An Act concerning improvements to existing structures; amending K.S.A. 12-1773 and 12- 1775 and K.S.A. 1995 Supp. 12-1770, 12-1771, 12-1771a, 12-1774, 12-17,115, 12-17,116, 12-17,117, 12-17,118, 72-6431 and 79-32,176 and repealing the existing sections.

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

Section 1. K.S.A. 1995 Supp. 12-1770 is hereby amended to read as follows: 12-1770. It is hereby declared to be the purpose of this act to promote, stimulate and develop the general and economic welfare of the state of Kansas and its communities and to assist in the development and redevelopment of central business district areas of cities, blighted areas and deteriorating areas which are not yet blighted, but may be so in the future located within cities, environmentally contaminated areas located within and without cities and enterprise zones located within cities, thus promoting the general welfare of the citizens of this state, by authorizing cities to acquire certain property and to issue special obligation bonds and full faith and credit tax increment bonds for the financing of rede- velopment projects. It is further found and declared that the powers con- ferred by this act are for public uses and purposes for which public money may be expended and the power of eminent domain exercised. The ne- cessity in the public interest for the provisions of this act is hereby de- clared as a matter of legislative determination.

Sec. 2. K.S.A. 1995 Supp. 12-1771 is hereby amended to read as follows: 12-1771. (a) No city shall exercise any of the powers conferred by K.S.A. 12-1770 et seq., and amendments thereto, unless the governing body of such city has adopted a resolution finding that the specific project area sought to be redeveloped is a blighted area, a conservation area 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 K.S.A. 12-1774 (a)(1)(D), and amend- ments thereto. For the purpose of this subsection, the term ``blighted area'' means an area which: (1) Because of the presence of a majority of the following factors, substantially impairs or arrests the sound develop- ment 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 deteriorated or deteriorating structures; (B) predominance of defective or inadequate street layout; (C) unsanitary or unsafe conditions; (D) deterioration 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 platting or land uses; (I) the existence of conditions which endanger life or property by fire and other causes; or (J) conditions which create economic obsoles- cence; or (2) has been identified by any state or federal environmental 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 resolution 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 standards; (iv) building abandonment; (v) excessive vacancies; (vi) overcrowding of structures and community facilities; or (vii) inadequate utilities and in- frastructure. 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 in central business district areas of 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, or (4) in blighted areas of cities, as determined by resolution adopted pursuant to K.S.A. 17-4742 et seq., and amend- ments thereto.

(c) Within that portion of the city described in subsection (b), the governing body of a city may establish a district to be known as a ``rede- velopment district''. Within that portion of a city and county described in subsection (b) excluding paragraph (3) of subsection (b), the governing body of the city, upon written consent of the board of county commis- sioners, may establish a district inclusive of land outside the boundaries of the city to be known as a ``redevelopment district''. In all such cases, the board of county commissioners, prior to providing written consent, shall be subject to the same procedure for public notice and hearing as is required of a city pursuant to subsection (d) for the establishment of a redevelopment district. One or more redevelopment projects may be un- dertaken by a city within a redevelopment district after such redevelop- ment district has been established in the manner provided by subsection (d).

(d) Any city proposing to establish a redevelopment district shall adopt a resolution stating that the city is considering the establishment of a redevelopment district. Such resolution shall:

(1) Give notice that a public hearing will be held to consider the establishment of a redevelopment district and fix the date, hour and place of such public hearing;

(2) describe the proposed boundaries of the redevelopment district;

(3) describe a proposed comprehensive plan that identifies all of the proposed redevelopment project areas and that identifies in a general manner all of the buildings and facilities that are proposed to be con- structed or improved in each redevelopment project area;

(4) state that a description and map of the proposed redevelopment district are available for inspection at a time and place designated;

(5) state that the governing body will consider findings necessary for the establishment of a redevelopment district.

Notice shall be given as provided in subsection (c) of K.S.A. 12-1772, and amendments thereto.

