Substitute for SENATE BILL No. 675

An Act concerning economic development; relating to certain projects of statewide as well as local importance; authorizing the issuance of bonds by the Kansas development finance authority therefor; prescribing certain other provisions therefor; amending K.S.A. 74-8907, 79-3603 and 79-3703 and K.S.A. 1997 Supp. 12-189, 12-192, 12-195, 12-1771 as amended by section 1 of 1998 House Bill No. 3036, 74-8902 and 74-8905 and repealing the existing sections.

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

    Section 1. K.S.A. 1997 Supp. 74-8902 is hereby amended to read as
follows: 74-8902. The following words or terms used in this act shall have
the following meanings unless a different meaning clearly appears from
the context:

    (a) ``Act'' means the Kansas development finance authority act.

    (b) ``Authority'' means the Kansas development finance authority cre-
ated by K.S.A. 74-8903, and amendments thereto.

    (c) ``Agricultural business enterprises'' means facilities supporting or
utilized in the operation of farms, ranches and other agricultural, aqua-
cultural or silvicultural commodity producers and services provided in
conjunction with the foregoing.

    (d) ``Board of directors'' means the board of directors of the authority
created by K.S.A. 74-8903, and amendments thereto.

    (e) ``Bonds'' means any bonds, notes, debentures, interim certificates,
grant and revenue anticipation notes, interest in a lease, lease certificate
of participation or other evidences of indebtedness, whether or not the
interest on which is subject to federal income taxation, issued by the
authority pursuant to this act.

    (f) ``Capital improvements'' means any physical public betterment or
improvement or any preliminary plans, studies or surveys relative thereto;
land or rights in land, including, without limitations, leases, air rights,
easements, rights-of-way or licenses; and any furnishings, machinery, ve-
hicles, apparatus or equipment for any public betterment or improve-
ment.

    (g) ``Construct'' means to acquire or build, in whole or in part, in such
manner and by such method as the authority shall determine to be in the
public interest and necessary to accomplish the purposes of and authority
set forth in this act.

    (h) ``Loans'' means loans made for the purposes of financing any of
the activities authorized within this act, including loans made to financial
institutions for funding or as security for loans made for accomplishing
any of the purposes of this act and reserves and expenses appropriate or
incidental thereto.

    (i) ``Educational facilities'' means real, personal and mixed property
of any and every kind intended by an educational institution in further-
ance of its educational program.

    (j) ``Facilities'' means any real property, personal property or mixed
property of any and every kind.

    (k) ``Health care facilities'' means facilities for furnishing physical or
mental health care.

    (l) ``Housing development'' means any work or undertaking, whether
new construction or rehabilitation, which is designed and financed pur-
suant to the provisions of this act for the primary purpose of providing
dwelling accommodations for elderly persons and families of low income
in need of housing.

    (m) ``Industrial enterprise'' means facilities for manufacturing, pro-
ducing, processing, assembling, repairing, extracting, warehousing, dis-
tributing, communications, computer services, transportation, corporate
and management offices and services provided in connection with any of
the foregoing, in isolation or in any combination, that involve the creation
of new or additional employment or the retention of existing employment.

    (n) ``Political subdivision'' means political or taxing subdivisions of the
state, including municipal and quasi-municipal corporations, boards, com-
missions, authorities, councils, committees, subcommittees and other
subordinate groups or administrative units thereof, receiving or expend-
ing and supported, in whole or in part, by public funds.

    (o) ``Pooled bonds'' means bonds of the authority, the interest on
which is subject to federal income taxation, which are issued for the pur-
pose of acquiring bonds issued by two or more political subdivisions.

    (p) ``Project of statewide as well as local importance'' means a project
as to which the secretary of commerce and housing has made a finding
that at least: (i) Capital improvements costing not less than $300,000,000
or, if constructed in a county which according to the 1990 decennial cen-
sus contained a population of 25,000 or less, costing not less than
$5,000,000 will be built in the state for such project; (ii) not less than
1,500 or, if created in a county which according to the 1990 decennial
census contained a population of 25,000 or less, not less than 150 per-
manent and seasonal employment positions as defined by K.S.A. 74-
50,114, and amendments thereto, will be created in the state by such
project; (iii) is to be located outside the city limits of any city; and (iv) is
to be located at a site designated as a federal enclave as of January 1,
1998.

    (p) (q) ``State'' means the state of Kansas.

    (q) (r) ``State agency'' means any office, department, board, commis-
sion, bureau, division, public corporation, agency or instrumentality of
this state.

    Sec. 2. K.S.A. 1997 Supp. 74-8905 is hereby amended to read as
follows: 74-8905. (a) The authority is hereby authorized and empowered
to issue bonds, either for a specific activity or on a pooled basis for a series
of related or unrelated activities or projects duly authorized by a political
subdivision or group of political subdivisions of the state in such amounts
as shall be determined by the authority for the purpose of financing pro-
jects of statewide as well as local importance as defined pursuant to K.S.A.
12-1744 and amendments thereto, capital improvement facilities, educa-
tional facilities, health care facilities and housing developments. Nothing
in this act shall be construed to authorize the authority to issue bonds or
use the proceeds thereof to (1) purchase, condemn, or otherwise acquire
a utility plant or distribution system owned or operated by a regulated
public utility or (2) finance any capital improvement facilities, educational
facilities, or health care facilities which are authorized under the laws of
the state to be financed by the issuance of general obligation or utility
revenue bonds of a political subdivision, except that the acquisition by
the authority of general obligation or utility revenue bonds issued by
political subdivisions with the proceeds of pooled bonds shall not violate
the provisions of the foregoing. Nothing in this subsection (a) shall pro-
hibit the issuance of bonds by the authority when any statute specifically
authorizes the issuance of bonds by the authority or approves any activity
or project of a state agency for purposes of authorizing any such issuance
of bonds in accordance with this section and provides an exemption from
the provisions of this subsection (a).

    (b) The authority is hereby authorized and empowered to issue bonds
for activities and projects of state agencies as requested by the secretary
of administration. No bonds may be issued pursuant to this act for any
activity or project of a state agency unless the activity or project either
has been approved by an appropriation or other act of the legislature or
has been approved by the state finance council acting on this matter which
is hereby characterized as a matter of legislative delegation and subject
to the guidelines prescribed in subsection (c) of K.S.A. 75-3711c and
amendments thereto. When requested to do so by the secretary of ad-
ministration, the authority is further authorized and empowered to issue
bonds for the purpose of refunding, whether at maturity or in advance of
maturity, any outstanding bonded indebtedness of any state agency. The
revenues of any state agency which are pledged as security for any bonds
of such state agency which are refunded by refunding bonds of the au-
thority may be pledged to the authority as security for the refunding
bonds.

    (c) The authority is hereby authorized and empowered to issue bonds
for the purpose of financing industrial enterprises, agricultural business
enterprises, educational facilities, health care facilities and housing de-
velopments, or any combination of such facilities, or any interest in facil-
ities, including without limitation leasehold interests in and mortgages on
such facilities. No less than 30 days prior to the issuance of any bonds
authorized under this act with respect to any project or activity which is
to be undertaken for the direct benefit of any person or entity which is
not a state agency or a political subdivision, written notice of the intention
of the authority to provide financing and issue bonds therefor shall be
given by the president of the authority to the governing body of the city
in which the project or activity is to be located, or, if the project or activity
is not proposed to be located within a city, such notice shall be given to
the governing body of the county. No bonds for the financing of the
project or activity shall be issued by the authority for a one-year period
if, within 15 days after the giving of such notice, the governing body of
the political subdivision in which the project or activity is proposed to be
located shall have duly enacted an ordinance or resolution stating express
disapproval of the project or activity and shall have notified the president
of the authority of such disapproval.

