Session Law

Identifying Information:L. 2003 ch. 097
Other Identifying Information:2003 Senate Substitute for House Bill 2208
Tax Type:Kansas Retailers' Sales Tax
Brief Description:(Amended by Chapter 154)An Act concerning tax increment financing and sales tax revenue bonds; relating to rede- velopment of certain property located throughout the state; amending K.S.A. 12-1770a, 12-1774 and 74-8017 and K.S.A. 2002 Supp. 79-3620 and 79-3710 and repealing the existing sections.
Keywords:


Body:

CHAPTER 97

SENATE Substitute for HOUSE BILL No. 2208

(Amended by Chapter 154)


An Act concerning tax increment financing and sales tax revenue bonds; relating to rede-

velopment of certain property located throughout the state; amending K.S.A. 12-1770a,

12-1774 and 74-8017 and K.S.A. 2002 Supp. 79-3620 and 79-3710 and repealing the


existing sections.


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

Section 1. K.S.A. 12-1770a is hereby amended to read as follows: 12-

1770a. As used in this act, unless the context clearly shows otherwise:

(a) ``Auto race track facility'' means: (1) An auto race track 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, souvenir facilities, catering facilities, visitor and retail

centers, signage and temporary hospitality facilities, but excluding (2) ho-

tels, motels, restaurants and retail facilities, not directly related to or nec-

essary to the operation of such facility.

(b) ``Base year assessed valuation'' means the assessed valuation of all

real property within the boundaries of a redevelopment district on the

date the redevelopment district was established.

(c) ``Blighted area'' means an area which:

(1) Because of the presence of a majority of the following factors,

substantially impairs or arrests the development and growth of the mu-

nicipality 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) tax or special assessment delinquency exceeding the fair market

value of the real property;

(F) defective or unusual conditions of title including but not limited

to cloudy or defective titles, multiple or unknown ownership interests to

the property;

(G) improper subdivision or obsolete platting or land uses;

(H) the existence of conditions which endanger life or property by

fire or other causes; or

(I) 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 re-

medial 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.

(d) ``Conservation area'' means any improved area comprising 15%

or less of the land 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:

(1) Dilapidation, obsolescence or deterioration of the structures;

(2) illegal use of individual structures;

(3) the presence of structures below minimum code standards;

(4) building abandonment;

(5) excessive vacancies;

(6) overcrowding of structures and community facilities; or

(7) inadequate utilities and infrastructure.

(e) ``De minimus'' means an amount less than 15% of the land area

within a redevelopment district.

(f) ``Developer'' means any person, firm, corporation, partnership or

limited liability company, other than a city.

(g) ``Eligible area'' means a blighted area, conservation area, enter-

prise zone, historic theater or, major tourism area or a major commercial

entertainment and tourism area as determined by the secretary.

(h) ``Enterprise zone'' means an area within a city that was designated

as an enterprise zone prior to July 1, 1992, pursuant to K.S.A. 12-17,107

through 12-17,113, and amendments thereto, prior to its repeal and the

conservation, development or redevelopment of the area is necessary to

promote the general and economic welfare of such city.

(i) ``Environmental increment'' means the increment determined

pursuant to subsection (b) of K.S.A. 12-1771a, and amendments thereto.

(j) ``Environmentally contaminated area'' means an area of land hav-

ing contaminated groundwater or soil which is deemed environmentally

contaminated by the department of health and environment or the United

States environmental protection agency.

(k) ``Feasibility study'' means a study which shows whether a rede-

velopment or special bond project's benefits and tax increment revenue

and other available revenues under K.S.A. 12-1774 (a)(1), and amend-

ments thereto, are expected to exceed or be sufficient to pay for the

redevelopment or special bond project costs and the effect, if any, the

redevelopment or special bond project will have on any outstanding spe-

cial obligation bonds as authorized pursuant to subsection (a)(1)(D) of

K.S.A. 12-1774, and amendments thereto.

(l) ``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.

(m) ``Historic theater 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.

(n) ``Major tourism area'' means an area for which the secretary has

made a finding the capital improvements costing not less than

$100,000,000 will be built in the state to construct an auto race track

facility.

(o) ``Real property taxes'' means all taxes levied on an ad valorem basis

upon land and improvements thereon.

