----------------------------------------------------------------------------


 9  AN ACT concerning tourism activities; amending K.S.A. 1996 Supp. 12-
10    1770, 12-1771 and 12-1774 and repealing the existing sections.
11
12  Be it enacted by the Legislature of the State of Kansas:
13    Section 1.  K.S.A. 1996 Supp. 12-1770 is hereby amended to read as
14  follows: 12-1770. It is hereby declared to be the purpose of this act to
15  promote, stimulate and develop the general and economic welfare of the
16  state of Kansas and its communities and to assist in the development and
17  redevelopment of blighted areas and deteriorating areas which are not
18  yet blighted, but may be so in the future located within cities, environ-
19  mentally contaminated areas located within and without cities, major
20  tourism areas within and without cities and enterprise zones located
21  within cities, thus promoting the general welfare of the citizens of this
22  state, by authorizing cities to acquire certain property and to issue special
23  obligation bonds and full faith and credit tax increment bonds for the
24  financing of redevelopment projects. It is further found and declared that
25  the powers conferred by this act are for public uses and purposes for
26  which public money may be expended and the power of eminent domain
27  exercised. The necessity in the public interest for the provisions of this
28  act is hereby declared as a matter of legislative determination.
29    Sec. 2.  K.S.A. 1996 Supp. 12-1771 is hereby amended to read as
30  follows: 12-1771. (a) No city shall exercise any of the powers conferred
31  by K.S.A. 12-1770 et seq., and amendments thereto, unless the governing
32  body of such city has adopted a resolution finding that the specific project
33  area sought to be redeveloped is a blighted area, a conservation area, a
34  major tourism area meeting the criteria specified in subsection (a)(1)(D)
35  of K.S.A. 12-1774 and amendments thereto or was designated prior to July
36  1, 1992, as an enterprise zone pursuant to K.S.A. 12-17,110 prior to its
37  repeal, and the conservation, development or redevelopment of such area
38  is necessary to promote the general and economic welfare of such city.
39  Enterprise zones designated prior to July 1, 1992, may be enlarged by
40  the city to an area not exceeding 25% of the city's land area upon a finding
41  by the secretary of the department of commerce and housing that a re-
42  development project proposed by the city which requires the enlarge-
43  ment is of statewide importance and that it will meet the criteria specified
HB 2349
                                     

 1  in K.S.A. 12-1774 (a)(1)(D), and amendments thereto. For the purpose
 2  of this subsection, the term ``blighted area'' means an area which: (1)
 3  Because of the presence of a majority of the following factors, substan-
 4  tially impairs or arrests the sound development and growth of the mu-
 5  nicipality or constitutes an economic or social liability or is a menace to
 6  the public health, safety, morals or welfare in its present condition and
 7  use: (A) A substantial number of deteriorated or deteriorating structures;
 8  (B) predominance of defective or inadequate street layout; (C) unsanitary
 9  or unsafe conditions; (D) deterioration of site improvements; (E) diversity
10  of ownership; (F) tax or special assessment delinquency exceeding the
11  fair value of the land; (G) defective or unusual conditions of title; (H)
12  improper subdivision or obsolete platting or land uses; (I) the existence
13  of conditions which endanger life or property by fire and other causes;
14  or (J) conditions which create economic obsolescence; or (2) has been
15  identified by any state or federal environmental agency as being environ-
16  mentally contaminated to an extent that requires a remedial investigation,
17  feasibility study and remediation or other similar state or federal action;
18  or (3) previously was found by resolution of the governing body to be a
19  slum or a blighted area under K.S.A. 17-4742 et seq., and amendments
20  thereto.
21    For the purpose of this subsection, conservation area means any im-
22  proved area within the corporate limits of a city in which 50% or more
23  of the structures in the area have an age of 35 years or more, which area
24  is not yet blighted, but may become a blighted area due to the existence
25  of a combination of two or more of the following factors: (i) Dilapidation,
26  obsolescence or deterioration of the structures; (ii) illegal use of individual
27  structures; (iii) the presence of structures below minimum code stan-
28  dards; (iv) building abandonment; (v) excessive vacancies; (vi) overcrowd-
29  ing of structures and community facilities; or (vii) inadequate utilities and
30  infrastructure. Not more than 15% of the land area of a city may be found
31  to be a conservation area.
32    (b)  The powers conferred upon cities under the provisions of K.S.A.
33  12-1770 et seq., and amendments thereto, shall be exercised by cities, as
34  determined by resolution adopted pursuant to K.S.A. 12-1772, and
35  amendments thereto, (1) in enterprise zones designated prior to July 1,
36  1992, including any area added to such enterprise zone after July 1, 1992,
37  pursuant to subsection (a), (2) in blighted areas of cities and counties
38  described by subsection (a)(2), (3) in conservation areas of cities, or (4)
39  in major tourism areas meeting the criteria specified in subsection
40    (a)(1)(D) of K.S.A. 12-1774 and amendments thereto or (5) in blighted
41  areas of cities, as determined by resolution adopted pursuant to K.S.A.
42  17-4742 et seq., and amendments thereto.
43    (c)  Within that portion of the city described in subsection (b), the
HB 2349
                                     