(e) Upon the conclusion of the public hearing, the governing body may adopt a resolution to make any findings required by subsection (a) and may establish the redevelopment district by ordinance. Such reso- lution shall contain a comprehensive plan that identifies all of the pro- posed redevelopment project areas and identifies in a general manner all of the buildings and facilities that are proposed to be constructed or im- proved in each redevelopment project area. The boundaries of such dis- trict shall not include any area not designated in the notice required by subsection (d). Any addition of area to the redevelopment district or any substantial change to the comprehensive plan shall be subject to the same procedure for public notice and hearing as is required for the establish- ment of the district.

(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 15 20 years from the date of the establishment of the redevelopment district. Projects relating to environ- mental investigation and remediation under subsection (i) shall be com- pleted within 20 years from the date a city enters into a consent decree agreement with the Kansas department of health and environment or the United States environmental protection agency.

(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. For the purposes of this act, ``increment'' means that amount of ad valorem taxes collected from real property lo- cated within the redevelopment district that is in excess of the amount which is produced from such property and attributable to the assessed valuation of such property prior to the date the redevelopment district was established, as determined under the provisions of K.S.A. 12-1775, 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 K.S.A. 79-2925 et seq., and amend- ments 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.

Sec. 3. K.S.A. 1995 Supp. 12-1771a is hereby amended to read as follows: 12-1771a. (a) The governing body of a city may establish an in- crement in ad valorem taxes using the procedure set forth in subsection (b) for projects that are initiated upon a finding that the area is a blighted area under subsection (a)(2) of K.S.A. 12-1771, and amendments thereto, when the following conditions exist:

(1) The proposed district has been identified by the Kansas depart- ment of health and environment or the United States environmental pro- tection agency to be an environmentally contaminated area;

(2) the city has entered into a consent decree or settlement agree- ment or has taken action expressing an intent to enter into a consent decree or settlement agreement with the Kansas department of health and environment or the United States environmental protection agency that addresses the investigation and remediation of the environmental contamination;

(3) the consent decree or settlement agreement contains a provision that has the effect of releasing property owners who are not responsible for the contamination from the responsibility of paying the response costs of the investigation and remediation of the contamination; and

(4) the city intends to establish a redevelopment district pursuant to K.S.A. 12-1771, and amendments thereto, to wholly finance or partially finance the investigation and remediation of contamination within such district.

(b) An increment established after a city has found that the condition in subsection (a)(2) of K.S.A. 12-1771, and amendments thereto, exists shall be set on a yearly basis. For purposes of this section, a yearly basis shall be a calendar year. Each year's increment shall be an amount suf- ficient to pay the direct costs of investigation and remediation of the contaminated condition anticipated to be incurred that year including principal and interest due on any special obligation bonds or full faith and credit tax increment bonds issued to finance in whole or in part the re- mediation and investigation, costs relating to remediation investigation and feasibility studies, operation and maintenance expenses and other expenses relating directly to the investigation and remediation of contam- ination. Each year's increment shall not exceed 20% of the amount of taxes that are produced from the by all taxing subdivisions within any currently existing or subsequently created redevelopment district area in the year the redevelopment district is first established, notwithstanding that such subdivision was not required to receive notice of the establish- ment of the district.

(c) The budget that establishes the yearly increment shall be certified by the city to the county clerk and county treasurer no later than August 25th, preceding the calendar year for which the budget is being set. Funds derived from an increment established by this section and interest on all funds derived from an increment established by this section may be used only for projects involving the investigation and remediation of contam- ination in the district.

