CHAPTER 110 SENATE BILL No. 672 (Amended by Chapter 169)
      An Act concerning tax increment financing; relating to the period of time by which a project
      shall be completed and the determination of the assessed value of the property located
      in a redevelopment district; amending K.S.A. 12-1776 and K.S.A. 1997 Supp. 12-1771
      and 12-1775 and repealing the existing sections.

Be it enacted by the Legislature of the State of Kansas:

Section 1. K.S.A. 1997 Supp. 12-1771 is hereby amended to read as
follows: 12-1771. (a) No city shall exercise any of the powers conferred
by K.S.A. 12-1770 et seq., and amendments thereto, unless the governing
body of such city has adopted a resolution finding that the specific project
area sought to be redeveloped is a blighted area, a conservation area, a
major tourism area as defined in K.S.A. 12-774 12-1774 and amendments
thereto or was designated prior to July 1, 1992, as an enterprise zone
pursuant to K.S.A. 12-17,110 prior to its repeal, and the conservation,
development or redevelopment of such area is necessary to promote the
general and economic welfare of such city. Enterprise zones designated
prior to July 1, 1992, may be enlarged by the city to an area not exceeding
25% of the city's land area upon a finding by the secretary of the de-
partment of commerce and housing that a redevelopment project pro-
posed by the city which requires the enlargement is of statewide impor-
tance and that it will meet the criteria specified in K.S.A. 12-1774
(a)(1)(D), and amendments thereto. For the purpose of this subsection,
the term ``blighted area'' means an area which: (1) Because of the pres-
ence of a majority of the following factors, substantially impairs or arrests
the sound development and growth of the municipality or constitutes an
economic or social liability or is a menace to the public health, safety,
morals or welfare in its present condition and use: (A) A substantial num-
ber of deteriorated or deteriorating structures; (B) predominance of de-
fective or inadequate street layout; (C) unsanitary or unsafe conditions;
(D) deterioration of site improvements; (E) diversity of ownership; (F)
tax or special assessment delinquency exceeding the fair value of the land;
(G) defective or unusual conditions of title; (H) improper subdivision or
obsolete platting or land uses; (I) the existence of conditions which en-
danger life or property by fire and other causes; or (J) conditions which
create economic obsolescence; or (2) has been identified by any state or
federal environmental agency as being environmentally contaminated to
an extent that requires a remedial investigation, feasibility study and re-
mediation or other similar state or federal action; or (3) previously was
found by resolution of the governing body to be a slum or a blighted area
under K.S.A. 17-4742 et seq., and amendments thereto.

For the purpose of this subsection, conservation area means any im-
proved area within the corporate limits of a city in which 50% or more
of the structures in the area have an age of 35 years or more, which area
is not yet blighted, but may become a blighted area due to the existence
of a combination of two or more of the following factors: (i) Dilapidation,
obsolescence or deterioration of the structures; (ii) illegal use of individual
structures; (iii) the presence of structures below minimum code stan-
dards; (iv) building abandonment; (v) excessive vacancies; (vi) overcrowd-
ing of structures and community facilities; or (vii) inadequate utilities and
infrastructure. Not more than 15% of the land area of a city may be found
to be a conservation area.

(b) The powers conferred upon cities under the provisions of K.S.A.
12-1770 et seq., and amendments thereto, shall be exercised by cities, as
determined by resolution adopted pursuant to K.S.A. 12-1772, and
amendments thereto, (1) in enterprise zones designated prior to July 1,
1992, including any area added to such enterprise zone after July 1, 1992,
pursuant to subsection (a), (2) in blighted areas of cities and counties
described by subsection (a)(2), (3) in conservation areas of cities, (4) in
major tourism areas as defined in K.S.A. 12-1774 and amendments
thereto or (5) in blighted areas of cities, as determined by resolution
adopted pursuant to K.S.A. 17-4742 et seq., and amendments thereto.

