CHAPTER 158 HOUSE BILL No. 2166 An  Act concerning redevelopment projects of statewide as well as local importance; relat-
ing to certain water rights appurtenant to certain land to be used for such a project;
amending K.S.A. 1998 Supp. 12-195, 74-8902, 74-8904, 74-8921, 74-8922, 74-8923, 74-
8924, 74-8925, 74-8927, 74-8930, 79-3603, 79-3703 and 79-5302 and repealing the ex-
isting sections; also repealing K.S.A. 1998 Supp. 74-8902a and 79-3603a.
Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 1998 Supp. 12-195 is hereby amended to read as
follows: 12-195. (a) Except as otherwise provided in K.S.A. 12-195b, 12-
1774, 12-17,103 and K.S.A. 1998 Supp. 74-8924, and amendments
thereto, or subsection (b), no city or county shall commit any of the funds
or proceeds derived from a retailers' sales tax as a guarantee for the pay-
ment of bonds issued by such city or county or the Kansas development
finance authority.

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

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

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

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

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

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

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

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

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

      Sec.  2. K.S.A. 1998 Supp. 74-8902 is hereby amended to read as
follows: 74-8902. The following words or terms used in this act shall have
the following meanings unless a different meaning clearly appears from
the context:

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

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

      (c) ``Agricultural business enterprises'' means facilities supporting or
utilized in the operation of farms, ranches and other agricultural, aqua-
cultural or silvicultural commodity producers and services provided in
conjunction with the foregoing. ``Agricultural business enterprise'' shall
not include a swine production facility on agricultural land which is
owned, acquired, obtained or leased by a corporation, limited liability
company, limited partnership, corporate partnership or trust.

      (d) ``Agricultural land,'' ``corporation,'' ``corporate partnership,''
``limited liability company,'' ``limited partnership,'' ``swine production fa-
cility'' and ``trust'' have the meanings ascribed pursuant to K.S.A. 17-
5903, and amendments thereto.

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

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

      (f) (g) ``Capital improvements'' means any physical public betterment
or improvement or any preliminary plans, studies or surveys relative
thereto; land or rights in land, including, without limitations, leases, air
rights, easements, rights-of-way or licenses; and any furnishings, machin-
ery, vehicles, apparatus or equipment for any public betterment or im-
provement.

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

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

      (i) (j) ``Educational facilities'' means real, personal and mixed prop-
erty of any and every kind intended by an educational institution in fur-
therance of its educational program.

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

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

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

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

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

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

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

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

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

      Sec.  3. K.S.A. 1998 Supp. 74-8904 is hereby amended to read as
follows: 74-8904. Except as otherwise limited by this act, the authority
shall have the following powers to:

      (a) Sue and be sued;

      (b) have a seal and alter such seal;

      (c) make and alter bylaws for its organization and internal manage-
ment;

      (d) adopt such rules and regulations as may be necessary to carry out
the purposes of this act;

      (e) acquire, hold and dispose of real and personal property for its
corporate purposes;

      (f) appoint officers, agents and employees, prescribe their duties and
qualifications and fix their compensation;

      (g) borrow money and to issue notes, bonds and other obligations
pursuant to K.S.A. 74-8905, and amendments thereto, whether or not the
interest on which is subject to federal income taxation, and to provide for
the rights of the lenders or holders thereof;

      (h) purchase notes or participations in notes evidencing loans which
are secured by mortgages or security interests and to enter into contracts
in that regard;

      (i) make secured or unsecured loans for any of the purposes for which
bonds of the authority may be issued under this act or to low and mod-
erate income multifamily rental housing projects participating in pro-
grams established in section 42 of the federal internal revenue code, and
provide financing for housing projects and programs in participation with
programs established by the United States department of housing and
urban development or the Kansas department of commerce and housing;
except as otherwise provided in this subsection, nothing in this act shall
be construed to authorize the authority to make loans directly to individ-
uals to finance housing developments;