(d) The real property taxes produced by the increment established under subsection (b) from a redevelopment district established under the provisions of K.S.A. 12-1771, and amendments thereto, shall be allocated and paid by the county treasurer to the treasurer of the city and deposited in a special separate fund of the city to pay the direct cost of investigation and remediation of contamination in the redevelopment district. Any funds collected by the city from parties determined to be responsible in any manner for the contaminated condition shall be either: (1) Deposited in the same separate special fund created hereunder, and with all interest earned thereon, may be used only for projects involving the investigation and remediation of contamination in the established redevelopment dis- trict; or (2) distributed to parties who have entered into a contract with the city to pay a portion of investigation and remediation of the contam- ination in the redevelopment district and the terms of such contract pro- vide that such parties are entitled to reimbursement for a portion of funds they have expended for such investigation and remediation of contami- nation from the recovery of costs that are collected from other third party responsible parties.

A redevelopment district created under the provisions of this section shall constitute a separate taxing district. If all costs for such investigation and remediation of contamination in the redevelopment district have been paid and moneys remain in the special fund, such moneys shall be remitted to each taxing subdivision which paid moneys into the special fund on the basis of the proportion which the total amount of moneys paid by such taxing subdivision into the special fund bears to the total amount of all moneys paid by all taxing subdivisions into the fund.

(e) Nothing in this section shall prevent any city from establishing a redevelopment district for other purposes pursuant to K.S.A. 12-1770 et seq., and amendments thereto, which may include part or all of the real property included in the district established under this section.

(f) Nothing in this section shall be construed to affect the obligations of the county to annually review the fair market value of property in accordance with procedures set by law or to affect the right of any tax- payer to protest and appeal the appraised or reappraised value of their property in accordance with procedures set forth by law.

(g) Commencing with the regular session of the legislature in 1993, each city that establishes a redevelopment district under this section shall make a status report on a biennial basis to the standing committee on commerce of the senate and the standing committee on economic de- velopment of the house of representatives during the month of January. The status report shall contain information on the status of the investi- gation and remediation of contamination in the redevelopment district.

Sec. 4. K.S.A. 12-1773 is hereby amended to read as follows: 12- 1773. (a) Any city which has adopted a redevelopment plan in accordance with the provisions of this act may purchase or otherwise acquire real property. Upon a 2/3 vote of the members of the governing body thereof a city may acquire by condemnation any interest in real property, includ- ing a fee simple title thereto, which it deems necessary for or in connec- tion with any redevelopment plan of an area located within the redevel- opment district. However no city shall exercise such eminent domain power to acquire real property in a conservation area. Any such city may exercise the power of eminent domain in the manner provided by K.S.A. 26-501 et seq., and amendments thereto. In addition to any compensation or damages allowed under the eminent domain procedure act, such city shall also provide for the payment of relocation assistance as provided in K.S.A. 12-1777, and amendments thereto.

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

(1) Acquisition of property within the project area;

(2) payment of relocation assistance;

(3) site preparation;

(4) sanitary and storm sewers and lift stations;

(5) drainage conduits, channels and levees;

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

(7) street lighting fixtures, connection and facilities;

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

(9) sidewalks and pedestrian underpasses or overpasses;

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

(11) water mains and extensions;

(12) plazas and arcades;

(13) parking facilities;

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

(15) all related expenses to redevelop and finance the redevelopment project. None of the proceeds from the sale of such bonds shall be used for the construction of buildings or other structures to be owned by such devel- oper.

Sec. 5. K.S.A. 1995 Supp. 12-1774 is hereby amended to read as follows: 12-1774. (a) (1) Any city shall have the power to issue special obligation bonds to finance the undertaking of any redevelopment project in accordance with the provisions of this act. Such special obligation bonds shall be made payable, both as to principal and interest:

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

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

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

(D) from a pledge of a portion or all of the revenue received by the city from transient guest sales, and use and transient guest taxes collected pursuant to K.S.A. 12-1696 et seq., 79-3601 et seq., 79-3701 et seq., and 12-187 et seq. and 12-1696 et seq., and amendments thereto, and which are collected from taxpayers doing business within that portion of the city's redevelopment district established pursuant to K.S.A. 12-1771, and amendments thereto, occupied by a redevelopment project if there first is a finding by the secretary of the department of commerce and housing that the redevelopment project is of statewide as well as local importance. In making such finding, the secretary must conclude at least: (1) (i) That capital improvements costing not less than $300,000,000 will be built in the state for such redevelopment project,; and (2) (ii) not less than 1,500 permanent and seasonal employment positions as defined by K.S.A. 74- 50,114, and amendments thereto, will be created in the state by such redevelopment project; or;

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

(E) (F) by any combination of these methods.

