An Act concerning the department of commerce and housing; amending K.S.A. 74-5060, 74-5066, 74-50,111, 74-50,118 and 74-9002 and K.S.A. 1995 Supp. 74-5049, 74-5073, 74-5080, 74-5097, 74-50,151, 74-50,152, 74-8310, 74-8405 and 74-8905 and repealing the existing sections; also repealing K.S.A. 1995 Supp. 74-50,146.

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

Section 1. K.S.A. 74-5066 is hereby amended to read as follows: 74- 5066. (a) The secretary shall administer the KIT program and the KIR program and shall:

(1) Consider proposals from industries and job training agencies for training or retraining services under the programs;

(2) publicize the programs and the procedures for making and sub- mitting proposals for participation therein;

(3) establish standards and criteria for consideration of proposals and for assigning priorities among industries making proposals;

(4) ensure the provision of adequate fiscal and accounting controls under the programs;

(5) allocate and distribute funds made available for administration of the programs;

(6) evaluate the programs each year and make a report on the per- formance and cost effectiveness thereof to the governor and the legisla- ture as a part of the annual report required by K.S.A. 1995 Supp. 74- 5049, and amendments thereto; and

(7) adopt rules and regulations necessary for administration of the programs.

(b) Contractual agreements may be entered into by the secretary with any industry or job training agency for participation in the programs and such agreements may be in the form of fixed-fee performance contracts. Training services under the KIT program may be provided at no cost to the industry or on a shared-cost basis with the industry as determined through negotiation between the secretary and the industry. Retraining services under the KIR program shall be provided on a shared cost basis. All expenditures for the payment of costs under the KIT and KIR pro- grams shall be made in accordance with appropriation acts upon warrants of the director of accounts and reports issued pursuant to vouchers ap- proved by the secretary or by a person or persons designated by the secretary. Notwithstanding any provision of law to the contrary, contrac- tual agreements entered into under the KIT program or the KIR program shall not be subject to competitive bidding procedures of K.S.A. 75-3739 and amendments thereto.

(c) Within the limitation of funds available for the KIT and KIR pro- grams and to the extent practicable, the secretary shall make participation in the programs available to all industries which submit proposals to par- ticipate therein, if consistent with program goals and objectives and the allocation of resources for the programs. Goals and objectives for the KIT and KIR programs shall include appropriate priorities for basic industries.

Sec. 2. K.S.A. 74-50,111 is hereby amended to read as follows: 74- 50,111. The secretary of commerce and housing shall annually report on activities under the SKILL IMPACT act to the joint committee on eco- nomic development prior to each November 1, pursuant to K.S.A. 1995 Supp. 74-5049, and amendments thereto. Each report shall contain in- formation regarding the number and characteristics of the new jobs cre- ated in Kansas for which SKILL projects or major project investments have been financed under this act, including a report on any such new jobs which do not continue to exist and the circumstances and effect of any such discontinuances.

Sec. 3. K.S.A. 74-50,118 is hereby amended to read as follows: 74- 50,118. (a) Each designated nonmetropolitan region approved by the sec- retary shall submit an annual report to the secretary, in such form as the secretary may require, on or before February 15 of each year. Each report shall include:

(1) A list of local incentives for economic development available in such region during the prior year;

(2) the usage of the local incentives which the governing body com- mitted to provide in such region; and

(3) such other information as required by the secretary.

(b) The secretary shall submit an annual report to the governor and the legislature by April 1 of, pursuant to K.S.A. 1995 Supp. 74-5049, and amendments thereto, each year detailing the information provided pur- suant to subsection (a).

(c) The secretary of revenue shall submit an annual report to the governor and the legislature by April 1 of each year detailing by county the state fiscal note on the income tax credits claimed and used, including the amount of carry-forward credits, and sales tax exemptions allowed pursuant to this act.

Sec. 4. K.S.A. 74-9002 is hereby amended to read as follows: 74- 9002. The commission on travel and tourism shall: (a) Advise the de- partment of commerce and housing in the development and implemen- tation of the state's tourism marketing and business development program including, but not limited to, long-range strategies for attracting visitors to the state; (b) report to the department of commerce and housing in- formation for preparation of the annual budget for the division of travel and tourism development; (c) identify and review tourism related issues and current state policies and programs which directly or indirectly affect travel and tourism in the state and, as appropriate, recommend the adop- tion of new, or the modification of existing, policies and programs; (d) prepare and submit to the governor and the legislature on or before De- cember 31 each year as a part of the annual report of the department of commerce and housing, pursuant to K.S.A. 1995 Supp. 74-5049, and amendments thereto, a report of findings and recommendations of the commission concerning the promoting of travel and tourism in Kansas and such related matters as the commission deems appropriate; and (e) perform such other acts as may be necessary in carrying out the duties of the commission.

