CHAPTER 83 SENATE BILL No. 76 An  Act concerning the preservation of historic theaters; amending K.S.A. 1998 Supp. 12-
1770, 12-1771 and 12-1774 and repealing the existing sections. Be it enacted by the Legislature of the State of Kansas:

      New Section  1. For purposes of K.S.A. 12-1770 et seq. and amend-
ments thereto:

      (a) ``Historic theater'' means a building constructed prior to 1940
which was constructed for the purpose of staging entertainment, includ-
ing motion pictures, vaudeville shows or operas, that is operated by a
nonprofit corporation and is designated by the state historic preservation
officer as eligible to be on the Kansas register of historic places or is a
member of the Kansas historic theatre association;

      (b) ``sales tax increment'' means the amount of state and local sales
tax revenue imposed pursuant to K.S.A. 12-187 et seq., 79-3601 et seq.
and 79-3701 et seq., and amendments thereto, collected from taxpayers
doing business within the historic theater that is in excess of the amount
of such taxes collected prior to the designation of the building as a historic
theater for purposes of this act.

      New Sec.  2. The governing body of any municipality may designate
a building within such municipality to be a historic theater if the governing
body of the municipality and the secretary of commerce and housing
agree that the building satisfies the requirements of subsection (a) of
section 1 and will contribute significantly to the economic development
of the city and surrounding area.

      Sec.  3. K.S.A. 1998 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 blighted areas and deteriorating areas which are not
yet blighted, but may be so in the future located within cities, environ-
mentally contaminated areas located within and without cities, enterprise
zones located within cities and, major tourism areas as defined in sub-
section (a)(1)(D) of K.S.A. 12-1774, and amendments thereto, thus pro-
moting 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.  4. K.S.A. 1998 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, a
major tourism area as defined in K.S.A. 12-1774, and amendments
thereto, a historic theater as defined in section 1, and amendments
thereto, or was designated prior to July 1, 1992, as an enterprise zone
pursuant to K.S.A. 12-17,110 prior to its repeal, and the conservation,
development or redevelopment of such area is necessary to promote the
general and economic welfare of such city. Enterprise zones designated
prior to July 1, 1992, may be enlarged by the city to an area not exceeding
25% of the city's land area upon a finding by the secretary of the de-
partment of commerce and housing that a redevelopment project pro-
posed by the city which requires the enlargement is of statewide impor-
tance and that it will meet the criteria specified in subsection (a)(1)(D)
of K.S.A. 12-1774, and amendments thereto. A unified government, es-
tablished pursuant to K.S.A. 12-340 et seq., and amendments thereto,
may enlarge an enterprise zone, established within its jurisdiction prior
to July 1, 1992, to an area not exceeding 200% of the area of the original
enterprise zone regardless of whether such enlargement crosses the
boundary of a city within the jurisdiction of the unified government if the
secretary of commerce and housing makes the same findings required for
enlargement of an enterprise zone by a city. For the purpose of this
subsection, the term ``blighted area'' means an area which: (1) Because
of the presence of a majority of the following factors, substantially impairs
or arrests the sound development and growth of the municipality or con-
stitutes 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 sub-
stantial number of deteriorated or deteriorating structures; (B) predom-
inance of defective or inadequate street layout; (C) unsanitary or unsafe
conditions; (D) deterioration of site improvements; (E) diversity of own-
ership; (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 condi-
tions which endanger life or property by fire and other causes; or (J)
conditions which create economic obsolescence; or (2) has been identified
by any state or federal environmental agency as being environmentally
contaminated to an extent that requires a remedial investigation, feasi-
bility 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 stan-
dards; (iv) building abandonment; (v) excessive vacancies; (vi) overcrowd-
ing of structures and community facilities; or (vii) inadequate utilities and
infrastructure. Not more than 15% of the land area of a city may be found
to be a conservation area.

      (b) The powers conferred upon cities under the provisions of K.S.A.
12-1770 et seq., and amendments thereto, shall be exercised by cities, as
determined by resolution adopted pursuant to K.S.A. 12-1772, and
amendments thereto, (1) in enterprise zones designated prior to July 1,
1992, including any area added to such enterprise zone after July 1, 1992,
pursuant to subsection (a), (2) in blighted areas of cities and counties
described by subsection (a)(2), (3) in conservation areas of cities, (4) in
major tourism areas as defined in K.S.A. 12-1774 and amendments
thereto or (5) in blighted areas of cities, as determined by resolution
adopted pursuant to K.S.A. 17-4742 et seq., and amendments thereto or
(6) for buildings designated as historic theaters pursuant to section 2.

