CHAPTER 17 HOUSE BILL No. 2631 (Amended by Chapter 169)
      An Act concerning tourism; special revenue bonds therefor; development of a motor speed-
      way; amending K.S.A. 12-1777, 79-3620, 79-3620b and 79-3710 and K.S.A. 1997 Supp.
      12-1770, 12-1771, 12-1773, 12-1774 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. 12-1770 is hereby amended to read as
follows: 12-1770. It is hereby declared to be the purpose of this act to
promote, stimulate and develop the general and economic welfare of the
state of Kansas and its communities and to assist in the development and
redevelopment of blighted areas and deteriorating areas which are not
yet blighted, but may be so in the future located within cities, environ-
mentally contaminated areas located within and without cities and, en-
terprise zones located within cities and major tourism areas as defined in
subsection (a)(1)(D) of K.S.A. 12-1774, and amendments thereto, thus
promoting the general welfare of the citizens of this state, by authorizing
cities to acquire certain property and to issue special obligation bonds
and full faith and credit tax increment bonds for the financing of rede-
velopment projects. It is further found and declared that the powers con-
ferred by this act are for public uses and purposes for which public money
may be expended and the power of eminent domain exercised. The ne-
cessity in the public interest for the provisions of this act is hereby de-
clared as a matter of legislative determination.

Sec. 2. 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) subsection (a)(1)(D) of K.S.A. 12-1774, and amend-
ments thereto. For the purpose of this subsection, the term ``blighted
area'' means an area which: (1) Because of the presence of a majority
of the following factors, substantially impairs or arrests the sound devel-
opment 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 number of deterio-
rated or deteriorating structures; (B) predominance of defective or in-
adequate street layout; (C) unsanitary or unsafe conditions; (D) deterio-
ration 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 plat-
ting or land uses; (I) the existence of conditions which endanger 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 environ-
mental agency as being environmentally contaminated to an extent that
requires a remedial investigation, feasibility study and remediation or
other similar state or federal action; or (3) previously was found by res-
olution 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). Any addition 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 establish-
ment of the district. The boundaries of any such district in a major tour-
ism area including an auto race track facility located in Wyandotte
county, shall, without regard to that portion of the district pertaining to
the auto race track facility, be as follows: Beginning at the intersection of
Interstate 70 and Interstate 435; West along Interstate 70 to 118th Street;
North along 118th Street to State Avenue; Northeasterly along proposed
relocated State Avenue to 110th Street; North along 110th Street to Par-
allel Parkway; East along Parallel Parkway to Interstate 435; South along
Interstate 435 to Interstate 70.

(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. Projects relating to environ-
mental investigation and remediation under subsection (i) shall be com-
pleted 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. A redevelopment project
in a major tourism area for an auto race track facility described in sub-
section (a)(1)(D) of K.S.A. 12-1774 shall be completed within 30 years
from the date the secretary of commerce and housing makes the finding
that the redevelopment project will create a major tourism area pursuant
to subsection (a)(1)(D) of K.S.A. 12-1774, and amendments thereto.

(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 except that: (1) Such maximum period of
special obligation bonds not payable from revenues described by subsec-
tion (a)(1)(D) of K.S.A. 12-1774, and amendments thereto issued to fi-
nance an auto race track facility shall not exceed 30 years; and (2) such
maximum period, if the governor determines and makes and submits a
finding to the speaker of the house of representatives and the president
of the senate that a maturity greater than 20 years, but in no event ex-
ceeding 30 years, is necessary for the economic feasibility of the financing
of an auto race track facility with special obligation bonds payable pri-
marily from revenues described by subsection (a)(1)(D) of K.S.A. 12-1774,
and amendments thereto, may be extended in accordance with such de-
termination and finding. For the purposes of this act, ``increment'' means
that amount of ad valorem taxes collected from real property located
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 estab-
lished, as determined under the provisions of K.S.A. 12-1775, and amend-
ments 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.

(k) If a city determines that revenues from sources other than prop-
erty taxes will be sufficient to pay any special obligation bonds issued to
finance a redevelopment project for an auto race track facility described
in subsection (a)(1)(D) of K.S.A. 12-1774 which the secretary of commerce
and housing makes a finding that such project will create a major tourism
area pursuant to subsection (a)(1)(D) of K.S.A. 12-1774, and amendments
thereto, all property, both real and personal, constituting an auto race
track facility described in subsection (a)(1)(D) of K.S.A. 12-1774 in such
redevelopment district shall be exempt from property taxation for a period
ending on the earlier of (1) the date which is 30 years after the date of
the finding by the secretary of commerce and housing with respect to such
major tourism area; or (2) the date on which no such special obligation
bonds issued to finance such auto race track facility in a major tourism
area remain outstanding.