Sec. 5. K.S.A. 1995 Supp. 74-5049 is hereby amended to read as follows: 74-5049. (a) In order to insure that the department of commerce and housing is effectively administering this act, the department shall cooperate with the standing committee on commerce of the senate, the standing committee on economic development of the house of represen- tatives and the joint committee on economic development and Kansas, Inc. in the performance of an independent performance review of the activities of the department and the departmental divisions. The review shall include, but not be limited to: (1) An assessment of the impacts of the department's programs corresponding to the strategic plans of the department and the departmental divisions; (2) a comparative assessment of the relative impact of the department's programs with similar programs in other states; and (3) a comparative assessment of the targeting of the department's programs by size and sector of economic activity, and by location in different areas of the state. The review shall be completed or updated at least once every three years.

(b) On or before October 1, the department shall prepare and publish an annual report, which shall be made widely available, of its activities and expenditures for the information of the governor, the standing com- mittee on commerce of the senate, the standing committee on economic development of the house of representatives and the joint committee on economic development, Kansas, Inc. and the public, and shall, from time to time, submit recommendations to the governor concerning legislation found to be necessary or desirable in effecting the purposes of this act. The annual report shall include any information which the department is required to report by law. The annual report shall specifically account for the ways in which the purposes of the department and its divisions as described in this act have been achieved, and the recommendations shall specifically note what changes in the activities of the department and its divisions, and of state government are necessary to better address the purposes described in this act.

Sec. 6. K.S.A. 1995 Supp. 74-5073 is hereby amended to read as follows: 74-5073. (a) There is hereby established the Kansas export loan guarantee review committee within the department of commerce and housing. The committee shall consist of five members all of whom have appropriate experience and expertise in areas of commercial finance. At least two members shall have experience in commercial finance from the perspective of a borrower and at least two members shall have experience and expertise in international finance. The members of the committee shall be appointed by the governor, subject to confirmation by the senate as provided in K.S.A. 75-4315b and amendments thereto. Except as pro- vided by K.S.A. 1995 Supp. 46-2601, and amendments thereto, no person appointed to the committee shall exercise any power, duty or function as a member of the committee until confirmed by the senate. Except as provided by subsection (b), members shall serve until a successor is ap- pointed and confirmed. Not more than three members of the committee shall be of the same political party.

(b) The terms of members who are serving on the committee on the effective date of this act shall expire on January 15, of the year in which such member's term would have expired under the provisions of this section prior to amendment by this act. Thereafter, members shall be appointed for terms of four years and until their successors are appointed and confirmed.

(c) The committee shall review all proposals for Kansas export loan financing guarantees under K.S.A. 74-5072 and amendments thereto and shall approve those proposals that the committee deems to represent reasonable risks and to have a sufficient likelihood of repayment. The committee shall advise the secretary of commerce and housing on matters under this act when requested by the secretary and may provide such advice when deemed appropriate by the committee. The committee shall submit an annual report of its activities on or before the first day of February of each year to the governor and the chairperson of the joint committee on economic development as a part of the department's an- nual report pursuant to K.S.A. 1995 Supp. 74-5049, and amendments thereto.

(d) The secretary of commerce and housing shall serve as a nonvoting chairperson of the committee, and the committee shall annually elect a vice-chairperson from among its members. The committee shall meet upon call of the chairperson or upon call of any two of its members. Three voting members shall constitute a quorum for the transaction of business.

(e) Members of the Kansas export loan guarantee review committee attending meetings of the committee, or attending a subcommittee meet- ing thereof authorized by the committee, shall be paid compensation, subsistence allowances, mileage and other expenses as provided in K.S.A. 75-3223 and amendments thereto.

Sec. 7. K.S.A. 1995 Supp. 74-5080 is hereby amended to read as follows: 74-5080. The secretary shall prepare and submit, as a part of the annual report required by K.S.A. 1995 Supp. 74-5049, and amendments thereto, a report of activities under the trade show promotion act to the standing committee on commerce of the senate and the standing com- mittee on economic development of the house of representatives at the beginning of each regular session of the legislature. The report shall con- tain information concerning the types of Kansas small business concerns receiving financial assistance for participation in trade shows and the re- sults obtained from such participation.