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

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

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

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

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

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

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

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

      (e) Upon the conclusion of the public hearing, the governing body
may adopt a resolution to make any findings required by subsection (a)
and may establish the redevelopment district by ordinance. Such reso-
lution shall contain a comprehensive plan that identifies all of the pro-
posed redevelopment project areas and identifies in a general manner all
of the buildings and facilities that are proposed to be constructed or im-
proved in each redevelopment project area. The boundaries of such dis-
trict shall not include any area not designated in the notice required by
subsection (d). Subject to the provisions of K.S.A. 1998 Supp. 12-1771c,
and amendments thereto, any addition of area to the redevelopment dis-
trict or any substantial change to the comprehensive plan shall be subject
to the same procedure for public notice and hearing as is required for
the establishment of the district. The boundaries of any such district in a
major tourism area including an auto race track facility located in Wy-
andotte county, shall, without regard to that portion of the district per-
taining to the auto race track facility, be as follows: Beginning at the
intersection of Interstate 70 and Interstate 435; West along Interstate 70
to 118th Street; North along 118th Street to State Avenue; Northeasterly
along proposed relocated State Avenue to 110th Street; North along
110th Street to Parallel Parkway; East along Parallel Parkway to Interstate
435; South along Interstate 435 to Interstate 70.

      (f) No privately owned property subject to ad valorem taxes shall be
acquired and redeveloped under the provisions of K.S.A. 12-1770 et seq.,
and amendments thereto, if the board of county commissioners or the
board of education levying taxes on such property determines by reso-
lution adopted within 30 days following the conclusion of the hearing for
the establishment of the redevelopment district required by subsection
(d) that the proposed redevelopment district will have an adverse effect
on such county or school district.

      (g) Any redevelopment plan undertaken within the redevelopment
district may be in separate development stages. Each plan shall be
adopted according to the provisions of K.S.A. 12-1772, and amendments
thereto, and shall fix a date for completion. Except as provided herein,
any project shall be completed within 20 years from the date of transmittal
of the redevelopment plan or a revision of the plan, as authorized by
K.S.A. 1998 Supp. 12-1771c, and amendments thereto, to the county
pursuant to K.S.A. 12-1776, and amendments thereto. Projects relating
to environmental investigation and remediation under subsection (i) shall
be completed within 20 years from the date a city enters into a consent
decree agreement with the Kansas department of health and environment
or the United States environmental protection agency. A redevelopment
project in a major tourism area for an auto race track facility described
in subsection (a)(1)(D) of K.S.A. 12-1774, and amendments thereto, shall
be completed within 30 years from the date the secretary of commerce
and housing makes the finding that the redevelopment project will create
a major tourism area pursuant to subsection (a)(1)(D) of K.S.A. 12-1774,
and amendments thereto.

      (h) Any increment in ad valorem property taxes resulting from a re-
development district undertaken in accordance with the provisions of this
act, shall be apportioned to a special fund for the payment of the cost of
the redevelopment project, including the payment of principal and inter-
est on any special obligation bonds or full faith and credit tax increment
bonds issued to finance such project pursuant to this act and may be
pledged to the payment of principal and interest on such bonds. The
maximum maturity on bonds issued to finance projects pursuant to this
act shall not exceed 20 years except that: (1) Such maximum period of
special obligation bonds not payable from revenues described by subsec-
tion (a)(1)(D) of K.S.A. 12-1774, and amendments thereto, issued to fi-
nance an auto race track facility shall not exceed 30 years; and (2) such
maximum period, if the governor determines and makes and submits a
finding to the speaker of the house of representatives and the president
of the senate that a maturity greater than 20 years, but in no event ex-
ceeding 30 years, is necessary for the economic feasibility of the financing
of an auto race track facility with special obligation bonds payable pri-
marily from revenues described by subsection (a)(1)(D) of K.S.A. 12-
1774, and amendments thereto, may be extended in accordance with such
determination and finding.

      For the purposes of this act, ``increment'' means that amount of ad
valorem taxes collected from real property located within the redevel-
opment district that is in excess of the amount which is produced from
such property and attributable to the assessed valuation of such property
prior to the date the redevelopment plan or revision of the plan, as au-
thorized by K.S.A. 1998 Supp. 12-1771c, and amendments thereto, is
transmitted to the county pursuant to K.S.A. 12-1776, and amendments
thereto.

      (i) The governing body of a city, in contracts entered into with the
Kansas department of health and environment or the United States en-
vironmental protection agency, may pledge increments receivable in fu-
ture years to pay costs directly relating to the investigation and remedi-
ation of environmentally contaminated areas. The provisions in such
contracts pertaining to pledging increments in future years shall not be
subject to K.S.A. 10-1101 et seq. or 79-2925 et seq., and amendments
thereto.