      (j) sell mortgages and security interests at public or private sale, to
negotiate modifications or alterations in mortgage and security interests,
to foreclose on any mortgage or security interest in default or commence
any action to protect or enforce any right conferred upon it by any law,
mortgage, security agreement, contract or other agreement, and to bid
for and purchase property which was the subject of such mortgage or
security interest at any foreclosure or at any other sale, to acquire or take
possession of any such property, and to exercise any and all rights as
provided by law for the benefit or protection of the authority or mortgage
holders;

      (k) collect fees and charges in connection with its loans, bond guar-
antees, commitments and servicing, including, but not limited to, reim-
bursement of costs of financing as the authority shall determine to be
reasonable and as shall be approved by the authority;

      (l) make and execute contracts for the servicing of mortgages ac-
quired by the authority pursuant to this act, and to pay the reasonable
value of services rendered to the authority pursuant to those contracts;

      (m) enter into agreements with and accept gifts, grants, loans and
other aid from the federal government, the state, any state agency, any
political subdivision of the state, or any person or corporation, foundation
or legal entity, and to agree to and comply with any conditions attached
to federal and state financial assistance not inconsistent with the provi-
sions of this act;

      (n) invest moneys of the authority not required for immediate use,
including proceeds from the sale of any bonds, in such manner as the
board shall determine, subject to any agreement with bondholders stated
in the authorizing resolution providing for the issuance of bonds;

      (o) procure insurance against any loss in connection with its pro-
grams, property and other assets;

      (p) provide technical assistance and advice to the state or political
subdivisions of the state and to enter into contracts with the state or
political subdivisions of the state to provide such services. The state or
political subdivisions of the state are hereby authorized to enter into con-
tracts with the authority for such services and to pay for such services as
may be provided them;

      (q) establish accounts in one or more depositories;

      (r) lease, acquire, construct, sell and otherwise deal in and contract
concerning any facilities;

      (s) have and exercise all of the powers granted to the public housing
authorities by the state, except that the authority shall not have the power
of eminent domain;

      (t) do any and all things necessary or convenient to carry out purposes
of the authority and exercise the powers given and granted in this act;

      (u) assist minority businesses in obtaining loans or other means of
financial assistance. The terms and conditions of such loans or financial
assistance, including the charges for interest and other services, will be
consistent with the provisions of this act. In order to comply with this
requirement, efforts must be made to solicit for review and analysis pro-
posed minority business ventures. Basic loan underwriting standards will
not be waived to inconsistently favor minority persons or businesses from
the intent of the authority's lending practices; and

      (v) form one or more subsidiary corporations under K.S.A. 17-6001
et seq., and amendments thereto, in accordance with the procedures
therein contained. Each subsidiary corporation shall be subject to the
same restrictions and limitations as to the powers and purposes to which
the authority is subject. The authority may delegate any of its powers,
obligations and duties to any subsidiary corporation by inclusion of such
powers, obligations and duties in the articles of incorporation of the sub-
sidiary corporation. Subsidiary corporations so formed shall constitute
legal entities separate and distinct from each other, the authority and the
state. The authority shall not be liable for the debts or obligations or for
any actions or inactions of its subsidiary corporations unless the authority
expressly agrees otherwise in writing. The authority may make loans or
grants to a subsidiary corporation from time to time to enable the sub-
sidiary corporation to carry out its purposes. The members of the au-
thority shall constitute all of the directors of each subsidiary corporation.

      The state, any municipality or any state commission, public authority,
agency, officer, department, board or division authorized and empowered
to enter into agreements with, to grant, convey, lease or otherwise transfer
any property to, or to otherwise transact business with the authority, shall
have the same authorization and power to engage in these activities with
each subsidiary corporation of the authority.

      One or more such subsidiary corporation may be formed for purposes
of establishing state tax credit equity funds to assist in the development
of low-income and middle-income housing and obtain financing through
participation in the program established in section 42 of the federal in-
ternal revenue code.

