Session of 1998
                   
SENATE BILL No. 676
         
By Committee on Federal and State Affairs
         
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            9             AN ACT relating to cities; concerning repayment of certain special obli-
10             gation bonds thereof; amending K.S.A. 1997 Supp. 12-1774, as
11             amended by section 3 of 1998 House Bill No. 2631, and repealing the
12             existing section.
13            
14       Be it enacted by the Legislature of the State of Kansas:
15           Section 1. K.S.A. 1997 Supp. 12-1774, as amended by section 3 of
16       1998 House Bill No. 2631, is hereby amended to read as follows: 12-1774.
17       (a) (1) Any city shall have the power to issue special obligation bonds in
18       one or more series to finance the undertaking of any redevelopment pro-
19       ject in accordance with the provisions of this act. Such special obligation
20       bonds shall be made payable, both as to principal and interest:
21           (A) From property tax increments allocated to, and paid into a special
22       fund of the city under the provisions of K.S.A. 12-1775, and amendments
23       thereto;
24           (B) from revenues of the city derived from or held in connection with
25       the undertaking and carrying out of any redevelopment project or projects
26       under this act;
27           (C) from any private sources, contributions or other financial assis-
28       tance from the state or federal government;
29           (D) from a pledge of a portion or all of the revenue received by the
30       city from transient guest, sales and use taxes collected pursuant to K.S.A.
31       12-1696 et seq., 79-3601 et seq., 79-3701 et seq. and 12-187 et seq., and
32       amendments thereto, and which are collected from taxpayers doing busi-
33       ness within that portion of the city's redevelopment district established
34       pursuant to K.S.A. 12-1771, and amendments thereto, occupied by a re-
35       development project if there first is a finding by the secretary of com-
36       merce and housing that the redevelopment project is of statewide as well
37       as local importance or will create a major tourism area for the state. In
38       making a finding that a redevelopment project is of statewide as well as
39       local importance, the secretary must conclude at least: (i) That capital
40       improvements costing not less than $300,000,000 will be built in the state
41       for such redevelopment project; and (ii) not less than 1,500 permanent
42       and seasonal employment positions as defined by K.S.A. 74-50,114, and
43       amendments thereto, will be created in the state by such redevelopment

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  1       project. In making a finding that a redevelopment project will create a
  2       major tourism area within the state, the secretary must conclude at
  3       least: (i) That capital improvements costing not less than $100,000,000
  4       will be built in the state to construct a project for such major tourism
  5       area; and (ii) that the project constructed will be an auto race track facility.
  6       An auto race track facility means (i) an auto race facility and facilities
  7       directly related and necessary to the operation of an auto race track facility
  8       including, but not limited to, grandstands, suites and viewing areas, con-
  9       cessions and souvenir facilities, catering facilities, visitor and retail cen-
10       ters, signage and temporary hospitality facilities; but excluding (ii) hotels,
11       motels, restaurants and retail facilities not included in (i);
12           (E) (i) from a pledge of a portion or all increased revenue received
13       by the city from franchise fees collected from utilities and other busi-
14       nesses using public right-of-way within the redevelopment district; (ii)
15       from a pledge of a portion or all of the revenue received by the city from
16       sales taxes collected pursuant to K.S.A. 12-187, and amendments thereto;
17       or
18           (F) by any combination of these methods.
19           The city may pledge such revenue to the repayment of such special
20       obligation bonds prior to, simultaneously with, or subsequent to the is-
21       suance of such special obligation bonds.
22           (2) Bonds issued under paragraph (1) of subsection (a) shall not be
23       general obligations of the city, nor in any event shall they give rise to a
24       charge against its general credit or taxing powers, or be payable out of
25       any funds or properties other than any of those set forth in paragraph (1)
26       of this subsection and such bonds shall so state on their face.
27           (3) Bonds issued under the provisions of paragraph (1) of this sub-
28       section shall be special obligations of the city and are declared to be
29       negotiable instruments. They shall be executed by the mayor and clerk
30       of the city and sealed with the corporate seal of the city. All details per-
31       taining to the issuance of such special obligation bonds and terms and
32       conditions thereof shall be determined by ordinance of the city. All special
33       obligation bonds issued pursuant to this act and all income or interest
34       therefrom shall be exempt from all state taxes except inheritance taxes.
35       Such special obligation bonds shall contain none of the recitals set forth
36       in K.S.A. 10-112, and amendments thereto. Such special obligation bonds
37       shall, however, contain the following recitals, viz., the authority under
38       which such special obligation bonds are issued, they are in conformity
39       with the provisions, restrictions and limitations thereof, and that such
40       special obligation bonds and the interest thereon are to be paid from the
41       money and revenue received as provided in paragraph (1) of this subsec-
42       tion. Notwithstanding the foregoing, any revenue received from taxes im-
43       posed by K.S.A. 79-3601 et seq. and K.S.A. 79-3701 et seq., in excess of

