12-1771a.   Environmentally contaminated areas;financing of investigationand remediation; tax increment bonds.(a) The governing body of a city may establish an increment in ad valorem taxesusing the procedure set forth in subsection (b) for projects that are initiatedupon a finding that the area is a blighted area as defined under K.S.A.12-1770a, and amendments thereto, when the following conditions exist:

      (1)   The proposed district has been identified by the Kansas department ofhealth and environment or the United States environmental protection agency tobe an environmentally contaminated area;

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

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

      (4)   the city intends to establish a redevelopment district pursuant toK.S.A. 12-1771, and amendments thereto, tofinance, in whole or in part,the investigation and remediation of contamination within such district.

      (b)   An environmental increment established after a city has found that theconditions described in subsection (c) of K.S.A. 12-1770a, and amendmentsthereto, exists shall be set on a yearly basis. For purposes of this section, ayearly basis shall be a calendar year. Each year's increment shall be an amountsufficient to pay the direct costs of investigation and remediation of thecontaminated condition anticipated to be incurred that year including principaland interest due on any special obligation bonds or full faith and credit taxincrement bonds issued to finance in whole or in part the remediation andinvestigation, costs relating to remediation investigation and feasibilitystudies, operation and maintenance expenses and other expenses relatingdirectly to the investigation and remediation of contamination. Each year'senvironmental increment shall not exceed 20% of the amount of taxes that areproduced by all taxing subdivisions within any currently existing orsubsequently created redevelopment district area in the year the redevelopmentdistrict is first established, notwithstanding that such subdivision was notrequired to receive notice of the establishment of the district.

      (c)   The budget that establishes the yearly environmental increment shall becertified by the city to the county clerk and county treasurer no later thanAugust 25th, preceding the calendar year for which the budget is being set.Funds derived from an environmental increment established by this section andinterest on all funds derived from an environmental increment established bythis section may be used only for projects involving the investigation andremediation of contamination in the district.

      (d)   The real property taxes produced by the environmental incrementestablished under subsection (b) from a redevelopment district establishedunder the provisions of K.S.A. 12-1771, and amendments thereto, and thissection shall be allocated and paid by the county treasurer to the treasurer ofthe city and deposited in a special separate fund of the city to pay the directcost of investigation and remediation of contamination in the redevelopmentdistrict. Any funds collected by the city from parties determined to beresponsible in any manner for the contaminated condition shall be: (1)Deposited in thesame separate special fund created hereunder, and with all interest earnedthereon, may be used only for projects involving the investigation andremediation of contamination in the established redevelopment district; or (2)distributed to parties who have entered into a contract with the city to pay aportion of investigation and remediation of the contamination in theredevelopment district and the terms of such contract provide that such partiesare entitled to reimbursement for a portion of funds they have expended forsuch investigation and remediation of contamination from the recovery of coststhat are collected from other third party responsible parties.

      (e)   A redevelopment district created under the provisionsof this section shall constitute a separate taxing district. If all costs forsuch investigation and remediation of contamination in the redevelopmentdistrict have been paid and moneys remain in the special fund, such moneysshall be remitted to each taxing subdivision which paid moneys into the specialfund on the basis of the proportion which the total amount of moneys paid bysuch taxing subdivision into the special fund bears to the total amount of allmoneys paid by all taxing subdivisions into the fund.

      (f)   Nothing in this section shall prevent any city from establishing aredevelopment district for other purposes pursuant to K.S.A. 12-1770 etseq., and amendments thereto, which may include part or all of the realproperty included in the district established under this section.

      (g)   Redevelopment projects relating to environmental investigation andremediation under this section shall becompleted within 20 years from the date the Kansas department of health andenvironment or theUnited States environmental protection agencyissues an order or enters into a consent decree with the governing body ofthe city approving such project,unless the board of county commissioners and the board of educationidentified in K.S.A. 12-1771, and amendments thereto, approve arequest in writing from the city to extend the project a maximum of 10 yearsbeyond the original 20.

      (h)   Nothing in this section shall be construed to affect the obligations ofthe county to annually review the fair market value of property in accordancewith procedures set by law or to affect the right of any taxpayer to protestand appeal the appraised or reappraised value of their property in accordancewith procedures set forth by law.

      (i)   Commencing with the regular session of the legislature in 1993, each citythat establishes a redevelopment district under this section shall make astatus report on a biennial basis to the standing committee on commerce of thesenate and the standing committee on economic development of the house ofrepresentatives during the month of January. The status report shall containinformation on the status of the investigation and remediation of contaminationin the redevelopment district.

      (j)   For the purposes of this act, the governing body of a city, in contractsentered into with the Kansas department of health and environment or the UnitedStates environmental protection agency, may pledge increments receivable infuture years to pay costs directly relating to the investigation andremediation of environmentally contaminated areas. The provisions in suchcontracts pertaining to pledging increments in future years shall not besubject to K.S.A. 10-1101 et seq. or 79-2925 et seq., andamendments thereto.

      History:   L. 1991, ch. 59, § 2;L. 1993, ch. 136, § 1;L. 1996, ch. 228, § 3;L. 2001, ch. 103, § 4;L. 2004, ch. 174, § 1; July 1.