      Actions of the authority or any subsidiary corporation relating to hous-
ing pursuant to this subsection (v) shall be carried out in accordance with
any terms, conditions and limitations relating to policy issues regarding
housing, as established by the secretary of commerce and housing.

      One or more such subsidiary corporations may be formed for purposes
of acquiring or conveying on behalf of the state and pursuant to this act
a project of statewide as well as local importance, issuing bonds on behalf
of the state pursuant to this act to finance a project of statewide as well
as local importance or otherwise financing on behalf of the state pursuant
to this act a project of statewide as well as local importance. The Kansas
statewide projects development corporation is hereby created in accord-
ance with this section.

      Sec.  4. K.S.A. 1998 Supp. 74-8921 is hereby amended to read as
follows: 74-8921. (a) In addition to the other requirements of this act,
bonds issued by the authority under subsection (e) of K.S.A. 74-8905, and
amendments thereto, shall be issued only after the authority establishes
a redevelopment district and approves a redevelopment plan for a project
of statewide as well as local importance in accordance with subsections
(b) and (c).

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

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

      (d) Any redevelopment plan undertaken within the redevelopment
district may be in separate development stages. Each plan shall be
adopted according to the provisions of K.S.A. 1998 Supp. 74-8922, and
amendments thereto, and shall fix a date for completion. Any project
constituting a part of an approved redevelopment plan shall be completed
within 20 years from the date of the establishment of the redevelopment
district on or before the final scheduled maturity of the first series of bonds
issued to finance the redevelopment project.

      (e) Subject to the provisions of K.S.A. 1998 Supp. 74-8925, and
amendments thereto, any increment in ad valorem property taxes result-
ing from a redevelopment district undertaken in accordance with the
provisions of this act, shall be apportioned to the redevelopment bond
fund created pursuant to K.S.A. 1998 Supp. 74-8927, and amendments
thereto, for the payment of the costs of the project of statewide as well
as local importance, including the payment of principal and interest on
any bonds issued to finance such project pursuant to this act and may be
pledged to the payment of principal and interest on such bonds. The
maximum maturity on of bonds issued to finance projects of statewide as
well as local importance pursuant to this section and subsection (e) of
K.S.A. 74-8905, and amendments thereto, shall not exceed 20 30 years
from the date of establishment of the redevelopment district the issuance
of the first series of bonds issued to finance the redevelopment project.
For the purposes of this act, ``increment'' means that amount of ad va-
lorem taxes collected from real property located within the redevelop-
ment 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. 1998 Supp. 74-8925, and amendments
thereto.

      (f) Before any redevelopment district is established pursuant to
K.S.A. 1998 Supp. 74-8921, and amendments thereto, a comprehensive
feasibility study, which shows the benefits derived from such project will
exceed the costs and that the income therefrom will be sufficient to pay
for the project, shall be prepared by the developer and submitted to the
secretary of commerce and housing and the authority and an a redevel-
opment agreement between the authority and the developer with respect
to implementing the redevelopment plan shall have been executed. Such
feasibility study shall be an open public record and the redevelopment
agreement shall be approved by the board of county commissioners of the
county in which the redevelopment district is located.

      Sec.  5. K.S.A. 1998 Supp. 74-8922 is hereby amended to read as
follows: 74-8922. (a) If the developer proposes to undertake a project of
statewide as well as local importance within a redevelopment district es-
tablished pursuant to K.S.A. 1998 Supp. 74-8921, and amendments
thereto, the developer shall prepare a redevelopment plan. The redevel-
opment plan shall include:

      (1) A summary of the feasibility study required by K.S.A. 1998 Supp.
74-8921, and amendments thereto;

      (2) a reference to the redevelopment district established under
K.S.A. 1998 Supp. 74-8921 and amendments thereto;