(c) Within that portion of the city described in subsection (b), the
governing body of a city may establish a district to be known as a ``rede-
velopment district''. Within that portion of a city and county described in
subsection (b) excluding paragraph (3) of subsection (b), the governing
body of the city, upon written consent of the board of county commis-
sioners, may establish a district inclusive of land outside the boundaries
of the city to be known as a redevelopment district. In all such cases, the
board of county commissioners, prior to providing written consent, shall
be subject to the same procedure for public notice and hearing as is
required of a city pursuant to subsection (d) for the establishment of a
redevelopment district. One or more redevelopment projects may be un-
dertaken by a city within a redevelopment district after such redevelop-
ment district has been established in the manner provided by subsection
(d).

(d) Any city proposing to establish a redevelopment district shall
adopt a resolution stating that the city is considering the establishment
of a redevelopment district. Such resolution shall:

(1) Give notice that a public hearing will be held to consider the
establishment of a redevelopment district and fix the date, hour and place
of such public hearing;

(2) describe the proposed boundaries of the redevelopment district;

(3) describe a proposed comprehensive plan that identifies all of the
proposed redevelopment project areas and that identifies in a general
manner all of the buildings and facilities that are proposed to be con-
structed or improved in each redevelopment project area;

(4) state that a description and map of the proposed redevelopment
district are available for inspection at a time and place designated;

(5) state that the governing body will consider findings necessary for
the establishment of a redevelopment district.

Notice shall be given as provided in subsection (c) of K.S.A. 12-1772,
and amendments thereto.

(e) Upon the conclusion of the public hearing, the governing body
may adopt a resolution to make any findings required by subsection (a)
and may establish the redevelopment district by ordinance. Such reso-
lution shall contain a comprehensive plan that identifies all of the pro-
posed redevelopment project areas and identifies in a general manner all
of the buildings and facilities that are proposed to be constructed or im-
proved in each redevelopment project area. The boundaries of such dis-
trict shall not include any area not designated in the notice required by
subsection (d). Subject to the provisions of section 4 of this act, any ad-
dition of area to the redevelopment district or any substantial change to
the comprehensive plan shall be subject to the same procedure for public
notice and hearing as is required for the establishment of the district.

(f) No privately owned property subject to ad valorem taxes shall be
acquired and redeveloped under the provisions of K.S.A. 12-1770 et seq.,
and amendments thereto, if the board of county commissioners or the
board of education levying taxes on such property determines by reso-
lution adopted within 30 days following the conclusion of the hearing for
the establishment of the redevelopment district required by subsection
(d) that the proposed redevelopment district will have an adverse effect
on such county or school district.

(g) Any redevelopment plan undertaken within the redevelopment
district may be in separate development stages. Each plan shall be
adopted according to the provisions of K.S.A. 12-1772, and amendments
thereto, and shall fix a date for completion. Except as provided herein,
any project shall be completed within 20 years from the date of the es-
tablishment of the redevelopment district of transmittal of the redevel-
opment plan or a revision of the plan, as authorized by section 4, to the
county pursuant to K.S.A. 12-1776, and amendments thereto. Projects
relating to environmental investigation and remediation under subsection
(i) shall be completed within 20 years from the date a city enters into a
consent decree agreement with the Kansas department of health and
environment or the United States environmental protection agency.

(h) Any increment in ad valorem property taxes resulting from a re-
development district undertaken in accordance with the provisions of this
act, shall be apportioned to a special fund for the payment of the cost of
the redevelopment project, including the payment of principal and inter-
est on any special obligation bonds or full faith and credit tax increment
bonds issued to finance such project pursuant to this act and may be
pledged to the payment of principal and interest on such bonds. The
maximum maturity on bonds issued to finance projects pursuant to this
act shall not exceed 20 years. For the purposes of this act, ``increment''
means that amount of ad valorem taxes collected from real property lo-
cated within the redevelopment district that is in excess of the amount
which is produced from such property and attributable to the assessed
valuation of such property prior to the date the redevelopment district
was established, as determined under the provisions of K.S.A. 12-1775
redevelopment plan or a revision of the plan, as authorized by section 4,
is transmitted to the county pursuant to K.S.A. 12-1776, and amendments
thereto.

