May 2, 1999

Journal of the Senate

SIXTY-SEVENTH DAY ______

Senate Chamber, Topeka, Kansas

Sunday, May 2, 1999--1:00 p.m.

The Senate was called to order by President Dick Bond.

The roll was called with thirty-nine senators present.

Senator Hardenburger was excused.

Invocation by Senator Nancey Harrington:

Dear Lord,

In whom we live, and breath, and have our being.

I praise you for the freedom that is ours as a nation and a state.

Freedom that affords the opportunity to offer a prayer, in a public body
such as this, the Kansas State Senate.

Lord God, let us not forget the connection between political and moral
action.

That just as the anti - slavery Reformers understood:

``Politics rightly considered, is a branch of morals and cannot be deserted
innocently.''

I now pray for the Governor, Senate leadership, all Senators and House
members.

Bless each one with your guiding wisdom, give us encouragement and inner
strength to rightly serve the people of Kansas.

From one who knows your loving Grace, I pray this prayer in the Name
of Jesus your Son.

AMEN

COMMUNICATIONS FROM STATE OFFICERS
TREASURER'S OFFICE STATE OF KANSAS April 30, 1999 Tim Shallenburger, State Treasurer, submitted the Annual Report of the Kansas State
Treasurer's Office for fiscal year 1998.

The President announced the above report is on file in the office of the Secretary of the
Senate and is available for review at any time.

MESSAGE FROM THE HOUSE
Announcing, the House adopts the conference committee report on HB 2015.

The House adopts the conference committee report on HB 2440.

The House adopts the conference committee report on SB 97.

The House adopts the conference committee report on SB 220.

The House adopts the conference committee report on SB 324.

The House adopts the conference committee report on SB 3.

The House concurs in Senate amendments to Senate Substitute for HB 2558.

ORIGINAL MOTION
Senator Emert moved that subsection 4(k) of the Joint Rules of the Senate and House
of Representatives be suspended for the purpose of considering the following bills: SB 3,
97, 220, 324; HB 2352; Sub HB 2469.

CONFERENCE COMMITTEE REPORT
Mr. President and Mr. Speaker: Your committee on conference on House
amendments to SB 3, submits the following report:

The Senate accedes to all House amendments to the bill, and your committee on
conference further agrees to amend the bill, as printed with House Committee amendments,
as follows:

On page 3, by striking lines 30 through 37 and inserting the following:

``Sec. 3. K.S.A. 1998 Supp. 40-2,103, as amended by section 5 of 1999 Senate Bill 108,
is hereby amended to read as follows: 40-2,103. The requirements of K.S.A. 40-2,100, 40-
2,101, 40-2,102, 40-2,104, 40-2,105, 40-2,114 and 40-2250, and amendments thereto and
K.S.A. 1998 Supp. 40-2,160 and sections 1 through 4 of 1999 Senate Bill 108, and section
1 and section 2 of this act, and amendments thereto, shall apply to all insurance policies,
subscriber contracts or certificates of insurance delivered, renewed or issued for delivery
within or outside of this state or used within this state by or for an individual who resides
or is employed in this state.'';

Also on page 3, by striking lines 38 through 43;

On page 4, by striking lines 1 through 18 and inserting the following:

``Sec. 4. K.S.A. 1998 Supp. 40-19c09, as amended by section 6 of 1999 Senate Bill 108,
is hereby amended to read as follows: 40-19c09. (a) Corporations organized under the
nonprofit medical and hospital service corporation act shall be subject to the provisions of
the Kansas general corporation code, articles 60 to 74, inclusive, of chapter 17 of the Kansas
Statutes Annotated, applicable to nonprofit corporations, to the provisions of K.S.A. 40-214,
40-215, 40-216, 40-218, 40-219, 40-222, 40-223, 40-224, 40-225, 40-226, 40-229, 40-230,
40-231, 40-235, 40-236, 40-237, 40-247, 40-248, 40-249, 40-250, 40-251, 40-252, 40-254,
40-2,100, 40-2,101, 40-2,102, 40-2,103, 40-2,104, 40-2,105, 40-2,116, 40-2,117, 40-2a01 et
seq., 40-2111 to 40-2116, inclusive, 40-2215 to 40-2220, inclusive, 40-2221a, 40-2221b, 40-
2229, 40-2230, 40-2250, 40-2251, 40-2253, 40-2254, 40-2401 to 40-2421, inclusive, and 40-
3301 to 40-3313, inclusive, K.S.A. 1998 Supp. 40-2,153, 40-2,154, 40-2,160, 40-2,161, 40-
2,163 ~~and~~, 40-2,164 and sections 1 through 4 of 1999 Senate Bill 108, and section 1 and
section 2 of this act, and amendments thereto, except as the context otherwise requires, and
shall not be subject to any other provisions of the insurance code except as expressly provided
in this act.

(b) No policy, agreement, contract or certificate issued by a corporation to which this
section applies shall contain a provision which excludes, limits or otherwise restricts coverage
because medicaid benefits as permitted by title XIX of the social security act of 1965 are or
may be available for the same accident or illness.

(c) Violation of subsection (b) shall be subject to the penalties prescribed by K.S.A. 40-
2407 and 40-2411, and amendments thereto.;''

Also on page 4, by striking lines 40 through 43 and inserting new sections 6 through 15
as follows:

``New Sec. 6. On and after January 1, 2000, for the purposes of sections 6 through 9
and amendments thereto:

(a) ``Adverse decision'' means a utilization review determination by a third-party
administrator, a health insurance plan, an insurer or a health care provider acting on behalf
of an insured that a proposed or delivered health care service which would otherwise be
covered under an insured's contract is not or was not medically necessary or the health care
treatment has been determined to be experimental or investigational and, (1) if the
requested service is provided in a manner that leaves the insured with a financial obligation
to the provider or providers of such services, or (2) the adverse decision is the reason for
the insured not receiving the requested services.

(b) ``Emergency medical condition'' means the sudden, and at the time, unexpected
onset of a health condition that requires immediate medical attention, where failure to
provide medical attention would result in a serious impairment to bodily functions, serious
dysfunction of a bodily organ or part or would place a person's health in serious jeopardy.

(c) ``External review organization'' means an entity that conducts independent external
reviews of adverse decisions pursuant to a contract with the commissioner. Such entity shall
have experience serving as the external quality review organization in health programs
administered by the state of Kansas, or be a nationally accredited external review
organization which utilizes health care providers actively engaged in the practice of their
profession in the state of Kansas who are qualified and credentialed with respect to the
health care service review. In the event no Kansas providers are qualified and credentialed
with respect to the review of any case, the external review organization shall have the
discretion to employ health care providers who actively engage in such health care provider's
practice outside the state of Kansas.

(d) ``Health insurance plan'' means any hospital or medical expense policy, health,
hospital or medical service corporation contract, and a plan provided by a municipal group-
funded pool, or a health maintenance organization contract offered by an employer or any
certificate issued under any such policies, contracts or plans.

(e) ``Insured'' means the beneficiary of any health insurance company, fraternal benefit
society, health maintenance organization, nonprofit hospital and medical service
corporation, municipal group funded pool, and the self-funded coverage established by the
state of Kansas, or any hospital or medical expense, health, hospital or medical service
corporation contract or a plan provided by a municipal group-funded pool.

(f) ``Insurer'' means any health insurance company, fraternal benefit society, health
maintenance organization, nonprofit hospital and medical service corporation, provider
sponsored organizations, municipal group-funded pool and the self-funded coverage
established by the state of Kansas for its employees.

New Sec. 7. On and after January 1, 2000:

(a) The provisions of sections 6 through 9 and amendments thereto shall not apply to
any policy or certificate which provides coverage for any specified disease, specified accident
or accident only coverage, credit, dental, disability income, hospital indemnity, long-term
care insurance as defined by K.S.A. 40-227, and amendments thereto, vision care or any
other limited supplemental benefit nor to any medicare supplement policy of insurance as
defined by the commissioner of insurance by rule and regulation, coverage under a plan
through medicare, medicaid, or the federal employees health benefits program, any coverage
issues as a supplement to liability insurance, workers compensation or similar insurance,
automobile medical-payment insurance or any insurance under which benefits are payable
with or without regard to fault, whether written on a group, blanket or individual basis.

(b) The right to external review under sections 6 through 9, and amendments thereto,
shall not be construed to change the terms of coverage under a health insurance plan or
insurance policy.

(c) The insurer or health insurance plan shall provide written notice to the insured of
a final adverse decision and the opportunity for requesting an external review.

(d) The insured has the right to request an independent external review of an adverse
decision by a health insurance plan or insurer when: (1) The insured has exhausted all
available internal review procedures provided by the health insurance plan or insurer, unless
the insured has an emergency medical condition, in which case an expedited procedure is
used; or (2) the insured has not received a final decision from the insurer within 60 days of
seeking the internal review, except to the extent that the delay was requested by the insured.

(e) Within 90 days of receipt of an adverse decision by a health insurance plan or an
insurer, any request for external review shall be made in writing to the commissioner from
the following persons: (1) The insured; (2) the treating physician or health care provider
acting on behalf on the insured with written authorization from the insured; or (3) a legally
authorized designee of the insured.

(f) The insured shall provide all information in the possession of the insured pertaining
to the adverse decision in order for the commissioner to make a preliminary determination
for an external review. The insured also shall provide the commissioner with an appeal form,
and a fully executed release for the commissioner and the external review organization to
obtain any necessary medical records from the insurer or health insurance plan and any
other relevant provider.

(g) In responding to the commissioner, the insurer or health insurance plan shall provide
a copy of the adverse decision given to the insured and all medical and other records
pertaining to the insured's claim within five business days of the request of the
commissioner.

(h) The confidentiality of any medical information submitted by the insured, on behalf
of the insured, insurer or health insurance plan, shall be maintained pursuant to applicable
state and federal laws.

New Sec. 8. On and after January 1, 2000:

(a) The commissioner shall:

(1) Negotiate contracts with external review organizations which are eligible to conduct
independent review of the adverse decision by a health insurance plan or insurer;

(2) allow the insurer or the health insurance plan, an insured or treating physician or
health care provider acting on behalf of the insured, or legally authorized designee filing a
request for external review to provide additional written information as may be relevant for
the commissioner to make a final decision on whether the request qualified for external
review;

(3) make a decision on a request for external review within 10 business days after
receiving all necessary information;

(4) notify the insured and treating physician or health care provider acting on behalf of
the insured, or legally authorized designee, and insurer or health insurance plan in writing
that a request for external review will or will not be granted; and

(5) design and implement an expedited procedure for use in an emergency medical
condition for purposes of the external review organization rendering a decision.

(b) The external review organization as defined in subsection (c) of section 6, and
amendments thereto, shall provide that all reviews completed pursuant to sections 6 through
9, and amendments thereto, are conducted by qualified and credentialed health care
providers with respect to the health care service under review and who have no conflict of
interest relating to the performance of the external review organization's duties in sections
6 through 9, and amendments thereto.

(c) The external review organization shall issue a written decision to the insured and
concurrently send a copy of such decision to the commissioner including the basis and
rationale for its decision within 30 business days. The standard of review shall be whether
the health care service denied by the insurer or health insurance plan was medically
necessary under the terms of the insured's contract. In reviews regarding experimental or
investigational treatment, the standard of review shall be whether the health care service
denied by the insurer or health insurance plan was covered or excluded from coverage under
the terms of the insured's contract.

(d) The external review organization shall provide expedited resolution when an
emergency medical condition exists, and shall resolve all issues within seven business days.

(e) The external review organization shall maintain and report such data as may be
required by the commissioner in order to assess the effectiveness of the external review
process.

(f) No external review organization nor any individual working on behalf of such
organization shall be liable in damages to any insured, health insurance plan or insurer for
any opinion rendered as part of an external review conducted pursuant to sections 6 through
9, and amendments thereto.

(g) The external review organization shall maintain confidentiality of the medical records
of the insured in accordance to state and federal law.

New Sec. 9. On and after January 1, 2000:

(a) The decision of the external review organization may be reviewed directly by the
district court at the request of either the insured, insurer or health insurance plan. The
review by the district court shall be de novo. The decision of the external review organization
shall not preclude the insured, insurer or health insurance plan from exercising other
available remedies applicable under state or federal law. Seeking a review by the district
court or any other available remedies exercised by the insured, insurer or health insurance
plan after the decision of the external review organization will not stay the external review
organization's decision as to the payment or provision of services to be rendered during the
pendency of the review by the insurer or health insurance plan. All material used in an
external review and the decision of the external review organization as a result of the external
review shall be deemed admissible in any subsequent litigation.

(b) In no event shall more than one external review be available during the same year
for any request arising out of the same set of facts. An insured may not pursue, either
concurrently or sequentially, an external review process under both a federal and state law.
In the event external review processes are available pursuant to federal law and this act, the
insured shall have the option of designating which external review process will be utilized.

(c) The commissioner of insurance is hereby authorized to negotiate and enter into
contracts necessary to perform the duties required by sections 6 through 9, and amendments
thereto.

(d) The commissioner of insurance shall adopt rules and regulations necessary to carry
out the purposes of sections 6 through 9, and amendments thereto. The rules and regulations
shall ensure that the commissioner is able to provide for an effective and efficient external
review of health care services.

Sec. 10. On and after January 1, 2000, K.S.A. 8-173 is hereby amended to read as
follows: 8-173. (a) An application for registration of a vehicle as provided in article 1 of
chapter 8 of the Kansas Statutes Annotated and amendments thereto, shall not be accepted
unless the person making such application shall exhibit:

(1) A receipt showing that such person has paid all personal property taxes levied against
such person for the preceding year, including taxes upon such vehicle, except that if such
application is made before June 21 such receipt need show payment of only one-half the
preceding year's tax; or

(2) evidence that such vehicle was assessed for taxation purposes by a state agency, or
was assessed as stock in trade of a merchant or manufacturer or was exempt from taxation
under the laws of this state.

(b) An application for registration of a vehicle as provided in article 1 of chapter 8 of
the Kansas Statutes Annotated shall not be accepted if the records of the county treasurer
show that the applicant is delinquent and owes personal property taxes levied against the
applicant for any preceding year.

(c) An application for registration or renewal of registration of a motor vehicle shall not
be accepted until the applicant signs a certification, provided by the director of motor
vehicles, certifying that the applicant has and will maintain, during the period of registration,
the required insurance, self insurance or other financial security required pursuant to K.S.A.
40-3104 and amendments thereto.

(d) An application for registration or renewal of registration of a vehicle shall not be
accepted if the applicant is unable to provide proof of the insurance, self insurance or other
financial security required by article 31 of chapter 40 of the Kansas Statutes Annotated.
Proof of insurance shall be verified by examination of the insurance card issued by an
insurance company, a certificate of self insurance issued by the commissioner, a binder of
insurance, a certificate of insurance, a motor carrier identification number issued by the
state corporation commission, proof of insurance for vehicles covered under a fleet policy, a
commercial policy covering more than one vehicle or a policy of insurance required by K.S.A.
40-3104, and amendments thereto and for vehicles used as part of a drivers education
program, a dealership contract and a copy of a motor vehicle liability insurance policy issued
to a school district or accredited nonpublic school. Examination of a photocopy of any of
these documents shall suffice for verification of mail registration or renewals.

Sec. 11. On and after January 1, 2000, K.S.A. 1998 Supp. 40-3104 is hereby amended
to read as follows: 40-3104. (a) Every owner shall provide motor vehicle liability insurance
coverage in accordance with the provisions of this act for every motor vehicle owned by
such person, unless such motor vehicle: (1) Is included under an approved self-insurance
plan as provided in subsection (f); (2) is used as a driver training motor vehicle, as defined
in K.S.A. 72-5015, and amendments thereto, in an approved driver training course by a
school district or an accredited nonpublic school under an agreement with a motor vehicle
dealer, and such motor vehicle liability insurance coverage is provided by the school district
or accredited nonpublic school; (3) is included under a qualified plan of self-insurance
approved by an agency of the state in which such motor vehicle is registered and the form
prescribed in subsection (b) of K.S.A. 40-3106, and amendments thereto, has been filed; or
(4) is expressly exempted from the provisions of this act.

(b) An owner of an uninsured motor vehicle shall not permit the operation thereof upon
a highway or upon property open to use by the public, unless such motor vehicle is expressly
exempted from the provisions of this act.

(c) No person shall knowingly drive an uninsured motor vehicle upon a highway or upon
property open to use by the public, unless such motor vehicle is expressly exempted from
the provisions of this act.

(d) Any person operating a motor vehicle upon a highway or upon property open to use
by the public shall display, upon demand, evidence of financial security to a law enforcement
officer. The law enforcement officer shall issue a citation to any person who fails to display
evidence of financial security upon such demand. The law enforcement officer shall attach
a copy of the insurance verification form prescribed by the secretary of revenue to the copy
of the citation forwarded to the court.

No citation shall be issued to any person for failure to provide proof of financial security
when evidence of financial security meeting the standards of subsection (e) is displayed
upon demand of a law enforcement officer. Whenever the authenticity of such evidence is
questionable, the law enforcement officer may initiate the preparation of the insurance
verification form prescribed by the secretary of revenue by recording information from the
evidence of financial security displayed. The officer shall immediately forward the form to
the department of revenue, and the department shall proceed with verification in the
manner prescribed in the following paragraph. Upon return of a form indicating that
insurance was not in force on the date indicated on the form, the department shall
immediately forward a copy of the form to the law enforcement officer initiating preparation
of the form.

(e) Unless the insurance company subsequently submits an insurance verification form
indicating that insurance was not in force, no person charged with violating subsections (b),
(c) or (d) shall be convicted if such person produces in court, within 10 days of the date of
arrest or of issuance of the citation, evidence of financial security for the motor vehicle
operated, which was valid at the time of arrest or of issuance of the citation. For the purpose
of this subsection, evidence of financial security shall be provided by a policy of motor
vehicle liability insurance, an identification card or certificate of insurance issued to the
policyholder by the insurer which provides the name of the insurer, the policy number and
the effective and expiration dates of the policy, or a certificate of self-insurance signed by
the commissioner of insurance. Upon the production in court of evidence of financial
security, the court shall record the information displayed thereon on the insurance
verification form prescribed by the secretary of revenue, immediately forward such form to
the department of revenue, and stay any further proceedings on the matter pending a
request from the prosecuting attorney that the matter be set for trial. Upon receipt of such
form the department shall mail the form to the named insurance company for verification
that insurance was in force on the date indicated on the form. It shall be the duty of insurance
companies to notify the department within 30 calendar days of the receipt of such forms of
any insurance that was not in force on the date specified. Upon return of any form to the
department indicating that insurance was not in force on such date, the department shall
immediately forward a copy of such form to the office of the prosecuting attorney or the
city clerk of the municipality in which such prosecution is pending when the prosecuting
attorney is not ascertainable. Receipt of any completed form indicating that insurance was
not in effect on the date specified shall be prima facie evidence of failure to provide proof
of financial security and violation of this section. A request that the matter be set for trial
shall be made immediately following the receipt by the prosecuting attorney of a copy of
the form from the department of revenue indicating that insurance was not in force. Any
charge of violating subsection (b), (c) or (d) shall be dismissed if no request for a trial setting
has been made within 60 days of the date evidence of financial security was produced in
court.

(f) Any person in whose name more than 25 motor vehicles are registered in Kansas
may qualify as a self-insurer by obtaining a certificate of self-insurance from the
commissioner of insurance. The certificate of self-insurance issued by the commissioner
shall cover such owned vehicles and those vehicles, registered in Kansas, leased to such
person if the lease agreement requires that motor vehicle liability insurance on the vehicles
be provided by the lessee. Upon application of any such person, the commissioner of
insurance may issue a certificate of self-insurance, if the commissioner is satisfied that such
person is possessed and will continue to be possessed of ability to pay any liability imposed
by law against such person arising out of the ownership, operation, maintenance or use of
any motor vehicle described in this subsection. A self-insurer shall provide liability coverage
subject to the provisions of subsection (e) of K.S.A. 40-3107, and amendments thereto,
arising out of the ownership, operation, maintenance or use of a self-insured motor vehicle
in those instances where the lessee or the rental driver, if not the lessee, does not have a
motor vehicle liability insurance policy or insurance coverage pursuant to a motor vehicle
liability insurance policy or certificate of insurance or such insurance policy for such leased
or rented vehicle. Such liability coverage shall be provided to any person operating a self-
insured motor vehicle with the expressed or implied consent of the self-insurer.

Upon notice and a hearing in accordance with the provisions of the Kansas administrative
procedure act, the commissioner of insurance may cancel a certificate of self-insurance upon
reasonable grounds. Failure to provide liability coverage or personal injury protection
benefits required by K.S.A. 40-3107 and 40-3109, and amendments thereto, or pay any
liability imposed by law arising out of the ownership, operation, maintenance or use of a
motor vehicle registered in such self-insurer's name, or to otherwise comply with the
requirements of this subsection shall constitute reasonable grounds for the cancellation of
a certificate of self-insurance. Reasonable grounds shall not exist unless such objectionable
activity occurs with such frequency as to indicate a general business practice.

Self-insureds shall investigate claims in a reasonably prompt manner, handle such claims
in a reasonable manner based on available information and effectuate prompt, fair and
equitable settlement of claims in which liability has become reasonably clear.

As used in this subsection, ``liability imposed by law'' means the stated limits of liability
as provided under subsection (e) of K.S.A. 40-3107, and amendments thereto.

Nothing in this subsection shall preclude a self-insurer from pursuing all rights of
subrogation against another person or persons.

(g) (1) Any person violating any provision of this section shall be guilty of a class B
misdemeanor and shall be subject to a fine of not less than ~~$200~~ $300 nor more than $1,000
or confinement in the county jail for a term of not more than six months, or both such fine
and confinement.

(2) Any person convicted of violating any provision of this section within three years of
any such prior conviction shall be guilty of a class A misdemeanor and shall be subject to a
fine of not less than $800 nor more than $2,500.

(h) In addition to any other penalties provided by this act for failure to have or maintain
financial security in effect, the director, upon receipt of a report required by K.S.A. 8-1607
or 8-1611, and amendments thereto, or a denial of such insurance by the insurance company
listed on the form prescribed by the secretary of revenue pursuant to subsection (d) of this
section, shall, upon notice and hearing as provided by K.S.A. 40-3118, and amendments
thereto:

(1) Suspend:

(A) The license of each driver in any manner involved in the accident;

(B) the license of the owner of each motor vehicle involved in such accident, unless the
vehicle was stolen at the time of the accident, proof of which must be established by the
owner of the motor vehicle. Theft by a member of the vehicle owner's immediate family
under the age of 18 years shall not constitute a stolen vehicle for the purposes of this section;

(C) if the driver is a nonresident, the privilege of operating a motor vehicle within this
state; or

(D) if such owner is a nonresident, the privilege of such owner to operate or permit the
operation within this state of any motor vehicle owned by such owner; and

(2) revoke the registration of all vehicles owned by the owner of each motor vehicle
involved in such accident.

(i) The suspension or revocation requirements in subsection (h) shall not apply:

(1) To the driver or owner if the owner had in effect at the time of the accident an
automobile liability policy as required by K.S.A. 40-3107, and amendments thereto, with
respect to the vehicle involved in the accident;

(2) to the driver, if not the owner of the vehicle involved in the accident, if there was
in effect at the time of the accident an automobile liability policy with respect to such driver's
driving of vehicles not owned by such driver;

(3) to any self-insurer as defined by subsection (u) of K.S.A. 40-3103, and amendments
thereto;

(4) to the driver or owner of any vehicle involved in the accident which was exempt
from the provisions of this act pursuant to K.S.A. 40-3105, and amendments thereto;

(5) to the owner of a vehicle described in subsection (a)(2).

(j) For the purposes of provisions (1) and (2) of subsection (i) of this section, the director
may require verification by an owner's or driver's insurance company or agent thereof that
there was in effect at the time of the accident an automobile liability policy as required in
this act.

Any suspension or revocation effected hereunder shall remain in effect until satisfactory
proof of financial security has been filed with the director as required by subsection (d) of
K.S.A. 40-3118, and amendments thereto, and such person has been released from liability
or is a party to an action to determine liability pursuant to which the court temporarily stays
such suspension pending final disposition of such action, has entered into an agreement for
the payment of damages, or has been finally adjudicated not to be liable in respect to such
accident and evidence of any such fact has been filed with the director and has paid the
reinstatement fee herein prescribed. Such reinstatement fee shall be ~~$25~~ $100 except that
if the registration of a motor vehicle of any owner is revoked within one year following a
prior revocation of the registration of a motor vehicle of such owner under the provisions
of this act such fee shall be ~~$75~~ $300.

(k) The provisions of this section shall not apply to motor carriers of property or
passengers regulated by the corporation commission of the state of Kansas.

(l) The provisions of subsection (d) shall not apply to vehicle dealers, as defined in K.S.A.
8-2401, and amendments thereto, for vehicles being offered for sale by such dealers.

Sec. 12. On and after January 1, 2000, K.S.A. 1998 Supp. 40-3118 is hereby amended
to read as follows: 40-3118. (a) No motor vehicle shall be registered or reregistered in this
state unless the owner, at the time of registration, has in effect a policy of motor vehicle
liability insurance covering such motor vehicle, as provided in this act, or is a self-insurer
thereof, or the motor vehicle is used as a driver training motor vehicle, as defined in K.S.A.
72-5015, and amendments thereto, in an approved driver training course by a school district
or an accredited nonpublic school under an agreement with a motor vehicle dealer, and
such policy of motor vehicle liability insurance is provided by the school district or accredited
nonpublic school. As used in this section, the term ``financial security'' means such policy
or self-insurance. The director shall require that the owner certify and provide verification
of financial security, in the manner prescribed by K.S.A. 8-173, and amendments thereto,
that the owner has such financial security, and the owner of each motor vehicle registered
in this state shall maintain financial security continuously throughout the period of
registration. In addition, when an owner certifies that such financial security is a motor
vehicle liability insurance policy meeting the requirements of this act, the director may
require that the owner or owner's insurance company produce records to prove the fact
that such insurance was in effect at the time the vehicle was registered and has been
maintained continuously from that date. Failure to produce such records shall be prima
facie evidence that no financial security exists with regard to the vehicle concerned. It shall
be the duty of insurance companies, upon the request of the director, to notify the director
within 30 calendar days of the date of the receipt of such request by the director of any
insurance that was not in effect on the date of registration and maintained continuously
from that date.

(b) Except as otherwise provided in K.S.A. 40-276, 40-276a and 40-277, and
amendments thereto, and except for termination of insurance resulting from nonpayment
of premium or upon the request for cancellation by the insured, no motor vehicle liability
insurance policy, or any renewal thereof, shall be terminated by cancellation or failure to
renew by the insurer until at least 30 days after mailing a notice of termination, by certified
or registered mail or United States post office certificate of mailing, to the named insured
at the latest address filed with the insurer by or on behalf of the insured. Time of the effective
date and hour of termination stated in the notice shall become the end of the policy period.
Every such notice of termination sent to the insured for any cause whatsoever shall include
on the face of the notice a statement that financial security for every motor vehicle covered
by the policy is required to be maintained continuously throughout the registration period,
that the operation of any such motor vehicle without maintaining continuous financial
security therefor is a class B misdemeanor and shall be subject to a fine of not less than $300
and not more than $1,000 and that the registration for any such motor vehicle for which
continuous financial security is not provided is subject to suspension and the driver's license
of the owner thereof is subject to suspension.