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

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

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

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

      (b) A copy of the proposed redevelopment plan shall be delivered by
the developer to the authority, the secretary of commerce and housing
and the board of county commissioners of the county in which the re-
development district is located, and the board of county commissioners
shall determine, within 30 days after receipt of the plan, whether the plan
as proposed is consistent with the comprehensive general plan for the
development of the area. If the proposed redevelopment plan is not con-
sistent with the comprehensive general plan, the board of county com-
missioners shall provide its comments and objections to the authority,
which shall modify, approve or deny the plan. If the redevelopment plan
is consistent with the comprehensive general plan of the county, then the
authority may adopt the redevelopment plan by a resolution passed by a
majority of the board of directors of the authority. Any substantial changes
to the plan as adopted shall be made in the same manner, with notice
and approval of the board of county commissioners and adoption of a
resolution by the authority. A redevelopment plan may be adopted by the
authority, pursuant to these procedures, at the same time that the au-
thority establishes the redevelopment district under K.S.A. 1998 Supp.
74-8921, and amendments thereto. Any redevelopment plan which pro-
poses to undertake a project of statewide as well as local importance in a
county which according to the 1990 decennial census contained a popu-
lation greater than 25,000 shall be adopted prior to July 1, 2001.

      (c)  (1) Under no circumstances shall the state of Kansas, any of its
political subdivisions, the Kansas development finance authority or any
unit of local government assume responsibility or otherwise be respon-
sible for any environmental remediation which may be required to be
performed within the redevelopment district designated through any re-
development plan. Any person or entity, other than the state, an instru-
mentality of the state, or a unit of local government, who proposes to take
legal title to land which is located at a site designated as a federal enclave
prior to January 1, 1998, for the purpose of developing a project of state-
wide as well as local importance shall: (1) prior to taking such title, enter
into a consent decree agreement with the Kansas department of health
and environment or the United States environmental protection agency
under which such person or entity expressly agrees to be responsible for
and to complete the remediation of all environmental contamination of
such land according to established standards and levels for appropriate
property uses, except that part, if any, of the remediation which is, by
agreement approved by the governor, to be retained by the federal gov-
ernment or any agency thereof and (2) prior to taking title to any of the
land, provide prepaid third-party financial guarantees to the state or an
instrumentality thereof sufficient in form and amount to insure full and
complete remediation of all of the land within the federal enclave as re-
quired in the consent decree agreement. Nothing in this section is intended
and shall not be construed to relieve the United States army, the federal
government or any agency thereof from any duty, responsibility or lia-
bility for any contamination or remediation of the land as may be imposed
or required under state or federal law; and

      Prior to taking title, possession or otherwise exercising control over the
land within a former federal enclave or in any other way exposing the
state to potential liability for environmental remediation of such property,
the state or any instrumentality of the state shall obtain the written opin-
ion of a competent attorney, specializing in environmental law and main-
taining professional liability insurance, regarding the state's potential li-
ability resulting from taking title, possession or otherwise exercising
control over the land.

      Sec.  6. K.S.A. 1998 Supp. 74-8923 is hereby amended to read as
follows: 74-8923. The authority may use the proceeds of bonds issued
pursuant to subsection (e) of K.S.A. 74-8905, and amendments thereto,
or upon approval by the board of county commissioners or other taxing
subdivision in which the redevelopment district is located any uncom-
mitted funds derived from those sources set forth in K.S.A. 1998 Supp.
74-8924, and amendments thereto, or other funds pledged for the pay-
ment of such bonds to implement the redevelopment plan, including the
payment or reimbursement of all costs of the project of statewide as well
as local importance to the extent authorized in the redevelopment plan
implementation agreement adopted pursuant to K.S.A. 74-8921, and
amendments thereto. Any excess revenue not otherwise needed or com-
mitted for the repayment of bonds or other project costs authorized in the
agreement shall upon approval by the authority be paid out by the state
treasurer proportionately to the appropriate taxing authorities.