    (d) The authority is hereby authorized and empowered to issue bonds
for the purpose of establishing and funding one or more series of venture
capital funds in such principal amounts, at such interest rates, in such
maturities, with such security, and upon such other terms and in such
manner as is approved by resolution of the authority. The proceeds of
such bonds not placed in a venture capital fund or used to pay or reim-
burse organizational, offering and administrative expenses and fees nec-
essary to the issuance and sale of such bonds shall be invested and rein-
vested in such securities and other instruments as shall be provided in
the resolution under which such bonds are issued. Moneys in a venture
capital fund shall be used to make venture capital investments in new,
expanding or developing businesses, including, but not limited to, equity
and debt securities, warrants, options and other rights to acquire such
securities, subject to the provisions of the resolution of the authority. The
authority shall establish an investment policy with respect to the invest-
ment of the funds in a venture capital fund not inconsistent with the
purposes of this act. The authority shall enter into an agreement with a
management company experienced in venture capital investments to
manage and administer each venture capital fund upon terms not incon-
sistent with the purposes of this act and such investment policy. The
authority may establish an advisory board to provide advice and consulting
assistance to the authority and the management company with respect to
the management and administration of each venture capital fund and the
establishment of its investment policy. All fees and expenses incurred in
the management and administration of a venture capital fund not paid or
reimbursed out of the proceeds of the bonds issued by the authority shall
be paid or reimbursed out of such venture capital fund.

    (e) The authority is hereby authorized and empowered to issue bonds
in one or more series for the purpose of financing a project of statewide
as well as local importance in connection with a redevelopment plan that
is approved by the authority in accordance with sections 4 and 5, and
amendments thereto.

    (e) (f) The authority is hereby authorized and empowered to use the
proceeds of any bond issues herein authorized, together with any other
available funds, for venture capital investments or for purchasing, leasing,
constructing, restoring, renovating, altering or repairing facilities as
herein authorized, for making loans, purchasing mortgages or security
interests in loan participations and paying all incidental expenses there-
with, paying expenses of authorizing and issuing the bonds, paying inter-
est on the bonds until revenues thereof are available in sufficient amounts,
purchasing bond insurance or other credit enhancements on the bonds,
and funding such reserves as the authority deems necessary and desirable.
All moneys received by the authority, other than moneys received by
virtue of an appropriation, are hereby specifically declared to be cash
funds, restricted in their use and to be used solely as provided herein.
No moneys of the authority other than moneys received by appropriation
shall be deposited with the state treasurer.

    (f) (g) Any time the authority is required to publish a notification
pursuant to the tax equity and fiscal responsibility act of 1982, the au-
thority shall further publish such notification in the Kansas register.

    (g) (h) Any time the authority issues bonds pursuant to this section,
the authority shall publish notification of such issuance of bonds 14 days
prior to any bond hearing in the official county newspaper where such
bonds will be used and in the Kansas register.

    Sec. 3. K.S.A. 74-8907 is hereby amended to read as follows: 74-
8907. (a) The bonds may be sold in such manner, either at public or
private sale, and upon such terms as the authority shall determine to be
reasonable and expedient for effectuating the purposes for which the
authority was created. The bonds may be sold at such price as the au-
thority may accept, including sale at discount or premium.

    (b) The bonds shall be executed by manual or facsimile signatures of
the chairperson of the board of directors and the president of the au-
thority or of any other director or officer of the authority authorized to
make such signature by resolution of the board of directors. In case any
of the officers whose signatures appear on the bonds or coupons shall
cease to be such officers before delivery of such bonds or coupons, their
signatures, nevertheless, shall be valid and sufficient for all purposes. The
authority shall adopt and use a seal in the execution and issuance of the
bonds, and each bond shall be impressed or imprinted with the seal of
the authority.

    (c) It shall be plainly stated on the face of each bond that it has been
issued under this act, that the bonds shall be obligations only of the au-
thority, and that, in no event, shall the bonds constitute an indebtedness
of the state of Kansas or an indebtedness for which the faith and credit
or taxing powers of the state of Kansas are pledged. The payment of the
principal of, redemption premium, if any, or interest on the trustee's and
paying agent's fees in connection with the bonds may be secured by a
lien on and security interest in facilities financed by bonds issued here-
under, by lien or pledge of loans made or mortgages purchased by the
authority and any collateral security received by the authority, including
without limitation the authority's interest in and any revenue derived from
any loan, lease or other financing agreements. It shall not be necessary
to the perfection of the lien and pledge for such purposes that the trustee
in connection with such bond issue or the holders of the bonds take
possession of the loans, mortgages and, leases or collateral security.

    New Sec. 4. (a) In addition to the other requirements of this act,
bonds issued by the authority under subsection (e) of K.S.A. 74-8905, and
amendments thereto, shall be issued only after the authority establishes
a redevelopment district and approves a redevelopment plan for a project
of statewide as well as local importance in accordance with subsections
(b) and (c).

    (b) The authority may establish a district to be known as a ``redevel-
opment district'' within the state after the secretary of commerce and
housing has certified that the district will contain a project of statewide
as well as local importance.

    (c) A project of statewide as well as local importance may be under-
taken by the authority or a developer on behalf of the authority, in one
or more phases, within a redevelopment district after the redevelopment
district has been established by the authority. To establish a redevelop-
ment district, the authority shall adopt a resolution stating its intent to
establish the redevelopment district, describing the boundaries of the
proposed district, identifying any proposed projects to be considered as
a part of the redevelopment district, and stating the time, place, and
manner that the authority will receive public written comment on the
proposed redevelopment district. The resolution shall be published once
each week for two consecutive weeks in a newspaper of general circula-
tion within the county in which the redevelopment district may be estab-
lished. A copy of the resolution shall be mailed to the governing bodies
of the county and the school district in which the proposed redevelop-
ment district is located. Upon conclusion of a public comment period of
not less than 10 days following the second publication, the authority may
adopt a resolution establishing the redevelopment district. Any addition
of area to the redevelopment district shall be subject to the same pro-
cedure as the original resolution that established the redevelopment dis-
trict.

    (d) Any redevelopment plan undertaken within the redevelopment
district may be in separate development stages. Each plan shall be
adopted according to the provisions of section 5, and amendments
thereto, and shall fix a date for completion. Any project constituting a
part of an approved redevelopment plan shall be completed within 20
years from the date of the establishment of the redevelopment district.

    (e) Subject to the provisions of section 8, and amendments thereto,
any increment in ad valorem property taxes resulting from a redevelop-
ment district undertaken in accordance with the provisions of this act,
shall be apportioned to the redevelopment bond fund created pursuant
to section 16, and amendments thereto, for the payment of the costs of
the project of statewide as well as local importance, including the payment
of principal and interest on any 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 fi-
nance projects of statewide as well as local importance pursuant to this
section and subsection (e) of K.S.A. 74-8905, and amendments thereto,
shall not exceed 20 years from the date of establishment of the redevel-
opment district. 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 pro-
duced 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 section 8, and amendments
thereto.

    (f) Before any redevelopment district is established pursuant to sec-
tion 4, and amendments thereto, 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 by the developer and submitted to the secretary of com-
merce and housing and the authority and an agreement between the
authority and the developer with respect to implementing the redevel-
opment plan shall have been executed. Such feasibility study shall be an
open public record.