(p) ``Redevelopment project area'' or ``project area'' means an area

designated by a city within a redevelopment district.

(q) ``Redevelopment project costs'' means those costs necessary to

implement a redevelopment plan, including, but not limited to costs in-

curred for:

(1) Acquisition of property within the redevelopment project area;

(2) payment of relocation assistance;

(3) site preparation including utility relocations;

(4) sanitary and storm sewers and lift stations;

(5) drainage conduits, channels and, levees and river walk canal fa-

cilities;

(6) street grading, paving, graveling, macadamizing, curbing, gutter-

ing and surfacing;

(7) street light 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 the 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.

Redevelopment project costs shall not include costs incurred in con-

nection with the construction of buildings or other structures to be owned

by or leased to a developer, however, the ``redevelopment project costs''

shall include costs incurred in connection with the construction of build-

ings or other structures to be owned or leased to a developer which in-

cludes an auto race track facility or is in a redevelopment district including

some or all of the land and buildings comprising a state mental institution

closed pursuant to section 2 of chapter 219 of the 1995 Session Laws of

Kansas.

(r) ``Redevelopment district'' means the specific area declared to be

an eligible area in which the city may develop one or more redevelopment

projects.

(s) ``Redevelopment district plan'' or ``district plan'' means the pre-

liminary plan that identifies all of the proposed redevelopment project

areas and identifies in a general manner all of the buildings, facilities and

improvements in each that are proposed to be constructed or improved

in each redevelopment project area.

(t) ``Redevelopment project'' means the approved project to imple-

ment a project plan for the development of the established redevelop-

ment district.

(u) ``Redevelopment project plan'' or ``project plan'' means the plan

adopted by a municipality for the development of a redevelopment pro-

ject or projects which conforms with K.S.A. 12-1772, and amendments

thereto, in a redevelopment district.

(v) ``Secretary'' means the secretary of commerce and housing.

(w) ``Substantial change'' means, as applicable, a change wherein the

proposed plan or plans differ substantially from the intended purpose for

which the district plan or project plan was approved.

(x) ``Tax increment'' means that amount of real property taxes col-

lected from real property located within the redevelopment district that

is in excess of the amount of real property taxes which is collected from

the base year assessed valuation.

(y) ``Taxing subdivision'' means the county, city, unified school district

and any other taxing subdivision levying real property taxes, the territory

or jurisdiction of which includes any currently existing or subsequently

created redevelopment district.

(z) ``Special bond project'' means a project with at least a $50,000,000

capital investment and $50,000,000 in projected gross annual sales reve-

nues or for areas outside of metropolitan statistical areas, as defined by

the federal office of management and budget as of June 30, 1999, the

secretary finds the project meets the requirements of subsection (g) and

would be of regional or statewide importance, but a ``special bond project''

shall not include a project for a gambling casino.

(aa) ``Marketing study'' means a study conducted to examine the im-

pact of the redevelopment or special bond project upon similar businesses

in the projected market area.

(bb) ``Projected market area'' means any area within the state in

which the redevelopment or special bond project is projected to have a

substantial fiscal or market impact upon businesses in such area.

(cc) ``River walk canal facilities'' means a canal and related water

features located adjacent to a river which flows through a major com-

mercial entertainment and tourism area and facilities related or contig-

uous thereto, including, but not limited to pedestrian walkways and prom-

enades, landscaping and parking facilities.

(dd) ``Commence work'' means the manifest commencement of actual

operations on the development site, such as, erecting a building, excavat-

ing the ground to lay a foundation or a basement or work of like descrip-

tion which a person with reasonable diligence can see and recognize as

being done with the intention and purpose to continue work until the

project is completed.

(ee) ``Major commercial entertainment and tourism area'' shall in-

clude, but not be limited to, a major multi-sport athletic complex.

(ff) ``Major multi-sport athletic complex'' means an athletic complex

that is utilized for the training of athletes, the practice of athletic teams,

the playing of athletic games or the hosting of events. Such project may

include playing fields, parking lots and other developments.