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  1       the amount thereof necessary to comply with the debt service payment
  2       schedule established by the terms and conditions of the special obligation
  3       bonds issued to finance an auto race track facility as prescribed by or-
  4       dinance adopted pursuant to this paragraph (3), shall be remitted by the
  5       state treasurer from the city bond finance fund to the city treasurer and
  6       credited to the special fund of the city to timely pay the costs of financing
  7       by means other than those provided by subsection (a)(1)(D) of K.S.A. 12-
  8       1774, and amendments thereto, the redevelopment project described by
  9       subsection (k) of K.S.A. 12-1771, and amendments thereto.
10           (b) (1) Subject to the provisions of paragraph (2) of this subsection,
11       any city shall have the power to issue full faith and credit tax increment
12       bonds to finance the undertaking of any redevelopment project in ac-
13       cordance with the provisions of K.S.A. 12-1770 et seq., and amendments
14       thereto other than a project determined by the secretary of commerce
15       and housing to be of statewide as well as local importance or will create
16       a major tourism area as specified in subsection (a)(1)(D) of K.S.A. 12-
17       1774, and amendments thereto. Such full faith and credit tax increment
18       bonds shall be made payable, both as to principal and interest: (A) From
19       the revenue sources identified in paragraph (1)(A), (B), (C), (D) and (E)
20       of subsection (a) or by any combination of these sources; and (B) subject
21       to the provisions of paragraph (2) of this subsection, from a pledge of the
22       city's full faith and credit to use its ad valorem taxing authority for repay-
23       ment thereof in the event all other authorized sources of revenue are not
24       sufficient.
25           (2) Except as provided in paragraph (3) of this subsection, before the
26       governing body of any city proposes to issue full faith and credit tax in-
27       crement bonds as authorized by this subsection, the feasibility study re-
28       quired by K.S.A. 12-1771, and amendments thereto, shall demonstrate
29       that the benefits derived from the project will exceed the cost and that
30       the income therefrom will be sufficient to pay the costs of the project.
31       No full faith and credit tax increment bonds shall be issued unless the
32       governing body states in the resolution required by K.S.A. 12-1772, and
33       amendments thereto, that it may issue such bonds to finance the proposed
34       redevelopment project. The governing body may issue the bonds unless
35       within 60 days following the date of the public hearing on the proposed
36       redevelopment plan a protest petition signed by 3% of the qualified voters
37       of the city is filed with the city clerk in accordance with the provisions of
38       K.S.A. 25-3601 et seq., and amendments thereto. If a sufficient petition
39       is filed, no full faith and credit tax increment bonds shall be issued until
40       the issuance of the bonds is approved by a majority of the voters voting
41       at an election thereon. Such election shall be called and held in the man-
42       ner provided by the general bond law. The failure of the voters to approve
43       the issuance of full faith and credit tax increment bonds shall not prevent

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  1       the city from issuing special obligation bonds in accordance with K.S.A.
  2       12-1774, and amendments thereto. No such election shall be held in the
  3       event the board of county commissioners or the board of education de-
  4       termines, as provided in K.S.A. 12-1771, and amendments thereto, that
  5       the proposed redevelopment district will have an adverse effect on the
  6       county or school district.
  7           (3) As an alternative to paragraph (2) of this subsection, any city which
  8       adopts a redevelopment plan but does not state its intent to issue full
  9       faith and credit tax increment bonds in the resolution required by K.S.A.
10       12-1772, and amendments thereto, and has not acquired property in the
11       redevelopment project area may issue full faith and credit tax increment
12       bonds if the governing body of the city adopts a resolution stating its intent
13       to issue the bonds and the issuance of the bonds is approved by a majority
14       of the voters voting at an election thereon. Such election shall be called
15       and held in the manner provided by the general bond law. The failure of
16       the voters to approve the issuance of full faith and credit tax increment
17       bonds shall not prevent the city from issuing special obligation bonds
18       pursuant to paragraph (1) of subsection (a). Any redevelopment plan
19       adopted by a city prior to the effective date of this act in accordance with
20       K.S.A. 12-1772, and amendments thereto, shall not be invalidated by any
21       requirements of this act.
22           (4) During the progress of any redevelopment project in which the
23       city's costs will be financed, in whole or in part, with the proceeds of full
24       faith and credit tax increment bonds, the city may issue temporary notes
25       in the manner provided in K.S.A. 10-123, and amendments thereto, to
26       pay the city's cost for the project. Such temporary notes shall not be issued
27       and the city shall not acquire property in the redevelopment project area
28       until the requirements of paragraph (2) or (3) of this subsection, which-
29       ever is applicable, have been met.
30           (5) Full faith and credit tax increment bonds issued under this sub-
31       section shall be general obligations of the city and are declared to be
32       negotiable instruments. They shall be issued in accordance with the gen-
33       eral bond law. All such bonds and all income or interest therefrom shall
34       be exempt from all state taxes except inheritance taxes. The amount of
35       the full faith and credit tax increment bonds issued and outstanding which
36       exceeds 3% of the assessed valuation of the city shall be within the bonded
37       debt limit applicable to such city.
38           (6) Any city issuing special obligation bonds under the provisions of
39       this act may refund all or part of such issue pursuant to the provisions of
40       K.S.A. 10-116a, and amendments thereto.
41           Sec. 2. K.S.A. 1997 Supp. 12-1774, as amended by section 3 of 1998
42       House Bill No. 2631, is hereby repealed.

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  1           Sec. 3. This act shall take effect and be in force from and after its
  2       publication in the statute book.
  3      
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