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

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

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

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

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

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

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

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

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

Sec. 6. K.S.A. 12-1775 is hereby amended to read as follows: 12- 1775. (a) For the purposes of this act, the term ``taxing subdivision'' shall include only the county, the city and, the unified school district and any other taxing subdivision levying real property taxes, the territory or ju- risdiction of which includes the any currently existing or subsequently created 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 K.S.A. 12-1771, and amendments thereto, real property taxes received by the county treasurer resulting from taxes which are levied subject to the provisions of this act by and for the benefit of a taxing subdivision, as herein defined, on property located within such redevel- opment district constituting a separate taxing unit under the provisions of this section, shall be divided as follows:

(1) From the taxes levied each year subject to the provisions of this act by or for each of the taxing subdivisions upon property located within a redevelopment district constituting a separate taxing unit under the provisions of this act, the county treasurer first shall allocate and pay to each such taxing subdivision all of the real property taxes collected which are produced from that portion of the current assessed valuation of such real property located within such separate taxing unit which is equal to the total assessed value of such real property on the date of the estab- lishment of the redevelopment district.

(2) Any real property taxes produced from that portion of the current assessed valuation of real property within the redevelopment district con- stituting a separate taxing unit under the provisions of this section in excess of an amount equal to the total assessed value of such real property on the effective date of the establishment of the district shall be allocated and paid by the county treasurer to the treasurer of the city and deposited in a special fund of the city to pay the cost of redevelopment projects including the payment of principal of and interest on any special obliga- tion bonds or full faith and credit tax increment bonds issued by such city to finance, in whole or in part, such redevelopment project. When such obligation bonds and interest thereon have been paid, all moneys there- after received from real property taxes within such redevelopment district shall be allocated and paid to the respective taxing subdivisions in the same manner as are other ad valorem taxes. If such obligation bonds and interest thereon have been paid before the completion of a project, the city may continue to use such moneys for any purpose authorized by this act until such time as the project is completed, but for not to exceed 15 20 years from the date of the establishment of the redevelopment district.

(d) In any redevelopment plan or in the proceedings for the issuing of any special obligation bonds or full faith and credit tax increment bonds by the city to finance a redevelopment project, the property tax increment portion of taxes provided for in paragraph (2) of subsection (c) may be irrevocably pledged for the payment of the principal of and interest on such obligation bonds, subject to the provisions of subsection (h) of K.S.A. 12-1771, and amendments thereto. A city may adopt a redevelopment plan in which only a specified percentage of the tax increment realized from taxpayers in the redevelopment district are pledged to the redevel- opment project. The county treasurer shall allocate the specified percent- age of the tax increment to the treasurer of the city for deposit in the special fund of the city to finance the cost of redevelopment projects if the city has other available revenues and pledges the revenues to the rede- velopment project in lieu of the tax increment. Any portion of such tax increment not allocated to the city for the redevelopment project shall be allocated and paid in the same manner as other ad valorem taxes.

Sec. 7. K.S.A. 1995 Supp. 72-6431 is hereby amended to read as follows: 72-6431. (a) The board of each district shall levy an ad valorem tax upon the taxable tangible property of the district in the school years specified in subsection (b) for the purpose of:

(1) Financing that portion of the district's general fund budget which is not financed from any other source provided by law;

(2) paying a portion of the costs of operating and maintaining public schools in partial fulfillment of the constitutional obligation of the legis- lature to finance the educational interests of the state; and

(3) with respect to any redevelopment district established prior to the effective date of this act pursuant to K.S.A. 12-1771, and amendments thereto, paying a portion of the principal and interest on bonds issued by cities under authority of K.S.A. 12-1774, and amendments thereto, for the financing of redevelopment projects upon property located within the district.