New Sec. 2. (a) The governing body of a city may establish one or

more special bond projects in any area within such city. The special bond

projects shall be eligible for financing by special obligation bonds payable

from revenues described by subsection (a)(1)(D) of K.S.A. 12-1774, and

amendments thereto. Each special bond project shall first be approved

by the secretary. The secretary may approve a special bond project located

in a redevelopment district established by a city prior to the effective date

of this act. A special bond project shall not be granted to any business

that proposes to relocate its business from another area of the state into

such city, for the purpose of consideration for a special bond project and

shall not receive any of the benefits provided by K.S.A. 12-1770 et seq.,

and amendments thereto. A special bond project shall not be approved

by the secretary if the marketing study required by section 3, and amend-

ments thereto, indicates a substantial negative impact upon businesses in

the project market area or the granting of such project would cause a

default in the payment of any outstanding special obligation bonds as

authorized pursuant to subsection (a)(1)(D) of K.S.A. 12-1774, and

amendments thereto.

(b) The maximum maturity of special obligation bonds payable pri-

marily from revenues described by subsection (a)(1)(D) of K.S.A. 12-

1774, and amendments thereto, to finance special bond projects pursuant

to this section shall not exceed 20 years.

(c) Any redevelopment project plan in a redevelopment district lo-

cated in the city of Wichita that is eligible for benefits provided by K.S.A.

12-1774 et seq., and amendments thereto, and includes an arena or arena-

like structure shall be subject to approval by a vote by the citizens of

Wichita at an election held for this purpose prior to approval by the

secretary of commerce and housing.

New Sec. 3. (a) Any city proposing to undertake a special bond pro-

ject established pursuant to section 2, and amendments thereto, shall

prepare a project plan in consultation with the planning commission of

the city. The project plan shall include:

(1) A summary of the feasibility study done as defined in K.S.A. 12-

1770a, and amendments thereto, which will be an open record;

(2) a summary of the marketing study done as defined in K.S.A. 12-

1770a, and amendments thereto, which will be an open record;

(3) a reference to the district plan established under K.S.A. 12-1771,

and amendments thereto, that identifies the project area that is set forth

in the project plan that is being considered;

(4) a description and map of the location of the facility that is the

subject of the special bond project;

(5) the relocation assistance plan required by K.S.A. 12-1777, and

amendments thereto;

(6) a detailed description of the buildings and facilities proposed to

be constructed or improved; and

(7) any other information the governing body deems necessary to

advise the public of the intent of the special bond project plan.

(b) Resolution requirements. A copy of the project plan shall be de-

livered to the board of county commissioners of the county and the board

of education of any school district levying taxes on property subject to the

special bond project. Upon a finding by the planning commission of the

city that the project plan is consistent with the intent of the comprehen-

sive plan for the development of the city, the governing body of the city

shall adopt a resolution stating that the city is considering the adoption

of the project plan. Such resolution shall:

(1) Give notice that a public hearing will be held to consider the

adoption of the project plan and fix the date, hour and place of such

public hearing;

(2) describe the boundaries of the area subject to the special bond

project; and

(3) state that the project plan, including a summary of the feasibility

study, relocation assistance plan and financial guarantees of the prospec-

tive developer and a description and map of the area to be developed are

available for inspection during regular office hours in the office of the

city clerk.

(c) (1) Hearing. The date fixed for the public hearing shall be not

less than 30 nor more than 70 days following the date of the adoption of

the resolution fixing the date of the hearing.

(2) A copy of the resolution providing for the public hearing shall be

by certified mail, return receipt requested sent to the board of county

commissioners of the county and the board of education of any school

district levying taxes on property subject to the special bond project. The

resolution shall be published once in the official city newspaper not less

than one week nor more than two weeks preceding the date fixed for the

public hearing. A description in sufficient detail to advise the reader of

the particular proposed special bond project shall be published with the

resolution.

(3) At the public hearing, a representative of the city shall present

the city's proposed project plan. Following the presentation of the project

plan, all interested persons shall be given an opportunity to be heard. The

governing body for good cause shown may recess such hearing to a time

and date certain, which shall be fixed in the presence of persons in at-

tendance at the hearing.

(d) The public hearing records and feasibility study shall be subject

to the open records act, K.S.A. 45-215, and amendments thereto.

(e) Posthearing procedure. Following the public hearing, the govern-

ing body may adopt the project plan by ordinance passed upon a 2/3 vote.

(f) Any substantial changes as defined in K.S.A. 12-1770a, and

amendments thereto, to the project plan as adopted shall be subject to a

public hearing following publication of notice thereof at least twice in the

official city newspaper.