    New Sec. 5. (a) If the developer proposes to undertake a project of
statewide as well as local importance within a redevelopment district es-
tablished pursuant to section 4, and amendments thereto, the developer
shall prepare a redevelopment plan. The redevelopment plan shall in-
clude:

    (1) A summary of the feasibility study required by section 4, and
amendments thereto;

    (2) a reference to the redevelopment district established under sec-
tion 4;

    (3) a comprehensive description of the project of statewide as well as
local importance;

    (4) a description and map of the area to be redeveloped;

    (5) a detailed description of the buildings and facilities proposed to
be constructed or improved in such area; and

    (6) any other information the authority deems necessary to advise the
public of the intent of the plan.

    (b) A copy of the proposed redevelopment plan shall be delivered by
the developer to the authority, the secretary of commerce and housing
and the board of county commissioners of the county in which the re-
development district is located, and the board of county commissioners
shall determine, within 30 days after receipt of the plan, whether the plan
as proposed is consistent with the comprehensive general plan for the
development of the area. If the proposed redevelopment plan is not con-
sistent with the comprehensive general plan, the board of county com-
missioners shall provide its comments and objections to the authority,
which shall modify, approve or deny the plan. If the redevelopment plan
is consistent with the comprehensive general plan of the county, then the
authority may adopt the redevelopment plan by a resolution passed by a
majority of the board of directors of the authority. Any substantial changes
to the plan as adopted shall be made in the same manner, with notice
and approval of the board of county commissioners and adoption of a
resolution by the authority. A redevelopment plan may be adopted by the
authority, pursuant to these procedures, at the same time that the au-
thority establishes the redevelopment district under section 4, and
amendments thereto.

    (c) Under no circumstances shall the state of Kansas, any of its polit-
ical subdivisions, the Kansas development finance authority or any unit
of local government assume responsibility or otherwise be responsible for
any environmental remediation which may be required to be performed
within the redevelopment district designated through any redevelopment
plan.

    New Sec. 6. The authority may use the proceeds of bonds issued
pursuant to subsection (e) of K.S.A. 74-8905, and amendments thereto,
or any uncommitted funds derived from those sources set forth in section
7, and amendments thereto, to implement the redevelopment plan, in-
cluding the payment or reimbursement of all costs of the project of state-
wide as well as local importance.

    New Sec. 7. (a) Any bonds issued by the authority under subsection
(e) of K.S.A. 74-8905, and amendments thereto, to finance the undertak-
ing of any project of statewide as well as local importance in accordance
with the provisions of this act, shall be made payable, both as to principal
and interest:

    (1) From property tax increments allocated to, and paid into a special
fund of the authority under the provisions of section 8, and amendments
thereto;

    (2) from revenues of the authority or the developer derived from or
held in connection with the undertaking and carrying out of any rede-
velopment plan under this act;

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

    (4) from a pledge of a portion or all of the revenue collected by the
state under section 16, and amendments thereto, for a period not to
exceed 20 years after the date of establishment of the redevelopment
district;

    (5) from a pledge of a portion or all increased revenue received by
any city from franchise fees collected from utilities and other businesses
using public right-of-way within the redevelopment district;

    (6) from a pledge of a portion or all of the revenue received by any
city from sales taxes collected pursuant to K.S.A. 12-187, and amend-
ments thereto; or

    (7) by any combination of these methods.

    (b) The authority may pledge such revenue to the repayment of such
bonds prior to, simultaneously with, or subsequent to the issuance of such
bonds.

    New Sec. 8. (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 pur-
suant to section 4, 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 according to specified percentages of
the tax increment expressly agreed upon and consented to by the gov-
erning bodies of the county and school district in which the redevelop-
ment district is located. The amount of the real property taxes allocated
and payable to the authority under the agreement shall be paid by the
county treasurer to the treasurer of the state. The remaining amount of
the real property taxes not payable to the authority shall be allocated and
paid in the same manner as other ad valorem taxes. Any real property
taxes paid to the state treasurer under this section shall be deposited in
the redevelopment bond finance fund of the authority which is created
pursuant to section 16, and amendments thereto, to pay the costs of the
project of statewide as well as local importance, including the payment
of principal of and interest on any bonds issued by the authority to fi-
nance, in whole or in part, such project. When such 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 bonds and interest thereon have been paid before
the completion of a project, the authority may continue to use such mon-
eys for any purpose authorized by this act until such time as the project
costs are paid or reimbursed, but for a period 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 bonds by the authority to finance a project of statewide as well as
local importance, 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 bonds. The authority
may adopt a redevelopment plan in which only a specified percentage of
the tax increment realized from taxpayers in the redevelopment district
is pledged to the payment of costs of the project of statewide as well as
local importance.

    New Sec. 9. (a) No later than 30 days prior to a meeting of the board
of directors of the authority at which a redevelopment plan that contains
the provisions authorized by section 5, and amendments thereto, is to be
considered by the authority, the secretary of the authority shall transmit
a copy of the proposed redevelopment plan to be considered by the au-
thority to the clerk, assessor and treasurer of the county in which the
redevelopment district is located and to the governing bodies of the
county and school district which levy taxes upon any property in the re-
development district. A representative of each office or jurisdiction re-
ceiving a copy of the proposed redevelopment plan under this subsection
shall have the right to be present and heard at the meeting of the board
of directors of the authority at which the redevelopment plan is first
considered by the authority.

    (b) For any year in which taxes are to be paid to the redevelopment
bond finance fund established under subsection (c)(2) of section 8, and
amendments thereto, any increase in assessed valuation of taxable tan-
gible real property within the redevelopment district in excess of an
amount equal to the total assessed value of such real property on the date
of the establishment of the redevelopment district shall not be considered
by any taxing subdivision in computing any debt limitation or for any other
purpose except for the levy of taxes and in determining the amount to be
paid to such fund.

    (c) The appraiser of any county in which a redevelopment district is
authorized by the authority 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. 10. As used in sections 10 through 13, and amendments
thereto, the following words and phrases shall have the meanings respec-
tively ascribed to them herein:

    (a) ``Person'' means an individual, firm, partnership, corporation, joint
venture or other association of persons;

    (b) ``Hotel, motel or tourist court'' means any structure or building
which contains rooms furnished for the purposes of providing lodging,
which may or may not also provide meals, entertainment or various other
personal services to transient guests, and which is kept, used, maintained,
advertised or held out to the public as a place where sleeping accom-
modations are sought for pay or compensation by transient or permanent
guests and having more than eight bedrooms furnished for the accom-
modation of such guests;

    (c) ``Transient guest'' means a person who occupies a room in a hotel,
motel or tourist court for not more than 28 consecutive days;

    (d) ``Business'' means any person engaged in the business of renting,
leasing or letting living quarters, sleeping accommodations, rooms or a
part thereof in connection with any motel, hotel or tourist court.

    New Sec. 11. (a) Upon notification to the director of taxation that
the Kansas development finance authority has established a redevelop-
ment district pursuant to section 4, and amendments thereto, there is
hereby imposed a tax at the rate of 5% upon the gross receipts derived
from or paid by transient guests for sleeping accommodations, exclusive
of charges for incidental services or facilities, in any hotel, motel or tourist
court located in a redevelopment district established pursuant to section
4, and amendments thereto.

    (b) Any transient guest tax levied pursuant to this section shall be
based on the gross rental receipts collected by any business.

    (c) The taxes levied pursuant to this section shall be paid by the con-
sumer or user to the business and it shall be the duty of each and every
business to collect from the consumer or user the full amount of any such
tax, or an amount equal as nearly as possible or practicable to the average
equivalent thereto. Each business collecting any of the taxes levied here-
under shall be responsible for paying over the same to the state depart-
ment of revenue in the manner prescribed by section 12, and amend-
ments thereto, and the state department of revenue shall administer and
enforce the collection of such taxes.

