12-1774.   Special obligation bonds and full faith andcredit taxincrement bonds; procedure for issuance; limitations; payment; exempt fromtaxation; refunding of bonds.(a) (1) Any city shall have the power to issue special obligation bonds inone or more series to finance the undertaking of any redevelopment projector bioscience development project in accordance with the provisions ofthis act. Such special obligation bonds shall be made payable, both as toprincipal and interest:

      (A)   From tax increments allocated to, and paid into a special fund of thecity 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 theundertaking and carrying out of any redevelopment project or projects orbioscience development project or projects under this act includingenvironmental increments;

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

      (D)   from a pledge of all of the revenue received by the city from anytransient guest and local sales and use taxes which are collected fromtaxpayers doing business within that portion of the city's redevelopmentdistrict or bioscience development district established pursuant toK.S.A. 12-1771, and amendments thereto, occupied by a redevelopment projector bioscience developmentproject. A city proposing to finance a majormotorsports complex pursuant to this paragraph shall prepare a project planwhich shall include:

      (i)   A summary of the feasibility study done, as defined in K.S.A. 12-1770a,and amendments thereto, which will be an open record;

      (ii)   a reference to the district plan established under K.S.A. 12-1771, andamendments thereto, that identifies the project area that is set forth in theproject plan that is being considered;

      (iii)   a description and map of the location of the facility that is thesubject of the special bond project or major motorsports complex;

      (iv)   the relocation assistance plan required by K.S.A. 12-1777, andamendments thereto;

      (v)   a detailed description of the buildings and facilities proposed to beconstructed or improved; and

      (vi)   any other information the governing body deems necessary to advise thepublic of the intent of the special bond project or majormotorsports complex plan.

      The project plan shall be prepared in consultation with the planning commissionof the city. Such project plan shall also be prepared in consultation with theplanning commission of the county, if any, if a major motorsports complex islocated wholly outside the boundaries of the city.

      (E)   from a pledge of a portion or all increased revenue receivedby the city from: (i) Franchise fees collected from utilities and otherbusinesses using public right-of-way within the redevelopment district; (ii)from a pledge of all or a portion of the revenue received by the city fromsales taxes; or (iii) both of the above;

      (F)   with the approval of the county, from a pledge of all of the revenuesreceived by the county from any transient guest, local sales and use taxeswhich are collected from taxpayers doing business within that portion of theredevelopment district established pursuant to K.S.A. 12-1771,and amendments thereto;

      (G)   by any combination of these methods.

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

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

      (3)   Bonds issued under the provisions of paragraph (1) of this subsectionshall be special obligations of the city and are declared to be negotiableinstruments. They shall be executed by the mayor and clerk of the city andsealed with the corporate seal of the city. All details pertaining to theissuance of such special obligation bonds and terms and conditions thereofshall be determined by ordinance of the city. All special obligation bondsissued pursuant to this act and all income or interest therefrom shall beexempt from all state taxes except inheritance taxes. Such special obligationbonds shall contain none of the recitals set forth in K.S.A. 10-112, andamendments thereto. Such special obligation bonds shall, however, contain thefollowing recitals, viz., the authority under which such special obligationbonds are issued, they are in conformity with the provisions, restrictions andlimitations thereof, and that such special obligation bonds and the interestthereon are to be paid from the money and revenue received as provided inparagraph (1) of this subsection.

      (b) (1)   Subject to the provisions of paragraph (2) of this subsection, anycity shall have the power to issue full faith and credit tax increment bondsto finance the undertaking of any redevelopment project in accordance with theprovisions of K.S.A. 12-1770 et seq., and amendments thereto, other than aproject that will create a major tourism area. Such full faith and credittax increment bonds shall be made payable, both as to principal and interest:(A) From the revenue sources identified in paragraph (1) of subsection (a) orbyany combination of these sources; and(B) subject to the provisions of paragraph (2) of this subsection, from apledge of the city's full faith and credit to use its ad valorem taxingauthority for repayment thereof in the event all other authorized sources ofrevenue are not sufficient.