(b) The tax required under subsection (a) shall be levied at a rate of 35 mills in the 1994-95 and 1995-96 school years.

(c) The proceeds from the tax levied by a district under authority of this section, except the proceeds of such tax levied for the purpose of paying a portion of the principal and interest on bonds issued by cities under authority of K.S.A. 12-1774, and amendments thereto, for the fi- nancing of redevelopment projects upon property located within the dis- trict, shall be deposited in the general fund of the district.

(d) On June 1 of each year, the amount, if any, by which a district's local effort exceeds the amount of the district's state financial aid, as determined by the state board, shall be remitted to the state treasurer. Upon receipt of any such remittance, the state treasurer shall deposit the same in the state treasury to the credit of the state school district finance fund.

(e) No district shall proceed under K.S.A. 79-1964, 79-1964a or 79- 1964b, and amendments to such sections.

Sec. 8. K.S.A. 1995 Supp. 12-17,115 is hereby amended to read as follows: 12-17,115. As used in this act:

(a) ``Dilapidated structure'' means a residence or other building which is in deteriorating condition by reason of obsolescence, inadequate provision of ventilation, light, air or structural integrity or is otherwise in a condition detrimental to the health, safety or welfare of its inhabitants or a residence or other building which is in deteriorating condition and because of age, architecture, history or significance is worthy of preser- vation.

(a) (b) ``Municipality'' means any municipality as defined by K.S.A. 10-1101, and amendments thereto.

(b) (c) ``Neighborhood revitalization area'' means:

(1) An area in which there is a predominance of buildings or im- provements which by reason of dilapidation, deterioration, obsolescence, inadequate provision for ventilation, light, air, sanitation, or open spaces, high density of population and overcrowding, the existence of conditions which endanger life or property by fire and other causes or a combination of such factors, is conducive to ill health, transmission of disease, infant mortality, juvenile delinquency or crime and which is detrimental to the public health, safety or welfare;

(2) an area which by reason of the presence of a substantial number of deteriorated or deteriorating structures, defective or inadequate streets, incompatible land use relationships, faulty lot layout in relation to size, adequacy, accessibility or usefulness, unsanitary or unsafe condi- tions, deterioration of site or other improvements, diversity of ownership, tax or special assessment delinquency exceeding the actual value of the land, defective or unusual conditions of title, or the existence of conditions which endanger life or property by fire and other causes, or a combination of such factors, substantially impairs or arrests the sound growth of a municipality, retards the provision of housing accommodations or consti- tutes an economic or social liability and is detrimental to the public health, safety or welfare in its present condition and use; or

(3) an area in which there is a predominance of buildings or improve- ments which by reason of age, history, architecture or significance should be preserved or restored to productive use.

(c) (d) ``Governing body'' means the governing body of any munici- pality.

(d) (e) ``Increment'' means that amount of ad valorem taxes collected from real property located within the neighborhood revitalization area or from dilapidated structures outside the revitalization area 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 neighborhood revitalization area was established or the structure was declared dilapi- dated pursuant to this act.

Sec. 9. K.S.A. 1995 Supp. 12-17,116 is hereby amended to read as follows: 12-17,116. The governing body of any municipality may designate any area within such municipality as a neighborhood revitalization area if the governing body finds that one or more of the conditions as described in subsection (b) (c) of K.S.A. 1995 Supp. 12-17,115, and amendments thereto, exist and that the rehabilitation, conservation or redevelopment of the area is necessary to protect the public health, safety or welfare of the residents of the municipality. The governing body may declare a building outside of a neighborhood revitalization area to be a dilapidated structure if the structure satisfies the conditions set forth in subsection (a) of K.S.A. 1995 Supp. 12-17,115.