(c) The director of vehicles shall verify a sufficient number of insurance certifications
each calendar year as the director deems necessary to insure compliance with the provisions
of this act. The owner or owner's insurance company shall verify the accuracy of any owner's
certification upon request, as provided in subsection (a).

(d) In addition to any other requirements of this act, the director shall require a person
to acquire insurance and for such person's insurance company to maintain on file with the
division evidence of such insurance for a period of one year when a person has been
convicted in this or another state of any of the violations enumerated in K.S.A. 8-285, and
amendments thereto.

The director shall also require any driver whose driving privileges have been suspended
pursuant to this section to maintain such evidence of insurance as required above.

The company of the insured shall immediately mail notice to the director whenever any
policy required by this subsection to be on file with the division is terminated by the insured
or the insurer for any reason. The receipt by the director of such termination shall be prima
facie evidence that no financial security exists with regard to the person concerned.

No cancellation notice shall be sent to the director if the insured adds or deletes a vehicle,
adds or deletes a driver, renews a policy or is issued a new policy by the same company.
No cancellation notice shall be sent to the director prior to the date the policy is terminated
if the company allows a grace period for payment until such grace period has expired and
the policy is actually terminated.

For the purposes of this act, the term ``conviction'' includes pleading guilty or nolo
contendere, being convicted or being found guilty of any violation enumerated in this
subsection without regard to whether sentence was suspended or probation granted. A
forfeiture of bail, bond or collateral deposited to secure a defendant's appearance in court,
which forfeiture has not been vacated, shall be equivalent to a conviction.

The requirements of this subsection shall apply whether or not such person owns a motor
vehicle.

(e) Whenever the director shall receive prima facie evidence, as prescribed by this
section, that continuous financial security covering any motor vehicle registered in this state
is not in effect, the director shall notify the owner by registered or certified mail or United
States post office certificate of mailing that, at the end of 30 days after the notice is mailed,
the registration for such motor vehicle and the driving privileges of the owner of the vehicle
shall be suspended or revoked, pursuant to such rules and regulations as the secretary of
revenue shall adopt, unless within 10 days after the notice is mailed: (1) Such owner shall
demonstrate proof of continuous financial security covering such vehicle to the satisfaction
of the director; or (2) such owner shall mail a written request which is postmarked within
10 days after the notice is mailed requesting a hearing with the director. Upon receipt of a
timely request for a hearing, the director shall afford such person an opportunity for hearing
within the time and in the manner provided in K.S.A. 8-255 and amendments thereto. If,
within the ten-day period or at the hearing, such owner is unable to demonstrate proof of
continuous financial security covering the motor vehicle in question, the director shall revoke
the registration of such motor vehicle and suspend the driving privileges of the owner of
the vehicle.

(f) Whenever the registration of a motor vehicle or the driving privileges of the owner
of the vehicle are suspended or revoked for failure of the owner to maintain continuous
financial security, such suspension or revocation shall remain in effect until satisfactory proof
of insurance has been filed with the director as required by subsection (d) and a
reinstatement fee in the amount herein prescribed is paid to the division of vehicles. Such
reinstatement fee shall be in the amount of ~~$25~~ $100 except that if the registration of a
motor vehicle of any owner is revoked within one year following a prior revocation of the
registration of a motor vehicle of such owner under the provisions of this act such fee shall
be in the amount of ~~$75~~ $300. The division of vehicles shall, at least monthly, deposit such
fees with the state treasurer, who shall credit such moneys to the state highway fund.

(g) In no case shall any motor vehicle, the registration of which has been revoked for
failure to have continuous financial security, be reregistered in the name of the owner
thereof, the owner's spouse, parent or child or any member of the same household, until
the owner complies with subsection (f). In the event the registration plate has expired, no
new plate shall be issued until the motor vehicle owner complies with the reinstatement
requirements as required by this act.

(h) Evidence that an owner of a motor vehicle, registered or required to be registered
in this state, has operated or permitted such motor vehicle to be operated in this state
without having in force and effect the financial security required by this act for such vehicle,
together with proof of records of the division of vehicles indicating that the owner did not
have such financial security, shall be prima facie evidence that the owner did at the time
and place alleged, operate or permit such motor vehicle to be operated without having in
full force and effect financial security required by the provisions of this act.

(i) Any owner of a motor vehicle registered or required to be registered in this state
who shall make a false certification concerning financial security for the operation of such
motor vehicle as required by this act, shall be guilty of a class A misdemeanor. Any person,
firm or corporation giving false information to the director concerning another's financial
security for the operation of a motor vehicle registered or required to be registered in this
state, knowing or having reason to believe that such information is false, shall be guilty of a
class A misdemeanor.

(j) The director shall administer and enforce the provisions of this act relating to the
registration of motor vehicles, and the secretary of revenue shall adopt such rules and
regulations as may be necessary for its administration.

(k) Whenever any person has made application for insurance coverage and such
applicant has submitted payment or partial payment with such application, the insurance
company, if payment accompanied the application and if insurance coverage is denied, shall
refund the unearned portion of the payment to the applicant or agent with the notice of
denial of coverage. If payment did not accompany the application to the insurance company
but was made to the agent, the agent shall refund the unearned portion of the payment to
the applicant upon receipt of the company's notice of denial.

(l) For the purpose of this act, ``declination of insurance coverage'' means a final denial,
in whole or in part, by an insurance company or agent of requested insurance coverage.

Sec. 13. K.S.A. 1998 Supp. 40-2,103, as amended by section 5 of 1999 Senate Bill 108,
40-1909 and 40-19c09, as amended by section 6 of 1999 Senate Bill 108, are hereby
repealed.

Sec. 14. On and after January 1, 2000, K.S.A. 8-173 and K.S.A. 1998 Supp. 40-3104
and 40-3118 are hereby repealed.

Sec. 15. This act shall take effect and be in force from and after its publication in the
statute book.'';

In the title in line 12, by striking ``accident and health''; also in line 12, by striking all
after the semicolon; by striking lines 13 through 16, in line 17 by striking all before the
semicolon and inserting ``concerning the regulation thereof; amending K.S.A. 8-173 and
K.S.A. 1998 Supp. 40-2,103, as amended by section 5 of 1999 Senate Bill 108, 40-19c09, as
amended by section 6 of 1999 Senate Bill 108, 40-3104 and 40-3118 and repealing the
existing sections''

\ And your committee on conference recommends the adoption of this report.

Robert Tomlinson

Cindy Empson

Nancy Kirk
Conferees on the part of House

Don Steffes

Sandy Praeger

Paul Feleciano, Jr.
Conferees on part of Senate

Senator Steffes moved the Senate adopt the Conference Committee Report on SB 3.

Senator Barone offered a substitute motion to not adopt and requested an new conference
committee be appointed. The motion failed.

The Senate returned to consideration of the motion by Senator Steffes to adopt the
conference committee report.

On roll call, the vote was: Yeas 31, nays 8, present and passing 0; absent or not voting 1.

Yeas: Becker, Bleeker, Bond, Brownlee, Clark, Donovan, Downey, Emert, Feleciano,
Gilstrap, Goodwin, Harrington, Hensley, Huelskamp, Jones, Jordan, Kerr, Langworthy,
Lawrence, Morris, Oleen, Praeger, Pugh, Ranson, Salisbury, Salmans, Steffes, Tyson,
Umbarger, Vidricksen, Vratil.

Nays: Barone, Biggs, Corbin, Gooch, Lee, Petty, Steineger, Stephens.

Absent or not voting: Hardenburger.

The Conference Committee report was adopted.

CONFERENCE COMMITTEE REPORT
Mr. President and Mr. Speaker: Your committee on conference on House
amendments to SB 97, submits the following report:

The Senate accedes to all House amendments to the bill, and your committee on
conference further agrees to amend the bill, as printed with House Committee amendments,
as follows:

On page 2, in line 7, by striking ``other than an individual,''; in line 8, after ``officer'' by
inserting ``or any person in a representative capacity so long as such person is not an
attorney''; by striking all in lines 41 through 43;

On page 3, by striking all in lines 1 through 31 and inserting the following:

``Sec. 3. K.S.A. 61-2713 is hereby amended to read as follows: 61-2713. (a) The petition
shall be in substantially the following form:

In the District Court of ________ County, Kansas.

Plaintiff
vs.

Defendant

No.

[qr

PETITION PURSUANT TO CHAPTER 61 OF THE KANSAS STATUTES
ANNOTATED

Statement of claim:

I, ________, having read the instruction below, hereby assert the following claim
against ________, defendant:

Demand for judgment:

Based on the claim stated above, judgment is demanded against defendant as follows:

1. Payment of $________, plus interest, costs and any damages awarded under
K.S.A. 60-2610 and amendments thereto.

2. Recovery of the following described personal property, plus costs: ________.
This property has an estimated value of $________.

Instructions to plaintiff:

1. State the claim you have against the defendant in the space provided. Be clear and
concise.

2. Your total claim against defendant may not exceed $1,800, not including interest,
costs and any damages awarded under K.S.A. 60-2610 and amendments thereto. If you are
seeking the recovery of personal property, the value of that property shall be based on your
estimate of its value under oath.

3. You must be present in person at the hearing in order to avoid default judgment
against you on any claim defendant may have which arises out of the transaction or
occurrence which is the subject to your claim against the defendant.

4. You must make demand for judgment in one or both of the spaces provided above.

5. Except as provided by law, neither you nor the defendant is permitted to appear with
an attorney at the hearing.

6. You may not file more than 10 small claims under the small claims procedure act in
this court during any calendar year.

7. After completing this form, you must subscribe to the following oath:

I, ________, hereby swear that, to the best of my knowledge and belief, the foregoing
claim asserted against the defendant (including the estimate of value of any property sought
to be recovered) is a just and true statement, exclusive of any valid claim or defense which
defendant may have.

[Signature] ____________

Plaintiff
Subscribed and sworn to before me this ________ day of ________, 19__.

[Signature] ________________

Judge (clerk or notary)

(b) The summons shall be in substantially the following form:

In the District Court of ________ County, Kansas.

Plaintiff
vs.

Defendant

No.

[qr

SUMMONS (Small Claims Procedure) To the above-named defendant:

You are hereby notified that the above-named plaintiff has filed a claim against you under
the small claims procedure of this court. The statement of plaintiff's claim and demand for
judgment against you are set forth in the petition which is served upon you with this
summons.

A trial will be held on this matter at __ o'clock __m. on the ____ day of

,

19__, at ____________________.

(Place of hearing and address)
You must be present in person at the trial or a judgment by default will be entered against
you. Except as otherwise provided by law, neither you nor the plaintiff is permitted to appear
with an attorney.

If your defense is supported by witnesses, books, receipts or other papers, you should
bring them with you at the time of the hearing. If you wish to have witnesses summoned,
see the judge or clerk of the court at once for assistance.

If you admit the claim, but desire additional time to satisfy plaintiff's demands, you must
be present at the trial and explain the circumstances to the court.

If you have a claim against the plaintiff, which arises out of the transaction or occurrence
which is the subject of plaintiff's claim and your claim does not exceed $1,800, you must
complete the form for ``Defendant's Claim,'' which accompanies this summons, and return
it to the judge or clerk of the court on or before the time set for the trial. If your claim
against plaintiff exceeds $1,800, you may complete and return the form for ``Defendant's
Claim'' on or before the time set for trial.

RETURN ON SERVICE OF SUMMONS I hereby certify that I have served this summons:

(1) Personal service. By delivering a copy of the summons and a copy of the petition to
each of the following defendants on the dates indicated:

________, 19__, ________, 19__

(2) Residence service. By leaving a copy of the summons and a copy of the petition at
the usual place of residence of each of the following defendants on the dates indicated:

________, 19__, ________, 19__

(3) No service. The following defendants were not found in this county:

Dated: ________.

____________________

(Signature and Title of Officer)
(c) The defendant's claim shall be in substantially the following form:

In the District Court of ________ County, Kansas.

Plaintiff
vs.

Defendant

No.

[qr

DEFENDANT'S CLAIM Instructions:

1. As stated in the summons, if you have a claim against the plaintiff which arises out
of the transaction or occurrence which is the subject of plaintiff's claim and your claim does
not exceed $1,800, you must state your claim in the space provided below. If your claim
against the plaintiff exceeds $1,800, you may state your claim in the space provided below.
In determining whether or not your claim against the plaintiff exceeds $1,800, do not include
interest, costs and any damages under K.S.A. 60-2610 and amendments thereto, but do
include the value of any personal property sought to be recovered as determined by your
estimate of its value under oath.

2. Be clear and concise in stating your claim.

3. If the value of your claim exceeds $1,800 (not including interest, costs and any
damages awarded under K.S.A. 60-2610 and amendments thereto, but including the value
of any personal property sought to be recovered, as determined by your estimate of its value
under oath), the court must decide whether you may pursue your entire claim or only that
portion not exceeding $1,800.

4. If your claim exceeds $1,800 and the court determines that you may not pursue the
entire claim at the hearing, you have three alternatives: (1) Make no demand for judgment
and reserve the right to pursue your entire claim in a court of competent jurisdiction; (2)
make demand for judgment of that portion of your claim which does not exceed $1,800 and
reserve the right to bring an action in a court of competent jurisdiction for any amount in
excess thereof; or (3) make demand for judgment of that portion of your claim which does
not exceed $1,800 and waive your right to recover any excess.

5. When completed, this form must be filed with the judge or the clerk of the court on
or before the time stated in the summons for the trial.

Statement of claim:

I, ________, having read the instructions above, assert the following claim against
________, plaintiff:

Demand for judgment:

Based on the claim stated above, judgment is demanded against plaintiff as follows:

1. Payment of $____, plus interest, costs and any damages awarded under K.S.A. 60-
2610 and amendments thereto.

2. Recovery of the following described personal property, plus costs:

This property has an estimated value of $____.

I, ________, hereby swear that, to the best of my knowledge and belief, the above
claim asserted against the plaintiff (including the estimate of value of any property sought
to be recovered) is a just and true statement.

[Signature] ____________

Plaintiff
Subscribed and sworn to before me this ____ day of ________, 19__.

[Signature] ____________________

Judge (clerk or notary)'';
Also on page 3, in line 32, by striking ``61-2714'' and inserting ``61-2713'';

On page 1, in the title, in line 15, by striking ``61-2714'' and inserting ``61-2713'';

\ And your committee on conference recommends the adoption of this report.
Michael O'Neal
Tim Carmody
Janice L. Pauls
Conferees on the part of House
Tim Emert
Edward W. Pugh
Greta Goodwin
Conferees on part of Senate

Senator Emert moved the Senate adopt the Conference Committee Report on SB 97.

On roll call, the vote was: Yeas 38, nays 1, present and passing 0; absent or not voting 1.

Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Harrington, Hensley, Huelskamp, Jones,
Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty, Praeger, Pugh, Ranson,
Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger, Vidricksen.

Nays: Vratil.

Absent or not voting: Hardenburger.

The Conference Committee report was adopted.

CONFERENCE COMMITTEE REPORT
Mr. President and Mr. Speaker: Your committee on conference on House
amendments to SB 220, submits the following report:

The Senate accedes to all House amendments to the bill, and your committee on
conference further agrees to amend the bill, as printed with House Committee of the Whole
amendments, as follows:

On page 1, by striking all in lines 16 through 43;

By striking all on pages 2 and 3;

On page 4 by striking all in lines 1 through 14 and inserting the following:

``Section 1. K.S.A. 60-612 is hereby amended to read as follows: 60-612. (a) Without
changing venue, a judge may conduct any hearing or nonjury trial in any county agreed
upon by all parties who are not in default.

(b) If the court finds on motion of any party, that the county where an action was filed
does not have a courtroom or other suitable facility which conforms to section 11 of the
Americans with disabilities act accessibility guidelines for buildings and facilities (ADAAG)
adopted by 28 CFR 36.406 and incorporated in appendix A thereto, as in effect on July 1,
1999, and that such failure to conform would prohibit or limit the participation of a person
material to the proceeding, the judge, without changing venue, may conduct any hearing or
trial in any county with an accessible courtroom.

(c) If the court finds, on motion of any person at least 20 days before the hearing or
trial, that the county where an action was filed does not have a courtroom or other suitable
facility which conforms to section 11 of the Americans with disabilities act accessibility
guidelines for buildings and facilities (ADAAG) adopted by 28 CFR 36.406 and incorporated
in appendix A thereto, as in effect on July 1, 1999, and that such failure to conform would
prohibit or limit the attendance of any person, the judge, without changing venue, may
conduct the hearing or trial in any county with an accessible courtroom. Notice of the change
of the location shall be given to the parties at least 10 days prior to the date of the first
proceeding at the alternate location.

Sec. 2. K.S.A. 60-612 is hereby repealed.'';

Also on page 4, by renumbering Section 5 as Section 3;

On page 1, in the title, in line 10, by striking all after ``concerning''; by striking all in lines
11 and 12; in line 13 by striking all before the period and inserting ``civil procedure; relating
to venue; amending K.S.A. 60-612 and repealing the existing section'';

\ And your committee on conference recommends the adoption of this report.

Michael O'Neal

Tim Carmody

Janice L. Pauls
Conferees on the part of House

Tim Emert

Edward W. Pugh

Greta Goodwin
Conferees on part of Senate

Senator Vratil moved the Senate adopt the Conference Committee Report on SB 220.

On roll call, the vote was: Yeas 39, nays 0, present and passing 0; absent or not voting 1.

Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Harrington, Hensley, Huelskamp, Jones,
Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty, Praeger, Pugh, Ranson,
Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger, Vidricksen, Vratil.

Absent or not voting: Hardenburger.

The Conference Committee report was adopted.

CONFERENCE COMMITTEE REPORT
Mr. President and Mr. Speaker: Your committee on conference on House
amendments to SB 324, submits the following report:

The Senate accedes to all House amendments to the bill, and your committee on
conference further agrees to amend the bill, as printed with House Committee amendments,
as follows:

On page 1, following line 24, by inserting the following:

``Section 1. K.S.A. 44-575 is hereby amended to read as follows: 44-575. (a) As used in
K.S.A. 44-575 through 44-580, and amendments thereto, ``state agency'' means the state, or
any department or agency of the state, but not including the Kansas turnpike authority, the
university of Kansas hospital authority, any political subdivision of the state or the district
court with regard to district court officers or employees whose total salary is payable by
counties.

(b) For the purposes of providing for the payment of compensation for claims arising
on and after July 1, 1974, and all other amounts required to be paid by any state agency as
a self-insured employer under the workers compensation act and any amendments or
additions thereto, there is hereby established the state workers compensation self-insurance
fund in the state treasury. The name of the state workmen's compensation self-insurance
fund is hereby changed to the state workers compensation self-insurance fund. Whenever
the state workmen's compensation self-insurance fund is referred to or designated by any
statute, contract or other document, such reference or designation shall be deemed to apply
to the state workers compensation self-insurance fund.

(c) The state workers compensation self-insurance fund shall be liable to pay: (1) All
compensation for claims arising on and after July 1, 1974, and all other amounts required
to be paid by any state agency as a self-insured employer under the workers compensation
act and any amendments or additions thereto; (2) the amount that all state agencies are
liable to pay of the ``carrier's share of expense'' of the administration of the office of the
director of workers' compensation as provided in K.S.A. 74-712 through 74-719, and
amendments thereto, for each fiscal year; (3) all compensation for claims remaining from
the self-insurance program which existed prior to July 1, 1974, for institutional employees
of the division of mental health and retardation services of the department of social and
rehabilitation services; (4) the cost of administering the state workers compensation self-
insurance fund including the defense of such fund and any costs assessed to such fund in
any proceeding to which it is a party; and (5) the cost of establishing and operating the state
workplace health and safety program under subsection (f). For the purposes of K.S.A. 44-
575 through 44-580, and amendments thereto, all state agencies are hereby deemed to be
a single employer whose liabilities specified in this section are hereby imposed solely upon
the state workers compensation self-insurance fund and such employer is hereby declared
to be a fully authorized and qualified self-insurer under K.S.A. 44-532, and amendments
thereto, but such employer shall not be required to make any reports thereunder.

(d) The secretary of administration shall administer the state workers compensation self-
insurance fund and all payments from such fund shall be upon warrants of the director of
accounts and reports issued pursuant to vouchers approved by the secretary of
administration or a person or persons designated by the secretary. The director of accounts
and reports may issue warrants pursuant to vouchers approved by the secretary for payments
from the state workers compensation self-insurance fund notwithstanding the fact that
claims for such payments were not submitted or processed for payment from money
appropriated for the fiscal year in which the state workers compensation self-insurance fund
first became liable to make such payments.

(e) The secretary of administration shall remit all moneys received by or for the secretary
in the capacity as administrator of the state workers compensation self-insurance fund, to
the state treasurer. Upon receipt of any such remittance the state treasurer shall deposit
the entire amount thereof in the state treasury to the credit of the state workers
compensation self-insurance fund.

(f) There is hereby established the state workplace health and safety program within
the state workers compensation self-insurance program of the department of administration.
The secretary of administration shall implement and administer the state workplace health
and safety program for state agencies. The state workplace health and safety program shall
include, but not be limited to:

(1) Workplace health and safety hazard surveys in all state agencies, including onsite
interviews with employees;

(2) Workplace health and safety hazard prevention services, including inspection and
consultation services;

(3) Procedures for identifying and controlling workplace hazards;

(4) Development and dissemination of health and safety informational materials, plans,
rules and work procedures; and

(5) Training for supervisors and employees in healthful and safe work practices.'';

On page 8, following line 16, by inserting the following:

``New Sec. 8. (a) The university of Kansas hospital authority is authorized to construct
buildings and facilities on state-owned property of the university of Kansas medical center
from any moneys of the university of Kansas hospital authority if the capital improvement
projects for such buildings and facilities have received prior approval by the state board of
regents and the plans and specifications for such projects have received prior approval by
the secretary of administration. Such capital improvement projects shall be totally financed
from moneys of the university of Kansas hospital authority and the buildings and facilities
constructed shall become the property of Kansas upon completion and acceptance by the
secretary of administration. No such capital improvement project for a building or facility
shall be approved by the state board of regents without having first advised and consulted
with the joint committee on state building construction.

(b) The university of Kansas hospital authority is authorized to repair, remodel or
renovate state buildings and facilities of the university of Kansas medical center from any
moneys of the university of Kansas hospital authority if the capital improvement projects
for such repairs, remodeling or renovations have received prior approval by the state board
of regents and the plans and specifications for such projects have received prior approval
by the secretary of administration. Such capital improvement projects shall be totally
financed from moneys of the university of Kansas hospital authority and the repairs,
remodeling or renovations shall become the property of Kansas upon completion and
acceptance by the secretary of administration. No such capital improvement project to
repair, remodel or renovate any state building or facility shall be approved by the state board
of regents without having first advised and consulted with the joint committee on state
building construction.'';

And by renumbering sections accordingly;

On page 8, in line 17, before ``75-5542'' by inserting ``44-575 and'';

On page 1, in the title, in line 13, by striking ``benefit plans'' and inserting ``benefits''; in
line 14, before ``amending'' by inserting ``authorizing certain capital improvement projects;'';
also in line 14, after ``K.S.A.'' by inserting ``44-575 and'';

\ And your committee on conference recommends the adoption of this report.

Kenny Wilk

Denna L. Horst

Candy L. Ruff
Conferees on the part of House

Dave Kerr

Alicia L. Salisbury

Marge Petty
Conferees on part of Senate

Senator Kerr moved the Senate adopt the Conference Committee Report on HB 324.

On roll call, the vote was: Yeas 39, nays 0, present and passing 0; absent or not voting 1.

Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Harrington, Hensley, Huelskamp, Jones,
Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty, Praeger, Pugh, Ranson,
Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger, Vidricksen, Vratil.

Absent or not voting: Hardenburger.

The Conference Committee report was adopted.

CONFERENCE COMMITTEE REPORT
Mr. President and Mr. Speaker: Your committee on conference on Senate
amendments to HB 2352, submits the following report:

The House accedes to all Senate amendments to the bill, and your committee on
conference further agrees to amend the bill, as printed with Senate Committee of the Whole
amendments, as follows:

On page 2, in line 35, following the semicolon, by inserting ``and''; in line 36, by striking
all after ``(15)''; in line 37, by striking ``(16)'';

On page 3, in line 2, following the semicolon, by inserting ``and''; in line 4, by striking ``;
and'' and inserting a period; by striking all in lines 5 and 6; in line 15, by striking
``administrative'' and inserting ``chief'';

On page 6, in line 35, by striking ``The court of appeals''; by striking all in lines 36 through
39, and inserting ``Appeals to the court of appeals may be taken by the prosecution from
cases before a district judge as a matter of right in the following cases, and no others:'';

On page 7, by striking all in lines 25 through 43;

By striking all on pages 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20 and 21;

On page 22, by striking all in lines 1 through 35;

By renumbering sections accordingly;

Also on page 22, in line 37 by striking the comma and inserting ``and''; also in line 37, by
striking ``and 38-1542''; in line 38, by striking all following ``302b''; in line 39, by striking
``38-1583'' and inserting ``, 20-302b, as amended by Section 13 of 1999 House Bill No. 2206,
and 20-302b, as amended by section 1 of 1999 Senate Bill No. 91,'';

On page 1, in the title, in line 12, by striking ``and judicial proceedings therein''; in line
15, by striking ``Kansas code for care of children;''; in line 16, by striking the comma, that
follows the stricken material, and inserting ``and''; also in line 16, following ``22-3602'', by
striking ``and''; in line 17, by striking ``38-1542''; also in line 17, by striking ``, 38-1502, 38-
1528, 38-''; in line 18, by striking ``1543, 38-1562, 38-1565 and 38-1583''; in line 19, by
striking ``38-1502c'' and inserting ``20-302b, as amended by Section 13 of 1999 House Bill
No 2206, and 20-302b, as amended by Section 1 of 1999 Senate Bill No. 91''

And your committee on conference recommends the adoption of this report.

Tim Emert

John Vratil

Greta Goodwin
Conferees on the part of Senate

Michael R. O'Neal

Tim Carmody

Janice L. Pauls
Conferees on part of House

Senator Vratil moved the Senate adopt the Conference Committee Report on HB 2352.

On roll call, the vote was: Yeas 39, nays 0, present and passing 0; absent or not voting 1.

Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Harrington, Hensley, Huelskamp, Jones,
Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty, Praeger, Pugh, Ranson,
Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger, Vidricksen, Vratil.

Absent or not voting: Hardenburger.

The Conference Committee report was adopted.

CONFERENCE COMMITTEE REPORT
Mr. President and Mr. Speaker: Your committee on conference on Senate
amendments to Substitute for HB 2469, submits the following report:

The House accedes to all Senate amendments to the bill, and your committee on
conference further agrees to amend the bill, as printed with Senate Committee of the Whole
amendments, as follows:

On page 3, by striking all on line 43;

By striking all on page 4;

On page 5, by striking all in lines 1 through 7 and by inserting the following:

``Section 1. K.S.A. 1998 Supp. 21-4705 is hereby amended to read as follows: 21-4705.
(a) For the purpose of sentencing, the following sentencing guidelines grid for drug crimes
shall be applied in felony cases under the uniform controlled substances act for crimes
committed on or after July 1, 1993:

(b) The provisions of subsection (a) will apply for the purpose of sentencing violations
of the uniform controlled substances act except as otherwise provided by law. Sentences
expressed in the sentencing guidelines grid for drug crimes in subsection (a) represent
months of imprisonment.