Sec. 8. K.S.A. 1995 Supp. 74-5097 is hereby amended to read as follows: 74-5097. (a) Subject to the provisions of appropriations acts and in accordance with the provisions of this act, the department of commerce and housing may provide planning grants and action grants to city-county economic development organizations located in nonmetropolitan coun- ties, for the development and implementation of countywide economic development strategy plans or to neighborhood revitalization organiza- tions, in metropolitan counties, for the planning and implementation of urban economic development plans.

(b) The committee shall establish grant eligibility criteria for appli- cants in both metropolitan and nonmetropolitan counties, and shall ad- minister the competitive selection process for the awarding of planning grants and action grants. The committee shall submit its recommenda- tions for grant awards to the secretary of commerce and housing for final determination and award.

(1) Grant applicants from nonmetropolitan counties shall be subject to the following conditions. Planning grants shall be for the development of countywide economic development strategy plans. No planning grant shall exceed $15,000 for any single county economic development plan. An additional award for an amount not to exceed $5,000 may be granted for each additional county participating in the development of a joint multi-county strategic economic development plan, except that under no circumstances shall the total planning grant exceed $35,000. Any city- county economic development organization receiving a planning grant shall be required to provide additional funds equaling 25% of the amount of the planning grant. Action grants shall be for the implementation of countywide economic development strategy plans. Total action grants shall not exceed $25,000 for any single county action grant application. An additional award for an amount not to exceed $10,000 may be granted for each additional county participating in a joint multi-county action grant implementation effort, except that under no circumstances shall the action grant totals exceed $65,000. Any city-county economic develop- ment organization receiving a grant shall be required to provide additional funds equaling 100% of the amount of the action grant. Not more than one planning grant may be awarded to any one county or combination of counties.

(2) Neighborhood revitalization organizations from metropolitan counties shall be subject to the following conditions. Prior to applying to the committee, the neighborhood revitalization organization must submit its application to a local economic development organization designated by the county commission of the county in which the organization is located. The local economic development organization shall review the application and determine whether the application should be funded on the basis of local needs and priorities. If the application is approved by the local economic development organization and endorsed by resolution by the county commission and the governing body of the city in which the blighted area is located, the application shall be forwarded to the committee for further consideration. Planning grants shall be for the de- velopment of urban economic development strategy plans. No planning grant shall exceed $15,000 for any single urban economic development plan. Any neighborhood revitalization organization receiving a planning grant shall be required to provide additional funds equaling 25% of the amount of the planning grant. Action grants shall be for the implemen- tation of urban economic development strategy plans. Total action grants shall not exceed $25,000 for any single urban action grant application. Any neighborhood revitalization organization receiving a grant shall be required to provide additional funds equaling 100% of the amount of the action grant. Not more than one planning grant may be awarded to any one neighborhood revitalization organization.

(3) No funds shall be granted under this act to applicants from met- ropolitan counties unless such funds are specifically appropriated for that purpose.

(4) The secretary of commerce and housing may authorize a recipient of a planning grant, who has unexpended funds from such planning grant, to apply such funds to the implementation of the recipient's approved strategic economic development plan. Any unexpended planning grant funds applied to the implementation of such strategic economic devel- opment plan shall require the appropriate 100% match. Application of the unexpended planning grant funds to the implementation of the stra- tegic economic development plan may result in the reduction of any sub- sequent action grant awarded to the recipient.

(c) The secretary of commerce and housing may enter into an agree- ment with economic development service providers to provide reim- bursement to such providers for expenses incurred in strategic planning activities which do not relate to the facilitation of a specific strategic plan. Such activities may include, but are not limited to, preapplication con- sulting and maintenance of economic development data bases. Such ex- penses shall be paid on a per project basis and must be preapproved by the secretary.

(d) Each city-county economic development organization or neigh- borhood revitalization organization which has received a planning grant beginning on and after July 1, 1990, shall assess the effectiveness of the strategic planning process under this program and the local preparedness in engaging in such process. Such assessment shall be submitted to the Kansas department of commerce and housing within three months after completion of a strategic plan. The status report developed pursuant to subsection (f) shall include a summary of all strategic plan assessments received for a twelve-month period prior to the submittal of the report to the joint committee on economic development. However, the summary may not include assessments submitted within 30 days of the submittal of the department's report. Any such assessments shall be included in a subsequent annual report.