    New Sec. 12. (a) The tax levied and collected pursuant to section 11,
and amendments thereto, shall become due and payable by the business
monthly, on or before the last day of the month immediately succeeding
the month in which it is collected, but any person filing an annual or
quarterly return under the Kansas retailers' sales tax act, as prescribed in
K.S.A. 79-3607, and amendments thereto, shall, upon such conditions as
the secretary of revenue may prescribe, pay the tax required by this act
on the same basis and at the same time such person pays the retailers'
sales tax. Each business shall make a true report to the department of
revenue, on a form prescribed by the director of taxation, providing such
information as may be necessary to determine the amounts to which any
such tax shall apply for all gross rental receipts for the applicable month
or months, which report shall be accompanied by the tax disclosed
thereby. Records of gross rental receipts shall be kept separate and apart
from the records of other retail sales made by a business in order to
facilitate the examination of books and records as provided herein.

    (b) The secretary of revenue or the secretary's authorized represen-
tative shall have the right at all reasonable times during business hours
to make such examination and inspection of the books and records of a
business as may be necessary to determine the accuracy of such reports.

    (c) The director of taxation is hereby authorized to administer and
collect the transient guest tax levied pursuant to this act and to adopt such
rules and regulations as may be necessary for the efficient and effective
administration and enforcement of the collection thereof. Whenever any
business liable to pay any transient guest tax refuses or neglects to pay
the same, the amount, including any penalty, shall be collected in the
manner prescribed for the collection of the retailers' sales tax by K.S.A.
79-3617, and amendments thereto. All of the taxes collected under the
provisions of this act shall be paid into the state treasury daily by the
director of taxation, and all moneys shall be credited at least quarterly by
the state treasurer as directed in section 16, and amendments thereto.

    New Sec. 13. (a) If any taxpayer shall fail to pay the tax levied pur-
suant to section 11, and amendments thereto, at the time required by or
under the provisions of section 12, and amendments thereto, there shall
be added to the unpaid balance of the tax, interest at the rate per month
prescribed by subsection (a) of K.S.A. 79-2968, and amendments thereto,
from the date the tax was due until paid.

    (b) If any taxpayer due to negligence or intentional disregard fails to
file a return or pay the tax due at the time required by or under the
provisions of section 12, and amendments thereto, there shall be added
to the tax a penalty in an amount equal to 10% of the unpaid balance of
tax due.

    (c) If any person fails to make a return, or to pay any tax, within 30
days after notice from the director, except in the case of an extension of
time granted by the director, there shall be added to the tax due a penalty
equal to 25% of the amount of such tax.

    (d) If any taxpayer, with fraudulent intent, fails to pay any tax or make,
render or sign any return, or to supply any information, within the time
required by or under the provisions of section 12, and amendments
thereto, there shall be added to the tax a penalty in an amount equal to
50% of the unpaid balance of tax due.

    (e) Penalty or interest applied under the provisions of subsections (a)
and (d) shall be in addition to the penalty added under any other provi-
sions of this section, but the provisions of subsections (b) and (c) shall be
mutually exclusive of each other.

    (f) Whenever, in the judgment of the director of taxation, the failure
of the taxpayer to comply with the provisions of subsections (b) and (c)
was due to reasonable causes and not willful neglect, the director of tax-
ation may waive or reduce any of the penalties upon making a record of
the reasons therefor.

    (g) In addition to all other penalties provided by this section, any
person who willfully fails to make a return or to pay any tax imposed
under section 11, and amendments thereto or who makes a false or fraud-
ulent return, or fails to keep any books or records necessary to determine
the accuracy of the person's reports, or who willfully violates any regu-
lations of the secretary of revenue, for the enforcement and administra-
tion of the provisions of sections 10 through 12, and amendments thereto,
or who aids and abets another in attempting to evade the payment of any
tax imposed by section 11, and amendments thereto, or who violates any
other provision of sections 10 through 12, and amendments thereto, upon
conviction thereof, shall be fined not less than $100 nor more than $1,000,
or be imprisoned in the county jail not less than one month nor more
than six months, or be both so fined and imprisoned, in the discretion of
the court.

    Sec. 14. K.S.A. 79-3603 is hereby amended to read as follows: 79-
3603. For the privilege of engaging in the business of selling tangible
personal property at retail in this state or rendering or furnishing any of
the services taxable under this act, there is hereby levied and there shall
be collected and paid a tax at the rate of 4.9%, and, within a redevelop-
ment district established pursuant to section 4, and amendments thereto,
there is hereby levied and there shall be collected and paid an additional
tax at the rate of 1% until the earlier of the date the bonds issued to
finance or refinance the redevelopment project undertaken in the district
have been paid in full or 20 years after establishment of the redevelopment
district, upon:

    (a) The gross receipts received from the sale of tangible personal
property at retail within this state;

    (b) (1) the gross receipts from intrastate telephone or telegraph serv-
ices and (2) the gross receipts received from the sale of interstate tele-
phone or telegraph services, which (A) originate within this state and
terminate outside the state and are billed to a customer's telephone num-
ber or account in this state; or (B) originate outside this state and ter-
minate within this state and are billed to a customer's telephone number
or account in this state except that the sale of interstate telephone or
telegraph service does not include: (A) Any interstate incoming or out-
going wide area telephone service or wide area transmission type service
which entitles the subscriber to make or receive an unlimited number of
communications to or from persons having telephone service in a speci-
fied area which is outside the state in which the station provided this
service is located; (B) any interstate private communications service to
the persons contracting for the receipt of that service that entitles the
purchaser to exclusive or priority use of a communications channel or
group of channels between exchanges; (C) any value-added nonvoice
service in which computer processing applications are used to act on the
form, content, code or protocol of the information to be transmitted; (D)
any telecommunication service to a provider of telecommunication serv-
ices which will be used to render telecommunications services, including
carrier access services; or (E) any service or transaction defined in this
section among entities classified as members of an affiliated group as
provided by federal law (U.S.C. Section 1504);

    (c) the gross receipts from the sale or furnishing of gas, water, elec-
tricity and heat, which sale is not otherwise exempt from taxation under
the provisions of this act, and whether furnished by municipally or pri-
vately owned utilities;

    (d) the gross receipts from the sale of meals or drinks furnished at
any private club, drinking establishment, catered event, restaurant, eating
house, dining car, hotel, drugstore or other place where meals or drinks
are regularly sold to the public;

    (e) the gross receipts from the sale of admissions to any place pro-
viding amusement, entertainment or recreation services including admis-
sions to state, county, district and local fairs, but such tax shall not be
levied and collected upon the gross receipts received from sales of ad-
missions to any cultural and historical event which occurs triennially;

    (f) the gross receipts from the operation of any coin-operated device
dispensing or providing tangible personal property, amusement or other
services except laundry services, whether automatic or manually operated;

    (g) the gross receipts from the service of renting of rooms by hotels,
as defined by K.S.A. 36-501 and amendments thereto, or by accommo-
dation brokers, as defined by K.S.A. 12-1692, and amendments thereto;

    (h) the gross receipts from the service of renting or leasing of tangible
personal property except such tax shall not apply to the renting or leasing
of machinery, equipment or other personal property owned by a city and
purchased from the proceeds of industrial revenue bonds issued prior to
July 1, 1973, in accordance with the provisions of K.S.A. 12-1740 through
12-1749, and amendments thereto, and any city or lessee renting or leas-
ing such machinery, equipment or other personal property purchased
with the proceeds of such bonds who shall have paid a tax under the
provisions of this section upon sales made prior to July 1, 1973, shall be
entitled to a refund from the sales tax refund fund of all taxes paid
thereon;

    (i) the gross receipts from the rendering of dry cleaning, pressing,
dyeing and laundry services except laundry services rendered through a
coin-operated device whether automatic or manually operated;