(l) Any major tourism area may include an additional area not ex-
ceeding 400 acres of additional property, excluding roads and highways,
in addition to the property necessary for the auto race track facility upon
a finding by the governor that the development plan and each project
within such additional area will enhance the major tourism area. For the
development of each project within such additional area the city shall
select qualified developers pursuant to a request for proposals in accord-
ance with written official procedures approved by the governing body of
the city. Any project within such additional area that is financed in whole
or in part by special obligation bonds payable form revenues derived from
subsection (a)(1)(D) of K.S.A. 12-1774 shall not be entitled to any real
property tax abatements or the revenues described in K.S.A. 12-1775. Any
project within such additional area must be approved by the governor
and construction must be commenced by July 1, 2002. The city shall pre-
pare and submit annually to the governor, the secretary of commerce and
housing and the legislature by each October 1, commencing October 1,
1999 and continuing until October 1, 2002, a report describing the status
of any projects within such additional area. Any business located in Kan-
sas within 50 miles of a major tourism area that relocates into a major
tourism area shall not receive any of the benefits of K.S.A. 12-1770 et seq.

Sec. 3. K.S.A. 1997 Supp. 12-1774 is hereby amended to read as
follows: 12-1774. (a) (1) Any city shall have the power to issue special
obligation bonds in one or more series to finance the undertaking of any
redevelopment project in accordance with the provisions of this act. Such
special obligation bonds shall be made payable, both as to principal and
interest:

(A) From property tax increments allocated to, and paid into a special
fund of the city under the provisions of K.S.A. 12-1775, and amendments
thereto;

(B) from revenues of the city derived from or held in connection with
the undertaking and carrying out of any redevelopment project or projects
under this act;

(C) from any private sources, contributions or other financial assis-
tance from the state or federal government;

(D) from a pledge of a portion or all of the revenue received by the
city from transient guest, sales and use taxes collected pursuant to K.S.A.
12-1696 et seq., 79-3601 et seq., 79-3701 et seq. and 12-187 et seq., and
amendments thereto, and which are collected from taxpayers doing busi-
ness within that portion of the city's redevelopment district established
pursuant to K.S.A. 12-1771, and amendments thereto, occupied by a re-
development project if there first is a finding by the secretary of com-
merce and housing that the redevelopment project is of statewide as well
as local importance or will create a major tourism area for the state. In
making a finding that a redevelopment project is of statewide as well as
local importance, the secretary must conclude at least: (i) That capital
improvements costing not less than $300,000,000 will be built in the state
for such redevelopment project; and (ii) not less than 1,500 permanent
and seasonal employment positions as defined by K.S.A. 74-50,114, and
amendments thereto, will be created in the state by such redevelopment
project. In making a finding that a redevelopment project will create a
major tourism area within the state, the secretary must conclude at
least: (i) That capital improvements costing not less than $100,000,000
will be built in the state to construct a project for such major tourism
area; and (ii) that the project constructed will be an auto race track facility
designated within the standard industrial classification code 7948-0201.
An auto race track facility means (i) an auto race facility and facilities
directly related and necessary to the operation of an auto race track fa-
cility including, but not limited to, grandstands, suites and viewing areas,
concessions and souvenir facilities, catering facilities, visitor and retail
centers, signage and temporary hospitality facilities; but excluding (ii)
hotels, motels, restaurants and retail facilities not included in (i);

(E) (i) from a pledge of a portion or all increased revenue received
by the city from franchise fees collected from utilities and other busi-
nesses using public right-of-way within the redevelopment district; (ii)
from a pledge of a portion or all of the revenue received by the city from
sales taxes collected pursuant to K.S.A. 12-187, and amendments thereto;
or

(F) by any combination of these methods.

The city may pledge such revenue to the repayment of such special
obligation bonds prior to, simultaneously with, or subsequent to the is-
suance of such special obligation bonds.