(c) (1) The sentencing court has discretion to sentence at any place within the
sentencing range. The sentencing judge shall select the center of the range in the usual case
and reserve the upper and lower limits for aggravating and mitigating factors insufficient to
warrant a departure. The sentencing court shall not distinguish between the controlled
substances cocaine base (9041L000) and cocaine hydrochloride (9041L005) when
sentencing within the sentencing range of the grid block.

(2) In presumptive imprisonment cases, the sentencing court shall pronounce the
complete sentence which shall include the prison sentence, the maximum potential
reduction to such sentence as a result of good time and the period of postrelease supervision
at the sentencing hearing. Failure to pronounce the period of postrelease supervision shall
not negate the existence of such period of postrelease supervision.

(3) In presumptive nonprison cases, the sentencing court shall pronounce the prison
sentence as well as the duration of the nonprison sanction at the sentencing hearing.

(d) Each grid block states the presumptive sentencing range for an offender whose
crime of conviction and criminal history place such offender in that grid block. If an offense
is classified in a grid block below the dispositional line, the presumptive disposition shall be
nonimprisonment. If an offense is classified in a grid block above the dispositional line, the
presumptive disposition shall be imprisonment. If an offense is classified in grid blocks 3-
E, 3-F, 3-G, 3-H, 3-I, 4-E or 4-F, the court may impose an optional nonprison sentence
upon making the following findings on the record:

(1) An appropriate treatment program exists which is likely to be more effective than
the presumptive prison term in reducing the risk of offender recidivism; and

(2) the recommended treatment program is available and the offender can be admitted
to such program within a reasonable period of time; or

(3) the nonprison sanction will serve community safety interests by promoting offender
reformation.

Any decision made by the court regarding the imposition of an optional nonprison
sentence if the offense is classified in grid blocks 3-E, 3-F, 3-G, 3-H, 3-I, 4-E or 4-F shall
not be considered a departure and shall not be subject to appeal.

(e) The sentence for a second or subsequent conviction of K.S.A. 65-4159 and
amendments thereto, manufacture of any controlled substance or controlled substance analog
shall be a presumptive term of imprisonment of two times the maximum duration of the
presumptive term of imprisonment. The court may impose an optional reduction in such
sentence of not to exceed 50% of the mandatory increase provided by this subsection upon
making a finding on the record that one or more of the mitigating factors as specified in
K.S.A. 21-4716 and amendments thereto justify such a reduction in sentence. Any decision
made by the court regarding the reduction in such sentence shall not be considered a
departure and shall not be subject to appeal.'';

On page 13, in line 14, by striking all after ``(k)''; by striking all in lines 15 through 18
and inserting ``''practitioner`` means a person licensed to practice medicine and surgery,
dentist, podiatrist, veterinarian, optometrist licensed under the optometry laws as a
therapeutic licensee or diagnostic and therapeutic licensee, or scientific investigator or other
person authorized by law to use a controlled substance in teaching or chemical analysis or
to conduct research with respect to a controlled substance;'';

On page 17, in line 22, by striking ``form'' and inserting ``from'';

On page 20, in line 13, after the semicolon, by inserting ``and''; in line 17, by striking ``;
and'' and inserting a period; by striking all in lines 18 and 19;

On page 21, in line 33, by striking ``Any'' and inserting ``Upon request of the law
enforcement agency in charge after determination of the existence of an alleged illegal drug
manufacturing site, any'';

On page 22, in line 5, after ``property'' by inserting ``not destroyed pursuant to subsection
(a)(2) of K.S.A. 60-4117 and amendments thereto'';

On page 25, after line 15, by inserting the following:

``Sec. 2. K.S.A. 1998 Supp. 65-4159 is hereby amended to read as follows: 65-4159. (a)
Except as authorized by the uniform controlled substances act, it shall be unlawful for any
person to manufacture any controlled substance or controlled substance analog.

(b) Any person violating the provisions of this section with respect to the unlawful
manufacturing or attempting to unlawfully manufacture any controlled substance or
controlled substance analog, upon conviction, is guilty of:

~~(1) A drug severity level 2 felony upon conviction for a first offense;~~

~~(2)~~ a drug severity level 1 felony ~~upon conviction for a second offense or subsequent~~
~~offense~~ and the sentence for which shall not be subject to statutory provisions for suspended
sentence, community work service, or probation.

(c) The provisions of subsection (d) of K.S.A. 21-3301, and amendments thereto, shall
not apply to a violation of attempting to unlawfully manufacture any controlled substance
pursuant to this section.

~~(d) Notwithstanding any other provision of law, upon conviction of any person for~~
~~violating subsection (a), such person shall be guilty of a drug severity level 1 felony if such~~
~~person is 18 or more years of age and the substances involved were manufactured within~~
~~1,000 feet of any school property upon which is located a structure used by a unified school~~
~~district or an accredited nonpublic school for student instruction or attendance or~~
~~extracurricular activities of pupils enrolled in kindergarten or any of the grades one through~~
~~12.~~

~~Nothing in this subsection shall be construed as requiring that school be in session or that~~
~~classes are actually being held at the time of the offense or that children must be present~~
~~within the structure or on the property during the time of any alleged criminal act. If the~~
~~structure or property meets the description above, the actual use of that structure or~~
~~property at the time alleged shall not be a defense to the crime charged or the sentence~~
~~imposed.~~'';

And by renumbering sections accordingly;

Also on page 25, in line 16, by striking ``21-4717 and''; in line 17, before ``22-2512'' by
inserting ``21-4705,''; also in line 17, by striking ``and'' and inserting a comma; also in line
17, after ``65-4152'' by inserting ``and 65-4159'';

On page 1, in the title, in line 16, by striking ``21-''; in line 17, by striking ``4717 and'';
also in line 17, before ``22-'' by inserting ``21-4705,''; in line 18, by striking ``and'' the first
time it appears and inserting a comma; also in line 18, after ``65-4152'' by inserting ``and
65-4159'';

And your committee on conference recommends the adoption of this report.

Tim Emert

John Vratil

Greta Goodwin
Conferees on the part of Senate

Michael O'Neal

Tim Carmody

Janice L. Pauls
Conferees on part of House

Senator Emert moved the Senate adopt the Conference Committee Report on Sub for
HB 2469.

On roll call, the vote was: Yeas 26, nays 12, present and passing 1; absent or not voting
1.

Yeas: Barone, Becker, Biggs, Bleeker, Bond, Corbin, Downey, Emert, Feleciano, Gilstrap,
Goodwin, Hensley, Jones, Jordan, Kerr, Langworthy, Lee, Morris, Petty, Praeger, Steffes,
Steineger, Stephens, Umbarger, Vidricksen, Vratil.

Nays: Brownlee, Clark, Donovan, Harrington, Huelskamp, Lawrence, Oleen, Pugh,
Ranson, Salisbury, Salmans, Tyson.

Present and passing: Gooch.

Absent or not voting: Hardenburger.

The Conference Committee report was adopted.

EXPLANATION OF VOTE
Mr. President: While I strongly agree that we need to punish drug law violators, this
bill fails to safeguard the freedoms and liberties of innocent folks caught in the crossfire of
the drug war. Therefore, I must vote ``No''. -- Tim Huelskamp

Mr. President: I too recognize methamphetamine manufacturing is a terrible problem,
but HB 2469 has a potential fiscal impact of $29 million per year, which has not been
addressed. This bill goes much further than targeting ``meth'': a better approach could be
taken to address the problem other than the price-tag on this bill. I vote no.--Lana Oleen

Senators Brownlee, Harrington, Lawrence and Salisbury request the record to show they
concur with the ``Explanation of Vote'' offered by Senator Oleen on HB 2469.

INTRODUCTION OF ORIGINAL MOTIONS AND SENATE RESOLUTIONS
Senators Clark, Oleen, Petty, Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Corbin,
Donovan, Downey, Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger,
Harrington, Hensley, Huelskamp, Jones, Jordan, Kerr, Langworthy, Lawrence, Lee, Morris,
Praeger, Pugh, Ranson, Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger,
Vidricksen and Vratil introduced the following Senate resolution, which was read:

SENATE RESOLUTION No. 1867--

By Senators Clark, Oleen, Petty, Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Corbin,
Donovan, Downey, Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger,
Harrington, Hensley, Huelskamp, Jones, Jordan, Kerr, Langworthy, Lawrence, Lee,
Morris, Praeger, Pugh, Ranson, Salisbury, Salmans, Steffes, Steineger, Stephens, Tyson,
Umbarger, Vidricksen and Vratil

A RESOLUTION honoring Craig Yorke, Sr. WHEREAS, Craig Yorke, Sr. is retiring at the conclusion of the 1999 legislative session
from his position as a member of the Sergeant-at-Arms staff for the Kansas Senate, a position
he has held since 1993; and

WHEREAS, Craig Yorke's life is a saga worth telling: He was born December 24, 1912,
in New Bedford, Massachusetts. Abandoned by his mother at age 4, when discovered he
was found to be seriously ill. He spent the next seven years in a tuberculosis sanatorium
where kind soldiers who had been gassed in World War I treated him as their own and
taught him to read and write. In 1921 he was released and placed in a Catholic orphanage.
Before completing high school he had lived with his grandmother, father and four foster
families. During grammar school he won a city-wide house design contest and received a
large radio. After his first year in high school he had won all 12 of the city's prizes in drafting.
After graduating from high school he completed a year of college at Lincoln University in
Pennsylvania before being forced to leave in 1933 because of lack of money; and

WHEREAS, Craig Yorke was a phenomenal athlete. In grammar school, in his first at
bat in a playground baseball game, he hit the ball for a homer and through a classroom
window. He played quarterback in high school football, was a state champion runner but
excelled in baseball--particularly as a hitter. From age 14 and for 16 years he played semi-
professional baseball. He was a switch hitter and maintained a batting average over .300.
He played on several white as well as black teams earning from $.35 to $29 per game. In
Yankee Stadium, while playing for the Brooklyn Black Sox, he bunted safely against the
great Sachel Paige; and

WHEREAS, After working as a draftsman for some time, with much of it being electrical
drawings, he qualified as a Registered Electrical Engineer. In 1963 he started a new career
working for the federal government as an electrical engineer and, later, working as a
specifications writer and chief electrical design engineer, retiring in 1985. Subsequently he
worked for Holmes and Narver, Inc. in Albuquerque on a high priority project involving
the U.S. Navy and its activities at the North Pole; and

WHEREAS, Craig Yorke married Dorothy Britt Reed in 1941. She died in 1988. He has
one son, Craig Yorke, Jr., a neurosurgeon here in Topeka, a daughter-in-law, Mary Powell,
and two grandsons, Zachary and Christopher, both students at Topeka High School: Now,
therefore,

Be it resolved by the Senate of the State of Kansas: That we marvel about the life
experiences of Craig Yorke, Sr. and will miss the cordial welcome he has given to visitors
in the Senate galleries; and

Be it further resolved: That the Secretary of the Senate be directed to provide five
enrolled copies of this resolution to Craig Yorke, Sr.

On emergency motion of Senator Oleen SR 1867 was adopted unanimously.

Senators Clark, Oleen and Petty remembered Craig Yorke as a friend, an inspiration and
a joy to know.

President Bond welcomed Mr. Yorke and family members: Craig, Jr., Mary Powell and
grandsons, Zachary and Christopher, and thanked him for his years of loyal service.

The Senators rose in a standing ovation.

Committee on Federal and State Affairs recommends HB 2570 be passed.

Also Substitute for HB 2013 be amended on page 1, in line 16, by striking ``16'' and
inserting ``17''; following line 20, by inserting the following:

``(a) ``Act'' means the bingo act.

(b) ``Administrator'' means the administrator of charitable gaming designated by the
secretary pursuant to section 15, and amendments thereto.'';

By relettering subsections (a) through (p) as (c) through (r) respectively;

Also on page 1, in line 39, by striking ``or'';

On page 3, in line 4, by striking ``secretary'' and inserting ``administrator''; in line 10, by
striking ``secretary'' and inserting ``administrator''; in line 20, by striking ``secretary'' and
inserting ``administrator''; in line 25, by striking ``secretary'' and inserting ``administrator'';
in line 32, by striking ``secretary'' and inserting ``administrator''; in line 37, by striking ``sec-
retary'' and inserting ``administrator''; in line 40, by striking ``secretary'' and inserting
``administrator'';

On page 4, in line 2, by striking ``secretary'' and inserting ``administrator''; in line 15, by
striking ``secretary'' and inserting ``administrator''; in line 20, by striking ``secretary'' and
inserting ``administrator''; in line 24, by striking ``secretary'' and inserting ``administrator'';
in line 27, by striking ``person'' and inserting ``nonprofit organization''; in line 29, following
``any'' by inserting ``Native American Indian tribe or''; in line 30, preceding the period, by
inserting ``within the geographic boundaries of the state of Kansas''; following line 30, by
inserting the following:

``(s) ``Person'' means any natural person, corporation, partnership, trust or association.'';

By relettering subsections (q) through (t) as (t) through (w) respectively;

Also on page 4, in line 33, preceding the period, by inserting ``by a licensee''; in line 40,
by striking all following ``revenue''; in line 41, by striking all preceding the period;

On page 5, in line 7, by striking ``secretary'' and inserting ``administrator''; in line 8, by
striking ``secretary'' and inserting ``administrator''; in line 16, by striking ``secretary'' and
inserting ``administrator''; by striking all of line 33 and inserting ``administrator. The admin-
istrator shall have the power and''; in line 35, by striking ``secretary'' and inserting ``admin-
istrator''; by striking all in line 38 and inserting ``administrator. No lease submitted to the
administrator shall''; in line 43, by striking ``sec-'';

On page 6, in line 1, by striking ``retary'' and inserting ``administrator''; in line 2, by striking
``secretary'' and inserting ``administrator''; in line 3, by striking ``by the secretary'' and in-
serting ``pursuant to the bingo act''; by striking all of line 7 and inserting ``administrator
under rules and regulations adopted pursuant to the bingo act.''; in line 9, by striking ``sec-
retary'' and inserting ``administrator''; in line 17, by striking ``secretary'' and inserting ``ad-
ministrator''; in line 27, by striking ``secretary'' and inserting ``administrator''; in line 29, by
striking ``secretary'' and inserting ``administrator''; in line 43, by striking ``secretary'' and
inserting ``administrator'';

On page 7, in line 2, by striking ``secretary'' and inserting ``administrator''; in line 3, by
striking ``secretary'' and inserting ``administrator''; in line 13, by striking ``secretary'' and
inserting ``administrator''; in line 26, by striking all following the period; by striking all in
lines 27 through 43;

On page 8, by striking all in lines 1 through 29 and inserting the following:

``For the privilege of participating in games of bingo, there is hereby levied upon each
player:

(a) A tax at the rate of 3% upon the charges made by each operator for participation in
call bingo games using hard cards. The operator shall collect the tax from the player at the
time that the player pays the charges for participation and shall remit the tax to the director.
The ultimate legal incidence of and liability for such tax shall be upon the player.

(b) A tax at the rate of $0.003 upon each bingo face sold or provided to the player by
the operator for participation in call bingo games. The tax shall be prepaid by the operator
to the distributor at the time that the operator purchases the bingo face. The distributor
shall remit the tax to the director. The operator shall then be reimbursed for the prepaid
tax by collecting the tax from each player at the time that the player pays the charges for
participation in call bingo games using bingo faces. The ultimate legal incidence of and
liability for such tax shall be upon the player.

(c) A tax at the rate of 1% upon the retail sales price printed on each instant bingo ticket
sold or provided to the player by the operator for participation in instant bingo games. The
tax shall be prepaid by the operator to the distributor at the time that the operator purchases
the bingo face. The distributor shall remit the tax to the director. The operator shall then
be reimbursed for the prepaid tax by collecting the tax from each player at the time that
the player pays the charges for participation in instant bingo games. The ultimate legal
incidence of and liability for such tax shall be upon the player.'';

Also on page 8, in line 31, by striking ``director'' and inserting ``administrator''; in line 33,
by striking ``director'' where it appears for the second time and inserting ``administrator'';
in line 35, by striking ``organization'' and inserting ``operator'';

On page 9, in line 4, by striking ``director'' and inserting ``administrator''; in line 6, by
striking ``licensees'' and inserting ``operators''; in line 9, by striking ``director'' and inserting
``administrator''; in line 11, by striking all following ``regulations''; in line 12, by striking all
preceding the period and inserting ``adopted pursuant to the bingo act''; in line 13, by striking
``director'' and inserting ``administrator''; in line 14, by striking ``director'' and inserting
``administrator''; in line 15, by striking ``director'' and inserting ``administrator''; in line 22,
by striking ``director'' and inserting ``administrator''; in line 31, by striking ``director'' and
inserting ``administrator''; in line 35, by striking ``director'' and inserting ``administrator''; in
line 41, by striking ``director'' and inserting ``administrator'';

On page 10, by striking all of line 1 and inserting ``able cause, the administrator, in the
administrator's discretion, may''; in line 10, by striking ``secretary'' and inserting ``adminis-
trator''; in line 15, by striking ``secretary'' and inserting ``administrator''; in line 21, by striking
``secretary'' and inserting ``administrator''; in line 24, by striking ``secretary'' and inserting
``administrator''; in line 28, by striking ``secretary'' and inserting ``administrator''; in line 34,
by striking ``sec-''; in line 35, by striking ``retary'' and inserting ``administrator''; in line 41,
by striking ``secretary'' and inserting ``administrator'';

On page 11, in line 2, by striking ``or''; by striking all in line 3; in line 4, by striking
``adopted by the secretary'' and inserting ``and conducted in accordance with the bingo act
and rules and regulations adopted pursuant thereto''; in line 5, by striking ``such organiza-
tion'' and inserting ``licensee''; in line 7, preceding ``bingo'' by inserting ``games of''; in line
8, by striking ``cards''; in line 9, by striking ``organization'' and inserting ``licensee''; in line
11, following ``person'' by inserting ``licensed under the bingo act''; in line 12, by striking
``sponsoring organization'' and inserting ``licensee''; in line 13, by striking ``sponsoring or-
ganization'' and inserting ``licensee''; in line 21, following ``games'' by inserting ``by a li-
censee''; by striking all in line 26 and inserting ``ing in any game of bingo managed, conducted
or operated by licensees.''; in line 28, by striking ``any such organization'' and inserting ``a
licensee''; in line 32, by striking ``$500'' and inserting ``$200''; in line 40, following ``awarded''
by inserting ``by a licensee''; in line 41, by striking ``in cash or its equivalent and such'' and
inserting ``. The''; in line 42, by striking ``in cash or its equivalent'';

On page 12, in line 3, following ``made'' by inserting ``by a licensee''; in line 9, following
``made'' by inserting ``by a licensee''; in line 16, following ``made'' by inserting ``by a licensee'';
in line 22, by striking ``licensee'' and inserting ``operator''; in line 27, following ``conducted''
by inserting ``by a licensee''; in line 32, by striking ``by the secretary'' and inserting ``pursuant
to the bingo act.'';

On page 13, in line 5, by striking ``secretary'' and inserting ``administrator''; in line 7,
following ``bingo'' by inserting ``by licensees''; in line 10, following ``conducted'' by inserting
``by licensees''; in line 12, following ``conducted'' by inserting ``by licensees''; in line 22, by
striking ``$500'' and inserting ``$200''; in line 25, by striking ``secretary'' and inserting ``ad-
ministrator''; in line 29, by striking ``secretary'' and inserting ``administrator'';

On page 14, in line 25, following ``(10)'' by inserting ``if sold or distributed to a licensee
under the bingo act,''; in line 37, by striking ``not have''; by striking all in line 38 and inserting
``be the full amount. If there is no winner of a progressive bingo game at a session, a stated
consolation prize may be awarded. Any'';

On page 15, in line 15, by striking ``the secretary in''; in line 16, following ``ulations'' by
inserting ``adopted pursuant to the bingo act''; also in line 16, by striking ``reusable''; in line
19, by striking all following the period; by striking all in lines 20 through 22; in line 23, by
striking ``secretary'' and inserting ``administrator''; in line 24, following ``ulations'' by inserting
``adopted pursuant to the bingo act''; in line 33, following ``sold'' by inserting ``, if sold or
distributed to a licensee''; in line 34, by striking ``secretary'' and inserting ``administrator'';
in line 36, by striking ``secretary'' and inserting ``administrator'';

On page 16, in line 1, by striking ``of the''; by striking all in line 2 and inserting ``adopted
pursuant thereto for the registration, licensing, taxing, management,''; in line 6, by striking
``secretary'' and inserting ``administrator''; in line 15, by striking ``secretary'' and inserting
``administrator''; in line 21, by striking ``secretary'' and inserting ``administrator''; following
line 28, by inserting the following:

``The provisions of this section shall not apply to games of bingo managed, operated or
conducted by Native American Indians.'';

Also on page 16, in line 30, by striking all following the period; by striking all in lines 31
through 37 and inserting the following:

``(a) The administration and enforcement of the bingo act and any rules and regulations
adopted pursuant thereto shall be vested in the administrator.

(b) Upon recommendation of the administrator, the secretary shall adopt all rules and
regulations necessary for the administration and enforcement of the bingo act by the
administrator.'';

Also on page 16, in line 39, by striking ``secretary'' and inserting ``administrator'';

On page 17, in line 2, by striking ``secretary'' and inserting ``administrator''; in line 14, by
striking ``exclusively''; also in line 14, preceding ``enforcement'' by inserting ``administration
and''; in line 17, by striking ``secretary'' and inserting ``administrator''; in line 32, by striking
``secretary related to the'' and inserting ``administrator related to the administration and'';
in line 33, by striking ``On''; by striking all in line 34 and inserting ``At the end of each fiscal
year,''; in line 37, by striking ``operating''; also in line 37, by striking ``of the secretary'' and
inserting ``administrator''; in line 38, by striking all following ``the'' where it appears for the
first time; by striking all in lines 39 through 41 and inserting ``administration and enforce-
ment of the bingo act.'';

On page 18, in line 11, by striking ``secretary'' and inserting ``administrator''; in line 20,
by striking ``secretary'' and inserting ``administrator''; in line 21, by striking ``secretary'' and
inserting ``administrator''; in line 23, by striking ``secretary'' and inserting ``administrator'';
in line 26, by striking ``secretary'' and inserting ``administrator''; in line 28, by striking ``sec-
retary'' and inserting ``administrator''; in line 29, by striking ``secretary'' and inserting ``ad-
ministrator''; also in line 29, by striking ``by rule and regulation'' and inserting ``, by rules
and regulations adopted under the bingo act,''; in line 31, by striking ``secretary'' and in-
serting ``administrator''; in line 40, by striking ``secretary'' and inserting ``administrator'';

On page 19, in line 1, by striking ``secretary'' and inserting ``administrator''; in line 10, by
striking ``secretary'' and inserting ``administrator''; by striking all in lines 19 through 25 and
inserting the following:

``New Sec. 15. (a) The secretary of revenue shall designate an administrator of chari-
table gaming. Any person designated the administrator of charitable gaming shall have at
least five years' experience in the area of charitable gaming regulation. The administrator
of charitable gaming shall be in the unclassified service and shall receive an annual salary
fixed by the secretary of revenue and approved by the governor.

(b) Under the supervision of the secretary, the administrator of charitable gaming shall
administer and enforce the provisions of the bingo act and any rules and regulations adopted
pursuant thereto. The administrator's exclusive duties shall be the administration and en-
forcement of the bingo act and any rules and regulations adopted pursuant thereto. The
administrator shall be solely accountable to and report to the secretary of revenue.

New Sec. 16. The department of revenue shall be subject to a performance audit of
the first year of implementation and enforcement of this act by the department. The scope
of such audit shall be determined by the legislative post audit committee and shall include,
but not be limited to, the efficiency and effectiveness of the department in implementing
and enforcing this act. The post auditor may contract for the conduct of such performance
audit in accordance with procedures established by the legislative post audit act. The report
of the audit required by this section shall be submitted to the legislative post audit committee
and to the legislature no later than the first day of the 2001 session. The furnishing of audit
services pursuant to this section shall be a transaction between the post auditor and the
department of revenue and shall be settled in accordance with the provisions of K.S.A. 75-
5515 and amendments thereto.

New Sec. 17. If any provision of the bingo act or the application thereof to any person
or circumstances is held unconstitutional or otherwise invalid, such unconstitutionality or
invalidity shall not affect other provisions or applications of the act which can be given effect
without the unconstitutional or invalid provision or application, and, to this end, the pro-
visions of this act are severable.'';

By renumbering sections accordingly;

On page 31, in line 40, by striking ``licensees'' and inserting ``operators''; by striking all in
lines 41 through 43 and inserting the following:

``Sec. 18. K.S.A. 74-8711 is hereby amended to read as follows: 74-8711. (a) There is
hereby established in the state treasury the lottery operating fund.

(b) The executive director shall remit at least weekly to the state treasurer all moneys
collected from the sale of lottery tickets and shares and any other moneys received by or
on behalf of the Kansas lottery. Upon receipt of any such remittance, the state treasurer
shall deposit the entire amount thereof in the state treasury and credit it to the lottery
operating fund. Moneys credited to the fund shall be expended or transferred only as pro-
vided by this act. Expenditures from such fund shall be made in accordance with appro-
priations acts upon warrants of the director of accounts and reports issued pursuant to
vouchers approved by the executive director or by a person designated by the executive
director.

(c) Moneys in the lottery operating fund shall be used for:

(1) The payment of expenses of the lottery, which shall include all costs incurred in the
operation and administration of the Kansas lottery; all costs resulting from contracts entered
into for the purchase or lease of goods and services needed for operation of the lottery,
including but not limited to supplies, materials, tickets, independent studies and surveys,
data transmission, advertising, printing, promotion, incentives, public relations, communi-
cations, and distribution of tickets and shares; and reimbursement of costs of facilities and
services provided by other state agencies;

(2) the payment of compensation to lottery retailers;

(3) transfers of moneys to the lottery prize payment fund pursuant to K.S.A. 74-8712,
and amendments thereto;

(4) transfers to the state general fund pursuant to K.S.A. 74-8713, and amendments
thereto;

(5) transfers to the state gaming revenues fund pursuant to subsection (d) of this section
and as otherwise provided by law; and

(6) ~~the~~ transfers to the county reappraisal fund as prescribed by law.

(d) The director of accounts and reports shall transfer moneys in the lottery operating
fund to the state gaming revenues fund created by K.S.A. 79-4801, and amendments thereto,
on or before the 15th day of each month~~, for fiscal years commencing on or after July 1,~~
~~1988~~ in an amount certified monthly by the executive director and determined as follows,
whichever is greater:

(1) In An amount equal to the moneys in the lottery operating fund in excess of those
needed for the purposes described in subsections (c)(1) through (c)(4); or

(2) except for pull-tab lottery tickets and shares, an amount equal to not less than 30%
of total monthly revenues from the sales of lottery tickets and shares less estimated returned
tickets. In the case of pull-tab lottery tickets and shares, an amount equal to not less than
20% of the total monthly revenues from the sales of pull-tab lottery tickets and shares less
estimated returned tickets.