    (j) the gross receipts from the rendering of the services of washing
and washing and waxing of vehicles;

    (k) the gross receipts from cable, community antennae and other sub-
scriber radio and television services;

    (l) the gross receipts received from the sales of tangible personal
property to all contractors, subcontractors or repairmen of materials and
supplies for use by them in erecting structures for others, or building on,
or otherwise improving, altering, or repairing real or personal property
of others;

    (m) the gross receipts received from fees and charges by public and
private clubs, drinking establishments, organizations and businesses for
participation in sports, games and other recreational activities, but such
tax shall not be levied and collected upon the gross receipts received from:
(1) Fees and charges by any political subdivision, or any youth recreation
organization exclusively providing services to persons 18 years of age or
younger which is exempt from federal income taxation pursuant to section
501(c)(3) of the federal internal revenue code of 1986, for participation
in sports, games and other recreational activities; and (2) entry fees and
charges for participation in a special event or tournament sanctioned by
a national sporting association to which spectators are charged an admis-
sion which is taxable pursuant to subsection (e);

    (n) the gross receipts received from dues charged by public and pri-
vate clubs, drinking establishments, organizations and businesses, pay-
ment of which entitles a member to the use of facilities for recreation or
entertainment;

    (o) the gross receipts received from the isolated or occasional sale of
motor vehicles or trailers but not including: (1) The transfer of motor
vehicles or trailers by a person to a corporation solely in exchange for
stock securities in such corporation; or (2) the transfer of motor vehicles
or trailers by one corporation to another when all of the assets of such
corporation are transferred to such other corporation; or (3) the sale of
motor vehicles or trailers which are subject to taxation pursuant to the
provisions of K.S.A. 79-5101 et seq., and amendments thereto, by an
immediate family member to another immediate family member. For the
purposes of clause (3), immediate family member means lineal ascendants
or descendants, and their spouses. In determining the base for computing
the tax on such isolated or occasional sale, the fair market value of any
motor vehicle or trailer traded in by the purchaser to the seller may be
deducted from the selling price;

    (p) the gross receipts received for the service of installing or applying
tangible personal property which when installed or applied is not being
held for sale in the regular course of business, and whether or not such
tangible personal property when installed or applied remains tangible
personal property or becomes a part of real estate, except that no tax shall
be imposed upon the service of installing or applying tangible personal
property in connection with the original construction of a building or
facility or the construction, reconstruction, restoration, replacement or
repair of a bridge or highway.

    For the purposes of this subsection:

    (1) ``Original construction'' shall mean the first or initial construction
of a new building or facility. The term ``original construction'' shall include
the addition of an entire room or floor to any existing building or facility,
the completion of any unfinished portion of any existing building or fa-
cility and the restoration, reconstruction or replacement of a building or
facility damaged or destroyed by fire, flood, tornado, lightning, explosion
or earthquake, but such term shall not include replacement, remodeling,
restoration, renovation or reconstruction under any other circumstances;

    (2) ``building'' shall mean only those enclosures within which individ-
uals customarily live or are employed, or which are customarily used to
house machinery, equipment or other property, and including the land
improvements immediately surrounding such building; and

    (3) ``facility'' shall mean a mill, plant, refinery, oil or gas well, water
well, feedlot or any conveyance, transmission or distribution line of any
cooperative, nonprofit, membership corporation organized under or sub-
ject to the provisions of K.S.A. 17-4601 et seq., and amendments thereto,
or of any municipal or quasi-municipal corporation, including the land
improvements immediately surrounding such facility;

    (q) the gross receipts received for the service of repairing, servicing,
altering or maintaining tangible personal property, except computer soft-
ware described in subsection (s), which when such services are rendered
is not being held for sale in the regular course of business, and whether
or not any tangible personal property is transferred in connection there-
with. The tax imposed by this subsection shall be applicable to the services
of repairing, servicing, altering or maintaining an item of tangible personal
property which has been and is fastened to, connected with or built into
real property;

    (r) the gross receipts from fees or charges made under service or
maintenance agreement contracts for services, charges for the providing
of which are taxable under the provisions of subsection (p) or (q);

    (s) the gross receipts received from the sale of computer software,
and the sale of the services of modifying, altering, updating or maintaining
computer software. As used in this subsection, ``computer software''
means information and directions loaded into a computer which dictate
different functions to be performed by the computer. Computer software
includes any canned or prewritten program which is held or existing for
general or repeated sale, even if the program was originally developed
for a single end user as custom computer software. The sale of computer
software or services does not include: (1) The initial sale of any custom
computer program which is originally developed for the exclusive use of
a single end user; or (2) those services rendered in the modification of
computer software when the modification is developed exclusively for a
single end user only to the extent of the modification and only to the
extent that the actual amount charged for the modification is separately
stated on invoices, statements and other billing documents provided to
the end user. The services of modification, alteration, updating and main-
tenance of computer software shall only include the modification, alter-
ation, updating and maintenance of computer software taxable under this
subsection whether or not the services are actually provided; and

    (t) the gross receipts received for telephone answering services, in-
cluding mobile phone services, beeper services and other similar services.

    Sec. 15. K.S.A. 79-3703 is hereby amended to read as follows: 79-
3703. There is hereby levied and there shall be collected from every
person in this state a tax or excise for the privilege of using, storing, or
consuming within this state any article of tangible personal property. Such
tax shall be levied and collected in an amount equal to the consideration
paid by the taxpayer multiplied by the rate of 4.9%. Within a redevel-
opment district established pursuant to section 4, and amendments
thereto, there is hereby levied and there shall be collected and paid an
additional tax of 1% until the earlier of: (1) The date the bonds issued to
finance or refinance the redevelopment project undertaken in the district
have been paid in full; or (2) twenty years after the establishment of the
redevelopment district. All property purchased or leased within or without
this state and subsequently used, stored or consumed in this state shall
be subject to the compensating tax if the same property or transaction
would have been subject to the Kansas retailers' sales tax had the trans-
action been wholly within this state.

    New Sec. 16. (a) Until the earlier of: (1) The date the bonds issued
to finance or refinance the redevelopment undertaken in the redevel-
opment district have been paid in full; or (2) twenty years after the es-
tablishment of the redevelopment district, all revenues collected or re-
ceived from the state transient guest tax established pursuant to sections
10 through 13, and amendments thereto, any revenue from a county or
countywide retailers' sales tax levied or collected under section 20 and
amendments thereto, the state retailers' sales tax pursuant to K.S.A. 79-
3603, and amendments thereto, and the state compensating use tax, pur-
suant to K.S.A. 79-3703, and amendments thereto, which have been cer-
tified by the director of taxation to have been derived from taxpayers
located in a redevelopment district shall be remitted to the state treasurer.

    (b) The state treasurer shall credit all such revenues to the redevel-
opment bond fund which is hereby established in the state treasury. The
state treasurer shall make such biannual distributions on dates mutually
agreed upon by the treasurer and the authority. The authority shall use
all such moneys received pursuant to this section to pay the costs of a
redevelopment project of statewide as well as local importance as de-
scribed in K.S.A. 74-8902, and amendments thereto.

    New Sec. 17. The secretary of commerce and housing, the state trea-
surer, the board of county commissioners, the director of taxation, any
bond trustee or fiscal agent are authorized to enter into agreements in
connection with the implementation of any redevelopment project with
a redevelopment district established pursuant to section 4, and amend-
ments thereto.