(2) Bonds issued under paragraph (1) of subsection (a) shall not be
general obligations of the city, nor in any event shall they give rise to a
charge against its general credit or taxing powers, or be payable out of
any funds or properties other than any of those set forth in paragraph (1)
of this subsection and such bonds shall so state on their face.

(3) Bonds issued under the provisions of paragraph (1) of this sub-
section shall be special obligations of the city and are declared to be
negotiable instruments. They shall be executed by the mayor and clerk
of the city and sealed with the corporate seal of the city. All details per-
taining to the issuance of such special obligation bonds and terms and
conditions thereof shall be determined by ordinance of the city. All special
obligation bonds issued pursuant to this act and all income or interest
therefrom shall be exempt from all state taxes except inheritance taxes.
Such special obligation bonds shall contain none of the recitals set forth
in K.S.A. 10-112, and amendments thereto. Such special obligation bonds
shall, however, contain the following recitals, viz., the authority under
which such special obligation bonds are issued, they are in conformity
with the provisions, restrictions and limitations thereof, and that such
special obligation bonds and the interest thereon are to be paid from the
money and revenue received as provided in paragraph (1) of this subsec-
tion.

(b) (1) Subject to the provisions of paragraph (2) of this subsection,
any city shall have the power to issue full faith and credit tax increment
bonds to finance the undertaking of any redevelopment project in ac-
cordance with the provisions of K.S.A. 12-1770 et seq., and amendments
thereto other than a project determined by the secretary of commerce
and housing to be of statewide as well as local importance and to meet
the other criteria or will create a major tourism area as specified in K.S.A.
12-1774(a)(1)(D) subsection (a)(1)(D) of K.S.A. 12-1774, and amend-
ments thereto. Such full faith and credit tax increment bonds shall be
made payable, both as to principal and interest: (A) From the revenue
sources identified in paragraph (1)(A), (B), (C), (D) and (E) of subsection
(a) or by any combination of these sources; and (B) subject to the pro-
visions of paragraph (2) of this subsection, from a pledge of the city's full
faith and credit to use its ad valorem taxing authority for repayment
thereof in the event all other authorized sources of revenue are not suf-
ficient.

(2) Except as provided in paragraph (3) of this subsection, before the
governing body of any city proposes to issue full faith and credit tax in-
crement bonds as authorized by this subsection, the feasibility study re-
quired by K.S.A. 12-1771, and amendments thereto, shall demonstrate
that the benefits derived from the project will exceed the cost and that
the income therefrom will be sufficient to pay the costs of the project.
No full faith and credit tax increment bonds shall be issued unless the
governing body states in the resolution required by K.S.A. 12-1772, and
amendments thereto, that it may issue such bonds to finance the proposed
redevelopment project. The governing body may issue the bonds unless
within 60 days following the date of the public hearing on the proposed
redevelopment plan a protest petition signed by 3% of the qualified voters
of the city is filed with the city clerk in accordance with the provisions of
K.S.A. 25-3601 et seq., and amendments thereto. If a sufficient petition
is filed, no full faith and credit tax increment bonds shall be issued until
the issuance of the bonds is approved by a majority of the voters voting
at an election thereon. Such election shall be called and held in the man-
ner provided by the general bond law. The failure of the voters to approve
the issuance of full faith and credit tax increment bonds shall not prevent
the city from issuing special obligation bonds in accordance with K.S.A.
12-1774, and amendments thereto. No such election shall be held in the
event the board of county commissioners or the board of education de-
termines, as provided in K.S.A. 12-1771, and amendments thereto, that
the proposed redevelopment district will have an adverse effect on the
county or school district.

(3) As an alternative to paragraph (2) of this subsection, any city which
adopts a redevelopment plan but does not state its intent to issue full
faith and credit tax increment bonds in the resolution required by K.S.A.
12-1772, and amendments thereto, and has not acquired property in the
redevelopment project area may issue full faith and credit tax increment
bonds if the governing body of the city adopts a resolution stating its intent
to issue the bonds and the issuance of the bonds is approved by a majority
of the voters voting at an election thereon. Such election shall be called
and held in the manner provided by the general bond law. The failure of
the voters to approve the issuance of full faith and credit tax increment
bonds shall not prevent the city from issuing special obligation bonds
pursuant to paragraph (1) of subsection (a). Any redevelopment plan
adopted by a city prior to the effective date of this act in accordance with
K.S.A. 12-1772, and amendments thereto, shall not be invalidated by any
requirements of this act.