(g) Any project shall be completed within 20 years from the date of

the approval of the project plan. Kansas resident employees shall be given

priority consideration for employment in construction projects located in

a special bond project area.

(h) Any developer of a special bond project shall commence work on

such project within two years from the date of adoption of the project

plan. Should the developer fail to commence work on the special bond

project within the two-year period, funding for such project shall cease

and the developer of such project shall have one year to appeal to the

secretary for reapproval of such project and the funding for it. Should

the project be reapproved, the two-year period for commencement shall

apply.

(i) The provisions of this act regarding special bond projects shall

expire on and after July 1, 2007.

Sec. 4. K.S.A. 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 obli-

gation bonds shall be made payable, both as to principal and interest:

(A) From 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 including historic theater sales tax increments and envi-

ronmental increments;

(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 based upon the feasibility study the redevelop-

ment project will create a major tourism area for the state or if the project

is the restoration of a historic theater as defined in subsection (l) of K.S.A.

12-1770a, and amendments thereto, or the project has been designated

as a special bond project as defined in subsection (z) of K.S.A. 12-1770a,

and amendments thereto;

(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 except that for a project

which has been designated as a special bond project as defined in subsec-

tion (z) of K.S.A. 12-1770a and amendments thereto, 100% of city and

county sales taxes collected pursuant to K.S.A. 12-187, and amendments

thereto, shall be pledged for such project except for amounts committed

to other use by election of voters prior to the effective date of this act.

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 that will create a major tourism area or result

in the renovation of an historic theater. 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 au-

thority 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. 12-1772, 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

project 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 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 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 project 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 redevel-

opment 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 project 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 require-

ments of this act.

(4) During the progress of any redevelopment project in which the

redevelopment project 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 redevelopment project costs for the pro-

ject. Such temporary notes shall not be issued and the city shall not ac-

quire property in the redevelopment project area until the requirements

of paragraph (2) or (3) of this subsection, whichever 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.

(c) Any increment in ad valorem property taxes resulting from a re-

development project in the established redevelopment district under-

taken in accordance with the provisions of this act, shall be apportioned

to a special fund for the payment of the redevelopment project costs,

including the payment of principal and interest 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 prin-

cipal and interest on such bonds.

Sec. 5. K.S.A. 2002 Supp. 79-3620 is hereby amended to read as

follows: 79-3620. (a) All revenue collected or received by the director of

taxation from the taxes imposed by this act shall be remitted to the state

treasurer in accordance with the provisions of K.S.A. 75-4215, and

amendments thereto. Upon receipt of each such remittance, the state

treasurer shall deposit the entire amount in the state treasury, less

amounts withheld as provided in subsection (b) and amounts credited as

provided in subsection (c) and (d), to the credit of the state general fund.

(b) A refund fund, designated as ``sales tax refund fund'' not to exceed

$100,000 shall be set apart and maintained by the director from sales tax

collections and estimated tax collections and held by the state treasurer

for prompt payment of all sales tax refunds including refunds authorized

under the provisions of K.S.A. 79-3635, and amendments thereto. Such

fund shall be in such amount, within the limit set by this section, as the

director shall determine is necessary to meet current refunding require-

ments under this act. In the event such fund as established by this section

is, at any time, insufficient to provide for the payment of refunds due

claimants thereof, the director shall certify the amount of additional funds

required to the director of accounts and reports who shall promptly trans-

fer the required amount from the state general fund to the sales tax refund

fund, and notify the state treasurer, who shall make proper entry in the

records.

(c) (1) The state treasurer shall credit 5/98 of the revenue collected

or received from the tax imposed by K.S.A. 79-3603, and amendments

thereto, at the rate of 4.9%, and deposited as provided in subsection (a),

exclusive of amounts credited pursuant to subsection (d), in the state

highway fund.

(2) The state treasurer shall credit 5/104 of the revenue collected or

received from the tax imposed by K.S.A. 79-3603, and amendments

thereto, at the rate of 5.2%, and deposited as provided in subsection (a),

exclusive of amounts credited pursuant to subsection (d), in the state

highway fund.