    Sec. 18. K.S.A. 1997 Supp. 12-189 is hereby amended to read as
follows: 12-189. Except as otherwise provided by paragraph (2) of sub-
section (a) of K.S.A. 12-187, and amendments thereto, the rate of any
class A or class C city retailers' sales tax shall be fixed in the amount of
.25%, .5%, .75% or 1% which amount shall be determined by the gov-
erning body of the city. Except as otherwise provided by paragraph (2)
of subsection (a) of K.S.A. 12-187, and amendments thereto, the rate of
any class B city retailers' sales tax shall be fixed in the amount of .25%,
.5%, .75%, 1%, 1.25%, 1.5%, 1.75% or 2%. Except as otherwise provided
by paragraph (2) of subsection (a) of K.S.A. 12-187, and amendments
thereto, the rate of any class D city retailers' sales tax shall be fixed in the
amount of .25%, .5%, .75%, 1%, 1.25%, 1.5% or 1.75%. The rate of any
countywide retailers' sales tax shall be fixed in an amount of either .25%,
.5%, .75% or 1% which amount shall be determined by the board of
county commissioners, except that:

    (a) The board of county commissioners of Cherokee, Crawford, Sa-
line, Seward or Wyandotte county, for the purposes of paragraph (2) of
subsection (b) of K.S.A. 12-187, and amendments thereto, may fix such
rate at 1.5%, and the board of county commissioners of Barton, Jefferson
or Ottawa county, for the purposes of paragraph (2) of subsection (b) of
K.S.A. 12-187, and amendments thereto, may fix such rate at 2%;

    (b) the board of county commissioners of Jackson county, for the
purposes of paragraph (3) of subsection (b) of K.S.A. 12-187, and amend-
ments thereto, may fix such rate at 2%;

    (c) the boards of county commissioners of Finney and Ford counties,
for the purposes of paragraph (4) of subsection (b) of K.S.A. 12-187, and
amendments thereto, may fix such rate at .25%;

    (d) the board of county commissioners of any county for the purposes
of paragraph (5) of subsection (b) of K.S.A. 12-187, and amendments
thereto, may fix such rate at a percentage which is equal to the sum of
the rate allowed to be imposed by a board of county commissioners on
the effective date of this act plus .25%, .5%, .75% or 1%, as the case
requires; or

    (e) the board of county commissioners of Dickinson county, for the
purposes of paragraph (7) of subsection (b) of K.S.A. 12-187, and amend-
ments thereto, may fix such rate at 1.25%.

    Any county or city levying a retailers' sales tax is hereby prohibited
from administering or collecting such tax locally, but shall utilize the serv-
ices of the state department of revenue to administer, enforce and collect
such tax. Except as otherwise specifically provided in K.S.A. 12-189a, and
amendments thereto, such tax shall be identical in its application, and
exemptions therefrom, to the Kansas retailers' sales tax act and all laws
and administrative rules and regulations of the state department of rev-
enue relating to the Kansas retailers' sales tax shall apply to such local
sales tax insofar as such laws and rules and regulations may be made
applicable. The state director of taxation is hereby authorized to admin-
ister, enforce and collect such local sales taxes and to adopt such rules
and regulations as may be necessary for the efficient and effective ad-
ministration and enforcement thereof.

    Upon receipt of a certified copy of an ordinance or resolution author-
izing the levy of a local retailers' sales tax, the state director of taxation
shall cause such taxes to be collected within or without the boundaries of
such taxing subdivision at the same time and in the same manner provided
for the collection of the state retailers' sales tax. All moneys collected by
the director of taxation under the provisions of this section shall be cred-
ited to a county and city retailers' sales tax fund which fund is hereby
established in the state treasury. Any refund due on any county or city
retailers' sales tax collected pursuant to this act shall be paid out of the
sales tax refund fund and reimbursed by the director of taxation from
collections of local retailers' sales tax revenue. Except for local retailers'
sales tax revenue required to be deposited in the redevelopment bond fund
established under section 16, and amendments thereto, all local retailers'
sales tax revenue collected within any county or city pursuant to this act
shall be apportioned and remitted at least quarterly by the state treasurer,
on instruction from the director of taxation, to the treasurer of such
county or city.

    The director of taxation shall provide, upon request by a city or county
clerk or treasurer of any city or county levying a local retailers' sales tax,
a monthly report identifying each retailer having a place of business in
such city or county and setting forth the amount of such tax remitted by
each retailer during the preceding month. Such report shall be made
available to the clerk or treasurer of such city or county within a reason-
able time after it has been requested from the director of taxation. The
director of taxation shall be allowed to assess a reasonable fee for the
issuance of such report. Information received by any city or county pur-
suant to this section shall be confidential, and it shall be unlawful for any
officer or employee of such city or county to divulge any such information
in any manner. Any violation of this paragraph by a city or county officer
or employee is a class B misdemeanor, and such officer or employee shall
be dismissed from office.

    Sec. 19. K.S.A. 1997 Supp. 12-192 is hereby amended to read as
follows: 12-192. (a) Except as otherwise provided by subsection (b), (d)
or (h), all revenue received by the director of taxation from a countywide
retailers' sales tax shall be apportioned among the county and each city
located in such county in the following manner: (1) One-half of all reve-
nue received by the director of taxation shall be apportioned among the
county and each city located in such county in the proportion that the
total tangible property tax levies made in such county in the preceding
year for all funds of each such governmental unit bear to the total of all
such levies made in the preceding year, and (2) except as provided by
paragraph (3), 1/2 of all revenue received by the director of taxation from
such countywide retailers' sales tax shall be apportioned among the county
and each city located in such county, first to the county that portion of
the revenue equal to the proportion that the population of the county
residing in the unincorporated area of the county bears to the total pop-
ulation of the county, and second to the cities in the proportion that the
population of each city bears to the total population of the county, except
that no persons residing within the Fort Riley military reservation shall
be included in the determination of the population of any city located
within Riley county, or (3) one-half of all revenue received by the director
of taxation from countywide retailers' sales taxes levied in Geary county
in any year shall be apportioned among the county and each city located
in such county, first to the county that portion of the revenue equal to
the proportion that the population of the county residing in the unincor-
porated area of the county less the population residing on a military res-
ervation bears to the total population of the county less the population
residing on a military reservation, and second to the cities in the propor-
tion that the population of each city bears to the total population of the
county less the population residing on a military reservation. All revenue
apportioned to a county shall be paid to its county treasurer and shall be
credited to the general fund of the county.

    (b) (1) As an alternative and in lieu of the apportionment formula
provided in subsection (a), all revenue received by the director of taxation
from a countywide retailers' sales tax imposed within Johnson county at
the rate of .75% or 1% after the effective date of this act may be appor-
tioned among the county and each city located in such county in the
following manner: (A) The revenue received from the first .5% rate of
tax shall be apportioned in the manner prescribed by subsection (a) and
(B) the revenue received from the rate of tax exceeding .5% shall be
apportioned as follows: (i) One-fourth shall be apportioned among the
county and each city located in such county in the proportion that the
total tangible property tax levies made in such county in the preceding
year for all funds of each such governmental unit bear to the total of all
such levies made in the preceding year and (ii) one-fourth shall be ap-
portioned among the county and each city located in such county, first to
the county that portion of the revenue equal to the proportion that the
population of the county residing in the unincorporated area of the county
bears to the total population of the county, and second to the cities in the
proportion that the population of each city bears to the total population
of the county and (iii) one-half shall be retained by the county for its sole
use and benefit.

    (2) In lieu of the apportionment formula provided in subsection (a),
all money received by the director of taxation from a countywide sales tax
imposed within Montgomery county pursuant to the election held on
November 8, 1994, shall be remitted to and shall be retained by the
county and expended only for the purpose for which the revenue received
from the tax was pledged. All revenue apportioned and paid from the
imposition of such tax to the treasurer of any city prior to the effective
date of this act shall be remitted to the county treasurer and expended
only for the purpose for which the revenue received from the tax was
pledged.