(e) Each city-county economic development organization or neigh- borhood revitalization organization which has received an action grant beginning on and after July 1, 1990, shall assess the extent to which goals identified in its action plan application have been met. Such assessment shall rely on quantifiable criteria to the greatest possible degree. Such assessment shall be submitted to the Kansas department of commerce and housing within three months after intended actions identified for implementation in the action grant application have been undertaken. The status report developed pursuant to subsection (f) shall include a summary of all action plan assessments received for a twelve-month pe- riod prior to the submittal of the report to the joint committee on eco- nomic development. However, the summary may not include assessments submitted within 30 days of the submittal of the department's report. Any such assessments shall be included in a subsequent annual report.

(f) Prior to September 1 of each year As a part of the annual report required pursuant to K.S.A. 1995 Supp. 74-5049, and amendments thereto, the Kansas department of commerce and housing shall present a status report of activities including, but not limited to, specifics of com- munity strengths and weaknesses and planning issues and strategies under the provisions of this act to the joint committee on economic develop- ment.

Sec. 9. K.S.A. 1995 Supp. 74-50,151 is hereby amended to read as follows: 74-50,151. (a) There is hereby created in the state treasury the Kansas economic opportunity initiatives fund. Subject to acts of the leg- islature applicable thereto, the moneys in the Kansas economic oppor- tunity initiatives fund shall be used only for the purposes prescribed by this section.

(b) All expenditures made pursuant to this act shall be made in ac- cordance with appropriations acts upon warrants of the director of ac- counts and reports issued pursuant to vouchers approved by the governor or the governor's designee. The governor may approve a warrant only upon certification, by the majority vote of a five member panel secretary of commerce and housing, that an economic emergency or unique op- portunity exists which warrant funding for a strategic economic interven- tion by such state agency or agencies to address expenses involved in securing economic benefits or avoiding or remedying economic losses related to:

(1) A major expansion of an existing Kansas commercial enterprise;

(2) the potential location in Kansas of the operations of a major em- ployer;

(3) the award of a significant federal or private sector grant which has a financial matching requirement;

(4) the departure from Kansas or the substantial reduction of the operations of a major employer; and

(5) the closure of a major federal or state institution or facility.

(c) No intervention strategy approved pursuant to this act shall in- clude loans for which state funds are used unless the five-member panel finds that private financing cannot adequately fund the intervention strat- egy An intervention strategy may include financial assistance in the form of grants, loans or both. The department of commerce and housing shall adopt written guidelines concerning the terms and conditions of any such loans. However, all repaid funds shall be credited to the Kansas economic opportunity initiatives fund. No intervention strategy approved pursuant to this act shall facilitate the moving of an existing Kansas firm to another location within the state unless such restriction is waived by a unanimous vote of the five member panel identified in subsection (b) the secretary of commerce and housing. Every intervention strategy approved pursuant to this act shall identify the intended outcomes to be realized by the strategy for which funding is sought.

(d) The department of commerce and housing and Kansas, Inc. shall make joint findings concerning the costs and benefits, on both a local and statewide basis, of projects proposed pursuant to this act. Prior to allo- cation of any funds pursuant to this act, the governor shall review the cost-benefit findings performed on each project.

(e) The director of the budget and the director of the legislative re- search department shall consult periodically and review the balance cred- ited to and the estimated receipts to be credited to the state economic development initiatives fund during the fiscal year. During any period when the legislature is not in session, upon a finding by the director of the budget in consultation with the director of the legislative research department that the total of the unencumbered balance and estimated receipts to be credited to the state economic development initiatives fund during a fiscal year are insufficient to fund the budgeted expenditures and transfers from the state economic development initiatives fund for the fiscal year in accordance with the provisions of appropriation acts, the director of the budget shall make a certification of such finding to the governor. Upon approval by the governor, the director of accounts and reports shall transfer the amount of moneys from the Kansas economic opportunity initiatives fund to the state economic development initiatives fund that is required, in accordance with a certification by the director of the budget under this subsection, to fund the budgeted expenditures and transfers from the state economic development initiatives fund for the fiscal year in accordance with the provisions of appropriation acts, as specified by the director of the budget pursuant to such certification.