Sec. 19. K.S.A. 74-8712 is hereby amended to read as follows: 74-8712. (a) There is
hereby established in the state treasury the lottery prize payment fund.

(b) The executive director shall certify periodically to the director of accounts and re-
ports such amounts as the executive director determines necessary to pay prizes to the
holders of valid winning lottery tickets or shares or for the purchase of nonmonetary prizes.
Upon receipt of such certification, the director of accounts and reports shall ~~promptly~~ trans-
fer the amount certified from the lottery operating fund to the lottery prize payment fund.
Moneys credited to the fund shall be expended only for ~~the~~:

(1) The payment of prizes to the holders of valid winning lottery tickets or shares~~, for~~;

(2) the reimbursement of retailers who have paid holders of winning tickets or shares
or;

(3) the purchase of nonmonetary prizes; or

(4) as purposes otherwise specifically authorized by law.

(c) Prior to making any expenditure for reimbursement of a retailer or payment of a
prize of $50 or more, the executive director shall cause all proposed prize payments to be
matched against the state debtor files maintained by the director of accounts and reports
and shall certify and pay or deliver any matched prize or the cash amount thereof to the
director of accounts and reports for setoff as prescribed under K.S.A. 75-6201 et seq., and
amendments thereto.

(d) Expenditures from ~~such~~ the lottery prize payment fund shall be made in accordance
with appropriations acts upon warrants of the director of accounts and reports, or a person
designated by the director of accounts and reports pursuant to K.S.A. 75-3732, and amend-
ments thereto, issued pursuant to vouchers approved by the executive director, or a person
designated by the executive director.

Sec. 20. K.S.A. 74-8720 is hereby amended to read as follows: 74-8720. (a) As nearly
as practical, an amount equal to not less than 45% of the total sales of lottery tickets or
shares, computed on an annual basis, shall be allocated for payment of lottery prizes.

(b) The prize to be paid or awarded for each winning ticket or share shall be paid to
one natural person who is adjudged by the executive director, the director's designee or the
retailer paying the prize, to be the holder of such winning ticket or share, or the person
designated in writing by the holder of the winning ticket or share on a form satisfactory to
the executive director, except that the prize of a deceased winner shall be paid to the duly
appointed representative of the estate of such winner or to such other person or persons
appearing to be legally entitled thereto.

(c) The executive director shall award the designated prize to the holder of the ticket
or share upon the validation of a claim or confirmation of a winning share. The executive
director shall have the authority to make payment for prizes by any means deemed appro-
priate upon the validation of winning tickets or shares.

(d) The right of a person to a prize drawn or awarded is not assignable.

(e) All prizes awarded shall be taxed as Kansas source income and shall be subject to
all state and federal income tax laws and rules and regulations. State income taxes shall be
withheld from prizes paid whenever federal income taxes are required to be withheld under
current federal law.

(f) (1) Unclaimed prize money not payable directly by lottery retailers shall be retained
for the period established by rules and regulations ~~and~~. Except as provided by paragraph
(2), if no claim is made within such period, ~~then~~ such unclaimed prize money shall be added
to the prize pools of subsequent lottery games.

(2) An amount equal to the greater of $60,000 or 2% of the unclaimed prize money shall
be used to fund grants awarded pursuant to section 21, and amendments thereto, for the
treatment of problem or compulsive gamblers and grants to conduct studies on the effects
of gambling.

(g) The state of Kansas, members of the commission and employees of the Kansas
lottery shall be discharged of all further liability upon payment of a prize pursuant to this
section.

(h) The Kansas lottery shall not publicly disclose the identity of any person awarded a
prize except upon written authorization of such person.

New Sec. 21. (a) The executive director shall develop and administer a competitive
grant program for the treatment of problem or compulsive gamblers and conduct studies
on the effects of gambling in Kansas. At least annually, the executive director shall determine
the amount of moneys available for grants. The executive director shall issue requests for
proposals for grant awards in accordance with the provisions of this section.

(b) In issuing requests for proposals and making such grants, the executive director shall
encourage proposals for new or creative programs or activities in addition to established or
current programs or activities.

(c) In addition to other criteria prescribed by the executive director, the executive di-
rector shall require each proposal for a grant to demonstrate that the proposal has been
developed with substantial and effective collaboration and coordination between the appli-
cant and the public and private organizations in the community that are directly involved
or otherwise recognized as interested in the treatment of problem or compulsive gamblers
or the study of the effects of gambling, including but not limited to community mental
health centers and organizations and public health and social services agencies.

Sec. 22. K.S.A. 1998 Supp. 74-8836 is hereby amended to read as follows: 74-8836. (a)
Any organization licensee that conducts at least 150 days of live racing during a calendar
year or a fair association that conducts fewer than 22 days of live racing during a calendar
year may apply to the commission for a simulcasting license to display simulcast horse or
greyhound races and to conduct intertrack parimutuel wagering thereon. If the organization
licensee conducts races at a racetrack facility that is owned by a facility owner licensee, both
licensees shall join in the application. A simulcasting license granted to a fair association
that conducts fewer than 22 days of live racing shall restrict the fair association's display of
simulcast races to a number of days, including days on which it conducts live races, equal
to not more than twice the number of days on which it conducts live races.

(b) (1) A simulcasting license granted to an organization licensee other than a fair as-
sociation shall authorize the display of simulcast races at the racetrack facility where the live
races are conducted so long as the licensee conducts at least eight live races per day and an
average of 10 live races per day per week. If a simulcasting licensee conducts live horse
races on a day when simulcast races are displayed by the licensee and the licensee conducts
fewer than an average of 10 live horse races per day per week, not less than 80% of the
races on which wagers are taken by the licensee during such week shall be live races con-
ducted by the licensee unless approved by the recognized horsemen's group or upon a
finding by the commission that the organization licensee was unable to do so for reasonable
cause. If a simulcast licensee conducts live greyhound races on a day when simulcast races
are displayed by the licensee and the licensee schedules fewer than 13 live greyhound races
during a performance on such day, not less than 80% of the races on which wagers are taken
by the licensee during such performance shall be live races conducted by the licensee.

(2) A simulcasting license granted to a fair association shall authorize the display of
simulcast races at the racetrack facility where the races are conducted only if live races are
scheduled for two or more days of the same calendar week, except that the licensee may
conduct simulcast races in the week immediately before and immediately after a live meeting
if the total number of days on which simulcast races are displayed does not exceed the total
authorized in subsection (a). In no case shall the live meet or simulcast races allowed under
this subsection exceed 10 consecutive weeks. For purposes of this subsection, a calendar
week shall be measured from Monday through the following Sunday.

(3) Notwithstanding the provisions of subsection (a), (b)(1) or (b)(2), a fair association
may apply to the commission for not more than five additional days of simulcasting of special
events. In addition, the commission may authorize a fair association to display additional
simulcast races but, if such fair association is less than 100 miles from an organization
licensee that is not a fair association, it ~~must~~ also shall secure written consent from that
organization licensee.

(4) Notwithstanding the provisions of subsection (b)(1), if an emergency causes the
cancellation of all or any live races scheduled for a day or performance by a simulcasting
licensee, the commission or the commission's designee may authorize the licensee to display
any simulcast races previously scheduled for such day or performance.

(5) Notwithstanding the provisions of subsection (b)(1), the commission may authorize
the licensee to display simulcast special racing events as designated by the commission.

(c) The application for a simulcasting license shall be filed with the commission at a
time and place prescribed by rules and regulations of the commission. The application shall
be in a form and include such information as the commission prescribes.

(d) To qualify for a simulcasting license the applicant shall:

(1) Comply with the interstate horse racing act of 1978 (15 U.S.C. 3001 et seq.) as in
effect December 31, 1991;

(2) submit with the application a written approval of the proposed simulcasting schedule
signed by: (A) The recognized horsemen's group for the track, if the applicant is licensed
to conduct only horse races; (B) the recognized greyhound owners' group, if the applicant
is licensed to conduct only greyhound races and only greyhound races are to be simulcast;
(C) both the recognized greyhound owners' group and a recognized horsemen's group, if
the applicant is licensed to conduct only greyhound races and horse races are to be simulcast;
(D) the recognized greyhound owners' group, if the applicant is licensed to conduct both
greyhound and horse races, only greyhound races are to be simulcast and races are to be
simulcast only while the applicant is conducting live greyhound races; (E) the recognized
horsemen's group for the track, if the applicant is licensed to conduct both greyhound and
horse races, only horse races are to be simulcast and races are to be simulcast only while
the applicant is conducting live horse races; or (F) both the recognized greyhound owners'
group and the recognized horsemen's group for the track, if the applicant is licensed to
conduct both greyhound races and horse races and horse races are to be simulcast while
the applicant is conducting live greyhound races or greyhound races are to be simulcast
while the applicant is conducting live horse races; and

(3) submit, in accordance with rules and regulations of the commission and before the
simulcasting of a race, a written copy of each contract or agreement which the applicant
proposes to enter into with regard to such race, and any proposed modification of any such
contract or agreement.

(e) The term of a simulcasting license shall be one year.

(f) A simulcasting licensee may apply to the commission or its designee for changes in
the licensee's approved simulcasting schedule if such changes are approved by the respective
recognized greyhound owners' group or recognized horsemen's group needed throughout
the term of the license. Application shall be made upon forms furnished by the commission
and shall contain such information as the commission prescribes.

(g) Except as provided by subsection (j), the takeout for simulcast horse and greyhound
races shall be the same as it is for the live horse and greyhound races conducted during the
current or next live race meeting at the racetrack facility where the simulcast races are
displayed. For simulcast races the tax imposed on amounts wagered shall be as provided by
K.S.A. 74-8823, and amendments thereto. Of the balance of the takeout remaining after
deduction of taxes, an amount equal to a percentage, to be determined by the commission,
of the gross sum wagered on simulcast races shall be used for purses, as follows:

(1) For greyhound races conducted by the licensee, if the simulcast race is a greyhound
race and the licensee conducts only live greyhound races;

(2) for horse races conducted by the licensee, if the simulcast race is a horse race and
the licensee conducts only live horse races;

(3) for horse races and greyhound races, as determined by both the recognized horse-
men's group and the recognized greyhound owners' group, if the simulcast race is a grey-
hound race and the licensee does not conduct or is not currently conducting live greyhound
races; or

(4) for horse races and greyhound races, as determined by both the recognized horse-
men's group and the recognized greyhound owners' group, if the simulcast is a horse race
and the licensee does not conduct or is not currently conducting live horse races. That
portion of simulcast purse money determined to be used for horse purses shall be appor-
tioned by the commission to the various horse race meetings held in any calendar year based
upon the number of live horse race dates comprising such horse race meetings in the
preceding calendar year.

(h) Except as provided by subsection (j):

(1) If a simulcasting licensee has a license to conduct live horse races and the licensee
displays a simulcast horse race: (A) All breakage proceeds shall be remitted by the licensee
to the commission not later than the 15th day of the month following the race from which
the breakage is derived and the commission shall promptly remit any such proceeds received
to the state treasurer, who shall deposit the entire amount in the state treasury and credit
it to the Kansas horse breeding development fund created by K.S.A. 74-8829, and amend-
ments thereto; and (B) all unclaimed ticket proceeds shall be remitted by the licensee to
the commission on the 61st day after the end of the calendar year and the commission shall
promptly remit any such proceeds received to the state treasurer, who shall deposit the
entire amount in the state treasury and credit it to the Kansas horse breeding development
fund created by K.S.A. 74-8829, and amendments thereto.

(2) If a simulcasting licensee has a license to conduct live greyhound races and the
licensee displays a simulcast greyhound race, breakage and unclaimed winning ticket pro-
ceeds shall be distributed in the manner provided by K.S.A. 74-8821 and 74-8822, and
amendments thereto, for breakage and unclaimed winning ticket proceeds from live grey-
hound races.

(3) If a simulcasting licensee has a license to conduct live racing of only horses and the
licensee displays a simulcast greyhound race, unclaimed winning ticket proceeds shall be
distributed in the manner provided by K.S.A. 74-8822, and amendments thereto, for un-
claimed winning ticket proceeds from live greyhound races. Breakage for such races shall
be distributed for use to benefit greyhound racing as determined by the commission.

(4) If a simulcasting licensee has a license to conduct live racing of only greyhounds and
the licensee displays a simulcast horse race: (A) All breakage proceeds shall be remitted by
the licensee to the commission not later than the 15th day of the month following the race
from which the breakage is derived and the commission shall promptly remit any such
proceeds received to the state treasurer, who shall deposit the entire amount in the state
treasury and credit it to the Kansas horse breeding development fund created by K.S.A. 74-
8829, and amendments thereto; and (B) all unclaimed ticket proceeds shall be remitted by
the licensee to the commission on the 61st day after the end of the calendar year and the
commission shall promptly remit any such proceeds received to the state treasurer, who
shall deposit the entire amount in the state treasury and credit it to the Kansas horse breed-
ing development fund created by K.S.A. 74-8829, and amendments thereto.

(i) The commission may approve a request by two or more simulcasting licensees to
combine wagering pools within the state of Kansas pursuant to rules and regulations adopted
by the commission.

(j) (1) The commission may authorize any simulcasting licensee to participate in an
interstate combined wagering pool with one or more other racing jurisdictions.

(2) If a licensee participates in an interstate pool, the licensee may adopt the takeout
of the host jurisdiction or facility~~, except that the takeout shall not be more than 20% on~~
~~win, place and show bets and not more than 25% on all other bets~~. The amount and manner
of paying purses from the takeout in an interstate pool shall be as provided by subsection
(g).

(3) The tax imposed on amounts wagered in an interstate pool shall be as provided by
K.S.A. 74-8823, and amendments thereto. Parimutuel taxes may not be imposed on any
amounts wagered in an interstate combined wagering pool other than amounts wagered
within this jurisdiction.

(4) Breakage for interstate combined wagering pools shall be calculated in accordance
with the statutes and rules and regulations of the host jurisdiction and shall be allocated
among the participating jurisdictions in a manner agreed to among the jurisdictions. Break-
age allocated to this jurisdiction shall be distributed as provided by subsection (h).

(5) Upon approval of the respective recognized greyhound owners' group or recognized
horsemen's group, the commission may permit an organization licensee to simulcast to other
racetrack facilities or off-track wagering or intertrack wagering facilities in other jurisdictions
one or more races conducted by such licensee, use one or more races conducted by such
licensee for an intrastate combined wagering pool or use one or more races conducted by
such licensee for an interstate combined wagering pool at off-track wagering or intertrack
wagering locations outside the commission's jurisdiction and may allow parimutuel pools in
other jurisdictions to be combined with parimutuel pools in the commission's jurisdiction
for the purpose of establishing an interstate combined wagering pool.

(6) The participation by a simulcasting licensee in a combined interstate wagering pool
does not cause that licensee to be considered to be doing business in any jurisdiction other
than the jurisdiction in which the licensee is physically located.

(k) If the organization licensee, facility owner licensee if any and the recognized horse-
men's group or recognized greyhound owners' group are unable to agree concerning a
simulcasting application, the matter may be submitted to the commission for determination
at the written request of any party in accordance with rules and regulations of the
commission.

(l) This section shall be part of and supplemental to the Kansas parimutuel racing act.

Sec. 23. K.S.A. 74-8711, 74-8712, 74-8720, 79-4701, 79-4703, 79-4704, 79-4705, 79-
4705a, 79-4706, 79-4707, 79-4708, 79-4710, 79-4711, 79-4712a, 79-4713 and 79-4714 and
K.S.A. 1998 Supp. 74-8836 and 79-3606 are hereby repealed.'';

By renumbering the remaining section accordingly;

In the title, by striking all in lines 9 through 13 and inserting the following:

``AN ACT concerning lotteries; relating to the regulation thereof; amending K.S.A. 74-
8711, 74-8712, 74-8720, 79-4701, 79-4703, 79-4704, 79-4705, 79-4705a, 79-4706, 79-4707,
79-4708, 79-4710, 79-4711, 79-4712a and 79-4713 and K.S.A. 1998 Supp. 74-8836 and 79-
3606 and repealing the existing sections; also repealing K.S.A. 79-4714.''; and the substitute
bill be passed as amended.

REPORT ON ENGROSSED BILLS
SB 171 reported correctly engrossed May 2, 1999.

ORIGINAL MOTION
Senator Emert moved that subsection 4(k) of the Joint Rules of the Senate and House
of Representatives be suspended for the purpose of considering the following bill: HB 2575.

FINAL ACTION ON BILLS AND CONCURRENT RESOLUTIONS
On motion of Senator Emert an emergency was declared by a 2/3 constitutional majority,
and HB 2575; HCR 5018, 5041 were advanced to Final Action, subject to amendment,
debate and roll call.

]HB 2575, An act concerning certain public officers and employees; relating to partici-
pation in certain programs; relating to certain deductions from such officers and employees
paychecks; amending K.S.A. 25-4142 and K.S.A. 1998 Supp. 71-212 and 72-5395 and re-
pealing the existing sections, was considered on final action.

Senator Kerr moved to amend the bill as amended by House on Final Action, on page 3,
following line 1, by inserting material to read as follows:

``Sec. 3. K.S.A. 25-4142 is hereby amended to read as follows: 25-4142. K.S.A. 25-
4119e, 25-4119f, 25-4119g, 25-4142 ~~to 25-4179~~ through 25-4187 and section 4, ~~inclusive,~~
~~and amendments thereto and 25-4119e, 25-4119f, 25-4119g, 25-4148a, 25-4153a, 25-4157a,~~
~~25-4169a, 25-4180 to 25-4185, inclusive,~~ and amendments thereto, shall constitute and may
be cited as the ``campaign finance act.''

New Sec. 4. (a) Sections 4 and 5, and amendments thereto, shall be known and may
be cited as the voluntary political contributions act of 1999.

(b) No officer or employee of the state of Kansas, any county, any unified school district
having 35,000 or more pupils regularly enrolled in the preceding school year, any city of
the first class or the board of public utilities of the unified government of Wyandotte county/
Kansas City, Kansas, responsible for the disbursement of funds in payment of wages or
salaries shall withhold or divert a portion of an employee's wages or salaries for contributions
to political committees for use as political contributions except upon the written request of
the employee. The request shall be made only on a form prescribed by the Kansas govern-
mental ethics commission which form shall contain a clear and unambiguous statement that
the employee may choose not to make such request for deduction and may opt to not return
the form to the employer. The form may only be filled out as to the amount of deduction
by the employee and must be signed by the employee in order to be valid. The request shall
be valid for no more than 12 months from the date it is signed.

New Sec. 5. No officer or employee of any municipality or political subdivision of the
state described in K.S.A. 25-901, and amendments thereto, responsible for the disbursement
of funds in payment of wages or salaries shall withhold or divert a portion of an employee's
wages or salaries for contributions to political committees or for use as political contributions
except upon the written request of the employee. The request shall be made only on a form
prescribed by the Kansas governmental ethics commission which form shall contain a clear
and unambiguous statement that the employee may choose not to make such request for
deduction and may opt to not return the form to the employer. The form may only be filled
out as to the amount of deduction by the employee and must be signed by the employee in
order to be valid. The request shall be valid for no more than 24 months from the date it
is signed.'';

By renumbering sections accordingly;

Also on page 3, in line 2, before ``K.S.A.'' by inserting ``K.S.A. 25-4142 and'';

In the title, in line 10, by striking ``early retirement incentive programs'' and inserting
``certain public officers and employees; relating to participation in certain programs; relating
to certain deductions from such officers and employees paychecks''; in line 11, preceding
``K.S.A.'' by inserting ``K.S.A. 25-4142 and''.

A ruling of the chair was requested as to the germaness of the amendment to the bill.

The Chair ruled the amendment to be germane.

Upon the showing of five hands a roll call vote was requested.

On roll call, the vote was: Yeas 22, nays 15, present and passing 2; absent or not voting
1.

Yeas: Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Harrington, Huelskamp, Jordan,
Kerr, Langworthy, Morris, Praeger, Pugh, Ranson, Salisbury, Salmans, Stefes, Tyson, Um-
barger, Vidricksen, Vratil.

Nays: Barone, Biggs, Downey, Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hensley,
Jones, Lee, Oleen, Petty, Steineger, Stephens.

Present and passing: Becker, Lawrence.

Absent or not voting: Hardenburger.

The motion carried and the amendment was adopted.

EXPLANATION OF VOTE
Mr. President: I vote ``no'' on the Kerr amendment to HB 2575, not because of the
subject matter but because it could keep this desperately needed legislation from becoming
law. If that happens, school districts, teachers and the taxpayers will spend thousands of
dollars and countless hours on lawyers and courts. A needless waste and distraction from
our children.--Tim Emert

Senators Hensley and Stephens request the record to show they concur with the ``Expla-
nation of Vote'' offered by Senator Emert on SB 2575.

On roll call, for Final Action on HB 2575, the vote was: Yeas 26, nays 13, present and
passing 0; absent or not voting 1.

Yeas: Becker, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Emert, Harrington,
Huelskamp, Jordan, Kerr, Langworthy, Lawrence, Morris, Oleen, Praeger, Pugh, Ranson,
Salisbury, Salmans, Steffes, Tyson, Umbarger, Vidricksen, Vratil.

Nays: Barone, Biggs, Downey, Feleciano, Gilstrap, Gooch, Goodwin, Hensley, Jones, Lee,
Petty, Steineger, Stephens.

Absent or not voting: Hardenburger.

The bill passed, as amended.

HCR 5018, A CONCURRENT RESOLUTION urging all public and private elementary
and secondary schools to create and update school crisis plans and to facilitate implemen-
tation of such plans by training personnel and conducting regular drills, was considered on
final action.

On roll call, the vote was: Yeas, 39, nays 0, present and passing 0; absent or not voting 1.

Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Harrington, Hensley, Huelskamp, Jones, Jor-
dan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty, Praeger, Pugh, Ranson, Sal-
isbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger, Vidricksen, Vratil.

Absent or not voting: Hardenburger.

The resolution was adopted.

HCR 5041, A CONCURRENT RESOLUTION memorializing Congress to rescind cer-
tain Health Care Financing Administration (HCFA) rules requiring Outcome and Assess-
ment Information Set (OASIS) reporting, was considered on final action.

On roll call, the vote was: Yeas 39, nays 0, present and passing 0; absent or not voting 1.

Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Harrington, Hensley, Huelskamp, Jones, Jor-
dan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty, Praeger, Pugh, Ranson, Sal-
isbury, Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger, Vidricksen, Vratil.

Absent or not voting: Hardenburger.

The resolution was adopted.

MESSAGE FROM THE HOUSE
Announcing passage of SB 361.

Also, passage of SB 351, as amended.

The House concurs in Senate amendments to HB 2548 and requests the Senate to return
the bill.

The House accedes to the request of the Senate for a conference on SB 102 and has
appointed Representatives Phill Kline, Neufeld and McKechnie as conferees on the part of
the House.

The House announces the appointment of Representatives Phill Kline, Neufeld and Rear-
don to replace Representatives Wagle, Franklin and Klein as conferees on HB 2489.

CHANGE OF CONFERENCE
The President announced the appointment of Senator Petty as a member of the Confer-
ence Committee on HB 2489 to replace Senator Hensley.

On motion of Senator Emert, the Senate recessed until 6:00 p.m.

______ Evening Session The Senate met pursuant to recess with President Bond in the chair.

MESSAGE FROM THE HOUSE
Announcing the House concurs in Senate amendments to HB 2115.

The House adopts the conference committee report on HB 2101.

The House adopts the conference committee report on HB 2166.

The House adopts the conference committee report on SB 45.

Announcing the House adopts the conference committee report on HB 2352.

The House adopts the conference committee report on Substitute HB 2469.

The House nonconcurs in Senate amendments to HB 2575, requests a conference and
has appointed Representatives Phill Kline, Neufeld and Helgerson as conferees on the part
of the House.

ORIGINAL MOTION
Senator Emert moved that subsection 4(k) of the Joint Rules of the Senate and House
of Representatives be suspended for the purpose of considering the following bills: H Sub
for SB 6, 15, 351.

CONSIDERATION OF MOTIONS TO CONCUR OR NONCONCUR
Senator Oleen moved the Senate Concur in house amendments to H Sub for SB 6.

H Sub for SB 6, An act concerning the state fire marshal; relating to the powers and
duties thereof; amending K.S.A. 31-133 and repealing the existing section.

On roll call, the vote was: Yeas 37, nays 2, present and passing 0; absent or not voting 1.

Yeas: Barone, Becker, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Goodwin, Harrington, Hensley, Huelskamp, Jones, Jordan,
Kerr, Langworthy, Lawrence, Lee, Morris, Oleen, Petty, Praeger, Pugh, Ranson, Salisbury,
Salmans, Steffes, Steineger, Stephens, Tyson, Umbarger, Vidricksen, Vratil.

Nays: Biggs, Gooch.

Absent or not voting: Hardenburger.

The Senate concurred.

Senator Oleen moved the Senate Concur in house amendments to SB 15.

SB 15, An act concerning alcoholic beverages; relating to the regulation and consumption
thereof; amending K.S.A. 1998 Supp. 41-201 and 41-719 and repealing the existing sections.

On roll call, the vote was: Yeas 29, nays 10, present and passing 0; absent or not voting
1.

Yeas: Barone, Becker, Bleeker, Bond, Corbin, Donovan, Downey, Emert, Feleciano, Gil-
strap, Goodwin, Hensley, Jones, Kerr, Langworthy, Lawrence, Morris, Oleen, Petty, Prae-
ger, Pugh, Ranson, Salisbury, Steffes, Steineger, Tyson, Umbarger, Vidricksen, Vratil.

Nays: Biggs, Brownlee, Clark, Gooch, Harrington, Huelskamp, Jordan, Lee, Salmans,
Stephens.

Absent or not voting: Hardenburger.

The Senate concurred.

Senator Becker moved the Senate Concur in house amendments to SB 351.

SB 351, An act concerning legislative and congressional redistricting; relating to popu-
lation data used; amending K.S.A. 11-304 and repealing the existing section.

On roll call, the vote was: Yeas 26, nays 13, present and passing 0; absent or not voting
1.

Yeas: Becker, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Emert, Harrington,
Huelskamp, Jordan, Kerr, Langworthy, Lawrence, Morris, Oleen, Praeger, Pugh, Ranson,
Salisbury, Salmans, Steffes, Tyson, Umbarger, Vidricksen, Vratil.

Nays: Barone, Biggs, Downey, Feleciano, Gilstrap, Gooch, Goodwin, Hensley, Jones, Lee,
Petty, Steineger, Stephens.

Absent or not voting: Hardenburger.

The Senate concurred.

ORIGINAL MOTION
Senator Emert moved that subsection 4(k) of the Joint Rules of the Senate and House
of Representatives be suspended for the purpose of considering the following bills: SB 45;
HB 2092.

