12-17,169. Special obligation bonds and full faith and credit tax increment bonds; procedure for issuance; limitations; payment; exempt from taxation; refunding of bonds; status reports.
12-17,169
12-17,169. Special obligation bonds and full faith
and credit tax increment bonds; procedure for issuance; limitations; payment;
exempt from taxation; refunding of bonds; status reports.
(a) (1) Any city or county shall have the power to issue
special obligation bonds in one or more series to finance the undertaking of
any STAR bond 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 revenues of the city or county derived from or held in connection
with the undertaking and carrying out of any STAR bond project or projects
under this act including historic theater sales tax increments;
(B) from any private sources, contributions or other financial assistance
from the state or federal government;
(C) from a pledge of 100% of the tax increment revenue received by the city
from any local sales and use taxes, including the city's share of any county
sales tax, which are collected from taxpayers doing business within that
portion of the city's STAR bond project district established pursuant to
K.S.A. 2009 Supp.
12-17,165, and amendments thereto, occupied by a STAR
bond project, except for amounts committed to
other uses by election of voters or pledged to bond repayment prior to the
approval of the STAR bond project;
(D) at the option of the county in a city STAR bond project district, from a
pledge of all of the tax increment revenues received
by the county from any local sales and use taxes which are collected from
taxpayers doing business within that portion of the city's STAR bond project
district established pursuant to
K.S.A. 2009 Supp.
12-17,165, and
amendments thereto, except for amounts committed to other uses by election of
voters or pledged to bond repayment prior to the approval of a STAR bond
project;
(E) in a county STAR bond project district, from a
pledge of 100% of the tax increment revenue received by the county from any
county sales and use tax, but excluding any portions of such taxes that are
allocated to the cities in such county pursuant to K.S.A. 12-192, and
amendments thereto, which are collected from taxpayers doing business within
that portion of the county's STAR bond project district established pursuant
to
K.S.A. 2009 Supp.
12-17,165, and amendments thereto, occupied by a STAR bond
project;
(F) from a pledge of all of the tax increment revenue received from any state
sales taxes which are collected from taxpayers doing business within that
portion of the city's or county's STAR bond project district occupied by a STAR
bond project;
(G) at the option of the city or county and with approval of the secretary,
from all or a portion of the transient guest tax of such city or county;
(H) at the option of the city or county and with approval of the secretary,
(i) from a pledge of all or a portion of increased revenue received by the city
or county from franchise fees collected from utilities and other businesses
using public right-of-way within the STAR bond project district; or (ii) from a
pledge of all or a portion of the revenue
received by a city or county from local sales taxes or local transient guest
and local use taxes; or
(I) by any combination of these methods.
The city or county may pledge such revenue to the repayment of such special
obligation bonds prior to, simultaneously with, or subsequent to the issuance
of such special obligation bonds.
(2) Bonds issued under paragraph (1) of this subsection shall not be general
obligations of the city or the county, 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 subsection
shall be special obligations of the city or county and are declared to be
negotiable instruments. Such bonds shall be executed by the mayor and clerk of
the city or the chairperson of the board of county commissioners and the county
clerk and sealed with the corporate seal of the city or county. All details
pertaining to the issuance of such special obligation bonds and terms and
conditions thereof shall be determined by ordinance of the city or by
resolution of the county.
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: (i) The authority under which
such special obligation bonds are issued; (ii) such bonds are in conformity
with the provisions, restrictions and limitations thereof; and (iii) 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 subsection.
(4) Any city or county 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.
(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,
establishment or redevelopment of any major motorsports complex, as defined in
subsection (k)
of
K.S.A. 2009 Supp.
12-17,162, 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) 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 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 increment bonds as
authorized by this
subsection, the feasibility study required by subsection (b) of K.S.A. 2009
Supp. 12-17,166, 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
subsection (e) of
K.S.A. 2009 Supp.
12-17,166, and amendments thereto, that it
may issue such
bonds to finance the
proposed STAR bond project. The governing body may issue the bonds unless
within 60 days
following the conclusion of the public hearing on the proposed STAR bond
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 this section. No such election
shall be held in the
event the board of county commissioners or the board of education determines,
as provided in
K.S.A. 2009 Supp.
12-17,165, and amendments thereto, that the proposed STAR
bond project 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 STAR
bond project plan for a major motorsports complex, but does not state its
intent to issue full faith
and credit tax increment bonds in the resolution required by subsection (e) of
K.S.A. 2009 Supp.
12-17,166, and
amendments thereto, and has not acquired property in the STAR bond 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 requirements of this act.
(4) During the progress of any major motorsports complex project in which the
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 project costs for the major motorsports complex
project. Such
temporary notes shall not be issued and the city shall not acquire property in
the STAR bond
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 subsection
shall be general
obligations of the city and are declared to be negotiable instruments. Such
bonds shall be issued
in accordance with the general 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 full faith and credit tax increment bonds under the
provisions of this
subsection may refund all or part of such issue pursuant to the provisions of
K.S.A. 10-116a, and
amendments thereto.
(c) For each project financed with special obligation bonds payable from the
revenues described in subsection (a)(1), the city or county
shall prepare and submit to the secretary by October 1 of each year, a report
describing the status of any projects within such STAR bond project area, any
expenditures of the proceeds of special obligation
bonds that have occurred since the last annual report and any expenditures of
the proceeds of such bonds expected to occur in the future, including the
amount of sales tax revenue, how such revenue has been spent, the projected
amount of such revenue and the anticipated use of such revenue. The department
of commerce shall compile this information and submit a report annually to the
governor, Kansas, Inc. and the legislature by February 1 of each year.
(d) A city or county may use the proceeds of special obligation bonds or any
uncommitted funds derived from sources set forth in this section to pay the
bond project costs as defined in
K.S.A. 2009 Supp.
12-17,162, and amendments
thereto, to
implement the STAR bond project plan.
(e) With respect to a STAR bond project district established prior to January
1, 2003, for which, prior to January 1, 2003, the secretary made a finding as
provided in subsection (a) of this section that a STAR bond project would
create a major tourism area for the state, such special obligation bonds shall
be payable both as to principal and interest, from a pledge of all of the
revenue from any transient guest, state and local sales and use taxes collected
from taxpayers as provided in subsection (a) of this section whether or not
revenues from such taxes are received by the city.
History: L. 2007, ch. 179, § 10; July 1.