(3) The state treasurer shall credit 5/106 of the revenue collected or

received from the tax imposed by K.S.A. 79-3603, and amendments

thereto, at the rate of 5.3%, and deposited as provided in subsection (a),

exclusive of amounts credited pursuant to subsection (d), in the state

highway fund.

(4) The state treasurer shall credit 1/20 of the revenue collected and

received from the tax imposed by K.S.A. 79-3603, and amendments

thereto, at the rate of 5%, and deposited as provided by subsection (a),

exclusive of amounts credited pursuant to subsection (d), in the state

highway fund.

(d) The state treasurer shall credit all revenue collected or received

from the tax imposed by K.S.A. 79-3603, and amendments thereto, as

certified by the director, from taxpayers doing business within that por-

tion of a redevelopment district occupied by a redevelopment project or

taxpayers doing business with such entity financed by a special bond

project as defined in K.S.A. 12-1770a, and amendments thereto, that was

determined by the secretary of commerce and housing to be of statewide

as well as local importance or will create a major tourism area for the

state or the project was designated as a special bond project as defined

in K.S.A. 12-1770a, and amendments thereto, to the city bond finance

fund, which fund is hereby created. The provisions of this subsection shall

expire when the total of all amounts credited hereunder and under sub-

section (d) of K.S.A. 79-3710, and amendments thereto, is sufficient to

retire the special obligation bonds issued for the purpose of financing all

or a portion of the costs of such redevelopment or special bond project.

New Sec. 6. Notwithstanding any other provisions of law to the con-

trary, copies of all retailers' sales, use and transient guest tax returns filed

with the director of the department of revenue in connection with a re-

development project area or special bond project for which sales, use and

transient guest tax revenues are pledged or otherwise intended to be used

in whole or in part for the payment of bonds issued to finance redevel-

opment or special bond project costs in such redevelopment or special

bond project area, shall be provided by the director of the department of

revenue to the bond trustee, escrow agent or paying agent for such bonds

upon the written request of the municipality within 15 days of receipt by

the director of the department of revenue. The bond trustee, escrow

agent or paying agent shall keep such retailers' sales, use and transient

guest tax returns and the information contained therein confidential, but

may use such information for purposes of allocating and depositing such

sales, use and transient guest tax revenues in connection with the bonds

used to finance redevelopment or special bond project costs in such re-

development or special bond project area. Except as otherwise provided

herein, the sales, use and transient guest tax returns received by the bond

trustee, escrow agent or paying agent shall be subject to the provisions

of K.S.A. 79-3614, and amendments thereto.

Sec. 7. K.S.A. 74-8017 is hereby amended to read as follows: 74-

8017. On and after January 1, 2003, it shall be the duty of Kansas, Inc.

to prepare an annual report evaluating the cost effectiveness of the various

income tax credits and sales tax exemptions enacted to encourage eco-

nomic development within this state and submit the same to the standing

committees on taxation and economic development of the house and as-

sessment and taxation and commerce of the senate at the beginning of

each regular session of the legislature. The secretary of revenue, in con-

sultation with the president of Kansas, Inc., shall develop a questionnaire

on the utilization of state income tax credits and sales tax exemptions that

shall be completed by all corporate taxpayers subject to state income tax

that shall be submitted to the department of revenue concurrently with

the filing of an annual corporate income tax return. The secretary shall

provide the completed questionnaires to Kansas, Inc. for use in the prep-

aration of such annual report. The questionnaire shall require respon-

dents to indicate utilization of the following credits and exemptions:

(a) Income tax credits authorized under the provisions of the job ex-

pansion and investment credit act of 1976 and acts amendatory thereof

and supplemental thereto;

(b) income tax credits for expenditures in research and development

activities authorized by K.S.A. 79-32,182, and amendments thereto;

(c) income and financial institutions privilege tax credits for cash in-

vestment in stock of Kansas Venture Capital, Inc. authorized by K.S.A.