CONFERENCE COMMITTEE REPORT
Mr. President and Mr. Speaker: Your committee on conference on House amend-
ments to SB 45, submits the following report:

The House recedes from all of its amendments to the bill;

And your committee on conference further agrees to amend the bill, as printed with
amendments by the Senate Committee of the Whole, as follows:

On page 1, by striking all of lines 15 to 42, inclusive;

On page 2, by striking all of lines 1 to 8, inclusive; after line 8, by inserting the following
sections:

``Section 1. On and after July 1, 1999, K.S.A. 1998 Supp. 79-3602 is hereby amended
to read as follows: 79-3602. (a) ``Persons'' means any individual, firm, copartnership, joint
adventure, association, corporation, estate or trust, receiver or trustee, or any group or
combination acting as a unit, and the plural as well as the singular number; and shall spe-
cifically mean any city or other political subdivision of the state of Kansas engaging in a
business or providing a service specifically taxable under the provisions of this act.

(b) ``Director'' means the state director of taxation.

(c) ``Sale'' or ``sales'' means the exchange of tangible personal property, as well as the
sale thereof for money, and every transaction, conditional or otherwise, for a consideration,
constituting a sale, including the sale or furnishing of electrical energy, gas, water, services
or entertainment taxable under the terms of this act and including, except as provided in
the following provision, the sale of the use of tangible personal property by way of a lease,
license to use or the rental thereof regardless of the method by which the title, possession
or right to use the tangible personal property is transferred. The term ``sale'' or ``sales'' shall
not mean the sale of the use of any tangible personal property used as a dwelling by way of
a lease or rental thereof for a term of more than 28 consecutive days.

(d) ``Retailer'' means a person regularly engaged in the business of selling tangible per-
sonal property at retail or furnishing electrical energy, gas, water, services or entertainment,
and selling only to the user or consumer and not for resale.

(e) ``Retail sale'' or ``sale at retail'' means all sales made within the state of tangible
personal property or electrical energy, gas, water, services or entertainment for use or con-
sumption and not for resale.

(f) ``Tangible personal property'' means corporeal personal property. Such term shall
include;: (1) Any computer software program which is not a custom computer software
program, as described by subsection (s) of K.S.A. 79-3603, and amendments thereto; and
(2) ~~and~~ any prepaid telephone calling card or prepaid authorization number, or recharge of
such card or number, as described by subsection (b) of K.S.A. 79-3603, and amendments
thereto.

(g) ``Selling price'' means the total cost to the consumer exclusive of discounts allowed
and credited, but including freight and transportation charges from retailer to consumer.

(h) ``Gross receipts'' means the total selling price or the amount received as defined in
this act, in money, credits, property or other consideration valued in money from sales at
retail within this state; and embraced within the provisions of this act. The taxpayer, may
take credit in the report of gross receipts for: (1) An amount equal to the selling price of
property returned by the purchaser when the full sale price thereof, including the tax col-
lected, is refunded in cash or by credit; and (2) an amount equal to the allowance given for
the trade-in of property.

(i) ``Taxpayer'' means any person obligated to account to the director for taxes collected
under the terms of this act.

(j) ``Isolated or occasional sale'' means the nonrecurring sale of tangible personal prop-
erty, or services taxable hereunder by a person not engaged at the time of such sale in the
business of selling such property or services. Any religious organization which makes a
nonrecurring sale of tangible personal property acquired for the purpose of resale shall be
deemed to be not engaged at the time of such sale in the business of selling such property.
Such term shall include: (1) Any sale by a bank, savings and loan institution, credit union
or any finance company licensed under the provisions of the Kansas uniform consumer
credit code of tangible personal property which has been repossessed by any such entity;
and (2) any sale of tangible personal property made by an auctioneer or agent on behalf of
not more than two principals or households if such sale is nonrecurring and any such prin-
cipal or household is not engaged at the time of such sale in the business of selling tangible
personal property.

(k) ``Service'' means those services described in and taxed under the provisions of K.S.A.
79-3603 and amendments thereto.

(l) ``Ingredient or component part'' means tangible personal property which is necessary
or essential to, and which is actually used in and becomes an integral and material part of
tangible personal property or services produced, manufactured or compounded for sale by
the producer, manufacturer or compounder in its regular course of business. The following
items of tangible personal property are hereby declared to be ingredients or component
parts, but the listing of such property shall not be deemed to be exclusive nor shall such
listing be construed to be a restriction upon, or an indication of, the type or types of property
to be included within the definition of ``ingredient or component part'' as herein set forth:

(1) Containers, labels and shipping cases used in the distribution of property produced,
manufactured or compounded for sale which are not to be returned to the producer, man-
ufacturer or compounder for reuse.

(2) Containers, labels, shipping cases, paper bags, drinking straws, paper plates, paper
cups, twine and wrapping paper used in the distribution and sale of property taxable under
the provisions of this act by wholesalers and retailers and which is not to be returned to
such wholesaler or retailer for reuse.

(3) Seeds and seedlings for the production of plants and plant products produced for
resale.

(4) Paper and ink used in the publication of newspapers.

(5) Fertilizer used in the production of plants and plant products produced for resale.

(6) Feed for animals, fowl and aquatic plants and animals, the primary purpose of which
is use in agriculture or aquaculture, as defined in K.S.A. 47-1901, and amendments thereto,
the production of food for human consumption, the production of animal, dairy, poultry or
aquatic plant and animal products, fiber, fur, or the production of offspring for use for any
such purpose or purposes.

(m) ``Property which is consumed'' means tangible personal property which is essential
or necessary to and which is used in the actual process of and ~~immediately~~ consumed,
depleted or dissipated within one year in (1) the production, manufacture, processing, min-
ing, drilling, refining or compounding of tangible personal property, (2) the providing of
services or, (3) the irrigation of crops, for sale in the regular course of business, or (4) the
storage or processing of grain by a public grain warehouse or other grain storage facility,
and which is not reusable for such purpose. The following ~~items of tangible personal prop-~~
~~erty are hereby declared to be ``consumed'' but the listing of such property shall not be~~
~~deemed to be exclusive nor shall such listing be construed to be a restriction upon or an~~
~~indication of, the type or types of property to be included within the definition of ``property~~
~~which is consumed'' as herein set forth~~ is a listing of tangible personal property, included
by way of illustration but not of limitation, which qualifies as property which is consumed:

(A) Insecticides, herbicides, germicides, pesticides, fungicides, fumigants, antibiotics,
biologicals, pharmaceuticals, vitamins and chemicals for use in commercial or agricultural
production, processing or storage of fruit, vegetables, feeds, seeds, grains, animals or animal
products whether fed, injected, applied, combined with or otherwise used; ~~and~~

(B) electricity, gas and water; and

(C) petroleum products, lubricants, chemicals, solvents, reagents and catalysts.

(n) ``Political subdivision'' means any municipality, agency or subdivision of the state
which is, or shall hereafter be, authorized to levy taxes upon tangible property within the
state or which certifies a levy to a municipality, agency or subdivision of the state which is,
or shall hereafter be, authorized to levy taxes upon tangible property within the state. Such
term also shall include any public building commission, housing, airport, port, metropolitan
transit or similar authority established pursuant to law.

(o) ``Municipal corporation'' means any city incorporated under the laws of Kansas.

(p) ``Quasi-municipal corporation'' means any county, township, school district, drainage
district or any other governmental subdivision in the state of Kansas having authority to
receive or hold moneys or funds.

(q) ``Nonprofit blood bank'' means any nonprofit place, organization, institution or es-
tablishment that is operated wholly or in part for the purpose of obtaining, storing, proc-
essing, preparing for transfusing, furnishing, donating or distributing human blood or parts
or fractions of single blood units or products derived from single blood units, whether or
not any remuneration is paid therefor, or whether such procedures are done for direct
therapeutic use or for storage for future use of such products.

(r) ``Contractor, subcontractor or repairman'' means a person who agrees to furnish and
install tangible personal property or install tangible personal property at a specified price.
A person who maintains an inventory of tangible personal property which enables such
person to furnish and install the tangible personal property or install the tangible personal
property shall not be deemed a contractor, subcontractor or repairman but shall be deemed
a retailer.

(s) ``Educational institution'' means any nonprofit school, college and university that
offers education at a level above the twelfth grade, and conducts regular classes and courses
of study required for accreditation by, or membership in, the North Central Association of
Colleges and Schools, the state board of education, or that otherwise qualify as an ``educa-
tional institution,'' as defined by K.S.A. 74-50,103, and amendments thereto. Such phrase
shall include: (1) A group of educational institutions that operates exclusively for an edu-
cational purpose; (2) nonprofit endowment associations and foundations organized and op-
erated exclusively to receive, hold, invest and administer moneys and property as a per-
manent fund for the support and sole benefit of an educational institution; (3) nonprofit
trusts, foundations and other entities organized and operated principally to hold and own
receipts from intercollegiate sporting events and to disburse such receipts, as well as grants
and gifts, in the interest of collegiate and intercollegiate athletic programs for the support
and sole benefit of an educational institution; and (4) nonprofit trusts, foundations and other
entities organized and operated for the primary purpose of encouraging, fostering and con-
ducting scholarly investigations and industrial and other types of research for the support
and sole benefit of an educational institution.

New Sec. 2. For the tax year commencing after December 31, 1997, there shall be
allowed as a credit against the tax liability of a taxpayer imposed under the Kansas income
tax act, an amount equal to 75% of the total amount of property tax levied for property tax
year 1998 actually and timely paid by the taxpayer which is attributable to the working
interest of an oil lease the average daily production per well from which is 15 barrels or
less. For all taxable years commencing after December 31, 1998, there shall be allowed as
a credit against the tax liability of a taxpayer imposed under the Kansas income tax act, an
amount equal to 50% of the total amount of property tax levied for the property tax year
when the price per barrel of oil is $16 or less, as promulgated in the oil and gas appraisal
guide prescribed by the director of property valuation for the applicable tax year. The credit
allowed by the preceeding sentence shall apply to taxes actually and timely paid by the
taxpayer which are attributable to the working interest of an oil lease the average daily
production per well from which is 15 barrels or less. No credit shall be allowed for property
tax paid upon machinery and equipment attributable to the working interest for which a
credit is claimed pursuant to K.S.A. 1998 Supp. 79-32,206, and amendments thereto. If the
amount of such tax credit exceeds the taxpayer's income tax liability for the taxable year,
the amount thereof which exceeds such tax liability shall be refunded to the taxpayer. If the
taxpayer is a corporation having an election in effect under subchapter S of the federal
internal revenue code, a partnership or a limited liability company, the credit provided by
this section shall be claimed by the shareholders of such corporation, the partners of such
partnership or the members of such limited liability company in the same manner as such
shareholders, partners and members account for their proportionate shares of the income
or loss of the corporation, partnership or limited liability company.

Sec. 3. K.S.A. 79-201 is hereby amended to read as follows: 79-201. The following
described property, to the extent herein specified, shall be and is hereby exempt from all
property or ad valorem taxes levied under the laws of the state of Kansas:

First. All buildings used exclusively as places of public worship and all buildings used
exclusively by school districts and school district interlocal cooperatives organized under the
laws of this state, with the furniture and books therein contained and used exclusively for
the accommodation of religious meetings or for school district or school district interlocal
cooperative purposes, whichever is applicable, together with the grounds owned thereby if
not leased or otherwise used for the realization of profit, except that: (a) (1) Any school
building, or portion thereof, together with the grounds upon which the building is located,
shall be considered to be used exclusively by the school district for the purposes of this
section when leased by the school district to any political or taxing subdivision of the state,
including a school district interlocal cooperative, or to any association, organization or non-
profit corporation entitled to tax exemption with respect to such property; and (2) any school
building, together with the grounds upon which the building is located, shall be considered
to be used exclusively by a school district interlocal cooperative for the purposes of this
section when being acquired pursuant to a lease-purchase agreement; and (b) any building,
or portion thereof, used as a place of worship, together with the grounds upon which the
building is located, shall be considered to be used exclusively for the religious purposes of
this section when used as a not-for-profit day care center for children which is licensed
pursuant to K.S.A. 65-501 et seq., and amendments thereto, or when used to house an area
where the congregation of a church society and others may purchase tracts, books and other
items relating to the promulgation of the church society's religious doctrines.

Second. All real property, and all tangible personal property, actually and regularly used
exclusively for literary, educational, scientific, religious, benevolent or charitable purposes,
including property used exclusively for such purposes by more than one agency or organi-
zation for one or more of such exempt purposes. Except with regard to real property which
is owned by a religious organization, is to be used exclusively for religious purposes and is
not used for a nonexempt purpose prior to its exclusive use for religious purposes which
property shall be deemed to be actually and regularly used exclusively for religious purposes
for the purposes of this paragraph, this exemption shall not apply to such property, not
actually used or occupied for the purposes set forth herein, nor to such property held or
used as an investment even though the income or rentals received therefrom is used wholly
for such literary, educational, scientific, religious, benevolent or charitable purposes. In the
event any such property which has been exempted pursuant to the preceding sentence is
not used for religious purposes prior to its conveyance which results in its use for nonreli-
gious purposes, there shall be a recoupment of property taxes in an amount equal to the tax
which would have been levied upon such property except for such exemption for all taxable
years for which such exemption was in effect. Such recoupment tax shall become due and
payable in such year as provided by K.S.A. 79-2004, and amendments thereto. A lien for
such taxes shall attach to the real property subject to the same on November 1 in the year
such taxes become due and all such taxes remaining due and unpaid after the date prescribed
for the payment thereof shall be collected in the manner provided by law for the collection
of delinquent taxes. Moneys collected from the recoupment tax hereunder shall be credited
by the county treasurer to the several taxing subdivisions within which such real property is
located in the proportion that the total tangible property tax levies made in the preceding
year for each such taxing subdivision bear to the total of all such levies made in that year
by all such taxing subdivisions. Such moneys shall be credited to the general fund of the
taxing subdivision or if such taxing subdivision is making no property tax levy for the support
of a general fund such moneys may be credited to any other tangible property tax fund of
general application of such subdivision. This exemption shall not be deemed inapplicable
to property which would otherwise be exempt pursuant to this paragraph because an agency
or organization: (a) Is reimbursed for the provision of services accomplishing the purposes
enumerated in this paragraph based upon the ability to pay by the recipient of such services;
or (b) is reimbursed for the actual expense of using such property for purposes enumerated
in this paragraph; or (c) uses such property for a nonexempt purpose which is minimal in
scope and insubstantial in nature if such use is incidental to the exempt purposes of this
paragraph; or (d) charges a reasonable fee for admission to cultural or educational activities
or permits the use of its property for such activities by a related agency or organization, if
any such activity is in furtherance of the purposes of this paragraph.

Third. All moneys and credits belonging exclusively to universities, colleges, academies
or other public schools of any kind, or to religious, literary, scientific or benevolent and
charitable institutions or associations, appropriated solely to sustain such institutions or
associations, not exceeding in amount or in income arising therefrom the limit prescribed
by the charter of such institution or association.

Fourth. The reserve or emergency funds of fraternal benefit societies authorized to do
business under the laws of the state of Kansas.

Fifth. All buildings of private nonprofit universities or colleges which are owned and
operated by such universities and colleges as student union buildings, presidents' homes
and student dormitories.

Sixth. All real and tangible personal property actually and regularly used exclusively by
the alumni association associated by its articles of incorporation with any public or nonprofit
Kansas college or university approved by the Kansas board of regents to confer academic
degrees or with any community college approved by its board of trustees to grant certificates
of completion of courses or curriculum, to provide accommodations and services to such
college or university or to the alumni, staff or faculty thereof.

Seventh. All parsonages owned by a church society and actually and regularly occupied
and used predominantly as a residence by a minister or other clergyman of such church
society who is actually and regularly engaged in conducting the services and religious min-
istrations of such society, and the land upon which such parsonage is located to the extent
necessary for the accommodation of such parsonage.

Eighth. All real property, all buildings located on such property and all personal property
contained therein, actually and regularly used exclusively by any individually chartered or-
ganization of honorably discharged military veterans of the United States armed forces or
auxiliary of any such organization, which is exempt from federal income taxation pursuant
to section 501(c)(19) of the federal internal revenue code of 1986, for clubhouse, place of
meeting or memorial hall purposes, and real property to the extent of not more than two
acres, and all buildings located on such property, actually and regularly used exclusively by
any such veterans' organization or its auxiliary as a memorial park.

Ninth. All real property and tangible personal property actually and regularly used by a
community service organization for the predominant purpose of providing humanitarian
services, which is owned and operated by a corporation organized not for profit under the
laws of the state of Kansas or by a corporation organized not for profit under the laws of
another state and duly admitted to engage in business in this state as a foreign not-for-profit
corporation if: (a) The directors of such corporation serve without pay for such services; (b)
the corporation is operated in a manner which does not result in the accrual of distributable
profits, realization of private gain resulting from the payment of compensation in excess of
a reasonable allowance for salary or other compensation for services rendered or the reali-
zation of any other form of private gain; (c) no officer, director or member of such corpo-
ration has any pecuniary interest in the property for which exemption is claimed; (d) the
corporation is organized for the purpose of providing humanitarian services; (e) the actual
use of property for which an exemption is claimed must be substantially and predominantly
related to the purpose of providing humanitarian services, except that, the use of such
property for a nonexempt purpose which is minimal in scope and insubstantial in nature
shall not result in the loss of exemption if such use is incidental to the purpose of providing
humanitarian services by the corporation; (f) the corporation is exempt from federal income
taxation pursuant to section 501(c)(3) of the internal revenue code of 1986 and; (g) contri-
butions to the corporation are deductible under the Kansas income tax act. As used in this
clause, ``humanitarian services'' means the conduct of activities which substantially and pre-
dominantly meet a demonstrated community need and which improve the physical, mental,
social, cultural or spiritual welfare of others or the relief, comfort or assistance of persons
in distress or any combination thereof including but not limited to health and recreation
services, child care, individual and family counseling, employment and training programs
for handicapped persons and meals or feeding programs. Notwithstanding any other pro-
vision of this clause, motor vehicles shall not be exempt hereunder unless such vehicles are
exclusively used for the purposes described therein.

Tenth. For all taxable years commencing after December 31, 1986, any building, and the
land upon which such building is located to the extent necessary for the accommodation of
such building, owned by a church or nonprofit religious society or order which is exempt
from federal income taxation pursuant to section 501(c)(3) of the federal internal revenue
code of 1986, and actually and regularly occupied and used exclusively for residential and
religious purposes by a community of persons who are bound by vows to a religious life and
who conduct or assist in the conduct of religious services and actually and regularly engage
in religious, benevolent, charitable or educational ministrations or the performance of health
care services.

Eleventh. For all taxable years commencing after December 31, 1998, all real property
upon which is located facilities which utilize renewable energy resources or technologies for
the purpose and as the primary means to produce and generate electricity and which is used
predominantly for such purpose, to the extent necessary to accommodate such facilities, and
all tangible personal property which comprises such facilities. For purposes of this section,
``renewable energy resources or technologies'' shall include wind, solar, thermal, photovol-
taic, biomass, hydropower, geothermal and landfill gas resources or technologies. For pur-
poses of valuation of property subject to valuation under K.S.A. 79-5a01 et seq., and amend-
ments thereto, the value of the exempt property set forth in this clause shall be removed
from the unit value prior to apportionment under K.S.A. 79-5a25, and amendments thereto.

The provisions of this section, except as otherwise more specifically provided, shall apply
to all taxable years commencing after December 31, 1995.

Sec. 4. K.S.A. 79-5a01 is hereby amended to read as follows: 79-5a01. (a) As used in
this act, the terms ``public utility'' or ``public utilities'' shall mean every individual, company,
corporation, association of persons, lessees or receivers that now or hereafter are in control,
manage or operate a business of:

(1) A railroad or railroad corporation if such railroad or railroad corporation owns or
holds, by deed or other instrument, an interest in right-of-way, track, franchise, roadbed or
trackage in this state;

(2) transmitting to, from, through or in this state telegraphic messages;

(3) transmitting to, from, through or in this state telephonic messages;

(4) transporting or distributing to, from, through or in this state natural gas, oil or other
commodities in pipes or pipelines, or engaging primarily in the business of storing natural
gas in an underground formation;

(5) generating, conducting or distributing to, from, through or in this state electric
power, except for private use;

(6) transmitting to, from, through or in this state water if for profit or subject to regu-
lation of the state corporation commission;

(7) transporting to, from, through or in this state cargo or passengers by means of any
vessel or boat used in navigating any of the navigable watercourses within or bordering upon
this state.

(b) The terms ``public utility'' or ``public utilities'' shall not include: (1) Rural water
districts established under the laws of the state of Kansas; or (2) any individual, company,
corporation, association of persons, lessee or receiver owning or operating an oil or natural
gas production gathering line which is situated within one county in this state and does not
cross any state boundary line; or (3) any individual, company, corporation, association of
persons, lessee or receiver owning any vessel or boat operated upon the surface of any
manmade waterway located entirely within one county in the state.

Sec. 5. K.S.A. 79-32,201 is hereby amended to read as follows: 79-32,201. (a) Any tax-
payer who makes expenditures for a qualified alternative-fueled motor vehicle ~~property~~ or
alternative-fuel fueling station shall be allowed a credit against the income tax imposed by
article 32 of chapter 79 of the Kansas Statutes Annotated, as follows:

(1) For any qualified alternative-fueled motor vehicle ~~property~~ placed in service on or
after January 1, 1996, and before January 1, ~~1999~~ 2005, an amount equal to 50% of the ~~total~~
~~amount expended~~ incremental cost or conversion cost for each qualified alternative-fueled
motor vehicle ~~property~~ but not to exceed ~~$2,500~~ $3,000 for each such motor vehicle with
a gross vehicle weight of less than 10,000 lbs.; $5,000 for a heavy duty motor vehicle with
a gross vehicle weight of greater than 10,000 lbs. but less than 26,000 lbs.; and $50,000 for
motor vehicles having a gross vehicle weight of greater than 26,000 lbs.;

(2) for any qualified alternative-fueled motor vehicle ~~property~~ placed in service on or
after January 1, ~~1999~~ 2005, an amount equal to 40% of the ~~total amount expended~~ incre-
mental cost or conversion cost for each qualified alternative-fueled motor vehicle ~~property~~,
but not to exceed ~~$2,000~~ $2,400 for each such motor vehicle with a gross vehicle weight of
less than 10,000 lbs.; $4,000 for a heavy duty motor vehicle with a gross vehicle weight of
greater than 10,000 lbs. but less than 26,000 lbs.; and $40,000 for motor vehicles having a
gross vehicle weight of greater than 26,000 lbs.;

(3) for any qualified alternative-fuel fueling station placed in service on or after January
1, 1996, and before January 1, 2005, an amount equal to 50% of the total amount expended
for each qualified alternative-fuel fueling station but not to exceed $200,000 for each fueling
station;

(4) for any qualified alternative-fuel fueling station placed in service on or after January
1, 2005, an amount equal to 40% of the total amount expended for each qualified alternative-
fuel fueling station, but not to exceed $160,000 for each fueling station.

(b) If no credit has been claimed pursuant to subsection (a), a credit in an amount not
exceeding the lesser of 5% of the cost of the vehicle or $750 shall be allowed to a taxpayer
who purchases a motor vehicle equipped by the vehicle manufacturer with ~~qualified alter-~~
~~native-fueled motor vehicle property~~ an alternative fuel system and who is unable or elects
not to determine the exact basis attributable to such property. The credit under this sub-
section shall be allowed only to the first individual to take title to such motor vehicle, other
than for resale.

(c) The tax credit under subsection (a) or (b) shall be deducted from the taxpayer's
income tax liability for the taxable year in which the expenditures are made by the taxpayer.
If the amount of the tax credit exceeds the taxpayer's income tax liability for the taxable
year, the amount which exceeds the tax liability may be carried over for deduction from the
taxpayer's income tax liability in the next succeeding taxable year or years until the total
amount of the tax credit has been deducted from tax liability, except that no such tax credit
shall be carried over for deduction after the third taxable year succeeding the taxable year
in which the expenditures are made.

(d) As used in this section:

(1) ``Alternative fuel'' has the meaning provided by 42 U.S.C. 13211.

~~(2) ``Qualified alternative-fueled motor vehicle property'' means:~~

~~(A) Equipment installed to modify a motor vehicle which is propelled by gasoline so~~
~~that the vehicle may be propelled by an alternative fuel;~~

~~(B) a motor vehicle originally equipped to be propelled only by an alternative fuel, but~~
~~only to the extent of the portion of the basis of such motor vehicle which is attributable to~~
~~the storage of such fuel, the delivery to the engine of such motor vehicle of such fuel and~~
~~the exhaust of gases from combustion of such fuel; or~~

~~(C) property which is directly related to the delivery of an alternative fuel into the fuel~~
~~tank of a motor vehicle propelled by such fuel, including compression equipment and storage~~
~~tanks for such fuel at the point where such fuel is so delivered but only if such property is~~
~~not used to deliver such fuel into any other type of storage tank or receptacle and such fuel~~
~~is not used for any purpose other than to propel a motor vehicle.~~

(2) ``Qualified alternative-fueled motor vehicle'' means a motor vehicle that operates on
an alternative fuel, meets or exceeds the clean fuel vehicle standards in the federal clean air
act amendments of 1990, Title II and meets one of the following categories:

(A) Bi-fuel motor vehicle: A motor vehicle with two separate fuel systems designed to
run on either an alternative fuel or conventional fuel, using only one fuel at a time;

(B) dedicated motor vehicle: A motor vehicle with an engine designed to operate on a
single alternative fuel only; or

(C) flexible fuel motor vehicle: A motor vehicle that may operate on a blend of an alter-
native fuel with a conventional fuel, such as E-85 (85% ethanol and 15% gasoline) or M-85
(85% methanol and 15% gasoline), as long as such motor vehicle is capable of operating on
at least an 85% alternative fuel blend.

(3) ``Qualified alternative-fuel fueling station'' means the property which is directly re-
lated to the delivery of alternative fuel into the fuel tank of a motor vehicle propelled by
such fuel, including the compression equipment, storage vessels and dispensers for such fuel
at the point where such fuel is delivered but only if such property is primarily used to deliver
such fuel for use in a qualified alternative-fueled motor vehicle.

(4) ``Incremental cost'' means the cost that results from subtracting the manufacturer's
list price of the motor vehicle operating on conventional gasoline or diesel fuel from the
manufacturer's list price of the same model motor vehicle designed to operate on an alter-
native fuel.

(5) ``Conversion cost'' means the cost that results from modifying a motor vehicle which
is propelled by gasoline or diesel to be propelled by an alternative fuel.

~~(3)~~ (6) ``Taxpayer'' means any person who owns and operates a ~~fleet of 10 or more motor~~
~~vehicles and the average fuel consumption for such fleet of motor vehicles is equal to or~~
~~greater than 2,000 gallons per year~~ qualified alternative-fueled vehicle licensed in the state
of Kansas or who makes an expenditure for a qualified alternative-fuel fueling station.

~~(4)~~ (7) ``Person'' means every natural person, association, partnership, limited liability
company, limited partnership or corporation.

(e) The provisions of this section shall apply to all taxable years commencing after De-
cember 31, 1995.