(f) On or before the 10th day of each month, the director of accounts and reports shall transfer from the state general fund to the state eco- nomic development initiatives fund the amount of money certified by the pooled money investment board in accordance with this section. Prior to the 10th day of each month, the pooled money investment board shall certify to the director of accounts and reports the amount of money equal to the proportionate amount of all the interest credited to the state gen- eral fund for the preceding month, pursuant to K.S.A. 75-4210a and amendments thereto, that is attributable to moneys in the Kansas eco- nomic opportunity initiatives fund. Such amount of money shall be de- termined by the pooled money investment board based on: (1) The av- erage daily balance of moneys in the Kansas economic opportunity initiatives fund during the preceding month as certified to the board by the director of accounts and reports; and (2) the average interest rate on repurchase agreements of less than 30 days duration entered into by the pooled money investment board for that period of time. On or before the fifth day of each month, the director of accounts and reports shall certify to the pooled money investment board the average daily balance of mon- eys in the Kansas economic opportunity initiatives fund during the pre- ceding month.

(g) The A five member panel provided for in subsection (b) shall consist consisting of the secretary of commerce and housing, the presi- dent of Kansas, Inc., the president of the Kansas technology enterprise corporation, the private sector chairperson of the board of Kansas, Inc. and the private sector chairperson of the Kansas technology enterprise corporation shall review annually the propriety of projects funded under this section. The panel shall report its findings to the governor.

Sec. 10. K.S.A. 1995 Supp. 74-50,152 is hereby amended to read as follows: 74-50,152. On or before September 1 of each year As a part of the annual report required pursuant to K.S.A. 1995 Supp. 74-5049, and amendments thereto, the secretary of commerce and housing shall issue a report concerning the use of the fund to the joint committee on eco- nomic development. The secretary's report shall include a detailed de- scription of how funds were spent, what, if any, economic benefits were realized from the expenditures and whether the intended outcomes iden- tified pursuant to subsection (c) of K.S.A. 1995 Supp. 74-50,151 and amendments thereto have been realized.

Sec. 11. K.S.A. 1995 Supp. 74-8310 is hereby amended to read as follows: 74-8310. (a) The Pursuant to K.S.A. 74-5049, and amendments thereto, the secretary shall report annually to the governor, the legislature, and to Kansas, Inc., and to each certified Kansas venture capital company detailing the following:

(1) The number of Kansas venture capital companies;

(2) the total tax credit generated;

(3) the total investments made in Kansas venture capital companies;

(4) the total investments in Kansas businesses by Kansas venture cap- ital companies;

(5) an estimate of jobs created or preserved under the program; and

(6) an estimate of the multiplier effect on the Kansas economy of the program.

(b) Additionally, in the report the secretary shall evaluate the success of the program in collaboration with Kansas, Inc. and the standing com- mittee on commerce of the senate, the standing committee on economic development of the house of representatives and the joint committee on economic development, and may include specific recommendations for legislation.

Sec./007006/K.S.A. 1995 Supp. 74-8405 is hereby amended to read as follows: 74-8405. (a) The Pursuant to K.S.A. 1995 Supp. 74-5049, and amendments thereto, the secretary of commerce and housing shall report annually to the governor, the legislature, and to Kansas, Inc., and to each certified local seed capital pool detailing the following:

(1) The number of local seed capital pools;

(2) the total tax credit generated;

(3) the total investments made in Kansas venture capital companies;

(4) the total investments in Kansas businesses by local seed capital pools;

(5) an estimate of jobs created or preserved under the program; and

(6) an estimate of the multiplier effect on the Kansas economy of the program.

(b) Additionally, in the report the secretary shall evaluate the success of the program in collaboration with Kansas, Inc. and the standing com- mittee on commerce of the senate, the standing committee on economic development of the house of representatives and the joint committee on economic development, and may include specific recommendations for legislation.

Sec./007006/K.S.A. 74-5060 is hereby amended to read as follows: 74- 5060. (a) The secretary shall determine the state ceiling for each calendar year in accordance with the formula provided therefor in the code and, except as otherwise provided in K.S.A. 74-5063, and amendments thereto, shall allocate the state ceiling among governmental issuers in accordance with the provisions of this section.

(b) The secretary shall reserve until October 15 of each year (1) an amount equal to $5,000,000 for allocation in accordance with the provi- sions of section 141(b)(5) of the code for private activity use of a portion of the proceeds of bonds issued by governmental issuers, (2) an amount equal to $5,000,000 for allocation for qualified student loan bonds as defined in section 144(b) of the code, and (3) an amount equal to $25,000,000 for allocation for qualified small issue bonds as defined in section 144(a) of the code. On and after October 15 of each year, any portion of the state ceiling remaining unused or uncommitted shall be available for allocation to governmental issuers by the secretary without regard to the reservations provided for in this subsection.