Sec. 10. K.S.A. 1995 Supp. 12-17,117 is hereby amended to read as follows: 12-17,117. (a) Prior to designating an area as a neighborhood revitalization area or a structure to be a dilapidated structure, the gov- erning body shall adopt a plan for the revitalization of such area or des- ignation of a dilapidated structure. Such plan shall include:

(1) A legal description of the real estate forming the boundaries of the proposed area and a map depicting the existing parcels of real estate;

(2) the existing assessed valuation of the real estate in the proposed area, listing the land and building values separately;

(3) a list of names and addresses of the owners of record of real estate within the area;

(4) the existing zoning classifications and district boundaries and the existing and proposed land uses within the area;

(5) any proposals for improving or expanding municipal services within the area including, but not limited to, transportation facilities, wa- ter and sewage systems, refuse collection, road and street maintenance, park and recreation facilities and police and fire protection;

(6) a statement specifying what property is eligible for revitalization and whether rehabilitation and additions to existing buildings or new con- struction or both is eligible for revitalization;

(7) the criteria to be used by the governing body to determine what property is eligible for revitalization;

(8) the contents of an application for a rebate of property tax incre- ments authorized by K.S.A. 1995 Supp. 12-17,118 and amendments thereto;

(9) the procedure for submission of an application for a rebate of property tax increments authorized by K.S.A. 1995 Supp. 12-17,118 and amendments thereto;

(10) the standards or criteria to be used when reviewing and approv- ing applications for a rebate of property tax increments authorized by K.S.A. 1995 Supp. 12-17,118 and amendments thereto;

(11) a statement specifying the maximum amount and years of eli- gibility for a rebate of property tax increments authorized by K.S.A. 1995 Supp. 12-17,118; and

(12) any other matter deemed necessary by the governing body.

(b) Prior to declaring a building to be a dilapidated structure, the governing body shall do the following:

(1) Obtain a legal description of the property to be declared dilapi- dated;

(2) determine the assessed value of the property to be declared a di- lapidated structure, with separate values established for the land and structure;

(3) determine the owner of record of the structure.

(b) (c) Prior to adopting a plan pursuant to this section, the governing body shall call and hold a hearing on the proposal. Notice of such hearing shall be published at least once each week for two consecutive weeks in a newspaper of general circulation within the municipality. Following such hearing, or the continuation thereof, the governing body may adopt such plan.

Sec. 11. K.S.A. 1995 Supp. 12-17,118 is hereby amended to read as follows: 12-17,118. (a) Following adoption of a plan pursuant to K.S.A. 1995 Supp. 12-17,117 and amendments thereto, the governing body shall create a neighborhood revitalization fund to finance the redevelopment of designated revitalization areas and dilapidated structures and to pro- vide rebates authorized by this section. Moneys may be budgeted and transferred to such fund from any source which may be lawfully utilized for such purposes. Any municipality may expend money from the general fund of such municipality to accomplish the purposes of this act.

(b) Moneys credited to such fund from annually budgeted transfers shall not be subject to the provisions of K.S.A. 79-2925 through 79-2937, and amendments thereto. In making the budget of the municipality, the amounts credited to, and the amount on hand in, such neighborhood revitalization fund and the amount expended therefrom shall be shown thereon for the information of taxpayers. Moneys in such fund may be invested in accordance with K.S.A. 10-131, and amendments thereto with the interest credited to the fund.

(c) If the governing body determines that money which has been credited to such fund or any part thereof is not needed for the purposes for which so budgeted or transferred, the governing body may transfer such amount not needed to the fund from which it came and such re- transfer and expenditure shall be subject to the provisions of K.S.A. 79- 2925 through 79-2937, and amendments thereto.