~~(f) The provisions of this section shall become effective on and after January 1, 1996.~~

Sec. 6. K.S.A. 1998 Supp. 79-3606 is hereby amended to read as follows: 79-3606. The
following shall be exempt from the tax imposed by this act:

(a) All sales of motor-vehicle fuel or other articles upon which a sales or excise tax has
been paid, not subject to refund, under the laws of this state except cigarettes as defined
by K.S.A. 79-3301 and amendments thereto, cereal malt beverages and malt products as
defined by K.S.A. 79-3817 and amendments thereto, including wort, liquid malt, malt syrup
and malt extract, which is not subject to taxation under the provisions of K.S.A. 79-41a02
and amendments thereto, motor vehicles taxed pursuant to K.S.A. 79-5117, and amend-
ments thereto, tires taxed pursuant to K.S.A. 1998 Supp. 65-3424d, and amendments
thereto, and drycleaning and laundry services taxed pursuant to K.S.A. 1998 Supp. 65-
34,150, and amendments thereto;

(b) all sales of tangible personal property or service, including the renting and leasing
of tangible personal property, purchased directly by the state of Kansas, a political subdi-
vision thereof, other than a school or educational institution, or purchased by a public or
private nonprofit hospital or public hospital authority or nonprofit blood, tissue or organ
bank and used exclusively for state, political subdivision, hospital or public hospital authority
or nonprofit blood, tissue or organ bank purposes, except when: (1) Such state, hospital or
public hospital authority is engaged or proposes to engage in any business specifically taxable
under the provisions of this act and such items of tangible personal property or service are
used or proposed to be used in such business, or (2) such political subdivision is engaged
or proposes to engage in the business of furnishing gas, water, electricity or heat to others
and such items of personal property or service are used or proposed to be used in such
business;

(c) all sales of tangible personal property or services, including the renting and leasing
of tangible personal property, purchased directly by a public or private elementary or sec-
ondary school or public or private nonprofit educational institution and used primarily by
such school or institution for nonsectarian programs and activities provided or sponsored
by such school or institution or in the erection, repair or enlargement of buildings to be
used for such purposes. The exemption herein provided shall not apply to erection, con-
struction, repair, enlargement or equipment of buildings used primarily for human
habitation;

(d) all sales of tangible personal property or services purchased by a contractor for the
purpose of constructing, equipping, reconstructing, maintaining, repairing, enlarging, fur-
nishing or remodeling facilities for any public or private nonprofit hospital or public hospital
authority, public or private elementary or secondary school or a public or private nonprofit
educational institution, which would be exempt from taxation under the provisions of this
act if purchased directly by such hospital or public hospital authority, school or educational
institution; and all sales of tangible personal property or services purchased by a contractor
for the purpose of constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities for any political subdivision of the state, the total cost of
which is paid from funds of such political subdivision and which would be exempt from
taxation under the provisions of this act if purchased directly by such political subdivision.
Nothing in this subsection or in the provisions of K.S.A. 12-3418 and amendments thereto,
shall be deemed to exempt the purchase of any construction machinery, equipment or tools
used in the constructing, equipping, reconstructing, maintaining, repairing, enlarging, fur-
nishing or remodeling facilities for any political subdivision of the state. As used in this
subsection, K.S.A. 12-3418 and 79-3640, and amendments thereto, ``funds of a political
subdivision'' shall mean general tax revenues, the proceeds of any bonds and gifts or grants-
in-aid. Gifts shall not mean funds used for the purpose of constructing, equipping, recon-
structing, repairing, enlarging, furnishing or remodeling facilities which are to be leased to
the donor. When any political subdivision of the state, public or private nonprofit hospital
or public hospital authority, public or private elementary or secondary school or public or
private nonprofit educational institution shall contract for the purpose of constructing,
equipping, reconstructing, maintaining, repairing, enlarging, furnishing or remodeling fa-
cilities, it shall obtain from the state and furnish to the contractor an exemption certificate
for the project involved, and the contractor may purchase materials for incorporation in
such project. The contractor shall furnish the number of such certificate to all suppliers
from whom such purchases are made, and such suppliers shall execute invoices covering
the same bearing the number of such certificate. Upon completion of the project the con-
tractor shall furnish to the political subdivision, hospital or public hospital authority, school
or educational institution concerned a sworn statement, on a form to be provided by the
director of taxation, that all purchases so made were entitled to exemption under this sub-
section. As an alternative to the foregoing procedure, any such contracting entity may apply
to the secretary of revenue for agent status for the sole purpose of issuing and furnishing
project exemption certificates to contractors pursuant to rules and regulations adopted by
the secretary establishing conditions and standards for the granting and maintaining of such
status. All invoices shall be held by the contractor for a period of five years and shall be
subject to audit by the director of taxation. If any materials purchased under such a certif-
icate are found not to have been incorporated in the building or other project or not to have
been returned for credit or the sales or compensating tax otherwise imposed upon such
materials which will not be so incorporated in the building or other project reported and
paid by such contractor to the director of taxation not later than the 20th day of the month
following the close of the month in which it shall be determined that such materials will not
be used for the purpose for which such certificate was issued, the political subdivision,
hospital or public hospital authority, school or educational institution concerned shall be
liable for tax on all materials purchased for the project, and upon payment thereof it may
recover the same from the contractor together with reasonable attorney fees. Any contractor
or any agent, employee or subcontractor thereof, who shall use or otherwise dispose of any
materials purchased under such a certificate for any purpose other than that for which such
a certificate is issued without the payment of the sales or compensating tax otherwise im-
posed upon such materials, shall be guilty of a misdemeanor and, upon conviction therefor,
shall be subject to the penalties provided for in subsection (g) of K.S.A. 79-3615, and amend-
ments thereto;

(e) all sales of tangible personal property or services purchased by a contractor for the
erection, repair or enlargement of buildings or other projects for the government of the
United States, its agencies or instrumentalities, which would be exempt from taxation if
purchased directly by the government of the United States, its agencies or instrumentalities.
When the government of the United States, its agencies or instrumentalities shall contract
for the erection, repair, or enlargement of any building or other project, it shall obtain from
the state and furnish to the contractor an exemption certificate for the project involved, and
the contractor may purchase materials for incorporation in such project. The contractor
shall furnish the number of such certificates to all suppliers from whom such purchases are
made, and such suppliers shall execute invoices covering the same bearing the number of
such certificate. Upon completion of the project the contractor shall furnish to the govern-
ment of the United States, its agencies or instrumentalities concerned a sworn statement,
on a form to be provided by the director of taxation, that all purchases so made were entitled
to exemption under this subsection. As an alternative to the foregoing procedure, any such
contracting entity may apply to the secretary of revenue for agent status for the sole purpose
of issuing and furnishing project exemption certificates to contractors pursuant to rules and
regulations adopted by the secretary establishing conditions and standards for the granting
and maintaining of such status. All invoices shall be held by the contractor for a period of
five years and shall be subject to audit by the director of taxation. Any contractor or any
agent, employee or subcontractor thereof, who shall use or otherwise dispose of any ma-
terials purchased under such a certificate for any purpose other than that for which such a
certificate is issued without the payment of the sales or compensating tax otherwise imposed
upon such materials, shall be guilty of a misdemeanor and, upon conviction therefor, shall
be subject to the penalties provided for in subsection (g) of K.S.A. 79-3615 and amendments
thereto;

(f) tangible personal property purchased by a railroad or public utility for consumption
or movement directly and immediately in interstate commerce;

(g) sales of aircraft including remanufactured and modified aircraft, sales of aircraft
repair, modification and replacement parts and sales of services employed in the remanu-
facture, modification and repair of aircraft sold to persons using directly or through an
authorized agent such aircraft and aircraft repair, modification and replacement parts as
certified or licensed carriers of persons or property in interstate or foreign commerce under
authority of the laws of the United States or any foreign government or sold to any foreign
government or agency or instrumentality of such foreign government and all sales of aircraft,
aircraft parts, replacement parts and services employed in the remanufacture, modification
and repair of aircraft for use outside of the United States;

(h) all rentals of nonsectarian textbooks by public or private elementary or secondary
schools;

(i) the lease or rental of all films, records, tapes, or any type of sound or picture tran-
scriptions used by motion picture exhibitors;

(j) meals served without charge or food used in the preparation of such meals to em-
ployees of any restaurant, eating house, dining car, hotel, drugstore or other place where
meals or drinks are regularly sold to the public if such employees' duties are related to the
furnishing or sale of such meals or drinks;

(k) any motor vehicle, semitrailer or pole trailer, as such terms are defined by K.S.A.
8-126 and amendments thereto, or aircraft sold and delivered in this state to a bona fide
resident of another state, which motor vehicle, semitrailer, pole trailer or aircraft is not to
be registered or based in this state and which vehicle, semitrailer, pole trailer or aircraft will
not remain in this state more than 10 days;

(l) all isolated or occasional sales of tangible personal property, services, substances or
things, except isolated or occasional sale of motor vehicles specifically taxed under the pro-
visions of subsection (o) of K.S.A. 79-3603 and amendments thereto;

(m) all sales of tangible personal property which become an ingredient or component
part of tangible personal property or services produced, manufactured or compounded for
ultimate sale at retail within or without the state of Kansas; and any such producer, manu-
facturer or compounder may obtain from the director of taxation and furnish to the supplier
an exemption certificate number for tangible personal property for use as an ingredient or
component part of the property or services produced, manufactured or compounded;

(n) all sales of tangible personal property which is consumed in the production, man-
ufacture, processing, mining, drilling, refining or compounding of tangible personal prop-
erty, the treating of by-products or wastes derived from any such production process, the
providing of services or the irrigation of crops for ultimate sale at retail within or without
the state of Kansas; and any purchaser of such property may obtain from the director of
taxation and furnish to the supplier an exemption certificate number for tangible personal
property for consumption in such production, manufacture, processing, mining, drilling,
refining, compounding, treating, irrigation and in providing such services;

(o) all sales of animals, fowl and aquatic plants and animals, the primary purpose of
which is use in agriculture or aquaculture, as defined in K.S.A. 47-1901, and amendments
thereto, the production of food for human consumption, the production of animal, dairy,
poultry or aquatic plant and animal products, fiber or fur, or the production of offspring for
use for any such purpose or purposes;

(p) all sales of drugs, as defined by K.S.A. 65-1626 and amendments thereto, dispensed
pursuant to a prescription order, as defined by K.S.A. 65-1626 and amendments thereto,
by a licensed practitioner;

(q) all sales of insulin dispensed by a person licensed by the state board of pharmacy to
a person for treatment of diabetes at the direction of a person licensed to practice medicine
by the board of healing arts;

(r) all sales of prosthetic and orthopedic appliances prescribed in writing by a person
licensed to practice the healing arts, dentistry or optometry. For the purposes of this sub-
section, the term prosthetic and orthopedic appliances means any apparatus, instrument,
device, or equipment used to replace or substitute for any missing part of the body; used
to alleviate the malfunction of any part of the body; or used to assist any disabled person in
leading a normal life by facilitating such person's mobility; such term shall include acces-
sories attached or to be attached to motor vehicles, but such term shall not include motor
vehicles or personal property which when installed becomes a fixture to real property;

(s) all sales of tangible personal property or services purchased directly by a groundwater
management district organized or operating under the authority of K.S.A. 82a-1020 et seq.
and amendments thereto, which property or services are used in the operation or mainte-
nance of the district;

(t) all sales of farm machinery and equipment or aquaculture machinery and equipment,
repair and replacement parts therefor and services performed in the repair and maintenance
of such machinery and equipment. For the purposes of this subsection the term ``farm
machinery and equipment or aquaculture machinery and equipment'' shall include machin-
ery and equipment used in the operation of Christmas tree farming but shall not include
any passenger vehicle, truck, truck tractor, trailer, semitrailer or pole trailer, other than a
farm trailer, as such terms are defined by K.S.A. 8-126 and amendments thereto. Each
purchaser of farm machinery and equipment or aquaculture machinery and equipment
exempted herein must certify in writing on the copy of the invoice or sales ticket to be
retained by the seller that the farm machinery and equipment or aquaculture machinery
and equipment purchased will be used only in farming, ranching or aquaculture production.
Farming or ranching shall include the operation of a feedlot and farm and ranch work for
hire and the operation of a nursery;

(u) all leases or rentals of tangible personal property used as a dwelling if such tangible
personal property is leased or rented for a period of more than 28 consecutive days;

(v) all sales of food products to any contractor for use in preparing meals for delivery
to homebound elderly persons over 60 years of age and to homebound disabled persons or
to be served at a group-sitting at a location outside of the home to otherwise homebound
elderly persons over 60 years of age and to otherwise homebound disabled persons, as all
or part of any food service project funded in whole or in part by government or as part of
a private nonprofit food service project available to all such elderly or disabled persons
residing within an area of service designated by the private nonprofit organization, and all
sales of food products for use in preparing meals for consumption by indigent or homeless
individuals whether or not such meals are consumed at a place designated for such purpose;

(w) all sales of natural gas, electricity, heat and water delivered through mains, lines or
pipes: (1) To residential premises for noncommercial use by the occupant of such premises;
(2) for agricultural use and also, for such use, all sales of propane gas; (3) for use in the
severing of oil; and (4) to any property which is exempt from property taxation pursuant to
K.S.A. 79-201b Second through Sixth. As used in this paragraph, ``severing'' shall have the
meaning ascribed thereto by subsection (k) of K.S.A. 79-4216, and amendments thereto;

(x) all sales of propane gas, LP-gas, coal, wood and other fuel sources for the production
of heat or lighting for noncommercial use of an occupant of residential premises;

(y) all sales of materials and services used in the repairing, servicing, altering, maintain-
ing, manufacturing, remanufacturing, or modification of railroad rolling stock for use in
interstate or foreign commerce under authority of the laws of the United States;

(z) all sales of tangible personal property and services purchased directly by a port
authority or by a contractor therefor as provided by the provisions of K.S.A. 12-3418 and
amendments thereto;

(aa) all sales of materials and services applied to equipment which is transported into
the state from without the state for repair, service, alteration, maintenance, remanufacture
or modification and which is subsequently transported outside the state for use in the trans-
mission of liquids or natural gas by means of pipeline in interstate or foreign commerce
under authority of the laws of the United States;

(bb) all sales of used mobile homes or manufactured homes. As used in this subsection:
(1) ``Mobile homes'' and ``manufactured homes'' shall have the meanings ascribed thereto
by K.S.A. 58-4202 and amendments thereto; and (2) ``sales of used mobile homes or man-
ufactured homes'' means sales other than the original retail sale thereof;

(cc) all sales of tangible personal property or services purchased for the purpose of and
in conjunction with constructing, reconstructing, enlarging or remodeling a business or retail
business which meets the requirements established in K.S.A. 74-50,115 and amendments
thereto, and the sale and installation of machinery and equipment purchased for installation
at any such business or retail business. When a person shall contract for the construction,
reconstruction, enlargement or remodeling of any such business or retail business, such
person shall obtain from the state and furnish to the contractor an exemption certificate for
the project involved, and the contractor may purchase materials, machinery and equipment
for incorporation in such project. The contractor shall furnish the number of such certificates
to all suppliers from whom such purchases are made, and such suppliers shall execute
invoices covering the same bearing the number of such certificate. Upon completion of the
project the contractor shall furnish to the owner of the business or retail business a sworn
statement, on a form to be provided by the director of taxation, that all purchases so made
were entitled to exemption under this subsection. All invoices shall be held by the contractor
for a period of five years and shall be subject to audit by the director of taxation. Any
contractor or any agent, employee or subcontractor thereof, who shall use or otherwise
dispose of any materials, machinery or equipment purchased under such a certificate for
any purpose other than that for which such a certificate is issued without the payment of
the sales or compensating tax otherwise imposed thereon, shall be guilty of a misdemeanor
and, upon conviction therefor, shall be subject to the penalties provided for in subsection
(g) of K.S.A. 79-3615 and amendments thereto. As used in this subsection, ``business'' and
``retail business'' have the meanings respectively ascribed thereto by K.S.A. 74-50,114 and
amendments thereto;

(dd) all sales of tangible personal property purchased with food stamps issued by the
United States department of agriculture;

(ee) all sales of lottery tickets and shares made as part of a lottery operated by the state
of Kansas;

(ff) on and after July 1, 1988, all sales of new mobile homes or manufactured homes to
the extent of 40% of the gross receipts, determined without regard to any trade-in allowance,
received from such sale. As used in this subsection, ``mobile homes'' and ``manufactured
homes'' shall have the meanings ascribed thereto by K.S.A. 58-4202 and amendments
thereto;

(gg) all sales of tangible personal property purchased in accordance with vouchers issued
pursuant to the federal special supplemental food program for women, infants and children;

(hh) all sales of medical supplies and equipment purchased directly by a nonprofit skilled
nursing home or nonprofit intermediate nursing care home, as defined by K.S.A. 39-923,
and amendments thereto, for the purpose of providing medical services to residents thereof.
This exemption shall not apply to tangible personal property customarily used for human
habitation purposes;

(ii) all sales of tangible personal property purchased directly by a nonprofit organization
for nonsectarian comprehensive multidiscipline youth development programs and activities
provided or sponsored by such organization, and all sales of tangible personal property by
or on behalf of any such organization. This exemption shall not apply to tangible personal
property customarily used for human habitation purposes;

(jj) all sales of tangible personal property or services, including the renting and leasing
of tangible personal property, purchased directly on behalf of a community-based mental
retardation facility or mental health center organized pursuant to K.S.A. 19-4001 et seq.,
and amendments thereto, and licensed in accordance with the provisions of K.S.A. 75-3307b
and amendments thereto. This exemption shall not apply to tangible personal property
customarily used for human habitation purposes;

(kk) on and after January 1, 1989, all sales of 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 dis-
tribution facility, and all sales of repair and replacement parts and accessories purchased
for such machinery and equipment:

(1) For purposes of this subsection, machinery and equipment shall be deemed to be
used directly and primarily in the manufacture, assemblage, processing, finishing, storing,
warehousing or distributing of tangible personal property where such machinery and equip-
ment is used during a manufacturing, assembling, processing or finishing, storing, ware-
housing or distributing operation:

(A) To effect a direct and immediate physical change upon the tangible personal
property;

(B) to guide or measure a direct and immediate physical change upon such property
where such function is an integral and essential part of tuning, verifying or aligning the
component parts of such property;

(C) to test or measure such property where such function is an integral part of the
production flow or function;

(D) to transport, convey or handle such property during the manufacturing, processing,
storing, warehousing or distribution operation at the plant or facility; or

(E) to place such property in the container, package or wrapping in which such property
is normally sold or transported.

(2) For purposes of this subsection ``machinery and equipment used directly and pri-
marily'' shall include, but not be limited to:

(A) Mechanical machines or components thereof contributing to a manufacturing, as-
sembling or finishing process;

(B) molds and dies that determine the physical characteristics of the finished product
or its packaging material;

(C) testing equipment to determine the quality of the finished product;

(D) computers and related peripheral equipment that directly control or measure the
manufacturing process or which are utilized for engineering of the finished product; and

(E) computers and related peripheral equipment utilized for research and development
and product design.

(3) ``Machinery and equipment used directly and primarily'' shall not include:

(A) Hand tools;

(B) machinery, equipment and tools used in maintaining and repairing any type of ma-
chinery and equipment;

(C) transportation equipment not used in the manufacturing, assembling, processing,
furnishing, storing, warehousing or distributing process at the plant or facility;

(D) office machines and equipment including computers and related peripheral equip-
ment not directly and primarily used in controlling or measuring the manufacturing process;

(E) furniture and buildings; and

(F) machinery and equipment used in administrative, accounting, sales or other such
activities of the business;

(4) for purposes of this subsection, ``repair and replacement parts and accessories''
means all parts and accessories for exempt machinery and equipment, including but not
limited to dies, jigs, molds, and patterns which are attached to exempt machinery or which
are otherwise used in production, short-lived replaceable parts that can be readily detached
from exempt machinery or equipment, such as belts, drill bits, grinding wheels, cutting bars
and saws, and other replacement parts for production equipment, including refractory brick
and other refractory items for kiln equipment used in production operations;

(ll) all sales of educational materials purchased for distribution to the public at no charge
by a nonprofit corporation organized for the purpose of encouraging, fostering and con-
ducting programs for the improvement of public health;

(mm) all sales of seeds and tree seedlings; fertilizers, insecticides, herbicides, germi-
cides, pesticides and fungicides; and services, purchased and used for the purpose of pro-
ducing plants in order to prevent soil erosion on land devoted to agricultural use;

(nn) except as otherwise provided in this act, all sales of services rendered by an ad-
vertising agency or licensed broadcast station or any member, agent or employee thereof;

(oo) all sales of tangible personal property purchased by a community action group or
agency for the exclusive purpose of repairing or weatherizing housing occupied by low
income individuals;

(pp) all sales of drill bits and explosives actually utilized in the exploration and produc-
tion of oil or gas;

(qq) all sales of tangible personal property and services purchased by a nonprofit mu-
seum or historical society or any combination thereof, including a nonprofit organization
which is organized for the purpose of stimulating public interest in the exploration of space
by providing educational information, exhibits and experiences, which is exempt from fed-
eral income taxation pursuant to section 501(c)(3) of the federal internal revenue code of
1986;

(rr) all sales of tangible personal property which will admit the purchaser thereof to any
annual event sponsored by a nonprofit organization which is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal internal revenue code of 1986;

(ss) all sales of tangible personal property and services purchased by a public broad-
casting station licensed by the federal communications commission as a noncommercial
educational television or radio station;

(tt) all sales of tangible personal property and services purchased by or on behalf of a
not-for-profit corporation which is exempt from federal income taxation pursuant to section
501(c)(3) of the federal internal revenue code of 1986, for the sole purpose of constructing
a Kansas Korean War memorial;

(uu) all sales of tangible personal property and services purchased by or on behalf of
any rural volunteer fire-fighting organization for use exclusively in the performance of its
duties and functions;

(vv) all sales of tangible personal property purchased by any of the following organiza-
tions which are exempt from federal income taxation pursuant to section 501 (c)(3) of the
federal internal revenue code of 1986, for the following purposes, and all sales of any such
property by or on behalf of any such organization for any such purpose:

(1) The American Heart Association, Kansas Affiliate, Inc. for the purposes of providing
education, training, certification in emergency cardiac care, research and other related serv-
ices to reduce disability and death from cardiovascular diseases and stroke;

(2) the Kansas Alliance for the Mentally Ill, Inc. for the purpose of advocacy for persons
with mental illness and to education, research and support for their families;

(3) the Kansas Mental Illness Awareness Council for the purposes of advocacy for per-
sons who are mentally ill and to education, research and support for them and their families;

(4) the American Diabetes Association Kansas Affiliate, Inc. for the purpose of elimi-
nating diabetes through medical research, public education focusing on disease prevention
and education, patient education including information on coping with diabetes, and pro-
fessional education and training;

(5) the American Lung Association of Kansas, Inc. for the purpose of eliminating all
lung diseases through medical research, public education including information on coping
with lung diseases, professional education and training related to lung disease and other
related services to reduce the incidence of disability and death due to lung disease;

(6) the Kansas chapters of the Alzheimer's Disease and Related Disorders Association,
Inc. for the purpose of providing assistance and support to persons in Kansas with Alzhei-
mer's disease, and their families and caregivers; and

(ww) all sales of tangible personal property purchased by the Habitat for Humanity for
the exclusive use of being incorporated within a housing project constructed by such
organization.

(xx) all sales of tangible personal property and services purchased by a nonprofit zoo
which is exempt from federal income taxation pursuant to section 501 (c)(3) of the federal
internal revenue code of 1986, or on behalf of such zoo by an entity itself exempt from
federal income taxation pursuant to section 50 501 (c)(3) of the federal internal revenue
code of 1986 contracted with to operate such zoo and all sales of tangible personal property
or services purchased by a contractor for the purpose of constructing, equipping, recon-
structing, maintaining, repairing, enlarging, furnishing or remodeling facilities for any non-
profit zoo which would be exempt from taxation under the provisions of this section if
purchased directly by such nonprofit zoo or the entity operating such zoo. Nothing in this
subsection shall be deemed to exempt the purchase of any construction machinery, equip-
ment or tools used in the constructing, equipping, reconstructing, maintaining, repairing,
enlarging, furnishing or remodeling facilities for any nonprofit zoo. When any nonprofit zoo
shall contract for the purpose of constructing, equipping, reconstructing, maintaining, re-
pairing, enlarging, furnishing or remodeling facilities, it shall obtain from the state and
furnish to the contractor an exemption certificate for the project involved, and the contractor
may purchase materials for incorporation in such project. The contractor shall furnish the
number of such certificate to all suppliers from whom such purchases are made, and such
suppliers shall execute invoices covering the same bearing the number of such certificate.
Upon completion of the project the contractor shall furnish to the nonprofit zoo concerned
a sworn statement, on a form to be provided by the director of taxation, that all purchases
so made were entitled to exemption under this subsection. All invoices shall be held by the
contractor for a period of five years and shall be subject to audit by the director of taxation.
If any materials purchased under such a certificate are found not to have been incorporated
in the building or other project or not to have been returned for credit or the sales or
compensating tax otherwise imposed upon such materials which will not be so incorporated
in the building or other project reported and paid by such contractor to the director of
taxation not later than the 20th day of the month following the close of the month in which
it shall be determined that such materials will not be used for the purpose for which such
certificate was issued, the nonprofit zoo concerned shall be liable for tax on all materials
purchased for the project, and upon payment thereof it may recover the same from the
contractor together with reasonable attorney fees. Any contractor or any agent, employee
or subcontractor thereof, who shall use or otherwise dispose of any materials purchased
under such a certificate for any purpose other than that for which such a certificate is issued
without the payment of the sales or compensating tax otherwise imposed upon such mate-
rials, shall be guilty of a misdemeanor and, upon conviction therefor, shall be subject to the
penalties provided for in subsection (g) of K.S.A. 79-3615, and amendments thereto;

(yy) all sales of tangible personal property and services purchased by a parent-teacher
association or organization, and all sales of tangible personal property by or on behalf of
such association or organization;

(zz) all sales of machinery and equipment purchased by over-the-air, free access radio
or television station which is used directly and primarily for the purpose of producing a
broadcast signal or is such that the failure of the machinery or equipment to operate would
cause broadcasting to cease. For purposes of this subsection, machinery and equipment
shall include, but not be limited to, that required by rules and regulations of the federal
communications commission, and all sales of electricity which are essential or necessary for
the purpose of producing a broadcast signal or is such that the failure of the electricity would
cause broadcasting to cease;