 1  governing body of a city may establish a district to be known as a ``rede-
 2  velopment district''. Within that portion of a city and county described in
 3  subsection (b) excluding paragraph (3) of subsection (b), the governing
 4  body of the city, upon written consent of the board of county commis-
 5  sioners, may establish a district inclusive of land outside the boundaries
 6  of the city to be known as a redevelopment district. In all such cases, the
 7  board of county commissioners, prior to providing written consent, shall
 8  be subject to the same procedure for public notice and hearing as is
 9  required of a city pursuant to subsection (d) for the establishment of a
10  redevelopment district. One or more redevelopment projects may be un-
11  dertaken by a city within a redevelopment district after such redevelop-
12  ment district has been established in the manner provided by subsection
13    (d).
14    (d)  Any city proposing to establish a redevelopment district shall
15  adopt a resolution stating that the city is considering the establishment
16  of a redevelopment district. Such resolution shall:
17    (1)  Give notice that a public hearing will be held to consider the
18  establishment of a redevelopment district and fix the date, hour and place
19  of such public hearing;
20    (2)  describe the proposed boundaries of the redevelopment district;
21    (3)  describe a proposed comprehensive plan that identifies all of the
22  proposed redevelopment project areas and that identifies in a general
23  manner all of the buildings and facilities that are proposed to be con-
24  structed or improved in each redevelopment project area;
25    (4)  state that a description and map of the proposed redevelopment
26  district are available for inspection at a time and place designated;
27    (5)  state that the governing body will consider findings necessary for
28  the establishment of a redevelopment district.
29    Notice shall be given as provided in subsection (c) of K.S.A. 12-1772,
30  and amendments thereto.
31    (e)  Upon the conclusion of the public hearing, the governing body
32  may adopt a resolution to make any findings required by subsection (a)
33  and may establish the redevelopment district by ordinance. Such reso-
34  lution shall contain a comprehensive plan that identifies all of the pro-
35  posed redevelopment project areas and identifies in a general manner all
36  of the buildings and facilities that are proposed to be constructed or im-
37  proved in each redevelopment project area. The boundaries of such dis-
38  trict shall not include any area not designated in the notice required by
39  subsection (d). Any addition of area to the redevelopment district or any
40  substantial change to the comprehensive plan shall be subject to the same
41  procedure for public notice and hearing as is required for the establish-
42  ment of the district.
43    (f)  No privately owned property subject to ad valorem taxes shall be
HB 2349
                                     

 1  acquired and redeveloped under the provisions of K.S.A. 12-1770 et seq.,
 2  and amendments thereto, if the board of county commissioners or the
 3  board of education levying taxes on such property determines by reso-
 4  lution adopted within 30 days following the conclusion of the hearing for
 5  the establishment of the redevelopment district required by subsection
 6    (d) that the proposed redevelopment district will have an adverse effect
 7  on such county or school district.
 8    (g)  Any redevelopment plan undertaken within the redevelopment
 9  district may be in separate development stages. Each plan shall be
10  adopted according to the provisions of K.S.A. 12-1772, and amendments
11  thereto, and shall fix a date for completion. Except as provided herein,
12  any project shall be completed within 20 years from the date of the es-
13  tablishment of the redevelopment district. Projects relating to environ-
14  mental investigation and remediation under subsection (i) shall be com-
15  pleted within 20 years from the date a city enters into a consent decree
16  agreement with the Kansas department of health and environment or the
17  United States environmental protection agency.
18    (h)  Any increment in ad valorem property taxes resulting from a re-
19  development district undertaken in accordance with the provisions of this
20  act, shall be apportioned to a special fund for the payment of the cost of
21  the redevelopment project, including the payment of principal and inter-
22  est on any special obligation bonds or full faith and credit tax increment
23  bonds issued to finance such project pursuant to this act and may be
24  pledged to the payment of principal and interest on such bonds. The
25  maximum maturity on bonds issued to finance projects pursuant to this
26  act shall not exceed 20 years. For the purposes of this act, ``increment''
27  means that amount of ad valorem taxes collected from real property lo-
28  cated within the redevelopment district that is in excess of the amount
29  which is produced from such property and attributable to the assessed
30  valuation of such property prior to the date the redevelopment district
31  was established, as determined under the provisions of K.S.A. 12-1775,
32  and amendments thereto.
33    (i)  The governing body of a city, in contracts entered into with the
34  Kansas department of health and environment or the United States en-
35  vironmental protection agency, may pledge increments receivable in fu-
36  ture years to pay costs directly relating to the investigation and remedi-
37  ation of environmentally contaminated areas. The provisions in such
38  contracts pertaining to pledging increments in future years shall not be
39  subject to K.S.A. 10-1101 et seq. or 79-2925 et seq., and amendments
40  thereto.
41    (j)  Before any redevelopment project is undertaken, a comprehensive
42  feasibility study, which shows the benefits derived from such project will
43  exceed the costs and that the income therefrom will be sufficient to pay
HB 2349
                                     