      (2)   Except as provided in paragraph (3) of this subsection, before thegoverning body of any city proposes to issue full faith and credit taxincrement bonds as authorized by this subsection, the feasibility studyrequired by K.S.A. 12-1772, and amendments thereto, shall demonstrate thatthe benefits derived from the project will exceed the cost and that theincome therefrom will be sufficient to pay the costs of the project. No fullfaith and credit tax increment bonds shall be issued unless the governingbody states in the resolution required by K.S.A. 12-1772, and amendmentsthereto, that it may issue such bonds to finance theproposed redevelopment project.

      The governing body may issue the bonds unless within 60 daysfollowing the date of the public hearing on the proposed project plana protest petition signed by 3% of the qualified voters of the city is filedwith the city clerk in accordance with the provisions of K.S.A. 25-3601 etseq., and amendments thereto. If a sufficient petition is filed, no fullfaith and credit tax increment bonds shall be issued until the issuance ofthe bonds is approved by a majority of the voters voting at an electionthereon. Such election shall be called and held in the manner provided bythe general bond law.

      The failure of the voters to approve the issuance offull faith and credit tax increment bonds shall not prevent the city fromissuing special obligation bonds in accordance with this section.

      No such election shall be held in the event the board of county commissionersor the board of education determines, as provided in K.S.A. 12-1771, andamendments thereto, that the proposed redevelopment district will have anadverse effect on the county or school district.

      (3)   As an alternative to paragraph (2) of this subsection, any city whichadopts a redevelopment project plan but does not state its intent to issue fullfaith and credit tax increment bonds in the resolution required by K.S.A.12-1772, and amendments thereto, and has not acquired property in theredevelopment project area may issue full faith and credit tax increment bondsif the governing body of the city adopts a resolution stating its intent toissue the bonds and the issuance of the bonds is approved by a majority of thevoters voting at an election thereon. Such election shall be called and held inthe manner provided by the general bond law.

      The failure of the voters to approve the issuance of full faith and credit taxincrement bonds shall not prevent the city from issuing special obligationbonds pursuant to paragraph (1) of subsection (a). Any project plan adopted bya city prior to the effective date of this act inaccordance with K.S.A. 12-1772, and amendments thereto, shall not beinvalidated by any requirements of this act.

      (4)   During the progress of any redevelopment project in which theredevelopment project costs will be financed, in whole or in part, with theproceeds of full faith and credit tax increment bonds, the city may issuetemporary notes in the manner provided in K.S.A. 10-123, and amendmentsthereto, to pay the redevelopment project costs for the project. Such temporarynotes shall not be issued and the city shall not acquire property in theredevelopment project area until the requirements of paragraph (2) or (3) ofthis subsection, whichever is applicable, have been met.

      (5)   Full faith and credit tax increment bonds issued under this subsectionshall be general obligations of the city and are declared to be negotiableinstruments. They shall be issued in accordance with the general bond law. Allsuch bonds and all income or interest therefrom shall be exempt from all statetaxes except inheritance taxes. The amount of the full faith and credit taxincrement bonds issued and outstanding which exceeds 3% of the assessedvaluation of the city shall be within the bonded debt limitapplicable to such city.

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

      (c)   Any increment in ad valorem property taxes resulting from aredevelopment project in the established redevelopment district undertaken inaccordance with the provisions of this act, shall be apportioned to a specialfund for the payment of the redevelopment project costs, including the paymentof principal and interest on any special obligation bonds or full faith andcredit tax increment bonds issued to finance such project pursuant to this actand may be pledged to the payment of principal and interest on such bonds.

      (d)   A city may use the proceeds of special obligation bonds or full faithand credit tax increment bonds, or any uncommitted funds derived from sourcesset forth in this section to pay the redevelopment project costs as defined inK.S.A. 12-1770a, and amendments thereto, to implement the redevelopment projectplan.

      History:   L. 1976, ch. 69, § 5;L. 1979, ch. 52, § 5;L. 1982, ch. 75, § 10;L. 1984, ch. 74, § 5;L. 1988, ch. 78, § 5;L. 1993, ch. 213, § 2;L. 1996, ch. 228, § 5;L. 1997, ch. 162, § 2;L. 1998, ch. 17, § 3;L. 1999, ch. 83, § 5;L. 2001, ch. 103, § 9;L. 2003, ch. 97, § 4;L. 2003, ch. 154, § 6;L. 2004, ch. 183, § 4;L. 2005, ch. 132, § 6;L. 2007, ch. 179, § 26; July 1.