governing the EDIF (KSA 79-4804) provide that it shall be used to finance programs:

• Supporting and enhancing the existing economic foundation of the State;
• Fostering growth through the expansion of current businesses; and
• The establishment and attraction of new, commercial, and industrial enterprises. KSA 79-4804 also requires 50.0 percent of the funds transferred to the EDIF to be split evenly between the two Kansas congressional districts. The statute further creates three EDIF accounts and requires that all EDIF revenue be deposited into one of those three accounts. The appropriation bills have created new EDIF accounts and deposited the funding as instructed by the Legislature. The statutory EDIF accounts include:
• Kansas Capital Formation Account: Used to provide, encourage, and implement capital development and formation in Kansas;
• Kansas Economic Development Research and Development Account: Used to promote, encourage, and implement research and development programs and activities in Kansas and technical assistance funded through state educational institutions under the supervision and control of the Kansas Board of Regents or other Kansas colleges and universities; and
• Kansas Economic Development Endowment Account: Used to provide an ongoing source of funds to support specific community infrastructure projects in Kansas that stimulate economic growth.

Distribution of Funds

The EDIF is funded through the State Gaming Revenues Fund (SGRF). A portion of state revenue from both the Lottery and parimutuel wagering is transferred to the SGRF. That Fund is used essentially as a holding fund from which further transfers are made on a monthly basis. In normal years, no more than $50.0 million may be credited to the SGRF in any fiscal year. Amounts in excess of $50.0 million are credited to the State General Fund.

The initial transfers from the SGRF, which began in 1986, were as follows:

• County Reappraisal Fund (until June 30, 1989) — 30.0 percent;
• Split between Juvenile Detention Facilities Fund and Correctional Institutions Building Fund (actual amount to be determined by appropriations act) — 10.0 percent; and
• EDIF (to be increased to 90.0 percent as of July 1, 1989) — 60.0 percent.

During the 1988 Session, the Legislature delayed the increase in the transfer to the EDIF until July 1, 1990.

During the 1994 Session, the Legislature changed the transfers as of July 1, 1995, to the following:

• Correctional Institutions Building Fund — 10.0 percent;
• Juvenile Detention Facilities Fund — 5.0 percent; and
• EDIF — 85.0 percent.

During the 2000 Session, the Legislature changed the transfers to the following:

• EDIF – $42,432,000;
• Correctional Institutions Building Fund — $4,992,000;
• Juvenile Detention Facilities Fund — $2,496,000; and
• Problem Gambling Grant Fund — $80,000.

During the 2009 Session, the Legislature changed the transfers to the following for FY 2009 and FY 2010:

• EDIF — $40,782,869;
• Correction Institutions Building Fund — $4,797,985;
• Juvenile Detention Facilities Fund — $2,398,992; and
• Problem Gambling Grant Fund — $80,000.

Current Transfer Sources and Amounts:

The SGRF transfers 85.0 percent of the first $50.0 million, or $42.4 million, per fiscal year in net receipts from regular lottery revenues to the EDIF. Of that amount, the following transfers are made:

• State Housing Trust Fund: The State Housing Trust Fund does not have a statutorily designated revenue source. Since FY 2010, $2.0 million per year has been transferred to this fund from EDIF. The State Housing Trust Fund is used to support the Moderate Income Housing Program in the Kansas Housing Resources Corporation.
• State Water Plan Fund (SWPF): KSA 79-4804 directs $2.0 million per year to be transferred from the EDIF to the SWPF.
• State General Fund (SGF): There is no statutory transfer to the SGF from the EDIF; however, excess receipts in the EDIF, after transfers and appropriated expenditures, have been transferred to the SGF by action of the appropriation acts. SGF moneys have also been transferred to the EDIF when transfers and appropriated expenditures exceed receipts.

by Chardae Caine
Senior Fiscal Analyst
785-296-3183