(i) The governing body of a city, in contracts entered into with the
Kansas department of health and environment or the United States en-
vironmental protection agency, may pledge increments receivable in fu-
ture years to pay costs directly relating to the investigation and remedi-
ation of environmentally contaminated areas. The provisions in such
contracts pertaining to pledging increments in future years shall not be
subject to K.S.A. 10-1101 et seq. or 79-2925 et seq., and amendments
thereto.

(j) Before any redevelopment project is undertaken, a comprehensive
feasibility study, which shows the benefits derived from such project will
exceed the costs and that the income therefrom will be sufficient to pay
for the project shall be prepared. Such feasibility study shall be an open
public record.

Sec. 2. K.S.A. 1997 Supp. 12-1775 is hereby amended to read as
follows: 12-1775. (a) For the purposes of this act, the term ``taxing sub-
division'' shall include the county, the city, the unified school district and
any other taxing subdivision levying real property taxes, the territory or
jurisdiction of which includes any currently existing or subsequently cre-
ated redevelopment district. The term ``real property taxes'' includes all
taxes levied on an ad valorem basis upon land and improvements thereon.

(b) All tangible taxable property located within a redevelopment dis-
trict shall be assessed and taxed for ad valorem tax purposes pursuant to
law in the same manner that such property would be assessed and taxed
if located outside such district, and all ad valorem taxes levied on such
property shall be paid to and collected by the county treasurer in the
same manner as other taxes are paid and collected. Except as otherwise
provided in this section, the county treasurer shall distribute such taxes
as may be collected in the same manner as if such property were located
outside a redevelopment district. Each redevelopment district established
under the provisions of this act shall constitute a separate taxing unit for
the purpose of the computation and levy of taxes.

(c) Beginning with the first payment of taxes which are levied follow-
ing the date of approval of any redevelopment district established the
redevelopment plan or revision of the plan, as authorized by section 4, to
the county pursuant to K.S.A. 12-1771 12-1776, and amendments thereto,
real property taxes received by the county treasurer resulting from taxes
which are levied subject to the provisions of this act by and for the benefit
of a taxing subdivision, as herein defined, on property located within such
redevelopment district constituting a separate taxing unit under the pro-
visions of this section, shall be divided as follows:

(1) From the taxes levied each year subject to the provisions of this
act by or for each of the taxing subdivisions upon property located within
a redevelopment district constituting a separate taxing unit under the
provisions of this act, the county treasurer first shall allocate and pay to
each such taxing subdivision all of the real property taxes collected which
are produced from that portion of the current assessed valuation of such
real property located within such separate taxing unit which is equal to
the total assessed value of such real property on the date of the estab-
lishment of the redevelopment district.

(2) Any real property taxes produced from that portion of the current
assessed valuation of real property within the redevelopment district con-
stituting a separate taxing unit under the provisions of this section in
excess of an amount equal to the total assessed value of such real property
on the effective date of the establishment of the district January 1 in the
year preceding transmittal of the redevelopment plan or a revision of the
plan, as authorized by section 4, to the county pursuant to K.S.A. 12-
1776, and amendments thereto, shall be allocated and paid by the county
treasurer to the treasurer of the city and deposited in a special fund of
the city to pay the cost of redevelopment projects including the payment
of principal of and interest on any special obligation bonds or full faith
and credit tax increment bonds issued by such city to finance, in whole
or in part, such redevelopment project. When such obligation bonds and
interest thereon have been paid, all moneys thereafter received from real
property taxes within such redevelopment district shall be allocated and
paid to the respective taxing subdivisions in the same manner as are other
ad valorem taxes. If such obligation bonds and interest thereon have been
paid before the completion of a project, the city may continue to use such
moneys for any purpose authorized by this act until such time as the
project is completed, but for not to exceed 20 years from the date of the
establishment of the redevelopment district transmittal to the county of
the redevelopment plan or a revision of the plan as authorized pursuant
to section 4.