(4) During the progress of any redevelopment project in which the
city's costs will be financed, in whole or in part, with the proceeds of full
faith and credit tax increment bonds, the city may issue temporary notes
in the manner provided in K.S.A. 10-123, and amendments thereto, to
pay the city's cost for the project. Such temporary notes shall not be issued
and the city shall not acquire property in the redevelopment project area
until the requirements of paragraph (2) or (3) of this subsection, which-
ever is applicable, have been met.

(5) Full faith and credit tax increment bonds issued under this sub-
section shall be general obligations of the city and are declared to be
negotiable instruments. They shall be issued in accordance with the gen-
eral bond law. All such bonds and all income or interest therefrom shall
be exempt from all state taxes except inheritance taxes. The amount of
the full faith and credit tax increment bonds issued and outstanding which
exceeds 3% of the assessed valuation of the city shall be within the bonded
debt limit applicable to such city.

(6) Any city issuing special obligation bonds under the provisions of
this act may refund all or part of such issue pursuant to the provisions of
K.S.A. 10-116a, and amendments thereto.

Sec. 4. 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) Except for redevelopment projects satisfying the conditions of sub-
section (k) of K.S.A. 12-1771 hereof, all tangible taxable property located
within a redevelopment district 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 trea-
surer 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) Except for redevelopment projects satisfying the conditions of sub-
section (k) of K.S.A. 12-1771 hereof, beginning with the first payment of
taxes which are levied following the date of approval of any redevelop-
ment district established pursuant to K.S.A. 12-1771, 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 provisions 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 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 obliga-
tion 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 there-
after 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.

(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. 5. K.S.A. 1997 Supp. 12-1773 is hereby amended to read as
follows: 12-1773. (a) Any city which has adopted a redevelopment plan
in accordance with the provisions of this act may purchase or otherwise
acquire real property. Upon a 2/3 vote of the members of the governing
body thereof a city may acquire by condemnation any interest in real
property, including a fee simple title thereto, which it deems necessary
for or in connection with any redevelopment plan of an area located
within the redevelopment district. Prior to the exercise of such eminent
domain power, the city shall offer to the owner of any property which
will be subject to condemnation with respect to any redevelopment pro-
ject, other than one which includes an auto race track facility, compen-
sation in amount equal to the highest appraised valuation amount deter-
mined for property tax purposes by the county appraiser for any of the
three most recent years next preceding the year of condemnation, except
that, if in the year next preceding the year of condemnation any such
property had been damaged or destroyed by fire, flood, tornado, light-
ning, explosion or other catastrophic event, the amount offered should be
equal to the appraised valuation of the property which would have been
determined taking into account such damage or destruction unless such
property has been restored, renovated or otherwise improved. However
no city shall exercise such eminent domain power to acquire real property
in a conservation area. Any such city may exercise the power of eminent
domain in the manner provided by K.S.A. 26-501 et seq., and amend-
ments thereto. In addition to the compensation or damage amount finally
awarded thereunder with respect to any property subject to proceedings
thereunder as a result of the construction of an auto race track facility,
such city shall provide for the payment of an amount equal to 25% of
such compensation or damage amount. In addition to any compensation
or damages allowed under the eminent domain procedure act, such city
shall also provide for the payment of relocation assistance as provided in
K.S.A. 12-1777, and amendments thereto.

(b) Any property acquired by a city under the provisions of this act
may be sold or leased to any person, firm or corporation, hereinafter
referred to as a developer, in accordance with the redevelopment plan
and under such other conditions as may be agreed upon. Such city may
use the proceeds of special obligation bonds issued under K.S.A. 12-1774,
and amendments thereto, or full faith and credit tax increment bonds
issued under K.S.A. 12-1774, and amendments thereto, or any uncom-
mitted funds derived from those sources set forth in paragraph (1) of
subsection (a) of K.S.A. 12-1774, and amendments thereto, to implement
the redevelopment plan including, without limitation:

(1) Acquisition of property within the project area;

(2) payment of relocation assistance;

(3) site preparation;

(4) sanitary and storm sewers and lift stations;

(5) drainage conduits, channels and levees;

(6) street grading, paving, graveling, macadamizing, curbing, gutter-
ing and surfacing;

(7) street lighting fixtures, connection and facilities;

(8) underground gas, water, heating, and electrical services and con-
nections located within the public right-of-way;

(9) sidewalks and pedestrian underpasses or overpasses;

(10) drives and driveway approaches located within public right-of-
way;

(11) water mains and extensions;

(12) plazas and arcades;

(13) parking facilities;

(14) landscaping and plantings; fountains, shelters, benches, sculp-
tures, lighting, decorations and similar amenities; and

(15) all related expenses to redevelop and finance the redevelopment
project.

