HOUSE BILL No. 2731

      An Act concerning governmental entities; relating to urban renewal; providing procedure
      for partial payment on construction contracts; amending K.S.A. 17-4759 and repealing
      the existing section.

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

    Section 1. K.S.A. 17-4759 is hereby amended to read as follows:
17-4759. (a) Whenever any municipality finds that there exist in such
municipality structures which are unfit for human use or habitation due
to dilapidation, defects increasing the hazards of fire, accidents or other
calamities, lack of ventilation, light or sanitary facilities, or due to other
conditions, including those set forth in subsection (c), rendering such
structures unsafe, insanitary or dangerous or detrimental to the health,
safety or morals, or otherwise inimical to the welfare of the residents of
such municipality, the municipality may require or cause the repair, clos-
ing, demolition or removal of such structures in the manner herein pro-
vided. ``Residential structure'' or ``dwelling'' means any building, or struc-
ture, or part thereof, used and occupied for human habitation or intended
to be so used, and includes any appurtenances belonging thereto or usu-
ally enjoyed therewith. ``Nonresidential structure'' means any structure
which is used for other than residential purposes, or a part of such struc-
ture, or a structure a part of which is used for other than residential
purposes and, where applicable, the premises on which such structures
are situated.

    (b) Upon the adoption of an ordinance finding that structural con-
ditions of the character described in subsection (a) exist within a munic-
ipality, the governing body of such municipality is hereby authorized to
adopt ordinances relating to the structures within such municipality which
are unfit for human use or habitation. Such ordinances shall include the
following provisions that:

    (1) A public officer be designated or appointed to exercise the powers
prescribed by the ordinances.

    (2) Whenever a petition is filed with the public officer or by at least
five residents of the municipality charging that any structure is unfit for
human use or habitation or whenever it appears to the public officer (,
on the officer's own motion), that any structure is unfit for human use or
habitation, the officer shall, if the officer's preliminary investigation dis-
closes a basis for such charges, shall issue and cause to be served upon
the owner, every mortgagee of record and all parties in interest in such
structure (, including persons in possession), a complaint stating the
charges. Such complaint shall contain a notice that: A hearing will be held
before the public officer or the officer's designated agent at a place
therein fixed not less than 10 days nor more than 30 days after the serving
of the complaint; that the owner, mortgagee and parties in interest shall
be given the right to file an answer to the complaint and to appear in
person, or otherwise, and give testimony at the place and time fixed in
the complaint; and that the rules of evidence prevailing in courts of law
or equity shall not be controlling in hearings before the public officer.

    (3) If, after such notice and hearing, the public officer determines
that the structure under consideration is unfit for human use or habita-
tion, the officer shall state in writing the findings of facts in support of
such determination and shall issue and cause to be served upon the owner
thereof an order which:

    (A) If the repair, alteration or improvement of the structure can be
made at a reasonable cost in relation to the value of the structure (the
ordinance of the municipality shall fix a certain percentage of such cost
as being reasonable for such purpose), Requires the owner, within the
time specified in the order, to repair, alter, or improve such structure to
render it fit for human use or habitation or to vacate and close the struc-
ture until conformance with ordinances established under this law if the
repair, alteration or improvement of the structure can be made at a rea-
sonable cost in relation to the replacement value of the structure. The
ordinance of the municipality shall fix a certain percentage of such cost
as being reasonable; or

    (B) if the repair, alteration or improvement of the structure cannot
be made at a reasonable cost in relation to the value of the structure (the
ordinance of the municipality shall fix a certain percentage of such cost
as being reasonable for such purpose), requires the owner, within the
time specified in the order, to remove or demolish such structure if the
repair, alteration or improvement of the structure cannot be made at a
reasonable cost in relation to the replacement value of the structure. The
ordinance of the municipality shall fix a certain percentage of such cost
as being reasonable.

    (4) If the owner fails to comply with an order to repair, alter or im-
prove or to vacate and close the structure, the public officer may cause
such structure to be repaired, altered or improved, or to be vacated and
closed.

    (5) If the owner fails to comply with an order to remove or demolish
the structure, the public officer may cause such structure to be removed
or demolished.

    (6) The amount of the cost of the repairs, alterations, improvements,
vacating and closing or removal or demolition by the public officer shall
be a lien against the real property upon which the cost was incurred. Such
lien shall include allowance of the officer's costs and the necessary attor-
ney's fees and may be foreclosed in judicial proceedings in the manner
provided or authorized by law for loans secured by liens on real property.
In lien of foreclosure, the costs, including the officer's costs, may be
assessed as a special assessment against the lot or parcel of land on which
the structure was located, in which case the city clerk, at the time of
certifying other city taxes, shall certify the unpaid portion of the costs and
the county clerk shall extend the same on the tax rolls of the county against
the lot or parcel of land. If the structure is removed or demolished by
the public officer, the officer shall sell the materials of such structure and
shall credit the proceeds of the sale against the cost of the removal or
demolition. If there is any balance remaining it shall be paid to the parties
entitled thereto as determined by proper judicial proceedings instituted
by the public officer after deducting the costs of such judicial proceedings,
including necessary attorneys' fees incurred therein, as determined by
the court.