(d) In any redevelopment plan or in the proceedings for the issuing
of any special obligation bonds or full faith and credit tax increment bonds
by the city to finance a redevelopment project, the property tax increment
portion of taxes provided for in paragraph (2) of subsection (c) may be
irrevocably pledged for the payment of the principal of and interest on
such obligation bonds, subject to the provisions of subsection (h) of K.S.A.
12-1771, and amendments thereto. A city may adopt a redevelopment
plan in which only a specified percentage of the tax increment realized
from taxpayers in the redevelopment district are pledged to the redevel-
opment project. The county treasurer shall allocate the specified per-
centage of the tax increment to the treasurer of the city for deposit in the
special fund of the city to finance the cost of redevelopment projects if
the city has other available revenues and pledges the revenues to the
redevelopment project in lieu of the tax increment. Any portion of such
tax increment not allocated to the city for the redevelopment project shall
be allocated and paid in the same manner as other ad valorem taxes.

Sec. 3. K.S.A. 12-1776 is hereby amended to read as follows: 12-
1776. (a) After the adoption by the city governing body of a redevelop-
ment plan which contains the provisions authorized by K.S.A. 12-1775,
and amendments thereto, the clerk of the city shall transmit a copy of the
description of the land within the redevelopment district, a copy of the
ordinance adopting the plan and a map or plat indicating the boundaries
of the district to the clerk, assessor and treasurer of the county in which
the district is located and to the governing bodies of the county and school
district which levy taxes upon any property in the district. Such documents
shall be transmitted as promptly as practicable following the adoption or
modification of the plan or a revision of the plan, as authorized by section
4, but in any event, on or before the January 1st 1 next following the
adoption or modification of the plan of the year in which the increment
is first allocated to the taxing subdivision pursuant to K.S.A. 12-1775, and
amendments thereto.

(b) For any year in which taxes are to be paid to the special fund
established under subsection (c)(2) of K.S.A. 12-1775, and amendments
thereto, any increase in assessed valuation of taxable tangible real prop-
erty within the redevelopment district in excess of an amount equal to
the total assessed value of such real property on the date of the estab-
lishment of the redevelopment district shall not be considered by any
taxing subdivision in computing any debt limitation or for any other pur-
pose except for the levy of taxes and in determining the amount to be
paid to such special fund.

(c) The appraiser of any county in which a redevelopment district is
authorized by a city shall certify the amount of such increase in assessed
valuation of real and personal property within the redevelopment district
to the county clerk on or before July 1 of each year.

New Sec. 4. (a) The provisions of this section shall apply to all cities
in which a redevelopment plan has been dormant and a tax increment
has not been received within three years or more following adoption of
the ordinance establishing a redevelopment plan pursuant to subsection
(e) of K.S.A. 12-1772, and amendments thereto, and the boundaries of
such plan include a portion of the land subject to the jurisdiction of the
capitol area plaza authority established under the provisions of K.S.A. 75-
2237, and amendments thereto.

(b) Such city may, by ordinance of the governing body passed by a
two-thirds vote, revise the project areas of a previously approved but
dormant redevelopment plan into separate stages. Such an ordinance es-
tablishing one or more separate stages shall fix a date of completion and
shall adopt, by reference, a revised plan which shall include: (1) a sum-
mary of a new comprehensive feasibility study required by K.S.A. 12-
1771, and amendments thereto; (2) a description and map of the project
area; (3) a detailed description of the buildings and facilities proposed to
be constructed or improved in such project area; and (4) any other in-
formation the governing body deems necessary to advise the public. A
certified copy of such revised plan shall be transmitted to the county
pursuant to K.S.A. 12-1776 and amendments thereto and to the capitol
area plaza authority. The revised plan shall be an open public record.

Sec. 5. K.S.A. 12-1776 and K.S.A. 1997 Supp. 12-1771 and 12-1775
are hereby repealed.

Sec. 6. This act shall take effect and be in force from and after its
publication in the Kansas register.

Approved April 15, 1998

Published in the Kansas Registers April 23, 1998

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