None of the proceeds from the sale of such bonds shall be used for the
construction of buildings or other structures to be owned by or to be
leased to such developer, except for proceeds of such bonds as may be
issued under subsection (a)(1)(D) of K.S.A. 12-1774, and amendments
thereto for a redevelopment project which includes an auto race track
facility and except for proceeds of such bonds as may be issued for a
redevelopment district including some or all of the land and buildings
comprising a state mental institution closed pursuant to section 2 of chap-
ter 219 of the 1995 Session Laws of Kansas.

Sec. 6. K.S.A. 12-1777 is hereby amended to read as follows: 12-
1777. Before any redevelopment project shall be initiated under this act
a relocation assistance plan shall be approved by the governing body pro-
posing to undertake the project. Such relocation assistance plan shall:

(a) Provide for relocation payments to be made to persons, families
and businesses who move from real property or who move personal prop-
erty from real property as a result of the acquisition of the real property
by the city in carrying out the provisions of this act. With respect to any
redevelopment project other than one which includes an auto race track
facility, such payments shall not be less than $500;

(b) provide that no persons or families residing in the redevelopment
district shall be displaced unless and until there is a suitable housing unit
available and ready for occupancy by such displaced person or family at
rents within their ability to pay. Such housing units shall be suitable to
the needs of such displaced persons or families and must be a decent,
safe, sanitary and otherwise standard dwelling; and

(c) provide for the payment of any damages sustained by a retailer,
as defined by K.S.A. 79-3702, and amendments thereto, by reason of the
liquidation of inventories necessitated by relocation.

New Sec. 7. (a) The city which is authorized to issue bonds pursuant
to the provisions of K.S.A. 12-1770 et seq. in order to finance a redevel-
opment project in a major tourism area described by subsection (a)(1)(D)
of K.S.A. 12-1774 shall obtain underwriting services required by the city
for the issuance of such bonds pursuant to written proposals received in
accordance with this section.

(b) Prior to the issuance of any such bonds after the effective date of
this act, the city shall publish notice of a request for proposals to provide
the underwriting services that are required by the city with regard to the
proposed bond issuance and shall mail requests for proposals to qualified
interested parties upon request for such notice. The city shall award con-
tracts for such underwriting services from the proposals received in ac-
cordance with the procedures and evaluation criteria adopted by the city
for such purpose. A city shall publish such notice in the official newspaper
of the city.

(c) Each city which is authorized to issue such bonds shall establish
written official procedures for obtaining underwriting services required
for the issuance of such bonds, including specifications for requests for
proposals and criteria for evaluation of proposals on a competitive basis.
The proposal evaluation criteria shall include factors based on cost, ca-
pacity to provide the required services, qualifications and experience.

Sec. 8. K.S.A. 79-3620 is hereby amended to read as follows: 79-
3620. (a) All revenue collected or received by the director of taxation
from the taxes imposed by this act shall be deposited daily with the state
treasurer. The state treasurer shall credit all revenue received from this
act, less amounts withheld as provided in subsection (b) and amounts
credited as provided in subsection (c) and (d), to the state general fund.

(b) A refund fund, designated as ``sales tax refund fund'' not to exceed
$100,000 shall be set apart and maintained by the director from sales tax
collections and estimated tax collections and held by the state treasurer
for prompt payment of all sales tax refunds including refunds authorized
under the provisions of K.S.A. 79-3635, and amendments thereto. Such
fund shall be in such amount, within the limit set by this section, as the
director shall determine is necessary to meet current refunding require-
ments under this act. In the event such fund as established by this section
is, at any time, insufficient to provide for the payment of refunds due
claimants thereof, the director shall certify the amount of additional funds
required to the director of accounts and reports who shall promptly trans-
fer the required amount from the state general fund to the sales tax refund
fund, and notify the state treasurer, who shall make proper entry in the
records.