(aaa) all sales of tangible personal property and services purchased by a religious or-
ganization which is exempt from federal income taxation pursuant to section 501 (c)(3) of
the federal internal revenue code, and used exclusively for religious purposes, and all sales
of tangible personal property or services purchased by a contractor for the purpose of con-
structing, equipping, reconstructing, maintaining, repairing, enlarging, furnishing or re-
modeling facilities for any such organization which would be exempt from taxation under
the provisions of this section if purchased directly by such organization. Nothing in this
subsection shall be deemed to exempt the purchase of any construction machinery, equipment
or tools used in the constructing, equipping, reconstructing, maintaining, repairing, enlarg-
ing, furnishing or remodeling facilities for any such organization. When any such organi-
zation shall contract for the purpose of constructing, equipping, reconstructing, maintaining,
repairing, enlarging, furnishing or remodeling facilities, it shall obtain from the state and
furnish to the contractor an exemption certificate for the project involved, and the contractor
may purchase materials for incorporation in such project. The contractor shall furnish the
number of such certificate to all suppliers from whom such purchases are made, and such
suppliers shall execute invoices covering the same bearing the number of such certificate.
Upon completion of the project the contractor shall furnish to such organization concerned
a sworn statement, on a form to be provided by the director of taxation, that all purchases
so made were entitled to exemption under this subsection. All invoices shall be held by the
contractor for a period of five years and shall be subject to audit by the director of taxation.
If any materials purchased under such a certificate are found not to have been incorporated
in the building or other project or not to have been returned for credit or the sales or
compensating tax otherwise imposed upon such materials which will not be so incorporated
in the building or other project reported and paid by such contractor to the director of
taxation not later than the 20th day of the month following the close of the month in which
it shall be determined that such materials will not be used for the purpose for which such
certificate was issued, such organization concerned shall be liable for tax on all materials
purchased for the project, and upon payment thereof it may recover the same from the
contractor together with reasonable attorney fees. Any contractor or any agent, employee
or subcontractor thereof, who shall use or otherwise dispose of any materials purchased
under such a certificate for any purpose other than that for which such a certificate is issued
without the payment of the sales or compensating tax otherwise imposed upon such materials,
shall be guilty of a misdemeanor and, upon conviction therefor, shall be subject to the pen-
alties provided for in subsection (g) of K.S.A. 79-3615, and amendments thereto. Sales tax
paid on and after July 1, 1998, but prior to the effective date of this act upon the gross
receipts received from any sale exempted by the amendatory provisions of this subsection
shall be refunded. Each claim for a sales tax refund shall be verified and submitted to the
director of taxation upon forms furnished by the director and shall be accompanied by any
additional documentation required by the director. The director shall review each claim and
shall refund that amount of sales tax paid as determined under the provisions of this sub-
section. All refunds shall be paid from the sales tax refund fund upon warrants of the director
of accounts and reports pursuant to vouchers approved by the director or the director's
designee; ~~and~~

(bbb) all sales of food for human consumption by an organization which is exempt from
federal income taxation pursuant to section 501 (c)(3) of the federal internal revenue code
of 1986, pursuant to a food distribution program which offers such food at a price below
cost in exchange for the performance of community service by the purchaser thereof.;

(ccc) on and after July 1, 1999, all sales of tangible personal property and services
purchased by a primary care clinic or health center the primary purpose of which is to
provide services to medically underserved individuals and families, and which is exempt
from federal income taxation pursuant to section 501 (c)(3) of the federal internal revenue
code, and all sales of tangible personal property or services purchased by a contractor for
the purpose of constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities for any such clinic or center which would be exempt from
taxation under the provisions of this section if purchased directly by such clinic or center.
Nothing in this subsection shall be deemed to exempt the purchase of any construction
machinery, equipment or tools used in the constructing, equipping, reconstructing, main-
taining, repairing, enlarging, furnishing or remodeling facilities for any such clinic or center.
When any such clinic or center shall contract for the purpose of constructing, equipping,
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling facilities, it shall
obtain from the state and furnish to the contractor an exemption certificate for the project
involved, and the contractor may purchase materials for incorporation in such project. The
contractor shall furnish the number of such certificate to all suppliers from whom such
purchases are made, and such suppliers shall execute invoices covering the same bearing the
number of such certificate. Upon completion of the project the contractor shall furnish to
such clinic or center concerned a sworn statement, on a form to be provided by the director
of taxation, that all purchases so made were entitled to exemption under this subsection. All
invoices shall be held by the contractor for a period of five years and shall be subject to
audit by the director of taxation. If any materials purchased under such a certificate are
found not to have been incorporated in the building or other project or not to have been
returned for credit or the sales or compensating tax otherwise imposed upon such materials
which will not be so incorporated in the building or other project reported and paid by such
contractor to the director of taxation not later than the 20th day of the month following the
close of the month in which it shall be determined that such materials will not be used for
the purpose for which such certificate was issued, such clinic or center concerned shall be
liable for tax on all materials purchased for the project, and upon payment thereof it may
recover the same from the contractor together with reasonable attorney fees. Any contractor
or any agent, employee or subcontractor thereof, who shall use or otherwise dispose of any
materials purchased under such a certificate for any purpose other than that for which such
a certificate is issued without the payment of the sales or compensating tax otherwise imposed
upon such materials, shall be guilty of a misdemeanor and, upon conviction therefor, shall
be subject to the penalties provided for in subsection (g) of K.S.A. 79-3615, and amendments
thereto;

(ddd) on and after January 1, 1999, and before January 1, 2000, all sales of materials
and services purchased by any class II or III railroad as classified by the federal surface
transportation board for the construction, renovation, repair or replacement of class II or
III railroad track and facilities used directly in interstate commerce. In the event any such
track or facility for which materials and services were purchased sales tax exempt is not
operational for five years succeeding the allowance of such exemption, the total amount of
sales tax which would have been payable except for the operation of this subsection shall be
recouped in accordance with rules and regulations adopted for such purpose by the secretary
of revenue; and

(eee) on and after January 1, 1999, and before January 1, 2000, all sales of materials
and services purchased for the original construction, reconstruction, repair or replacement
of grain storage facilities, including railroad sidings providing access thereto.

Sec. 7. K.S.A. 1998 Supp. 79-32,195 is hereby amended to read as follows: 79-32,195.
As used in this act, the following words and phrases shall have the meanings ascribed to
them herein: (a) ``Business firm'' means any business entity authorized to do business in the
state of Kansas which is subject to the state income tax imposed by the provisions of the
Kansas income tax act, any national banking association, state bank, trust company or savings
and loan association paying an annual tax on its net income pursuant to article 11 of chapter
79 of the Kansas Statutes Annotated, or any insurance company paying the premium tax
and privilege fees imposed pursuant to K.S.A. 40-252, and amendments thereto;

(b) ``community services'' means:

(1) The conduct of activities which meet a demonstrated community need and which
are designed to achieve improved educational and social services for Kansas children and
their families, and which are coordinated with communities including, but not limited to,
social and human services organizations that address the causes of poverty through programs
and services that assist low income persons in the areas of employment, food, housing,
emergency assistance and health care;

(2) crime prevention; and

(3) health care services.

(c) ``crime prevention'' means any nongovernmental activity which aids in the prevention
of crime ~~in an impoverished area~~.

(d) ``community service organization'' means any organization performing community
services in Kansas and which:

(1) Has obtained a ruling from the internal revenue service of the United States de-
partment of the treasury that such organization is exempt from income taxation under the
provisions of section 501(c)(3) of the federal internal revenue code; or

(2) is incorporated in the state of Kansas or another state as a nonstock, nonprofit
corporation; or

(3) has been designated as a community development corporation by the United States
government under the provisions of title VII of the economic opportunity act of 1964; or

(4) is chartered by the United States congress.

(e) ``contributions'' shall mean and include the donation of cash, services or property
other than used clothing. Stocks and bonds contributed shall be valued at the stock market
price on the date of transfer. Services contributed shall be valued at the standard billing rate
for not-for-profit clients. Personal property items contributed shall be valued at the lesser of
its fair market value or cost to the donor and may be inclusive of costs incurred in making
the contribution, but shall not include sales tax. Contributions of real estate are allowable
for credit only when title thereto is in fee simple absolute and is clear of any encumbrances.
The amount of credit allowable shall be based upon the lesser of two current independent
appraisals conducted by state licensed appraisers.

~~(e)~~ (f) ``health care services'' shall include, but not be limited to, the following: Services
provided by local health departments, city, county or district hospitals, city or county nursing
homes, or other residential institutions, preventive health care services offered by a com-
munity service organization including immunizations, prenatal care, the postponement of
entry into nursing homes by home health care services, and community based services for
persons with a disability, mental health services, indigent health care, physician or health
care worker recruitment, health education, emergency medical services, services provided
by rural health clinics, integration of health care services, home health services and services
provided by rural health networks.

~~(f)~~ (g) ``rural community'' means any city having a population of fewer than 15,000
located in a county that is not part of a standard metropolitan statistical area as defined by
the United States department of commerce or its successor agency. However, any such city
located in a county defined as a standard metropolitan statistical area shall be deemed a
rural community if a substantial number of persons in such county derive their income from
agriculture and, in any county where there is only one city within the county which has a
population of more than 15,000 and which classifies as a standard metropolitan statistical
area, all other cities in that county having a population of less than 15,000 shall be deemed
a rural community.

New Sec. 8. Any business firm or business entity not subject to Kansas income, privilege
or premiums tax, hereinafter designated the assignor, may sell, assign, convey or otherwise
transfer tax credits allowed and earned pursuant to K.S.A. 79-32,196, and amendments
thereto. Such credits shall be deemed to be allowed and earned by any such business entity
which is only disqualified therefrom by reason of not being subject to such Kansas taxes.
The business firm acquiring earned credits, hereinafter designated the assignee, may use
the amount of the acquired credits to offset up to 100% of its income, privilege or premiums
tax liability for the taxable year in which such acquisition was made. Only the full credit
amount for any one contribution may be transferred and such credit may be transferred
one time. Unused credit amounts claimed by the assignee may be carried forward for up to
five years, except that all such amounts shall be claimed within 10 years following the tax
year in which the contribution was made. The assignor shall enter into a written agreement
with the assignee establishing the terms and conditions of the agreement and shall perfect
such transfer by notifying the director of community development of the department of
commerce and housing in writing within 30 calendar days following the effective date of
the transfer and shall provide any information as may be required by the director of com-
munity development of the department of commerce and housing to administer and carry
out the provisions of this section. The amount received by the assignor of such tax credit
shall be taxable as income of the assignor, and the excess of the value of such credit over
the amount paid by the assignee for such credit shall be taxable as income of the assignee.

Sec. 9. K.S.A. 79-32,197 is hereby amended to read as follows: 79-32,197. The amount
of credit allowed pursuant to K.S.A. 79-32,196, and amendments thereto, shall not exceed
50% of the total amount contributed during the taxable year by the business firm to a
community service organization or governmental entity for programs approved pursuant to
K.S.A. 79-32,198, and amendments thereto. The amount of credit allowed pursuant to K.S.A.
79-32,196, and amendments thereto, shall not exceed 70% of the total amount contributed
during the taxable year by the business firm in a rural community to a community service
organization or governmental entity located therein for programs approved pursuant to
K.S.A. 79-32,198, and amendments thereto. ~~Any tax credit not used for the taxable year the~~
~~contribution was made may be carried over to any succeeding taxable year until the total~~
~~amount of the credit is used.~~ If the amount of the credit allowed by K.S.A. 1998 Supp. 79-
32,196, and amendments thereto, exceeds the taxpayer's income tax liability imposed under
the Kansas income tax act, such excess amount shall be refunded to the taxpayer. In no event
shall the total amount of credits allowed under this section exceed $5,000,000 for any one
fiscal year.

New Sec. 10. The provisions of sections 7 through 9 of this act shall be applicable to
all taxable years commencing after December 31, 1998.

New Sec. 11. The legislature hereby declares that the availability of improved access
to and choice of higher education opportunities in this state will benefit the residents of the
state and that the establishment of a postsecondary education savings program will assist
residents in meeting the expenses incurred in availing themselves of higher education op-
portunities. Therefore, it is the intention of sections 11 to 19, and amendments thereto, to
provide for development and administration of a postsecondary education savings program
and to vest the state treasurer with powers to enable the treasurer to accomplish such
purpose.

New Sec. 12. There is hereby established a postsecondary education savings program
and such program shall be known and may be cited as the Kansas postsecondary education
savings program. The program shall be implemented and become operational on July 1,
2000.

New Sec. 13. The purpose of the Kansas postsecondary education savings program is
to authorize the establishment of family postsecondary education savings accounts and to
provide guidelines for the maintenance of such accounts to:

(a) Enable residents of this state and other states to benefit from the tax incentive
provided for qualified state tuition programs as defined in section 529 of the federal internal
revenue code of 1986, as amended; and

(b) attract residents of this state to institutions of postsecondary education.

New Sec. 14. As used in sections 11 to 19, and amendments thereto:

(a) ``Account'' or ``family postsecondary education savings account'' means an individual
savings account established in accordance with the provisions of sections 11 to 19, and
amendments thereto.

(b) ``Account owner'' means the individual or individuals who enter into a postsecondary
education savings agreement pursuant to the provisions of sections 11 to 19, and amend-
ments thereto. If the account is owned by one individual, the account owner may also be
the designated beneficiary of the account.

(c) ``Designated beneficiary'' means, with respect to an account, the individual desig-
nated at the time the account is established as the individual whose higher education ex-
penses are expected to be paid from the account or in the case of a change in beneficiaries,
the individual who is the new beneficiary.

(d) ``Financial organization'' means an organization authorized to do business in the
state of Kansas and (1) which is an authorized fiduciary to act as a trustee pursuant to the
provisions of the federal employee retirement income security act of 1974, an insurance
company, or a registered investment advisor; and (2) (A) is licensed or chartered by the
commissioner of insurance, (B) is licensed or chartered by the state bank commissioner, (C)
is chartered by an agency of the federal government, (D) is subject to the jurisdiction and
regulation of the securities and exchange commission of the federal government, or (E) is
any other entity otherwise authorized to act in this state as a trustee pursuant to the pro-
visions of the federal employee retirement income security act of 1974.

(e) ``Institution of postsecondary education'' means any institution of postsecondary ed-
ucation which is accredited by a nationally recognized accrediting agency or association,
offers credit toward an undergraduate or graduate degree or other recognized postsecondary
education credential, and qualifies as an eligible institution for federal student aid programs.

(f) ``Member of the family'' has the meaning ascribed thereto in section 529 of the
federal internal revenue code of 1986, as amended.

(g) ``Program'' means the Kansas postsecondary education savings program established
pursuant to sections 11 to 19, and amendments thereto.

(h) ``Qualified higher education expenses'' means any qualified higher education ex-
pense included in section 529 of the federal internal revenue code of 1986, as amended.

(i) ``Qualified withdrawal'' means a withdrawal from an account to pay the qualified
higher education expenses of the designated beneficiary of the account.

(j) ``Nonqualified withdrawal'' means a withdrawal from an account but does not mean:

(1) A qualified withdrawal;

(2) a withdrawal made as the result of the death or disability of the designated benefi-
ciary of an account; or

(3) a withdrawal made on the account of a scholarship received by the designated ben-
eficiary to the extent the amount of the withdrawal does not exceed the amount of the
scholarship.

(k) ``Treasurer'' means the state treasurer.

(l) ``Management contract'' means the contract executed by the treasurer and a financial
organization selected to act as a depository and manager of the program.

(m) ``Postsecondary education savings agreement'' means an agreement between the
state treasurer and the account owner or owners.

(n) ``Program manager'' means a financial organization selected by the treasurer to act
as a depository and manager of the program.

New Sec. 15. (a) The state treasurer shall implement and administer the program under
the terms and conditions established by sections 11 to 19, and amendments thereto.

(b) In furtherance of such implementation and administration, the state treasurer shall
have the authority and responsibility to:

(1) Develop and implement the program in a manner consistent with the provisions of
sections 11 to 19, and amendments thereto through adoption of rules and regulations;

(2) engage the services of consultants on a contract basis for rendering professional and
technical assistance and advice;

(3) seek rulings and other guidance from the United States department of treasury and
the federal internal revenue service relating to the program;

(4) make changes to the program required for the participants in the program to obtain
the federal income tax benefits or treatment provided by section 529 of the federal internal
revenue code of 1986, as amended, or any similar successor legislation;

(5) charge, impose and collect administrative fees and service charges in connection
with any agreement, contract or transaction relating to the program;

(6) develop marketing plans and promotion material;

(7) establish the methods by which the funds held in accounts shall be dispersed;

(8) establish the method by which funds shall be allocated to pay for administrative
costs;

(9) do all things necessary and proper to carry out the purposes of sections 11 to 19,
and amendments thereto;

(10) adopt rules and regulations necessary to administer sections 11 to 19, and amend-
ments thereto; and

(11) evaluate the Kansas postsecondary education savings program annually, and make
a report thereon to the governor and legislature for the period.

New Sec. 16. (a) The state treasurer may implement the program through use of fi-
nancial organizations as account depositories and managers.

(b) The state treasurer may solicit proposals from financial organizations to act as de-
positories and managers of the program. Financial organizations submitting proposals shall
describe the investment instrument which will be held in accounts. The state treasurer shall
select as program depositories and managers the financial organization, from among the
bidding financial organizations, that demonstrates the most advantageous combination, both
to potential program participants and this state, of the following factors:

(1) Financial stability and integrity of the financial organization;

(2) the safety of the investment instrument being offered;

(3) the ability of the investment instrument to track increasing costs of postsecondary
education;

(4) the ability of the financial organization to satisfy recordkeeping and reporting
requirements;

(5) the financial organization's plan for promoting the program and the investment the
organization is willing to make to promote the program;

(6) the fees, if any, proposed to be charged to persons for opening accounts;

(7) the minimum initial deposit and minimum contributions that the financial organi-
zation will require;

(8) the ability of the financial organization to accept electronic withdrawals, including
payroll deduction plans; and

(9) other benefits to the state or its residents included in the proposal, including fees
payable to the state to cover expenses of operation of the program.

(c) The state treasurer may enter into a contract with a financial organization. Such
financial organization management shall provide only one type of investment instrument.

(d) The state treasurer may select more than one financial organization and investment
instrument for the program when the federal internal revenue service has provided guidance
that giving a contributor the choice of two or more investment instruments under a state
program will not cause the program to fail to qualify for favorable tax treatment under
section 529 of the federal internal revenue code of 1986, as amended.

(e) A management contract shall include, at a minimum, terms requiring the financial
organization to:

(1) Take any action required to keep the program in compliance with requirements of
sections 11 to 19, and amendments thereto, and any actions not contrary to its contract to
manage the program to qualify as a ``qualified state tuition plan'' as defined in section 529
of the federal internal revenue code of 1986, as amended;

(2) keep adequate records of each account, keep each account segregated from each
other account and provide the state treasurer with the information necessary to prepare the
statements required by section 17, and amendments thereto;

3) compile and total information contained in statements required to be prepared under
section 17, and amendments thereto, and provide such compilations to the state treasurer;

(4) if there is more than one program manager, provide the state treasurer with such
information as is necessary to determine compliance with section 17, and amendments
thereto;

(5) provide the state treasurer with access to the books and records of the program
manager to the extent needed to determine compliance with the contract;

(6) hold all accounts for the benefit of the account owner or owners;

(7) be audited at least annually by a firm of certified public accountants selected by the
program manager and provide the results of such audit to the state treasurer;

(8) provide the state treasurer with copies of all regulatory filings and reports made by
the financial organization during the term of the management contract or while the financial
organization is holding any accounts, other than confidential filings or reports that will not
become part of the program. The program manager shall make available for review by the
state treasurer the results of any periodic examination of such manager by any state or federal
banking, insurance or securities commission, except to the extent that such report or reports
may not be disclosed under law; and

(9) ensure that any description of the program, whether in writing or through the use
of any media, is consistent with the marketing plan developed pursuant to the provisions of
sections 11 to 19, and amendments thereto.

(f) The state treasurer may provide that an audit shall be conducted of the operations
and financial position of the program depository and manager at any time if the state trea-
surer has any reason to be concerned about the financial position, the recordkeeping prac-
tices or the status of accounts of such program depository and manager.

(g) During the term of any contract with a program manager, the state treasurer shall
conduct an examination of such manager and the manager's handling of accounts. Such
examination shall be conducted at least biennially if such manager is not otherwise subject
to periodic examination by the state bank commissioner, the federal deposit insurance cor-
poration or other similar entity.

(h) (1) If selection of a financial organization as a program manager or depository is
not renewed, after the end of the financial organization's term:

(A) Accounts previously established and held in investment instruments at such financial
organization may be terminated;

(B) additional contributions may be made to such accounts;

(C) no new accounts may be placed with such financial organization; and

(D) existing accounts held by such depository shall remain subject to all oversight and
reporting requirements established by the state treasurer.

(2) If the state treasurer terminates a financial organization as a program manager or
depository, the state treasurer shall take custody of accounts held by such financial organi-
zation and shall seek to promptly transfer such accounts to another financial organization
that is selected as a program manager or depository and into investment instruments as
similar to the original instruments as possible.

(i) The state treasurer may enter into such contracts as it deems necessary and proper
for the implementation of the program.

New Sec. 17. (a) Family postsecondary education savings accounts established pursuant
to the provisions of sections 11 to 19, and amendments thereto shall be governed by the
provisions of this section.

(b) A family postsecondary education savings account may be opened by any person or
persons who desire to save money for the payment of the qualified higher education ex-
penses of the designated beneficiary. Such persons shall be considered the account owner.

(1) An application for such account shall be in the form prescribed by the state treasurer
and contain the following:

(A) The name, address and social security number or employer identification number
of the account owner or owners;

(B) the designation of a designated beneficiary;

(C) the name, address and social security number of the designated beneficiary;

(D) the certification relating to no excess contributions; and

(E) such other information as the state treasurer may require.

(2) The state treasurer shall establish a nominal nonrefundable application fee for such
application.

(c) Only the account owner or owners may make contributions to the account after the
account is opened.

(d) Contributions to accounts may be made only in cash.

(e) An account owner may withdraw all or part of the balance from an account on sixty-
days notice or such shorter period as may be authorized under rules and regulations gov-
erning the program. Such rules and regulations shall include provisions that will generally
enable the determination as to whether a withdrawal is a nonqualified withdrawal or a
qualified withdrawal. Such rules and regulations may require one or more of the following:

(1) An account owner seeking to make a qualified withdrawal must provide certification
of qualified higher education expenses in a form and manner and pursuant to the method
consistent with the requirements of sections 11 to 19, and amendments thereto; and

(2) withdrawals not meeting the requirements of sections 11 to 19, and amendments
thereto shall be treated as nonqualified withdrawals by the program manager and if such
withdrawals are subsequently deemed qualified withdrawals, the account owner must seek
any refund of penalties directly from the program.

(f) (1) An account owner may change the designated beneficiary of an account to an
individual who is a member of the family of the prior designated beneficiary in accordance
with procedures established pursuant to the provisions of sections 11 to 19, and amendments
thereto.

(2) An account owner may transfer all or a portion of an account to another family
postsecondary education savings account, the designated beneficiary of which is a member
of the family as defined in section 529 of the federal internal revenue code of 1986, as
amended.

(3) Changes in designated beneficiaries and transfers under this subsection shall not be
permitted to the extent that they would constitute excess contributions or unauthorized
investment choices.

(g) In the case of any nonqualified withdrawal from an account an amount equal to 15%
of the portion of the withdrawal constituting income as determined in accordance with the
principles of section 529 of the federal internal revenue code of 1986, as amended, plus an
amount equal to the amount of interest earned on such portion shall be withheld as a penalty
and paid to the Kansas postsecondary education savings program.

(h) The penalty prescribed in subsection (g) may be increased if the state treasurer
determines that the amount of such penalty must be increased to constitute a greater than
de minimis penalty for purposes of qualifying the program as a qualified state tuition pro-
gram as defined in section 529 of the federal internal revenue code of 1986, as amended.

(i) If an account owner makes a nonqualified withdrawal and no penalty amount is
withheld pursuant to subsection (g) or the amount withheld was less than the amount re-
quired to be withheld under such subsection for nonqualified withdrawals, the account
owner shall pay the unpaid portion of the penalty to the program at the same time that the
account owner files the earlier of the account owner's state or federal income tax return for
the taxable year of the withdrawal or if such account owner does not file such return, the
due date for such returns but in any event on or before the due date for such return taking
into account any authorized extensions.

(j) The program shall provide separate accounting for each designated beneficiary.

(k) No account owner or designated beneficiary of any account shall be permitted to
direct the investment of any contributions to an account or the earnings thereon.

(l) Neither an account owner nor a designated beneficiary may use an interest in an
account as security for a loan. Any pledge of an interest in an account shall be of no force
and effect.

(m) (1) The state treasurer shall adopt rules and regulations to prevent contributions on
behalf of a designated beneficiary in excess of an amount equal to the average amount of
the qualified higher education expenses that would be incurred for five years of study at
institutions of postsecondary education located in the midwest states. Such amount shall be
determined annually by the state treasurer.

(2) Such rules and regulations shall include requirements that any excess balance with
respect to a designated beneficiary be promptly withdrawn in a nonqualified withdrawal or
transferred to another account.

(n) (1) If there is any distribution from an account to any individual or for the benefit
of any individual during a calendar year, such distribution shall be reported to the federal
internal revenue service and the account owner or owners, the designated beneficiary, or
the distributee to the extent required by federal law or regulation.

(2) Statements shall be provided to each account owner at least once each year within
60 days after the end of the twelve-month period to which they relate. The statement shall
identify the contributions made during a preceding twelve-month period, the total contri-
butions made to the account through the end of the period, the value of the account at the
end of such period, distributions made during such period and any other information that
the state treasurer shall require to be reported to the account owner.

(3) Statements and information relating to accounts shall be prepared and filed to the
extent required by federal and state tax law.

(o) (1) A local government or organization described in section 501(c) (3) of the federal
internal revenue code of 1986, as amended, may open and become the account owner of
an account to fund scholarships for persons whose identity will be determined upon
disbursement.

(2) In the case of any account opened pursuant to provision (1) of this subsection, the
requirement set forth in subsection (b) that a designated beneficiary be designated when
an account is opened shall not apply and each individual who receives an interest in such
account as a scholarship shall be treated as a designated beneficiary with respect to such
interest.

(p) An annual fee may be imposed upon the account owner or owners for the mainte-
nance of the account.

(q) An account must be opened before the designated beneficiary attains 25 years of
age and at least two calendar years before a qualified withdrawal can be made. Qualified
withdrawals must be completed by the time the designated beneficiary attains 30 years of
age or within 10 years after the initial qualified withdrawal is made, whichever occurs first.
The state treasurer may adopt rules and regulations providing for exceptions to the foregoing
requirements for such extenuating circumstances as the state treasurer deems necessary and
appropriate.

(r) An account owner or designated beneficiary of a Kansas postsecondary education
savings account may be a resident of any state but must be a resident of the United States
of America.

(s) The program shall disclose the following information in writing to each account
owner and prospective account owner of a family postsecondary education savings account:

(1) The terms and conditions for purchasing a family postsecondary education savings
account;

(2) any restrictions on the substitution of beneficiaries;

(3) the person or entity entitled to terminate the savings agreement;

(4) the period of time during which a beneficiary may receive benefits under the savings
agreement;

(5) the terms and conditions under which money may be wholly or partially withdrawn
from the program, including, but not limited to, any reasonable charges and fees that may
be imposed for withdrawal;

(6) the probable tax consequences associated with contributions to and distributions
from accounts; and

(7) all other rights and obligations pursuant to savings agreements, and any other terms,
conditions and provisions deemed necessary and appropriate by the state treasurer.

(t) Nothing in sections 10 to 19, and amendments thereto, or in any savings agreement
entered into pursuant to sections 11 to 19, and amendments thereto, shall be construed as
a guarantee by the state of Kansas or any institution of postsecondary education that a
beneficiary will be admitted to the institution of postsecondary education or, upon admission
to any institution of postsecondary education, will be permitted to continue to attend or will
receive a degree from such institution of postsecondary education.

New Sec. 18. (a) Nothing in sections 11 to 19, and amendments thereto, shall be con-
strued to:

(1) Give any designated beneficiary any rights or legal interest with respect to an account
unless the designated beneficiary is the account owner;

(2) guarantee that a designated beneficiary will be admitted to an institution of postse-
condary education;

(3) create state residency for an individual merely because the individual is a designated
beneficiary; or

(4) guarantee that amounts saved pursuant to the program will be sufficient to cover
the qualified higher education expenses of a designated beneficiary.