    (c) An ordinance adopted by a municipality pursuant to this section
shall provide that the public officer may determine that a structure is
unfit for human use or habitation if the officer finds that conditions exist
in such structure which are dangerous or injurious to the health, safety
or morals of the occupants of such buildings or other residents of the
municipality or which have a blighting influence on properties in the area.
Such conditions may include, but are not limited to, the following: De-
fects increasing the hazards of fire, accident, or other calamities; lack of
adequate ventilation; air pollution; light or sanitary facilities; dilapidation;
disrepair; structural defects; uncleanliness; overcrowding; inadequate in-
gress and egress; dead and dying trees, limbs or other unsightly natural
growth or unsightly appearances that constitute a blight to adjoining prop-
erty, the neighborhood or the city; walls, sidings or exteriors of a quality
and appearance not commensurate with the character of the properties
in the neighborhood; unsightly stored or parked material, equipment,
supplies, machinery, trucks or automobiles or parts thereof; vermin in-
festation; inadequate drainage; or any violation of health, fire, building or
zoning regulations, or any other laws or regulations relating to the use of
land and the use and occupancy of buildings and improvements. Such
ordinance may provide additional standards to guide the public officer or
the officer's agents or employees in determining the fitness of a structure
for human use or habitation.

    (d) Complaints or orders issued by a public officer pursuant to an
ordinance adopted under this section shall be served upon persons either
personally or by registered or certified mail. If the location of such per-
sons is unknown and cannot be ascertained by the public officer in the
exercise of reasonable diligence, and the public officer makes an affidavit
to that effect, service may be made by publishing the complaint or order
once in a newspaper printed and published in the municipality or, in the
absence of such newspaper, in one printed and published in the county
and circulating in the municipality in which the structures are located. A
copy of such complaint or order shall be posted in a conspicuous place
on the premises affected by the complaint or order. A copy of such com-
plaint or order shall also shall be filed with the clerk of the district court
of the county in which the structure is located and the filing of the com-
plaint or order shall have the same force and effect as other lis pendens
notices provided by law.

    (e) Any person affected by an order issued by a public officer pur-
suant to this section may petition the district court of the county in which
the property is located for an injunction restraining the public officer from
carrying out the provisions of the order. Upon such petition, the court
may issue a temporary injunction restraining the public officer pending
the final disposition of the case. Such petition shall be filed not later than
30 days after the posting and service of the order of the public officer.
Hearings shall be held by the court on such petition as soon thereafter
as possible and shall be given preference over other matters before the
court. The court shall hear and determine the issues raised and shall enter
a final order or decree in the proceedings. In all such proceedings the
findings of the public officer as to facts, if supported by evidence, shall
be conclusive. Costs shall be in the discretion of the court. The remedies
herein provided shall be exclusive remedies and no person affected by an
order of a public officer pursuant to this section shall be entitled to re-
cover any damages for action taken pursuant to such order or because of
compliance by such person with such order.

    (f) An ordinance adopted by the governing body of the municipality
pursuant to this section may authorize the public officer to exercise such
powers as may be necessary or convenient to carry out and effectuate the
purposes and provisions of this section, including, in addition to others
herein granted, the power to:

    (1) Investigate the structure conditions in the municipality in order
to determine which structures therein are unfit for human use or habi-
tation;

    (2) administer oaths and affirmations, examine witnesses and receive
evidence;

    (3) enter upon premises for the purpose of making examinations, pro-
vided that such entries shall be made in such manner as to cause the least
possible inconvenience to the persons in possession, and obtain an order
for this purpose from a court of competent jurisdiction in the event entry
is denied or resisted;

    (4) appoint and fix the duties of such officers, agents and employees
as the officer deems necessary to carry out the purposes of such ordi-
nance; and

    (5) delegate any of the officer's functions and powers under such
ordinance to such officers, agents and employees as the officer may des-
ignate.

    (g) As soon as possible after adopting an ordinance under this section,
the governing body of any municipality adopting an ordinance under this
section shall as soon as possible thereafter shall prepare an estimate of
the annual expenses or costs to provide the equipment, personnel and
supplies necessary for periodic examinations and investigations of the
structures in such municipality to determine the fitness of such structures
for human use or habitation, and for the enforcement and administration
of its ordinance or ordinances adopted under this section.