(c) The state treasurer shall credit 5/98 of the revenue collected or
received from the tax imposed by K.S.A. 79-3603, and amendments
thereto, at the rate of 4.9%, and deposited as provided in subsection (a),
exclusive of amounts credited pursuant to subsection (d), in the state
highway fund.

(d) The state treasurer shall credit all revenue collected or received
from the tax imposed by K.S.A. 79-3603, and amendments thereto, as
certified by the director, from taxpayers doing business within that por-
tion of a redevelopment district occupied by a redevelopment project that
was determined by the secretary of commerce and housing to be of state-
wide as well as local importance and to meet the other criteria or will
create a major tourism area for the state as specified in K.S.A. 12-
1774(a)(1)(D) subsection (a)(1)(D) of K.S.A. 12-1774, and amendments
thereto, to the city bond finance fund, which fund is hereby created. The
provisions of this subsection shall expire when the total of all amounts
credited hereunder and under subsection (d) of K.S.A. 79-3710, and
amendments thereto, is sufficient to retire the special obligation bonds
issued for the purpose of financing all or a portion of the construction
costs of such redevelopment project.

Sec. 9. K.S.A. 79-3620b is hereby amended to read as follows: 79-
3620b. Moneys credited to the city bond finance fund in accordance with
the provisions of subsections (d) of K.S.A. 79-3620 and (d) of K.S.A.
79-3710, and amendments thereto, shall be distributed biannually to cities
which have issued special obligation bonds to finance, in whole or in part,
a redevelopment project which was determined by the secretary of com-
merce and housing to be of statewide as well as local importance and to
meet the other criteria or will create a major tourism area for the state
as specified in K.S.A. 12-1774(a)(1)(D) subsection (a)(1)(D) of K.S.A. 12-
1774, and amendments thereto. The state treasurer shall make such bi-
annual distributions on such dates as mutually agreed to by the city and
the state treasurer. The total of all distributions under this section shall
not exceed an amount determined to be sufficient to retire the principal
and interest payable on such special obligation bonds. Moneys paid to
cities hereunder shall be deposited in a special fund of the city to pay the
costs described herein.

Sec. 10. K.S.A. 79-3710 is hereby amended to read as follows: 79-
3710. (a) All revenue collected or received by the director under the
provisions of this act shall be deposited daily with the state treasurer and
the state treasurer shall credit the same, less amounts set apart as pro-
vided in subsection (b) and amounts credited as provided in subsection
(c) and (d), to the general revenue fund of the state.

(b) A revolving fund, designated as ``compensating tax refund fund''
not to exceed $10,000 shall be set apart and maintained by the director
from compensating tax collections and estimated tax collections and held
by the state treasurer for prompt payment of all compensating tax refunds.
Such fund shall be in such amount, within the limit set by this section,
as the director shall determine is necessary to meet current refunding
requirements under this act.

(c) The state treasurer shall credit 5/98 of the revenue collected or
received from the tax imposed by K.S.A. 79-3703, and amendments
thereto, at the rate of 4.9%, and deposited as provided in subsection (a),
exclusive of amounts credited pursuant to subsection (d), in the state
highway fund.

(d) The state treasurer shall credit all revenue collected or received
from the tax imposed by K.S.A. 79-3703, and amendments thereto, as
certified by the director, from taxpayers doing business within that por-
tion of a redevelopment district occupied by a redevelopment project that
was determined by the secretary of commerce and housing to be of state-
wide as well as local importance and to meet the other criteria or will
create a major tourism area for the state as specified in K.S.A. 12-
1774(a)(1)(D) subsection (a)(1)(D) of K.S.A. 12-1774, and amendments
thereto, to the city bond finance fund created by subsection (d) of K.S.A.
79-3620, and amendments thereto. The provisions of this subsection shall
expire when the total of all amounts credited hereunder and under sub-
section (d) of K.S.A. 79-3620, and amendments thereto, is sufficient to
retire the special obligation bonds issued for the purpose of financing all
or a portion of the construction costs of such redevelopment project.

Sec. 11. K.S.A. 12-1777, 79-3620, 79-3620b and 79-3710 and K.S.A.
1997 Supp. 12-1770, 12-1771, 12-1773, 12-1774 and 12-1775 are hereby
repealed.

Sec. 12. This act shall take effect and be in force from and after its
publication in the Kansas register.

Approved February 25, 1998

Published in the Kansas Registers February 26, 1998

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