74-8205 and 74-8206, and amendments thereto;

(d) income tax credits for cash investment in certified Kansas venture

capital companies authorized by K.S.A. 74-8304, and amendments

thereto;

(e) income tax credits for cash investment in certified local seed cap-

ital pools authorized by K.S.A. 74-8401, and amendments thereto;

(f) income tax credits for investment in the training and education of

qualified firms' employees authorized by K.S.A. 74-50,132, and amend-

ments thereto;

(g) sales tax exemptions for property or services purchased for the

purpose of and in conjunction with constructing, reconstructing, enlarg-

ing or remodeling a business, or retail business meeting the requirements

of K.S.A. 74-50,115, and amendments thereto, and machinery and equip-

ment for installation at such business or retail business authorized by

subsection (cc) of K.S.A. 79-3606, and amendments thereto; and

(h) sales tax exemptions for machinery and equipment used directly

and primarily for the purposes of manufacturing, assembling, processing,

finishing, storing, warehousing or distributing articles of tangible personal

property in this state intended for resale by a manufacturing or processing

plant or facility or a storage, warehousing or distribution facility. The

secretary of revenue shall provide the completed questionnaires and cop-

ies of sales tax exemption certificates to Kansas, Inc. for the preparation

of such report.; and

(i) special obligation bonds authorized by K.S.A. 12-1774, and

amendments thereto.

Sec. 8. K.S.A. 2002 Supp. 79-3710 is hereby amended to read as

follows: 79-3710. (a) All revenue collected or received by the director

under the provisions of this act shall be remitted to the state treasurer in

accordance with the provisions of K.S.A. 75-4215, and amendments

thereto. Upon receipt of each such remittance, the state treasurer shall

deposit the entire amount in the state treasury, less amounts set apart as

provided in subsection (b) and amounts credited as provided in subsection

(c) and (d), to the credit of the state general fund.

(b) A revolving fund, designated as ``compensating tax refund fund''

not to exceed $10,000 shall be set apart and maintained by the director

from compensating tax collections and estimated tax collections and held

by the state treasurer for prompt payment of all compensating tax refunds.

Such fund shall be in such amount, within the limit set by this section,

as the director shall determine is necessary to meet current refunding

requirements under this act.

(c) (1) The state treasurer shall credit 5/98 of the revenue collected

or received from the tax imposed by K.S.A. 79-3703, and amendments

thereto, at the rate of 4.9%, and deposited as provided in subsection (a),

exclusive of amounts credited pursuant to subsection (d), in the state

highway fund.

(2) The state treasurer shall credit 5/104 of the revenue collected or

received from the tax imposed by K.S.A. 79-3703, and amendments

thereto, at the rate of 5.2%, and deposited as provided in subsection (a),

exclusive of amounts credited pursuant to subsection (d), in the state

highway fund.

(3) The state treasurer shall credit 5/106 of the revenue collected or

received from the tax imposed by K.S.A. 79-3703, and amendments

thereto, at the rate of 5.3%, and deposited as provided in subsection (a),

exclusive of amounts credited pursuant to subsection (d), in the state

highway fund.

(4) The state treasurer shall credit 1/20 of the revenue collected or

received from the tax imposed by K.S.A. 79-3703, and amendments

thereto, at the rate of 5%, and deposited as provided by subsection (a),

exclusive of amounts credited pursuant to subsection (d), in the state

highway fund.

(d) The state treasurer shall credit all revenue collected or received

from the tax imposed by K.S.A. 79-3703, and amendments thereto, as

certified by the director, from taxpayers doing business within that por-

tion of a redevelopment district occupied by a redevelopment project that

was determined by the secretary of commerce and housing to be of state-

wide as well as local importance or will create a major tourism area for

the state as defined in K.S.A. 12-1770a, and amendments thereto, to the

city bond finance fund created by subsection (d) of K.S.A. 79-3620, and

amendments thereto. The provisions of this subsection shall expire when

the total of all amounts credited hereunder and under subsection (d) of

K.S.A. 79-3620, and amendments thereto, is sufficient to retire the special

obligation bonds issued for the purpose of financing all or a portion of

the costs of such redevelopment project.

This subsection shall not apply to a project designated as a special bond

project as defined in subsection (z) of K.S.A. 12-1770a, and amendments

thereto.

Sec. 9. K.S.A. 12-1770a, 12-1774 and 74-8017 and K.S.A. 2002 Supp.

79-3620 and 79-3710 are hereby repealed.

Sec. 10. This act shall take effect and be in force from and after its

publication in the Kansas register.

Approved April 18, 2002.

Published in the Kansas Register May 1, 2002.


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Date Composed: 10/29/2003 Date Modified: 10/29/2003