(d) Any increment in ad valorem property taxes levied by the munic- ipality resulting from improvements by a taxpayer to property in a neigh- borhood revitalization area or to a dilapidated structure may be credited to the fund for the purpose of returning all or a part of the property increment to the taxpayer in the form of a rebate. Applications for rebates shall be submitted in the manner and subject to the conditions provided by the revitalization plan adopted under K.S.A. 1995 Supp. 12-17,117 and amendments thereto. Upon approval of an application received hereunder the municipality shall rebate any all or a part of incremental increases in ad valorem property tax resulting from the improvements within 30 days of payment by the taxpayer. Upon payment of taxes by the taxpayer, the rebate must be made within 30 days after the next distribution date as specified in K.S.A. 12-1678a, and amendments thereto.

Sec./007006/K.S.A. 1995 Supp. 79-32,176 is hereby amended to read as follows: 79-32,176. (a) Any resident individual taxpayer who makes ex- penditures for the purpose of making all or any portion of an existing facility accessible to individuals with a disability, which facility is used as, or in connection with, such taxpayer's principal dwelling or the principal dwelling of a lineal ascendant or descendant, including construction of a small barrier free living unit attached to such principal dwelling, shall be entitled to claim a tax credit in an amount equal to the applicable per- centage of such expenditures or $3,000 $9,000, whichever is less, against the income tax liability imposed against such taxpayer pursuant to article 32 of chapter 79 of the Kansas Statutes Annotated. Nothing in this sub- section shall be deemed to prevent any such taxpayer from claiming such credit: (1) For each principal dwelling in which the taxpayer or lineal ascendant or descendant may reside, or facility used in connection there- with; or (2) more than once, but not more often than once every four- year period of time. The applicable percentage of such expenditures el- igible for credit shall be as set forth in the following schedule:

Taxpayers Kansas Adjusted                                     % of expenditures

Gross Income                                                  eligible for
     credit

$0 to $25,000..................................................          100%

Over $25,000 but not over $30,000..............................           90%

Over $30,000 but not over $35,000..............................           80%

Over $35,000 but not over $40,000..............................           70%

Over $40,000 but not over $45,000..............................           60%

Over $45,000 but not over $55,000..............................           50%

Over $55,000...................................................             0

(b) Notwithstanding the provisions of subsection (a), if the amount of the taxpayer's tax liability is less than $750 $2,250 in the first year in which the credit is claimed under this section, an amount equal to the amount by which 1/4 of the credit allowable under this section exceeds such tax liability shall be refunded to the taxpayer and the amount by which such credit exceeds such tax liability less the amount of such refund may be carried over for the next three succeeding taxable years. If the amount of the taxpayer's tax liability is less than $750 $2,250 in the second year in which the credit is claimed under this section, an amount equal to the amount by which 1/3 of the amount of the credit carried over from the first taxable year exceeds such tax liability shall be refunded to the taxpayer and the amount by which the amount of the credit carried over from the first taxable year exceeds such tax liability less the amount of such refund may be carried over for the next two succeeding taxable years. If the amount of the taxpayer's tax liability is less than $750 $2,250 in the third year in which the credit is claimed under this section, an amount equal to the amount by which 1/2 of the amount carried over from the second taxable year exceeds such tax liability shall be refunded to the taxpayer and the amount by which the amount of the credit carried over from the second taxable year exceeds such tax liability less the amount of such refund may be carried over to the next succeeding taxable year. If the amount of the credit carried over from the third taxable year exceeds the taxpayer's income tax liability for such year, the amount thereof which exceeds such tax liability shall be refunded to the taxpayer.

Sec./007006/K.S.A. 12-1733 and 12-1775 and K.S.A. 1995 Supp. 12-1770, 12-1771, 12-1771a, 12-1774, 12-17,115, 12-17,116, 12-17,117, 12-17,118, 72-6431 and 79-32,176 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.