    (c) (1) Except as otherwise provided by paragraph (2) of this subsec-
tion, for purposes of subsections (a) and (b), the term ``total tangible
property tax levies'' means the aggregate dollar amount of tax revenue
derived from ad valorem tax levies applicable to all tangible property
located within each such city or county. The ad valorem property tax levy
of any county or city district entity or subdivision shall be included within
this term if the levy of any such district entity or subdivision is applicable
to all tangible property located within each such city or county.

    (2) For the purposes of subsections (a) and (b), any ad valorem prop-
erty tax levied on property located in a city in Johnson county for the
purpose of providing fire protection service in such city shall be included
within the term ``total tangible property tax levies'' for such city regardless
of its applicability to all tangible property located within each such city.
If the tax is levied by a district which extends across city boundaries, for
purposes of this computation, the amount of such levy shall be appor-
tioned among each city in which such district extends in the proportion
that such tax levied within each city bears to the total tax levied by the
district.

    (d) (1) All revenue received from a countywide retailers' sales tax
imposed pursuant to paragraphs (2), (6) or (7) of subsection (b) of K.S.A.
12-187, and amendments thereto, shall be remitted to and shall be re-
tained by the county and expended only for the purpose for which the
revenue received from the tax was pledged.

    (2) Except as otherwise provided in paragraph (5) of subsection (b)
of K.S.A. 12-187, and amendments thereto, all revenues received from a
countywide retailers' sales tax imposed pursuant to paragraph (5) of sub-
section (b) of K.S.A. 12-187, and amendments thereto, shall be remitted
to and shall be retained by the county and expended only for the purpose
for which the revenue received from the tax was pledged.

    (e) All revenue apportioned to the several cities of the county shall
be paid to the respective treasurers thereof and deposited in the general
fund of the city. Whenever the territory of any city is located in two or
more counties and any one or more of such counties do not levy a coun-
tywide retailers' sales tax, or whenever such counties do not levy coun-
tywide retailers' sales taxes at a uniform rate, the revenue received by
such city from the proceeds of the countywide retailers' sales tax, as an
alternative to depositing the same in the general fund, may be used for
the purpose of reducing the tax levies of such city upon the taxable tan-
gible property located within the county levying such countywide retail-
ers' sales tax.

    (f) Prior to March 1 of each year, the secretary of revenue shall advise
each county treasurer of the revenue collected in such county from the
state retailers' sales tax for the preceding calendar year.

    (g) Prior to December 31 of each year, the clerk of every county
imposing a countywide retailers' sales tax shall provide such information
deemed necessary by the secretary of revenue to apportion and remit
revenue to the counties and cities pursuant to this section.

    (h) The provisions of subsection (a) and (b) for the apportionment of
countywide retailers' sales tax shall not apply to any revenues received
pursuant to a county or countywide retailers' sales tax levied or collected
under section 20, and amendments thereto. All such revenue collected
under section 20 shall be deposited into the redevelopment bond fund
established by section 16, and amendments thereto, for the period of time
set forth in section 16, and amendments thereto.

    New Sec. 20. (a) Whenever a redevelopment district is proposed to
be established pursuant to section 4, the governing body of the county in
which the redevelopment district is proposed to be located may, in ad-
dition to any countywide retailers' sales tax authorized by K.S.A. 12-187,
and amendments thereto, or other specific statutory provisions, adopt and
impose a county retailers' sales tax at a rate of .5% within the redevel-
opment district, without submitting the question to an election and all
revenue derived from the county retailers' sales tax levied under this
subsection shall be pledged for the purposes of financing the redevel-
opment plan.

    (b) Notwithstanding any other statutory provision to the contrary,
whenever the governing body of a county adopts and imposes the county
retailers' sales tax authorized under subsection (a), then all revenue that
is derived from a countywide retailers' sales tax imposed by such county
pursuant to K.S.A. 12-187, and amendments thereto, from taxpayers
within the redevelopment district, except those portions of such taxes
which have otherwise been expressly dedicated for other purposes by a
prior pledge of such county or by authorizing statute or voter approval,
shall be considered to be dedicated for purposes of the redevelopment
district and upon collection by the director of taxation, such revenues
shall be remitted to the state treasurer for deposit in the redevelopment
bond fund established pursuant to section 16, and amendments thereto.

    (c) All revenue derived from a county retailers' sales tax imposed
under subsection (a) and collected under subsection (b) shall upon col-
lection, be remitted to the state treasurer, as provided by section 16, and
may be pledged and used by the authority in like manner as other reve-
nues collected or received under section 16. Whenever the authority has
proposed to issue bonds pursuant to subsection (e) of K.S.A. 74-8905 and
amendments thereto, the county retailers' sales tax imposed under sub-
section (a) and the revenue collected under subsection (b) shall remain
in effect and may not be reduced or rescinded by the governing body of
the county until such time as the bonds have been fully paid. When such
bonds have been fully paid, then (1) the county retailers' sales tax imposed
under subsection (a) shall expire, unless otherwise renewed by action of
the governing body of the county for purposes of implementing additional
projects authorized under the redevelopment plan for the redevelopment
district; and (2) the revenues to be collected under subsection (b) may
be rededicated for other purposes by resolution of the governing body of
such county and if not so rededicated then the revenues thereafter col-
lected shall be used only for approved and authorized costs in the rede-
velopment district in accordance with the redevelopment plan. Upon re-
dedication of the revenues under subsection (b), or in the event that no
future redevelopment projects or authorized costs remain for the rede-
velopment district, the revenues derived from the countywide retailers'
sales tax covered under subsection (b) shall thereafter be distributed to
the county treasurer as required under K.S.A. 12-192, and amendments
thereto.

    Sec. 21. K.S.A. 1997 Supp. 12-195 is hereby amended to read as
follows: 12-195. (a) Except as otherwise provided in K.S.A. 12-195b, 12-
1774 and, 12-17,103 and section 7, and amendments thereto, or subsec-
tion (b), no city or county shall commit any of the funds or proceeds
derived from a retailers' sales tax as a guarantee for the payment of bonds
issued by such city or county.

    (b) Any city or county which is the recipient of funds derived from a
local option sales tax pursuant to K.S.A. 12-187 et seq., and amendments
thereto, is hereby authorized to issue revenue bonds to provide for the
payment of all or any portion of the cost of public facilities or improve-
ments of such city or county for which such city or county is authorized
pursuant to the constitution or laws of this state to issue general obligation
bonds and to pledge revenues received from countywide or city retailers'
sales taxes for the payment thereof. No such bonds shall be issued for the
payment of all or any portion of the cost of any facilities or improvements
to be used for commercial or retail purposes, except that such prohibition
shall not apply to revenue bonds issued for the payment of the cost of
constructing or improving a convention or exposition hall or center or
public auditorium. In the event the governing body of a city or county
proposes to issue such bonds, and the question of pledging the revenues
received from the countywide or city retailers' sales tax has not previously
been submitted to and approved by the voters of the city or county, such
proposition shall be published once each week for two consecutive weeks
in the official city or county newspaper, as the case requires. If, within
30 days after the last publication of the proposition, a petition is filed with
the county election officer signed by not less than 4% of the electors of
the city or county, as the case requires, who voted for the office of sec-
retary of state at the last preceding general election for such office re-
questing an election thereon, no such bonds shall be issued unless the
proposition is submitted to and approved by a majority of the voters of
the city or county, as the case requires, voting at an election held thereon.
Any such election shall be called and held in accordance with the provi-
sions of K.S.A. 10-120, and amendments thereto, or in accordance with
the provisions of the mail ballot election act.