    (h) Nothing in this section shall be construed to abrogate or impair
the powers of the courts or of any department of any municipality to
enforce any provisions of its charter or its ordinances or regulations, nor
to prevent or punish violations thereof and the powers conferred by this
section shall be in addition and supplemental to the powers conferred by
any other law.

    (i) Nothing in this section shall be construed to impair or limit in any
way the power of the municipality to define and declare nuisances and
to cause their removal or abatement, by summary proceedings or other-
wise.

    (j) Any municipality may, by ordinance adopted by its governing
body, may:

    (1) Prescribe minimum standards for the use and occupancy of any
type structure throughout the city,;

    (2) prevent the use or occupancy of any structure which is injurious
to the public health, safety, morals or welfare,; and

    (3) prescribe punishment for the violation of any provision of such
ordinance.

    New Sec. 2. Notwithstanding any other statutory provision of this
state, in any contract entered into by the state of Kansas or any depart-
ment or agency of the state, or any county, city, school district or any
other political subdivision of the state, for the construction, reconstruc-
tion, renovation, remodeling or repair of any building or structure or for
the construction, reconstruction, repair or maintenance of any highway,
road, bridge, underpass, viaduct, sewer or waterworks, or other improve-
ments to public property, the contracting public entity may include a
provision for retaining moneys until such time as the contract has been
satisfactorily completed, subject to the following:

    (a) With respect to any contract to which this act applies of
$1,000,000 or more, at any time before the public contracting entity re-
leases the contract funds it has retained, the public entity may approve a
request from the contractor that the retained funds be placed in an in-
terest bearing escrow account. It shall be the responsibility of the con-
tractor to establish the escrow account in a state or national bank, fed-
erally chartered savings and loan association, or federally chartered
savings bank with offices located in Kansas. All fees or charges for estab-
lishing and maintaining the escrow account shall be paid by the contrac-
tor. Prior to paying any retained funds into the escrow account the public
contracting entity shall enter into an appropriate escrow agreement with
the bank, savings and loan association or savings bank and the contractor.
The escrow agreement shall provide that the retained funds shall be re-
turned to the contracting public entity in the event the contracting public
entity notifies the bank, savings and loan association or savings bank that
the contractor has defaulted on the contract, that the retained funds shall
not be released to the contractor until authorized by the contracting pub-
lic entity and that the interest on the retained funds shall be paid to the
contractor as it accumulates.

    (b) With respect to any contract to which this act applies of
$1,000,000 or more, at any time after the contracting public entity has
retained any contract funds the contractor may request and upon approval
by the public contracting entity of such request the contractor may sub-
stitute securities of the following types for the retained contract funds:

    (1) United States treasury bonds, United States treasury notes,
United States treasury certificates of indebtedness or United States treas-
ury bills;

    (2) bonds or notes of the state of Kansas or any political subdivision
of the state; or

    (3) certificates of deposit from any state or national bank, federally
chartered savings and loan association, or federally chartered savings
bank, with offices located in Kansas.

    The value of the securities substituted must be at least equal to the
amount of the funds retained. The substituted securities shall be issued
in such a manner as to allow the contracting public entity to convert the
securities to cash in the event the contracting public entity makes a claim
against the contractor as a result of the contractor's default on the con-
tract. Upon substitution of appropriate securities the contracting public
entity shall pay the retained funds to the contractor within five working
days. When the contract is satisfactorily completed the substituted se-
curities will be returned to the contractor with any interest that has ac-
cumulated. In the event that the contracting public entity makes a claim
against the retained securities the entity shall retain only such substituted
securities of a sufficient value to cover the amount of the claim and return
the remaining substituted securities to the contractor plus any accumu-
lated interest. Substituted securities retained to cover the amount of the
claim made by the contracting public entity may be converted to cash by
the entity. All costs associated with substituting securities as provided in
this subsection shall be paid by the contractor. The contracting public
entity may require the contractor to establish and maintain an escrow
account with an escrow agent approved by the contracting public entity
for the purpose of effectuating the substitution of securities provided for
in this subsection.

    Sec. 3. K.S.A. 17-4759 is hereby repealed.

    Sec. 4. This act shall take effect and be in force from and after its
publication in the statute book.

I hereby certify that the above Bill originated in the House,
and passed that body

__________________________________

House concurred in
Senate amendments __________________________

__________________________________

Speaker of the House.

__________________________________

Chief Clerk of the House.

Passed the Senate
as amended __________________________

__________________________________

President of the Senate

__________________________________

Secretary of the Senate.

Aproved __________________________

__________________________________

Governor.