Session of 2000
SENATE BILL No. 474
By Committee on Elections and Local Government
1-24
10 AN ACT relating
to cities and counties; enacting the city and county
11 development activity
excise tax act.
12
13 Be it enacted by the Legislature of the
State of Kansas:
14 Section 1.
This act shall be known and may be cited as the city and
15 county development activity excise tax
act.
16 Sec. 2. As
used in this act:
17 (a) "Building
permit fee" means the fees charged to enforce any
18 adopted uniform building code.
19 (b) "Development
activity" means any construction or expansion of
20 a building, structure, any change in use of
a building or structure, or any
21 changes in the use of land that creates
additional demand and need for
22 public facilities.
23 (c) "Development
approval" means any written authorization from a
24 municipality that authorizes the
commencement of development activity.
25 (d) "Hookup fees"
means reasonable fees, not in excess of the ap-
26 proximate average costs to the
municipality, for services provided for and
27 directly attributable to the connection to
utility services, including gas,
28 water, sewer, power, or municipality
utility services.
29 (e) "Excise tax"
means a payment of money imposed upon develop-
30 ment activity as a condition of development
approval but shall not mean
31 a special assessment, a building permit
fee, a hookup fee, a fee for project
32 improvements, or other reasonable permit or
application fee.
33
(f) "Municipality" means a city or county.
34 (g) "Project
improvements" means site improvements and facilities
35 that are planned and designed to provide
service for development re-
36 sulting from a development activity; and
necessary for the use and con-
37 venience of the occupants or users of
development resulting from a de-
38 velopment activity. Such term shall not
mean system improvements.
39
(h) "Proportionate share" means the cost of public facility
improve-
40 ments that are roughly proportionate and
reasonably related to the service
41 demands and needs of any development
activity.
42 (i) "Public
facilities" means only the following capital facilities that
43 have a life expectancy of 10 or more years
and are owned or operated by
2
1 or on behalf of a municipality: (1)
Water rights and water supply, treat-
2 ment, and distribution facilities;
(2) wastewater collection and treatment
3 facilities; (3) storm water,
drainage, and flood control facilities; (4) mu-
4 nicipal power facilities; (5) roadway
facilities; (6) parks, recreation facili-
5 ties, open space, and trails; and (7)
public safety facilities.
6 (j) "Public
safety facility" means a building constructed or leased to
7 house police, fire, or other public
safety entities, but shall not mean a jail,
8 prison, or other place of involuntary
incarceration.
9
(k) "Roadway facilities" means streets or roads that have been
de-
10 signed on an officially adopted subdivision
plat, roadway plan or general
11 plan of a municipality, together with all
necessary appurtenance, including
12 associated improvements to federal or state
roadways only when the as-
13 sociated improvements are necessitated by
the new development, and are
14 not funded by the state or federal
government. Such term shall not mean
15 federal or state roadways.
16 (l) "Service
area" means a geographic area designed by a municipality
17 on the basis of sound planning or
engineering principals in which a de-
18 fined set of public facilities provide
service within the area. Such areas
19 may include the entire municipality.
20 (m) "System
improvements" means existing public facilities that are
21 designed to provide services to service
areas within the community at
22 large and future public facilities
identified in a capital improvements plan
23 that are intended to upgrade or improve
services to service areas within
24 the community at large. Such term shall not
mean project improvements.
25 Sec. 3. (a)
Each municipality shall comply with the requirements of
26 this act before establishing or modifying
any excise tax. A municipality
27 may not: Establish any new excise tax that
are not authorized by this act,
28 or impose or charge any other fees as a
condition of development approval
29 unless those fees are a reasonable charge
for the service provided.
30 (b) Before
imposing an excise tax, each municipality shall prepare a
31 capital facilities plan. The plan shall
identify demands placed upon exist-
32 ing public facilities by new development
activity, and the proposed means
33 by which the local political subdivision
will meet those demands.
34
(c) Municipalities need not prepare a separate capital
facilities plan
35 if an existing capital facilities plan
contains the elements required by this
36 subsection. In preparing the plan, each
municipality shall generally con-
37 sider all standard revenue sources to
finance the system improvements.
38 (d) A
Municipality may only impose an excise tax on development
39 activities when its plan for financing
system improvements establishes that
40 such tax is necessary to achieve an
equitable allocation to the cost borne
41 in the past and to be borne in the future,
in comparison to the benefits
42 already received and yet to be
received.
43 (e)
(1) Each municipality imposing an excise tax shall prepare a
writ-
3
1 ten analysis of each excise tax
that:
2
(A) Identifies the impact on system improvements required by
the
3 development activity;
4
(B) demonstrates how those impacts on system improvements
are
5 reasonably related to the development
activity;
6
(C) estimates the proportionate share of the costs of impacts
on sys-
7 tem improvements that are reasonably
related to the new development
8 activity; and
9 (D) based
upon those factors and the requirements of this act, iden-
10 tifies how the excise tax was
calculated.