      Sec.  7. K.S.A. 1998 Supp. 74-8924 is hereby amended to read as
follows: 74-8924. (a) Any bonds issued by the authority under subsection
(e) of K.S.A. 74-8905, and amendments thereto, to finance the undertak-
ing of any project of statewide as well as local importance in accordance
with the provisions of this act, shall be made payable, both as to principal
and interest:

      (1) From property tax increments allocated to, and paid into a special
fund of the authority under the provisions of K.S.A. 1998 Supp. 74-8925,
and amendments thereto;

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

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

      (4) from a pledge of a portion or all of the revenue collected by the
state under K.S.A. 1998 Supp. 74-8927, and amendments thereto, for a
period not to exceed 20 years after the date of establishment of the re-
development district;

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

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

      (7) by any combination of these methods.

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

      Sec.  8. K.S.A. 1998 Supp. 74-8925 is hereby amended to read as
follows: 74-8925. (a) For the purposes of this act, the term ``taxing sub-
division'' shall include the county, the city, the unified school district and
any other taxing subdivision levying real property taxes, the territory or
jurisdiction of which includes any currently existing or subsequently cre-
ated redevelopment district. The term ``real property taxes'' includes all
taxes levied on an ad valorem basis upon land and improvements thereon,
other than the property tax levied pursuant to the provisions of K.S.A.
1998 Supp. 72-6431, and amendments thereto or any other property tax
levied by or on behalf of a school district.

      (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. 1998 Supp. 74-8921, and amendments thereto, real prop-
erty taxes received by the county treasurer resulting from taxes which are
levied subject to the provisions of this act by and for the benefit of a
taxing subdivision, as herein defined, on property located within such
redevelopment district constituting a separate taxing unit under the pro-
visions of this section, shall be divided as follows:

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

      (2) Any real property taxes produced from that portion of the current
assessed valuation of real property within the redevelopment district con-
stituting a separate taxing unit under the provisions of this section in
excess of an amount equal to the total assessed value of such real property
on the effective date of the establishment of the district shall be allocated
and paid by the county treasurer according to specified percentages of
the tax increment expressly agreed upon and consented to by the gov-
erning bodies of the county and school district in which the redevelop-
ment district is located. The amount of the real property taxes allocated
and payable to the authority under the agreement shall be paid by the
county treasurer to the treasurer of the state. The remaining amount of
the real property taxes not payable to the authority shall be allocated and
paid in the same manner as other ad valorem taxes. Any real property
taxes paid to the state treasurer under this section shall be deposited in
the redevelopment bond finance fund of the authority which is created
pursuant to K.S.A. 1998 Supp. 74-8927, and amendments thereto, to pay
the costs of the project of statewide as well as local importance, including
the payment of principal of and interest on any bonds issued by the au-
thority to finance, in whole or in part, such project. When such bonds
and interest thereon have been paid, all moneys thereafter received from
real property taxes within such redevelopment district shall be allocated
and paid to the respective taxing subdivisions in the same manner as are
other ad valorem taxes. If such bonds and interest thereon have been paid
before the completion of a project, the authority may continue to use
such moneys for any purpose authorized by this act the redevelopment
agreement until such time as the project costs are paid or reimbursed,
but for a period not to exceed 20 years from the date of the establishment
of the redevelopment district the final scheduled maturity of the bonds.

      (d) In any redevelopment plan or in the proceedings for the issuing
of any bonds by the authority to finance a project of statewide as well as
local importance, the property tax increment portion of taxes provided
for in paragraph (2) of subsection (c) may be irrevocably pledged for the
payment of the principal of and interest on such bonds. The authority
may adopt a redevelopment plan in which only a specified percentage of
the tax increment realized from taxpayers in the redevelopment district
is pledged to the payment of costs of the project of statewide as well as
local importance.