(c) Prior to any issuance of private activity bonds subject to the state ceiling, a governmental issuer shall submit to the secretary on a form prescribed by the secretary a written application for an allocation of the state ceiling for such issue.

(d) Subject to the provisions of subsection (b), the secretary shall approve each properly filed application for an allocation for qualified small issue bonds of $5,000,000 or less on the basis of the chronological order of receipt of applications. If an application is for an allocation in excess of $5,000,000, the secretary may approve the total amount, approve a partial amount or reject the application.

(e) Within five business days after receipt of an application for an allocation, the secretary shall notify the governmental issuer in writing that (1) the application has been approved and shall specify the amount approved, or (2) the application has been denied, or (3) the application has been placed on hold pending receipt of additional information with respect to the application or pending a review of the effect approval of the application will have on the state ceiling.

(f) Unless an extension or a carryforward election is approved by the secretary, an approved allocation, or any portion thereof, that is not util- ized by the issuance of the private activity bonds for which the allocation was approved shall expire at the earliest of (1) the time of 11:59 p.m. on the date which is 60 days after the date the notification of the approved allocation is mailed to the governmental issuer or on such other date as the secretary may specify in the notification, or (2) the date upon which the approved allocation is voluntarily surrendered to the secretary by the governmental issuer, or (3) the time of 11:59 p.m. on December 1 of the calendar year in which the allocation was approved.

(g) A governmental issuer may request an extension of the expiration date of an approved allocation by filing a written application therefor with the secretary. Any such application must be received by the secretary not less than two days prior to the expiration date of the approved allocation. In such instances, the secretary may approve an extension for a period ending at the earliest of (1) the time of 11:59 p.m. on the date which is 30 days after the initial expiration date, or (2) the date upon which the approved allocation is voluntarily surrendered to the secretary by the gov- ernmental issuer, or (3) the time of 11:59 p.m. on December 1 of the calendar year in which the allocation was approved. The secretary shall notify the governmental issuer within five business days after receipt of the application if the request for extension has been approved or denied. If the private activity bonds for which an extension has been approved are not issued on or before the last day of the extension period approved by the secretary, the approved allocation shall expire unless a carryforward election is approved by the secretary.

(h) Notwithstanding any other provision of this section, if an ap- proved allocation or an approved extension period expires on December 1, the secretary may grant an extension, or a further extension, for any period ending not later than the time of 11:59 p.m. on December 31 of the calendar year in which the allocation was approved.

(i) The secretary shall provide to the governmental issuer on or prior to the date of issuance of any private activity bonds for which an approved allocation has not expired a certification that such bonds meet the require- ments of section 146 of the code.

(j) On or after December 16 of each calendar year, the secretary may approve a carryforward election with respect to an approved allocation or any approved extension if the governmental issuer, in writing (1) requests such action, and (2) indicates that the private activity bonds for which the allocation was approved cannot be issued during the calendar year in which the allocation was approved. Such approved carryforward election shall be made by the governmental issuer by means of a statement, signed by a duly authorized official of such issuer. Such statement shall be filed with the secretary and with the internal revenue service in accordance with section 146(f) of the code. A governmental issuer may elect to car- ryforward such issuing authority only for qualified mortgage bonds, mort- gage credit certificates, qualified student loan bonds, qualified redevel- opment bonds, as defined in sections 142, 143 and 144 of the code, or for bonds to finance a project described in section 141(e)(1)(A) of the code. In no event shall such carryforward be effective for a period longer than permitted by section 146(f) of the code.

(k) If an approved allocation expires, a governmental issuer may sub- mit another application for an allocation of the state ceiling for the same purpose for which the expired allocation was approved. Any such appli- cations shall be reviewed in order of receipt with no preference or priority being given as a result of the prior application and allocation.

Sec./007006/K.S.A. 1995 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 cap- ital improvement facilities, educational 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 sub- division, 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 prohibit the issuance of bonds by the authority when any statute specifically authorizes the issuance of bonds by the au- thority 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 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) Any time the authority is required to publish a notification pur- suant to the tax equity and fiscal responsibility act of 1982, the authority shall further publish such notification in the Kansas register.

(g) 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./007006/K.S.A. 74-5060, 74-5066, 74-50,111, 74-50,118 and 74-9002 and K.S.A. 1995 Supp. 74-5049, 74-5073, 74-5080, 74-5097, 74-50,146, 74-50,151, 74-50,152, 74-8310, 74-8405 and 74-8905 are hereby repealed.

Sec./007006/This act shall take effect and be in force from and after its publication in the statute book.

Approved May 11, 1996.