11 (2) In analyzing
whether or not the proportionate share of the costs
12 of public facilities are reasonably related
to the new development activity,
13 the municipality shall identify, if
applicable:
14 (A) The cost of
existing public facilities;
15 (B) the manner of
financing existing public facilities, such as user
16 charges, special assessments, bonded
indebtedness, property taxes, sales
17 taxes, or state and federal grants;
18 (C) the relative
extent to which the newly developed properties and
19 the other properties in the municipality
have already contributed to the
20 cost of existing public facilities, by such
means as user charges, special
21 assessments, or payment from the proceeds
of general taxes;
22 (D) the relative
extent to which the newly developed properties and
23 the other properties in the municipality
will contribute to the cost of
24 existing public facilities in the
future;
25 (E) the extent to
which the newly developed properties are entitled
26 to a credit because the municipality is
requiring their developers or own-
27 ers, by contractual arrangement or
otherwise, to provide common facili-
28 ties, inside or outside the proposed
development, that have been provided
29 by the municipality and financed through
general taxation or other means,
30 apart from user charges, in other parts of
the municipality;
31 (F) extraordinary
costs, if any, in servicing the newly developed prop-
32 erties; and
33 (G) projected
revenue from user charges, special assessments, gen-
34 eral property taxes, sales taxes, bond
proceeds, and other locally collected
35 revenues.
36 (f) Nothing in
this act may be construed to repeal or otherwise elim-
37 inate any impact fee or similar exaction in
effect on the effective date of
38 this act that is pledged as a source of
revenues to pay bonded indebted-
39 ness that was incurred before the effective
date of this act.
40 Sec. 4.
(a) Each municipality wishing to impose an excise tax shall
41 pass an ordinance or resolution
specifically stating the need for such tax.
42 The excise tax imposed by that enactment
may not exceed the highest
43 fee justified by the excise tax analysis
performed pursuant to section 3,
4
1 and amendments thereto. In
calculating the excise tax, each municipality
2 may include:
3 (1) The
construction contract price;
4 (2) the
cost of acquiring land improvements, materials, and fixtures;
5 (3) the
cost for planning, surveying, and engineering fees for services
6 provided for and directly related to
the construction of the system im-
7 provements; and
8 (4) debt
service charges, if the political subdivision might use excise
9 tax as a revenue stream to pay the
principal and interest on bonds, notes,
10 or other obligations issued to finance the
costs of the system
11 improvement.
12 (b) In enacting
an excise tax ordinance or resolution a municipality
13 shall make a copy of the proposed excise
tax ordinance or resolution
14 available to the public at least 14 days
before the date of the public hear-
15 ing and publish notice of the hearing at
least once each week for two
16 consecutive weeks in the municipality's
official newspaper, prior to the
17 public hearing.
18 (c) The
municipality shall ensure that the excise tax ordinance or res-
19 olution contains: (1) A provision
establishing one or more service areas
20 within which it shall calculate and impose
an excise tax for various land
21 use categories; either pursuant to a
schedule of the excise taxes for each
22 type of development activity that specifies
the amount of the excise tax
23 to be imposed for each type of system
improvement; or the formula that
24 the municipality will use to calculate each
excise tax;
25 (2) a provision
authorizing the municipality to adjust the standard
26 excise tax at the time the fee is charged
to respond to unusual circum-
27 stances in specific cases and ensure that
the excise taxes are imposed
28 fairly; and
29 (3) a provision
governing calculation of the amount of the excise tax
30 to be imposed on a particular development
that permits adjustment of
31 the amount of the tax based upon studies
and data submitted by the
32 developer.
33 (d) The
municipality may include a provision in the excise tax ordi-
34 nance or resolution that:
35 (1) Exempts low
income housing and other development activities
36 with broad public purposes from an excise
tax and establishes one or more
37 sources of funds other than an excise tax
to pay for that development
38 activity;
39 (2) imposes an
excise tax for public facility costs previously incurred
40 by a municipality to the extent that new
growth and development will be
41 served by the previously constructed
improvements; and
42 (3) allows a
credit against an excise tax for any dedication of land for,
43 improvement to or new construction of, any
system improvements pro-
5
1 vided by the developer if the
facilities are identified in the capital im-
2 provements plan, and are required by
the municipality as a condition of
3 approving the development
activity.
4 (e) Except
as provided in subsection (d)(2), the municipality may not
5 impose an excise tax to cure
deficiencies in public facilities serving existing
6 development.
7 Sec.
5. Each municipality collecting an excise tax shall establish
sep-
8 arate interest bearing accounts for
each type of public facility for which
9 an excise tax is collected, deposit
excise tax receipts in the account, retain
10 the interest earned on each fund or account
in the fund or account, and
11 at the end of each fiscal year, prepare a
report on each fund or account
12 showing the source and amount of all moneys
collected, earned, and re-
13 ceived by the fund or account and each
expenditure from the fund or
14 account.
15 Sec. 6. (a)
A municipality may expend an excise tax only for system
16 improvements for public facilities
identified in the capital improvements
17 plan; and system improvements for the
specific public facility type for
18 which the tax was collected.
19 (b)
(1) Except as provided in paragraph (2), a municipality shall
ex-
20 pend or encumber the excise tax for a
permissible use within six years of
21 their receipt.
22 (2) A
municipality may hold the taxes for longer than six years if it
23 identifies in writing an extraordinary and
compelling reason why the ex-
24 cise tax moneys should be held longer than
six years, and an absolute date
25 by which the excise tax moneys will be
expended.
26 Sec. 7. A
municipality shall refund any excise tax paid by a developer,
27 plus interest earned, when the developer
does not proceed with the de-
28 velopment activity and has filed a written
request for a refund, the taxes
29 have not been spent or encumbered, and no
impact has resulted.
30 Sec. 8. This act shall
take effect and be in force from and after its
31 publication in the statute book.