 1  for the project shall be prepared. Such feasibility study shall be an open
 2  public record.
 3    Sec. 3.  K.S.A. 1996 Supp. 12-1774 is hereby amended to read as
 4  follows: 12-1774. (a) (1)  Any city shall have the power to issue special
 5  obligation bonds to finance the undertaking of any redevelopment project
 6  in accordance with the provisions of this act. Such special obligation bonds
 7  shall be made payable, both as to principal and interest:
 8    (A)  From property tax increments allocated to, and paid into a special
 9  fund of the city under the provisions of K.S.A. 12-1775, and amendments
10  thereto;
11    (B)  from revenues of the city derived from or held in connection with
12  the undertaking and carrying out of any redevelopment project or projects
13  under this act;
14    (C)  from any private sources, contributions or other financial assis-
15  tance from the state or federal government;
16    (D)  from a pledge of a portion or all of the revenue received by the
17  city from transient guest sales and use taxes collected pursuant to K.S.A.
18  12-1696 et seq., 79-3601 et seq., 79-3701 et seq. and 12-187 et seq., and
19  amendments thereto, and which are collected from taxpayers doing busi-
20  ness within that portion of the city's redevelopment district established
21  pursuant to K.S.A. 12-1771, and amendments thereto, occupied by a re-
22  development project if there first is a finding by the secretary of com-
23  merce and housing that the redevelopment project is of statewide as well
24  as local importance or will create a major tourism area for the state. In
25  making such a finding that a redevelopment project is of statewide as well
26  as local importance, the secretary must conclude at least: (i) That capital
27  improvements costing not less than $300,000,000 will be built in the state
28  for such redevelopment project; and (ii) not less than 1,500 permanent
29  and seasonal employment positions as defined by K.S.A. 74-50,114, and
30  amendments thereto, will be created in the state by such redevelopment
31  project. In making a finding that a redevelopment project will create a
32  major tourism area for the state, the secretary must conclude at least: (i)
33  That the tourism activity resulting from the redevelopment project will
34  attract not less than ____________ out-of-state visitors to Kansas and (ii)
35  that the tourism activity resulting from the redevelopment project will
36  generate $____________ in retail sales in the state;
37    (E) (i)  from a pledge of a portion or all increased revenue received
38  by the city from franchise fees collected from utilities and other busi-
39  nesses using public right-of-way within the redevelopment district; (ii)
40  from a pledge of a portion or all of the revenue received by the city from
41  sales taxes collected pursuant to K.S.A. 12-187, and amendments thereto;
42  or
43    (F)  by any combination of these methods.
HB 2349
                                     

 1    The city may pledge such revenue to the repayment of such special
 2  obligation bonds prior to, simultaneously with, or subsequent to the is-
 3  suance of such special obligation bonds.
 4    (2)  Bonds issued under paragraph (1) of subsection (a) shall not be
 5  general obligations of the city, nor in any event shall they give rise to a
 6  charge against its general credit or taxing powers, or be payable out of
 7  any funds or properties other than any of those set forth in paragraph (1)
 8  of this subsection and such bonds shall so state on their face.
 9    (3)  Bonds issued under the provisions of paragraph (1) of this sub-
10  section shall be special obligations of the city and are declared to be
11  negotiable instruments. They shall be executed by the mayor and clerk
12  of the city and sealed with the corporate seal of the city. All details per-
13  taining to the issuance of such special obligation bonds and terms and
14  conditions thereof shall be determined by ordinance of the city. All special
15  obligation bonds issued pursuant to this act and all income or interest
16  therefrom shall be exempt from all state taxes except inheritance taxes.
17  Such special obligation bonds shall contain none of the recitals set forth
18  in K.S.A. 10-112, and amendments thereto. Such special obligation bonds
19  shall, however, contain the following recitals, viz., the authority under
20  which such special obligation bonds are issued, they are in conformity
21  with the provisions, restrictions and limitations thereof, and that such
22  special obligation bonds and the interest thereon are to be paid from the
23  money and revenue received as provided in paragraph (1) of this subsec-
24  tion.
25    (b) (1) Subject to the provisions of paragraph (2) of this subsection,
26  any city shall have the power to issue full faith and credit tax increment
27  bonds to finance the undertaking of any redevelopment project in accor-
28  dance with the provisions of K.S.A. 12-1770 et seq., and amendments
29  thereto other than a project determined by the secretary of commerce
30  and housing to be of statewide as well as local importance and to meet
31  the other criteria specified in K.S.A. 12-1774 (a)(1)(D), and amendments
32  thereto. Such full faith and credit tax increment bonds shall be made
33  payable, both as to principal and interest: (A) From the revenue sources
34  identified in paragraph (1)(A), (B), (C), (D) and (E) of subsection (a) or
35  by any combination of these sources; and (B) subject to the provisions of
36  paragraph (2) of this subsection, from a pledge of the city's full faith and
37  credit to use its ad valorem taxing authority for repayment thereof in the
38  event all other authorized sources of revenue are not sufficient.
39    (2)  Except as provided in paragraph (3) of this subsection, before the
40  governing body of any city proposes to issue full faith and credit tax in-
41  crement bonds as authorized by this subsection, the feasibility study re-
42  quired by K.S.A. 12-1771, and amendments thereto, shall demonstrate
43  that the benefits derived from the project will exceed the cost and that
HB 2349
                                     