      Sec.  9. K.S.A. 1998 Supp. 74-8927 is hereby amended to read as
follows: 74-8927. (a) Until the earlier of: (1) The date the bonds issued
to finance or refinance the redevelopment undertaken in the redevel-
opment district have been paid in full; or (2) twenty years after the es-
tablishment of the redevelopment district (2) the final scheduled maturity
date of the first series of bonds issued to finance the redevelopment project,
all revenues collected or received from the state transient guest tax es-
tablished pursuant to K.S.A. 1998 Supp. 79-5301 through 79-5304, and
amendments thereto, any revenue from a county or countywide retailers'
sales tax levied or collected under K.S.A. 1998 Supp. 74-8929 and amend-
ments thereto, the state retailers' sales tax pursuant to K.S.A. 79-3603,
and amendments thereto, and the state compensating use tax, pursuant
to K.S.A. 79-3703, and amendments thereto, which have been certified
by the director of taxation to have been derived from taxpayers located
in a redevelopment district shall be remitted to the state treasurer.

      (b) The state treasurer shall credit all such revenues to the redevel-
opment bond fund which is hereby established in the state treasury. The
state treasurer shall make such biannual distributions on dates mutually
agreed upon by the treasurer and the authority. The authority shall use
all such moneys received pursuant to this section to pay the costs of a
redevelopment project of statewide as well as local importance as de-
scribed in K.S.A. 74-8902, and amendments thereto. Any revenues not
needed or committed for the payment of bonds or other project costs as
authorized by the redevelopment plan implementation agreement shall
upon approval by the authority be remitted by the state treasurer pro-
portionately to the appropriate taxing authorities.

      Sec.  10. K.S.A. 1998 Supp. 74-8930 is hereby amended to read as
follows: 74-8930. Within one year of the commencement of construction
of any project of statewide as well as local importance as defined in K.S.A.
74-8902 and amendments thereto, located within a county which accord-
ing to the 1990 decennial census contained a population greater than
25,000, a developer shall reimburse the unified government of Wyandotte
county for cash investment in the project and for the use of during the
course of negotiations with the developer as documented to and deter-
mined by the secretary of commerce and housing.

      Sec.  11. K.S.A. 1998 Supp. 79-3603 is hereby amended to read as
follows: 79-3603. For the privilege of engaging in the business of selling
tangible personal property at retail in this state or rendering or furnishing
any of the services taxable under this act, there is hereby levied and there
shall be collected and paid a tax at the rate of 4.9% and, within a rede-
velopment district established pursuant to K.S.A. 74-8921, and amend-
ments thereto, there is hereby levied and there shall be collected and paid
an additional tax at the rate of 2% until the earlier of the date the bonds
issued to finance or refinance the redevelopment project have been paid
in full or the final scheduled maturity of the first series of bonds issued
to finance any part of the project upon:

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

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

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

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

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

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

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

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

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

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

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

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

      (m) the gross receipts received from fees and charges by public and
private clubs, drinking establishments, organizations and businesses for
participation in sports, games and other recreational activities, but such
tax shall not be levied and collected upon the gross receipts received from:
(1) Fees and charges by any political subdivision, by any organization
exempt from property taxation pursuant to paragraph Ninth of K.S.A. 79-
201, and amendments thereto, or by any youth recreation organization
exclusively providing services to persons 18 years of age or younger which
is exempt from federal income taxation pursuant to section 501(c)(3) of
the federal internal revenue code of 1986, for participation in sports,
games and other recreational activities; and (2) entry fees and charges for
participation in a special event or tournament sanctioned by a national
sporting association to which spectators are charged an admission which
is taxable pursuant to subsection (e);

      (n) the gross receipts received from dues charged by public and pri-
vate clubs, drinking establishments, organizations and businesses, pay-
ment of which entitles a member to the use of facilities for recreation or
entertainment, but such tax shall not be levied and collected upon the
gross receipts received from: (1) Dues charged by any organization ex-
empt from property taxation pursuant to paragraphs Eighth and Ninth of
K.S.A. 79-201, and amendments thereto; and (2) sales of memberships
in a nonprofit organization which is exempt from federal income taxation
pursuant to section 501 (c)(3) of the federal internal revenue code of
1986, and whose purpose is to support the operation of a nonprofit zoo;

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

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

      For the purposes of this subsection:

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

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

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

      (4) ``residence'' shall mean only those enclosures within which indi-
viduals customarily live;

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

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

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

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

      (u) the gross receipts received from the sale of prepaid telephone
calling cards or pre-paid authorization numbers and the recharge of such
cards or numbers. A pre-paid telephone calling card or pre-paid author-
ization number means the right to exclusively make telephone calls, paid
for in advance, with the prepaid value measured in minutes or other time
units, that enables the origination of calls using an access number or
authorization code or both, whether manually or electronically dialed. If
the dale or recharge of such card or number does not take place at the
vendor's place of business, it shall be conclusively determined to take
place at the customer's shipping address; if there is no item shipped then
it shall be the customer's billing address.

      Sec.  12. K.S.A. 1998 Supp. 79-3703 is hereby amended to read as
follows: 79-3703. There is hereby levied and there shall be collected from
every person in this state a tax or excise for the privilege of using, storing,
or consuming within this state any article of tangible personal property.
Such tax shall be levied and collected in an amount equal to the consid-
eration paid by the taxpayer multiplied by the rate of 4.9%. Within a
redevelopment district established pursuant to K.S.A. 1998 Supp. 74-
8921, and amendments thereto, there is hereby levied and there shall be
collected and paid an additional tax of 1% 2% until the earlier of: (1) The
date the bonds issued to finance or refinance the redevelopment project
undertaken in the district have been paid in full; or (2) twenty years after
the establishment of the redevelopment district the final scheduled ma-
turity of the first series of bonds issued to finance the redevelopment
project. All property purchased or leased within or without this state and
subsequently used, stored or consumed in this state shall be subject to
the compensating tax if the same property or transaction would have been
subject to the Kansas retailers' sales tax had the transaction been wholly
within this state.

      Sec.  13. K.S.A. 1998 Supp. 79-5302 is hereby amended to read as
follows: 79-5302. (a) Upon notification to the director of taxation that the
Kansas development finance authority has established a redevelopment
district pursuant to K.S.A. 1998 Supp. 74-8921, and amendments thereto,
there is hereby imposed a tax at the rate of 5% upon the gross receipts
derived from or paid by transient guests for sleeping accommodations,
exclusive of charges for incidental services or facilities, in any hotel, motel
or tourist court located in a redevelopment district established pursuant
to K.S.A. 1998 Supp. 74-8921, and amendments thereto, until the earlier
of the date the bonds issued to finance or refinance the redevelopment
project have been paid in full or the final scheduled maturity of the first
series of bonds issued to finance any part of the redevelopment project.

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

      (c) The taxes levied pursuant to this section shall be paid by the con-
sumer or user to the business and it shall be the duty of each and every
business to collect from the consumer or user the full amount of any such
tax, or an amount equal as nearly as possible or practicable to the average
equivalent thereto. Each business collecting any of the taxes levied here-
under shall be responsible for paying over the same to the state depart-
ment of revenue in the manner prescribed by K.S.A. 1998 Supp. 79-5303,
and amendments thereto, and the state department of revenue shall ad-
minister and enforce the collection of such taxes.

      New Sec.  14. No ad valorem tax exemption for real or personal prop-
erty, located within a redevelopment district established pursuant to
K.S.A. 74-8921 and amendments thereto, granted after the effective date
of this act by the governing body of any city or the board of county
commissioners of any county pursuant to the provisions of section 13 of
article 11 of the Kansas constitution shall be deemed to exempt any such
property from the ad valorem property tax levied by or on behalf of a
school district.

 Sec.  15. K.S.A. 1998 Supp. 12-195, 74-8902, 74-8902a, 74-8904, 74-
8921, 74-8922, 74-8923, 74-8924, 74-8925, 74-8927, 74-8930, 79-3603,
79-3603a, 79-3703 and 79-5302 are hereby repealed.

 Sec.  16. This act shall take effect and be in force from and after its
publication in the statute book.

Approved May 12, 1999.
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