    (1) Such bonds shall be authorized by ordinance of the governing
body of such city or resolution of the governing body of such county. The
bonds may be issued as registered bonds or coupon bonds, payable to
bearer, and, if coupon bonds, may be registrable as to principal only or
as to principal and interest, and may be made exchangeable for bonds of
another denomination or in another form. The bonds may be in such
form and denominations, may have such date or dates, may be stated to
mature at such time or times, may bear interest payable at such times
and at such rate or rates, may be payable at such places within or without
the state, may be subject to such terms of redemption in advance of
maturity at such prices, and may contain such terms and conditions, all
as the city or county shall determine. The bonds shall have all the qualities
of and shall be deemed to be negotiable instruments under the laws of
the state of Kansas. The authorizing ordinance or resolution may contain
any other terms, covenants and conditions that the city or county deems
reasonable and desirable, including without limitation those pertaining to
the maintenance of various funds and reserves, the nature and extent of
any security for payment of the bonds, the custody and application of the
proceeds of the bonds, the collection, transfer and disposition of sales tax
revenues, the investing of bond proceeds or any funds pledged to the
repayment of the bonds, and the rights, duties and obligations of the city
or county and the owners of the bonds.

    (2) The authorizing ordinance or resolution may provide for the ex-
ecution of a trust indenture between the city or county and any financial
institution within or without the state of Kansas. The trust indenture may
contain any terms, covenants and conditions that are deemed desirable
by the city or county.

    (3) Any authorizing ordinance or resolution and trust indenture re-
lating to the issuance of and security for the bonds shall constitute a
contract between the city or county and the owners of the bonds, which
contract, and all covenants, agreements and obligations therein, shall be
promptly performed in strict compliance with the terms and provisions
of such contract, and the covenants, agreements and obligations of the
city or county may be enforced by mandamus or other appropriate pro-
ceeding at law or in equity. The pledge of revenues made by the city or
county shall be valid and binding from the time when such pledge is made
and the revenues so pledged and thereafter received by the city or county
shall immediately be subject to the lien of such pledge without such phys-
ical delivery thereof or further act on the part of the city or county, and
the lien of any such pledge shall be valid and binding as against all parties
having claims of any kind against the issuer, irrespective of whether such
parties have notice thereof. Neither the authorizing ordinance or reso-
lution nor any other instrument by which a pledge is created need be
filed or recorded except in the records of the city or county.

    (4) The revenue bonds may be sold in such manner, either at public
or private sale, and upon such terms as the city or county shall determine
to be reasonable, including sale at discount. It shall be plainly stated on
the face of each such bond that it has been issued under this act, that the
bonds shall be special obligations of the city or county, payable solely and
only from the revenues pledged to the payment of the bonds and that in
no event, shall the bonds constitute an indebtedness of the state of Kansas
or the city or county for which the faith and credit of the state of Kansas
or city or county is pledged.

    (5) Any bonds issued under the provisions of this section and the
interest thereon, shall be exempt from all taxes levied by the state of
Kansas, or any political or taxing subdivision thereof, except inheritance
taxes.

    (6) Bonds may be issued for the purpose of refunding, either at ma-
turity or in advance of maturity, any bonds issued under this section. Such
refunding bonds may either be sold or delivered in exchange for the bonds
being refunded. If sold, the proceeds may either be applied to the pay-
ment of the bonds being refunded or deposited in trust and there main-
tained in cash or investments for the retirement of the bonds being re-
funded, as shall be specified by the city or county and the authorizing
ordinance or resolution or trust indenture securing such refunding bonds.
The authorizing ordinance or resolution or trust indenture securing the
refunding bonds may provide that the refunding bonds shall have the
same security for their payment as provided for the bonds being refunded.
Refunding bonds shall be sold and secured in accordance with the pro-
visions of this act pertaining to the sale and security of the bonds.

    (7) Bonds issued under the provisions of this act shall be eligible to
secure the deposit of public funds under article 14 of chapter 9 of the
Kansas Statutes Annotated, and amendments thereto.

    (8) Bonds issued under the provisions of this act shall be in addition
to and not subject to any statutory limitation of bonded indebtedness
imposed on such city or county.

    Sec. 22. K.S.A. 1997 Supp. 12-1771, as amended by section 1 of 1998
House Bill No. 3036, 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. 12-1774, 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 department of commerce and
housing that a redevelopment project proposed by the city which requires
the enlargement is of statewide importance and that it will meet the
criteria specified in subsection (a)(1)(D) of K.S.A. 12-1774, and amend-
ments thereto. A unified government, established pursuant to K.S.A.
12-340 et seq., and amendments thereto, may enlarge an enterprise zone,
established within its jurisdiction prior to July 1, 1992, to an area not
exceeding 200% of the area of the original enterprise zone regardless of
whether such enlargement crosses the boundary of a city within the ju-
risdiction of the unified government if the secretary of commerce and
housing makes the same findings required for enlargement of an enter-
prise zone by a city. 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). Subject to the provisions of section 4 of 1998 Senate Bill
No. 672, and amendments thereto, any addition of area to the redevel-
opment 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. The boundaries of any such
district in a major tourism 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 Parallel 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 transmittal
of the redevelopment plan or a revision of the plan, as authorized by
section 4 of 1998 Senate Bill No. 672, and amendments thereto, 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. A
redevelopment project in a major tourism area for an auto race track
facility described in subsection (a)(1)(D) of K.S.A. 12-1774, and amend-
ments thereto, shall be completed within 30 years from the date the
secretary of commerce and housing makes the finding that the redevel-
opment 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
determination and finding.

    For the purposes of this act, ``increment'' means that amount of ad
valorem taxes collected from real property located within the redevel-
opment 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 plan or revision of the plan, as au-
thorized by section 4 of 1998 Senate Bill No. 672, and amendments
thereto, 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.

    (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, and amendments thereto,
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 real and personal prop-
erty, constituting an auto race track facility described in subsection
(a)(1)(D) of K.S.A. 12-1774, and amendments thereto, in such redevel-
opment district shall be exempt from property taxation for a period end-
ing 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, and amendments thereto, shall
not be entitled to any real property tax abatements or the revenues de-
scribed in K.S.A. 12-1775, and amendments thereto. Any project within
such additional area must be approved by the governor and construction
must be commenced by July 1, 2002. The city shall prepare and submit
annually to the governor, the secretary of commerce and housing and the
legislature by each October 1, commencing October 1, 1999 and contin-
uing until October 1, 2002, a report describing the status of any projects
within such additional area. Any business located in Kansas 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., and amend-
ments thereto.

    Sec. 23. Within one year of the commencement of construction of
any project of statewide as well as local importance as defined in K.S.A.
74-8902 and amendments thereto, located within a county which accord-
ing to the 1990 decennial census contained a population greater than
25,000, a developer shall reimburse the unified government of Wyandotte
county for cash investment in the project and for the use of during the
course of negotiations with the developer as documented to and deter-
mined by the secretary of commerce and housing.

    Sec. 24. K.S.A. 74-8907, 79-3603 and 79-3703 and K.S.A. 1997 Supp.
12-189, 12-192, 12-195, 12-1771 as amended by section 1 of 1998 House
Bill No. 3036, 74-8902 and 74-8905 are hereby repealed.

    Sec. 25. This act shall take effect and be in force from and after its
publication in the Kansas register.

I hereby certifiy that the above Bill originated in the
Senate, and passed that body

__________________________________

Senate adopted
Conference Committe Report __________________________________

__________________________________

President of the Senate.

__________________________________

Secretary of the Senate.

Passed the House
as amended __________________________

House adopted
Conference Committee Report __________________________

__________________________________

Speaker of the House.

__________________________________

Chief Clerk of the House.

Approved __________________________

__________________________________

Governor.