 1  the income therefrom will be sufficient to pay the costs of the project.
 2  No full faith and credit tax increment bonds shall be issued unless the
 3  governing body states in the resolution required by K.S.A. 12-1772, and
 4  amendments thereto, that it may issue such bonds to finance the proposed
 5  redevelopment project. The governing body may issue the bonds unless
 6  within 60 days following the date of the public hearing on the proposed
 7  redevelopment plan a protest petition signed by 3% of the qualified voters
 8  of the city is filed with the city clerk in accordance with the provisions of
 9  K.S.A. 25-3601 et seq., and amendments thereto. If a sufficient petition
10  is filed, no full faith and credit tax increment bonds shall be issued until
11  the issuance of the bonds is approved by a majority of the voters voting
12  at an election thereon. Such election shall be called and held in the man-
13  ner provided by the general bond law. The failure of the voters to approve
14  the issuance of full faith and credit tax increment bonds shall not prevent
15  the city from issuing special obligation bonds in accordance with K.S.A.
16  12-1774, and amendments thereto. No such election shall be held in the
17  event the board of county commissioners or the board of education de-
18  termines, as provided in K.S.A. 12-1771, and amendments thereto, that
19  the proposed redevelopment district will have an adverse effect on the
20  county or school district.
21    (3)  As an alternative to paragraph (2) of this subsection, any city which
22  adopts a redevelopment plan but does not state its intent to issue full
23  faith and credit tax increment bonds in the resolution required by K.S.A.
24  12-1772, and amendments thereto, and has not acquired property in the
25  redevelopment project area may issue full faith and credit tax increment
26  bonds if the governing body of the city adopts a resolution stating its intent
27  to issue the bonds and the issuance of the bonds is approved by a majority
28  of the voters voting at an election thereon. Such election shall be called
29  and held in the manner provided by the general bond law. The failure of
30  the voters to approve the issuance of full faith and credit tax increment
31  bonds shall not prevent the city from issuing special obligation bonds
32  pursuant to paragraph (1) of subsection (a). Any redevelopment plan
33  adopted by a city prior to the effective date of this act in accordance with
34  K.S.A. 12-1772, and amendments thereto, shall not be invalidated by any
35  requirements of this act.
36    (4)  During the progress of any redevelopment project in which the
37  city's costs will be financed, in whole or in part, with the proceeds of full
38  faith and credit tax increment bonds, the city may issue temporary notes
39  in the manner provided in K.S.A. 10-123, and amendments thereto, to
40  pay the city's cost for the project. Such temporary notes shall not be issued
41  and the city shall not acquire property in the redevelopment project area
42  until the requirements of paragraph (2) or (3) of this subsection, which-
43  ever is applicable, have been met.
HB 2349
                                     

 1    (5)  Full faith and credit tax increment bonds issued under this sub-
 2  section shall be general obligations of the city and are declared to be
 3  negotiable instruments. They shall be issued in accordance with the gen-
 4  eral bond law. All such bonds and all income or interest therefrom shall
 5  be exempt from all state taxes except inheritance taxes. The amount of
 6  the full faith and credit tax increment bonds issued and outstanding which
 7  exceeds 3% of the assessed valuation of the city shall be within the bonded
 8  debt limit applicable to such city.
 9    (6)  Any city issuing special obligation bonds under the provisions of
10  this act may refund all or part of such issue pursuant to the provisions of
11  K.S.A. 10-116a, and amendments thereto.
12    Sec. 4.  K.S.A. 1996 Supp. 12-1770, 12-1771 and 12-1774 are hereby
13  repealed.
14    Sec. 5.  This act shall take effect and be in force from and after its
15  publication in the statute book.