      (j) Before any redevelopment project is undertaken, a comprehensive
feasibility study, which shows the benefits derived from such project will
exceed the costs and that the income therefrom will be sufficient to pay
for the project shall be prepared. Such feasibility study shall be an open
public record.

      (k) If a city determines that revenues from sources other than prop-
erty taxes will be sufficient to pay any special obligation bonds issued to
finance a redevelopment project for an auto race track facility described
in subsection (a)(1)(D) of K.S.A. 12-1774, and amendments thereto,
which the secretary of commerce and housing makes a finding that such
project will create a major tourism area pursuant to subsection (a)(1)(D)
of K.S.A. 12-1774, and amendments thereto, all real and personal prop-
erty, constituting an auto race track facility described in subsection
(a)(1)(D) of K.S.A. 12-1774, and amendments thereto, in such redevel-
opment district shall be exempt from property taxation for a period end-
ing on the earlier of (1) the date which is 30 years after the date of the
finding by the secretary of commerce and housing with respect to such
major tourism area; or (2) the date on which no such special obligation
bonds issued to finance such auto race track facility in a major tourism
area remain outstanding.

      (l) Any major tourism area may include an additional area not ex-
ceeding 400 acres of additional property, excluding roads and highways,
in addition to the property necessary for the auto race track facility upon
a finding by the governor that the development plan and each project
within such additional area will enhance the major tourism area. For the
development of each project within such additional area the city shall
select qualified developers pursuant to a request for proposals in accord-
ance with written official procedures approved by the governing body of
the city. Any project within such additional area that is financed in whole
or in part by special obligation bonds payable form from revenues derived
from subsection (a)(1)(D) of K.S.A. 12-1774, and amendments thereto,
shall not be entitled to any real property tax abatements or the revenues
described in K.S.A. 12-1775, and amendments thereto. Any project within
such additional area must be approved by the governor and construction
must be commenced by July 1, 2002. The city shall prepare and submit
annually to the governor, the secretary of commerce and housing and the
legislature by each October 1, commencing October 1, 1999 and contin-
uing until October 1, 2002, a report describing the status of any projects
within such additional area. Any business located in Kansas within 50
miles of a major tourism area that relocates into a major tourism area
shall not receive any of the benefits of K.S.A. 12-1770 et seq., and amend-
ments thereto.

      Sec.  5. K.S.A. 1998 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 in one or more series 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 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
amendments thereto, and which are collected from taxpayers doing busi-
ness within that portion of the city's redevelopment district established
pursuant to K.S.A. 12-1771, and amendments thereto, occupied by a re-
development project if there first is a finding by the secretary of com-
merce and housing that the redevelopment project is of statewide as well
as local importance or will create a major tourism area for the state or if
the project is the restoration of a historic theater. In making a finding that
a redevelopment project is of statewide as well as local importance, the
secretary must conclude at least: (i) That capital improvements costing
not less than $300,000,000 will be built in the state for such redevelop-
ment project; and (ii) not less than 1,500 permanent and seasonal em-
ployment positions as defined by K.S.A. 74-50,114, and amendments
thereto, will be created in the state by such redevelopment project. In
making a finding that a redevelopment project will create a major tourism
area within the state, the secretary must conclude at least: (i) That cap-
ital improvements costing not less than $100,000,000 will be built in the
state to construct a project for such major tourism area; and (ii) that the
project constructed will be an auto race track facility. An auto race track
facility means (i) an auto race facility and facilities directly related and
necessary to the operation of an auto race track facility including, but not
limited to, grandstands, suites and viewing areas, concessions and sou-
venir facilities, catering facilities, visitor and retail centers, signage and
temporary hospitality facilities; but excluding (ii) hotels, motels, restau-
rants and retail facilities not included in (i);

      (E)  (i) from a pledge of a portion or all increased revenue received
by the city from franchise fees collected from utilities and other busi-
nesses 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

      (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 and such bonds shall so state on their face.

      (3) Bonds issued under the provisions of paragraph (1) of this sub-
section 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.

      (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 ac-
cordance 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 or will create
a major tourism area as specified in subsection (a)(1)(D) of K.S.A. 12-
1774, 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), (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 repay-
ment 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. 1998 Supp. 12-1770, 12-1771 and 12-1774 are hereby
repealed.

      Sec.  7. This act shall take effect and be in force from and after its
publication in the statute book.

Approved April 9, 1999.
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