(b) (1) Nothing in sections 11 to 19, and amendments thereto, shall create or be con-
strued to create any obligation of the state treasurer, the state or any agency or instrumen-
tality of the state to guarantee for the benefit of any account owner or designated beneficiary
with respect to:

(A) The rate of interest or other return on any account; and

(B) the payment of interest or other return on any account.

(2) The state treasurer by rules and regulations shall provide that every contract, appli-
cation, deposit slip or other similar document that may be used in connection with a con-
tribution to an account clearly indicate that the account is not insured by the state and
neither the principal deposited nor the investment return is guaranteed by the state.

New Sec. 19. (a) The Kansas postsecondary education savings program trust fund is
hereby established in the state treasury. Such savings trust fund shall consist of moneys
deposited by depositors in accordance with this act, moneys acquired from governmental
and private sources and state general fund appropriations, if any. All interest derived from
the deposit and investment of moneys in such savings trust fund shall be credited to the
fund. At the end of any fiscal year, all unexpended and unencumbered moneys in such
savings trust fund shall remain therein and not be credited or transferred to the state general
fund or to any other fund.

(b) The state treasurer shall credit all moneys received in connection with the Kansas
postsecondary education savings program to the Kansas postsecondary education savings
program trust fund.

(c) All expenses incurred by the treasurer in developing and administering the postse-
condary education savings program shall be payable from the Kansas postsecondary edu-
cation savings program trust fund.

Sec. 20. K.S.A. 1998 Supp. 79-32,117 is hereby amended to read as follows: 79-32,117.
(a) The Kansas adjusted gross income of an individual means such individual's federal ad-
justed gross income for the taxable year, with the modifications specified in this section.

(b) There shall be added to federal adjusted gross income:

(i) Interest income less any related expenses directly incurred in the purchase of state
or political subdivision obligations, to the extent that the same is not included in federal
adjusted gross income, on obligations of any state or political subdivision thereof, but to the
extent that interest income on obligations of this state or a political subdivision thereof issued
prior to January 1, 1988, is specifically exempt from income tax under the laws of this state
authorizing the issuance of such obligations, it shall be excluded from computation of Kansas
adjusted gross income whether or not included in federal adjusted gross income. Interest
income on obligations of this state or a political subdivision thereof issued after December
31, 1987, shall be excluded from computation of Kansas adjusted gross income whether or
not included in federal adjusted gross income.

(ii) Taxes on or measured by income or fees or payments in lieu of income taxes imposed
by this state or any other taxing jurisdiction to the extent deductible in determining federal
adjusted gross income and not credited against federal income tax. This paragraph shall not
apply to taxes imposed under the provisions of K.S.A. 79-1107 or 79-1108, and amendments
thereto, for privilege tax year 1995, and all such years thereafter.

(iii) The federal net operating loss deduction.

(iv) Federal income tax refunds received by the taxpayer if the deduction of the taxes
being refunded resulted in a tax benefit for Kansas income tax purposes during a prior
taxable year. Such refunds shall be included in income in the year actually received regard-
less of the method of accounting used by the taxpayer. For purposes hereof, a tax benefit
shall be deemed to have resulted if the amount of the tax had been deducted in determining
income subject to a Kansas income tax for a prior year regardless of the rate of taxation
applied in such prior year to the Kansas taxable income, but only that portion of the refund
shall be included as bears the same proportion to the total refund received as the federal
taxes deducted in the year to which such refund is attributable bears to the total federal
income taxes paid for such year. For purposes of the foregoing sentence, federal taxes shall
be considered to have been deducted only to the extent such deduction does not reduce
Kansas taxable income below zero.

(v) The amount of any depreciation deduction or business expense deduction claimed
on the taxpayer's federal income tax return for any capital expenditure in making any build-
ing or facility accessible to the handicapped, for which expenditure the taxpayer claimed
the credit allowed by K.S.A. 79-32,177, and amendments thereto.

(vi) Any amount of designated employee contributions picked up by an employer pur-
suant to K.S.A. 12-5005, 20-2603, 74-4919 and 74-4965, and amendments to such sections.

(vii) The amount of any charitable contribution made to the extent the same is claimed
as the basis for the credit allowed pursuant to K.S.A. 79-32,196, and amendments thereto.

(viii) The amount of any costs incurred for improvements to a swine facility, claimed
for deduction in determining federal adjusted gross income, to the extent the same is claimed
as the basis for any credit allowed pursuant to K.S.A. 1998 Supp. 79-32,204 and amendments
thereto.

(ix) The amount of any ad valorem taxes and assessments paid and the amount of any
costs incurred for habitat management or construction and maintenance of improvements
on real property, claimed for deduction in determining federal adjusted gross income, to
the extent the same is claimed as the basis for any credit allowed pursuant to K.S.A. 79-
32,203 and amendments thereto.

(c) There shall be subtracted from federal adjusted gross income:

(i) Interest or dividend income on obligations or securities of any authority, commission
or instrumentality of the United States and its possessions less any related expenses directly
incurred in the purchase of such obligations or securities, to the extent included in federal
adjusted gross income but exempt from state income taxes under the laws of the United
States.

(ii) Any amounts received which are included in federal adjusted gross income but which
are specifically exempt from Kansas income taxation under the laws of the state of Kansas.

(iii) The portion of any gain or loss from the sale or other disposition of property having
a higher adjusted basis for Kansas income tax purposes than for federal income tax purposes
on the date such property was sold or disposed of in a transaction in which gain or loss was
recognized for purposes of federal income tax that does not exceed such difference in basis,
but if a gain is considered a long-term capital gain for federal income tax purposes, the
modification shall be limited to that portion of such gain which is included in federal adjusted
gross income.

(iv) The amount necessary to prevent the taxation under this act of any annuity or other
amount of income or gain which was properly included in income or gain and was taxed
under the laws of this state for a taxable year prior to the effective date of this act, as
amended, to the taxpayer, or to a decedent by reason of whose death the taxpayer acquired
the right to receive the income or gain, or to a trust or estate from which the taxpayer
received the income or gain.

(v) The amount of any refund or credit for overpayment of taxes on or measured by
income or fees or payments in lieu of income taxes imposed by this state, or any taxing
jurisdiction, to the extent included in gross income for federal income tax purposes.

(vi) Accumulation distributions received by a taxpayer as a beneficiary of a trust to the
extent that the same are included in federal adjusted gross income.

(vii) Amounts received as annuities under the federal civil service retirement system
from the civil service retirement and disability fund and other amounts received as retire-
ment benefits in whatever form which were earned for being employed by the federal
government or for service in the armed forces of the United States.

(viii) Amounts received by retired railroad employees as a supplemental annuity under
the provisions of 45 U.S.C. 228b (a) and 228c (a)(1) et seq.

(ix) Amounts received by retired employees of a city and by retired employees of any
board of such city as retirement allowances pursuant to K.S.A. 13-14,106, and amendments
thereto, or pursuant to any charter ordinance exempting a city from the provisions of K.S.A.
13-14,106, and amendments thereto.

(x) For taxable years beginning after December 31, 1976, the amount of the federal
tentative jobs tax credit disallowance under the provisions of 26 U.S.C. 280 C. For taxable
years ending after December 31, 1978, the amount of the targeted jobs tax credit and work
incentive credit disallowances under 26 U.S.C. 280 C.

(xi) For taxable years beginning after December 31, 1986, dividend income on stock
issued by Kansas Venture Capital, Inc.

(xii) For taxable years beginning after December 31, 1989, amounts received by retired
employees of a board of public utilities as pension and retirement benefits pursuant to K.S.A.
13-1246, 13-1246a and 13-1249 and amendments thereto.

(xiii) For taxable years beginning after December 31, 1993, the amount of income
earned on contributions deposited to an individual development account under K.S.A. 79-
32,117h, and amendments thereto.

(xiv) For all taxable years commencing after December 31, 1996, that portion of any
income of a bank organized under the laws of this state or any other state, a national banking
association organized under the laws of the United States, an association organized under
the savings and loan code of this state or any other state, or a federal savings association
organized under the laws of the United States, for which an election as an S corporation
under subchapter S of the federal internal revenue code is in effect, which accrues to the
taxpayer who is a stockholder of such corporation and which is not distributed to the stock-
holders as dividends of the corporation.

(xv) For all taxable years beginning after December 31, 1999, amounts not exceeding
$2,000 for each designated beneficiary which are contributed to a family postsecondary
education savings account established under the Kansas postsecondary education savings
program for the purpose of paying the qualified higher education expenses of a designated
beneficiary at an institution of postsecondary education. The terms and phrases used in this
paragraph shall have the meaning respectively ascribed thereto by the provisions of section
14, and amendments thereto, and the provisions of such section are hereby incorporated by
reference for all purposes thereof.

(d) There shall be added to or subtracted from federal adjusted gross income the tax-
payer's share, as beneficiary of an estate or trust, of the Kansas fiduciary adjustment deter-
mined under K.S.A. 79-32,135, and amendments thereto.

(e) The amount of modifications required to be made under this section by a partner
which relates to items of income, gain, loss, deduction or credit of a partnership shall be
determined under K.S.A. 79-32,131, and amendments thereto, to the extent that such items
affect federal adjusted gross income of the partner.

New Sec. 21. (a) Without adoption of a resolution or ordinance so providing, the gov-
erning body of any taxing subdivision shall not approve any appropriation or budget, as the
case requires, which may be funded by revenue produced from property taxes, and which
provides for funding with such revenue in an amount exceeding that of the next preceding
year, except with regard to revenue produced and attributable to the taxation of: (1) New
improvements to real property;

(2) increased personal property valuation, other than increased valuation of oil and gas
leaseholds and mobile homes;

(3) property located within added jurisdictional territory; and

(4) property which has changed in use.

(b) The provisions of this section shall be applicable to all fiscal and budget years com-
mencing on and after the effective date of this act.

(c) The provisions of this section shall not apply to community colleges or unified school
districts.

(d) The provisions of this section shall not apply to revenue received from property tax
levied for the sole purpose of repayment of the principal of and interest upon bonded
indebtedness, temporary notes and no-fund warrants.

New Section 22. The governing body of any city is hereby authorized and empowered
to levy taxes in each year for the general fund and other city purposes.

Sec. 23. K.S.A. 79-1945 is hereby amended to read as follows: 79-1945. The board of
county commissioners of any county is hereby authorized and empowered to levy taxes in
each year ~~taxes~~ for the ~~several county purposes, on the assessed tangible valuation of the~~
~~respective counties, not to exceed the tax levy rates and amounts specified in the following~~
~~sections of this act~~ general fund and other county purposes. Revenues derived from property
taxes levied for mental health programs or for programs for people with disabilities, whether
deposited in special funds or in the general funds of the several counties, shall be expended
exclusively for such purposes.

Sec. 24. K.S.A. 79-1946 is hereby amended to read as follows: 79-1946. The board of
county commissioners of each of the several counties is hereby authorized to fix a rate of
levy annually ~~to meet and defray the~~ for current ~~general~~ expenses of the county and to pay
a portion of the principal and interest on bonds issued under the authority of K.S.A. 12-
1774, and amendments thereto, by any city located in such county~~, subject to limitations~~
~~prescribed according to the assessed tangible valuation or a total population as follows:~~

~~Less than $13,000,000 or having a population of less than 3,500~~	~~6.50 mills~~
~~$13,000,000 to $30,000,000~~	~~4.25 mills~~
~~Over $30,000,000 to $140,000,000~~	~~3.50 mills~~
~~Over $140,000,000~~	~~4.25 mills~~

~~Except that in any such county which adjoins a military reservation and which has an assessed~~
~~taxable tangible valuation of less than $100,000,000 such rate of levy may, except as here-~~
~~inafter provided, be increased not to exceed 11/2 mills. Before any county shall increase any~~
~~levy under the provisions of the foregoing proviso the board of county commissioners shall~~
~~publish a notice of its intention to make such increase in the levy. Such notice shall be~~
~~published once each week for two consecutive weeks in the official county newspaper and~~
~~if within 60 days next following the last publication of such notice a petition signed by~~
~~electors of the county equal in number to not less than 5% of the total electors of such~~
~~county is filed in the office of the county election officer requesting an election upon such~~
~~proposition, no such increased levy shall be made without such proposition having been~~
~~submitted to and approved by a majority of the electors of the county voting at an election~~
~~called and held thereon. All such elections shall be noticed, called and held in the manner~~
~~prescribed in K.S.A. 10-120, and amendments thereto~~.

Sec. 25. K.S.A. 79-1962 is hereby amended to read as follows: 79-1962. ~~(a)~~ The gov-
erning body of any township is hereby authorized and empowered to levy taxes in each year
for the general fund and other township purposes, except that levies of taxes for road and
noxious weed purposes shall only be levied on all taxable tangible property located outside
of incorporated cities. ~~but the governing body shall not fix a rate of levy in any one year on~~
~~each dollar of assessed tangible valuation of such township in excess of the following-named~~
~~rates:~~

~~Ambulance service: As authorized by K.S.A. 80-1425~~	~~3 mills~~
~~General fund~~	~~.50 mill~~
~~Judgments~~	~~1.00 mill~~
~~Establishing and maintenance of free library and reading room~~	~~1.00 mill~~

~~Such one-mill levy is subject to increase as hereinafter provided.~~

~~Free band concerts~~	~~.25 mill~~
~~Free band concerts when authorized by an election~~	~~.50 mill~~
~~To acquire land for a cemetery or park~~	~~1.00 mill~~
~~Maintenance of a cemetery or park~~	~~1.00 mill~~
~~To acquire a site and build a cemetery chapel~~	~~2.00 mills~~
~~Fire protection, joint with cities or townships~~	~~1.00 mill~~
~~Extermination of prairie dogs~~	~~1.00 mill~~
~~Cemeteries: As authorized by K.S.A. 12-1403~~	~~1.00 mill~~
~~Cemeteries: As authorized by K.S.A. 12-1405~~	~~1.00 mill~~
~~Cemeteries: As authorized by K.S.A. 80-932~~	~~.10 mill~~
~~Fire department: As authorized by K.S.A. 80-1903~~	~~2.00 mills~~
~~Townships in counties between 150,000 and 250,000~~	~~4.00 mills~~
~~Fire department: As authorized by K.S.A. 80-1916~~	~~3.00 mills~~
~~Fire department: As authorized by K.S.A. 80-1921~~	~~3.00 mills~~
~~Fire department: As authorized by K.S.A. 80-1537~~	~~3.00 mills~~

~~Garbage and trash fund: As authorized by K.S.A. 80-2201:~~

~~First year of levy~~	~~1.00 mill~~
~~Second year and thereafter~~	~~.50 mill~~
~~Garbage and trash disposal: As authorized by K.S.A. 80-2204~~	~~.50 mill~~
~~Halls and buildings: As authorized by K.S.A. 80-115~~	~~2.00 mills~~
~~Noxious weeds: As authorized by K.S.A. 2-1318~~	~~1.00 mill~~
~~Deficiency levy for chemicals~~	~~.50 mill~~
~~Parks and cemeteries: Maintenance as authorized by K.S.A. 80-903~~	~~2.00 mills~~
Police protection by sheriff's deputies: As authorized by K.S.A. 19-807d	~~1.00 mill~~
~~Roads: As authorized by 68-518c~~	~~5.00 mills~~
~~Townships in counties between 175,000 and 275,000~~	~~7.00 mills~~

~~Such rates are not intended to, and shall not be construed to apply to any township not~~
~~specifically authorized by law to make such levy.~~

~~(b) The townships of Garfield and Pierceville in Finney county, Kansas, are hereby~~
~~authorized to levy an annual tax upon all taxable tangible property in the respective town-~~
~~ships of not to exceed three mills for the purpose of paying for fire protection.~~

~~(c) The levy for establishing and maintaining a free library and reading room may be~~
~~increased from one mill to not more than 2.50 mills. Before any township increases this levy~~
~~the township board shall publish a notice of its intention to make such increase. Such notice~~
~~shall be published once each week for two consecutive weeks in the official county news-~~
~~paper and if within 60 days following the last publication of such notice a petition signed~~
~~by electors of the township equal in number to not less than 5% of the total electors of such~~
~~township is filed in the office of the county election officer requesting an election upon such~~
~~proposition, no such increased levy shall be made without such proposition having been~~
~~submitted to and approved by a majority of the electors of the township voting at an election~~
~~called and held thereon. All such elections shall be noticed, called and held in the manner~~
~~prescribed in K.S.A. 10-120, and amendments thereto.~~

Sec. 26. K.S.A. 2-610 is hereby amended to read as follows: 2-610. (a) On or before
July 15 each year, the executive board of the county extension council shall file with the
county commissioners in the office of the county clerk:

(1) A list of current members of the county extension council and its executive board;

(2) a certification of election of officers as provided in subsection (c) of K.S.A. 2-611,
and amendments thereto;

(3) a certificate by the director of extension of Kansas state university of agriculture and
applied science that the county extension council is properly functioning and entitled to
receive the appropriations provided by law; and

(4) a proposed budget prepared in cooperation with the director of extension of Kansas
state university of agriculture and applied science for the ensuing calendar year.

(b) If the commission does not approve the proposed budget within 10 days after receipt
thereof, it shall return the budget to the board. Upon receipt of the returned budget, the
board shall consider amendments or modifications and may consult with the commission
concerning the budget. Within 10 days after receipt of the returned budget, the board shall
resubmit its proposed budget, with or without amendment or modification, to the commis-
sion. Within 10 days after resubmission of the proposed budget, the commission shall ap-
prove, or amend or modify and approve as amended or modified, such proposed budget.
The commission shall adopt the proposed budget as approved and shall make the same a
part of the regular county budget. The board of county commissioners shall make an ap-
propriation and certify to the county clerk the amount of tax necessary to be levied on all
tangible taxable property of the county sufficient to provide a program of county extension
work and to pay a portion of the principal and interest on bonds issued under the authority
of K.S.A. 12-1774, and amendments thereto, by cities located in the county~~, which levy shall~~
~~not exceed the limitation prescribed by K.S.A. 79-1947, and amendments thereto~~.

Sec. 27. K.S.A. 2-1318 is hereby amended to read as follows: 2-1318. The county weed
supervisor of each county is hereby directed and it shall be the duty of the county weed
supervisor to ascertain each year the approximate amount of land and highways infested
with each kind of noxious weeds and its location in the county, and transmit such information
tabulated by cities and townships not later than June 1 of each year, to the secretary of the
state board of agriculture, board of county commissioners, and to the governing body of
each city and township in the district pertaining to such noxious weed infestation in their
respective jurisdiction. On the basis of such information the tax levying body of each county,
township or incorporated city shall make a tax levy each year for the purpose of paying their
part of the cost of control and eradication thereof as provided in this act and, in the case of
cities and counties, to pay a portion of the principal and interest on bonds issued under the
authority of K.S.A. 12-1774, and amendments thereto, by cities located in the county. Each
county, city, and township, separately, shall make a levy each year ~~in addition to all other~~
~~levies now authorized by law, in such amount as is deemed to be necessary but not to exceed~~
~~the limitation prescribed by K.S.A. 79-1947, 79-1948, 79-1949, 79-1950, 79-1951, 79-1952,~~
~~79-1953 and 79-1962 and amendments thereto, in any one year~~ for such purpose. Any city
may budget expenditures for weed control within its general operating fund in lieu of levying
a special tax therefor or maintaining a separate noxious weed eradication fund. Moneys
collected from such levy, except for an amount to pay a portion of the principal and interest
on bonds issued under the authority of K.S.A. 12-1774, and amendments thereto, by cities
located in the county, shall be set apart as a noxious weed eradication fund and warrants
duly verified by the county or city supervisor if such be employed or if no supervisor be
employed, then by county, township or city clerk, as the case may be, may be drawn against
this fund for all items of expense incident to control of noxious weeds in such district
respectively. Any moneys remaining in the noxious weed eradication fund at the end of any
year for which a levy is made under this section may be transferred to the noxious weed
capital outlay fund for making of capital expenditures incident to the control of noxious
weeds. ~~If moneys collected from such levy in the preceding year were insufficient to pur-~~
~~chase chemicals or chemical materials needed for the purposes authorized in K.S.A. 2-1319~~
~~or 2-1322, and amendments thereto, the tax levying body may levy an additional tax of not~~
~~to exceed the limitation prescribed by K.S.A. 79-1947, 79-1948, 79-1949, 79-1950, 79-1951,~~
~~79-1952, 79-1953 and 79-1962 and amendments thereto, but the moneys collected from~~
~~such levy shall not be used for any purpose other than the purchase of such chemicals or~~
~~chemical materials.~~

~~Any tax levy authorized under the provisions of this section shall be in addition to all~~
~~other tax levies authorized by law.~~

Sec. 28. K.S.A. 2-2007 is hereby amended to read as follows: 2-2007. Each board of
county commissioners is authorized to create a ~~``soil-drifting fund''. They are authorized and~~
~~empowered to make~~ soil drifting fund and levy a tax against all taxable tangible property of
the county ~~at a rate not to exceed the limitation prescribed by K.S.A. 79-1947, to be collected~~
~~as other taxes, and when collected to be credited to the ``soil-drifting fund''~~ to pay for the
cost of work done, or hired to be done, by the board of county commissioners and to pay a
portion of the principal and interest on bonds issued under the authority of K.S.A. 12-1774,
and amendments thereto, by cities located in the county. ~~To pay persons employed by them~~
~~to do such work ordered to be done on any property the county shall issue its warrants upon~~
~~the ``soil-drifting fund,'' and such warrants shall be paid from that fund. This shall be re-~~
~~garded as a special purpose for incurring obligations and issuing and paying warrants and is~~
~~not controlled by any general statute relating thereto.~~

Sec. 29. K.S.A. 2-1319 is hereby amended to read as follows: 2-1319. (a) The cost of
controlling and eradicating noxious weeds on all lands or highways owned or supervised by
a state agency, department or commission shall be paid by the state agency, department or
commission supervising such lands or highways from funds appropriated to its use; on county
lands and county roads, on township lands and township roads, on city lands, streets and
alleys by the county, township or city in which such lands, roads, streets and alleys are
located, and from funds made available for that purpose; on drainage districts, irrigation
districts, cemetery associations and other political subdivisions of the state, the costs shall
be paid from their respective funds made available for the purpose. If the governing body
of any political subdivision owning or supervising lands infested with noxious weeds within
their jurisdiction fails to control such noxious weeds after 15 days' notice directing any such
body to do so, the board of county commissioners shall proceed to have proper control and
eradication methods used upon such lands, and shall notify the governing body of the po-
litical subdivision by certified mail of the costs of such operations, with a demand for pay-
ment. The governing body of the political subdivision shall pay such costs from its noxious
weed fund, or if no such fund is available, from its general fund or from any other funds
available for such purpose. Copy of the statement, together with proof of notification, shall
at the same time be filed with the county clerk, and if the amount is not paid within 30
days, such clerk shall spread the amount upon the tax roll of the subdivision, and such
amount shall become a lien against the entire territory located within the particular political
subdivision, and shall be collected as other taxes are collected.

(b) All moneys collected pursuant to this section shall be paid into the county noxious
weed eradication fund. ~~Tax levies made pursuant to this section shall be in addition to all~~
~~other levies authorized by law, and shall be in addition to any aggregate tax levy limits~~
~~prescribed by law.~~

(c) As used in this section, ``governing body'' means the board, body, or persons in which
the powers of a political subdivision as a body corporate are vested; and ``political subdivi-
sion'' means any agency or unit of the state authorized to levy taxes or empowered to cause
taxes to be levied.

(d) On all other lands the owner thereof shall pay the cost of control and eradication of
noxious weeds. Except as provided in K.S.A. 2-1333 and amendments thereto, chemical
materials for use on privately owned lands may be purchased from the board of county
commissioners at a price fixed by the board of county commissioners which shall be in an
amount equal to not less than 50% nor more than 75% of the total cost incurred by the
county in purchasing, storing and handling such chemical materials. However, once the tax
levying body of a county, city or township has authorized ~~the maximum~~ a tax levy ~~prescribed~~
~~by K.S.A. 2-1318, and amendments thereto~~ of 1.5 mills or more, the board of county com-
missioners may collect from the owner of privately owned lands an amount equal to 75%
but not more than 100% of the total cost incurred by the county in purchasing, storing and
handling of chemical materials used in the control and eradication of noxious weeds on such
privately owned lands. Whenever official methods of eradication, adopted by the state board
of agriculture, are not followed in applying the chemical materials so purchased, the board
of county commissioners may collect the remaining portion of the total cost thereof.

Sec. 30. K.S.A. 2-1322 is hereby amended to read as follows: 2-1322. (a) The board of
county commissioners, or the governing body of incorporated cities, cooperating with the
secretary of the state board of agriculture, shall purchase or provide for needed and nec-
essary equipment and necessary chemical material for the control and eradication of noxious
weeds. The board of county commissioners of any county or the governing body of any city
may use any equipment or materials purchased as provided for in this section, upon the
highways, streets and alleys, for the treatment and eradication of weeds which have not
been declared noxious by legislative action.

(b) Except as provided in K.S.A. 2-1333 and amendments thereto, the board of county
commissioners shall sell chemical material to the landowners in their jurisdiction at a price
fixed by the board of county commissioners which shall be in an amount equal to not less
than 50% nor more than 75% of the total cost incurred by the county in purchasing, storing
and handling such chemical materials used in the control and eradication of noxious weeds,
and may make such charge for the use of machines or other equipment and operators as
may be deemed by them sufficient to cover the actual cost of operation. However, once the
tax levying body of a county, city or township has authorized ~~the maximum~~ a tax levy ~~pre-~~
~~scribed by K.S.A. 2-1318, and amendments thereto~~ of 1.5 mills or more, the board of county
commissioners may collect from the landowners in their jurisdiction an amount equal to
75% but not more than 100% of the total cost incurred by the county in purchasing, storing
and handling of chemical materials used in the control and eradication of noxious weeds.

(c) Whenever official methods of eradication adopted by the state board of agriculture
are not used in applying the chemical material purchased, the board of county commission-
ers may collect the remaining portion of the total cost thereof from the landowner.

(d) The board of county commissioners, township boards, and the governing body of
cities shall keep a record showing purchases of material and equipment for control and
eradication of noxious weeds. The board of county commissioners and the governing body
of cities shall also keep a complete itemized record showing sales for cash or charge sales
of material and shall maintain a record of charges and receipts for use of equipment owned
by each county or city on public and private land. Such records shall be open to inspection
by citizens of Kansas at all times.

Sec. 31. K.S.A. 3-121 is hereby amended to read as follows: 3-121. Municipalities op-
erating airports jointly may pay the expenses of purchasing or acquiring such airports from
the general funds of such municipalities or may issue general obligation bonds, as authorized
by law, but no such bonds shall be issued for the purchase or acquisition of airports as
provided hereunder, by any municipality unless and until the question of issuing same shall
have been submitted to the qualified electors of ~~said~~ such municipality at any regular or
special election and a majority of those voting on the proposition in ~~said~~ such municipality
shall have voted in favor of the issuance of said bonds. In addition, any such governing body
may issue general obligation bonds of the county or city in an amount not to exceed ~~fifty~~
~~thousand dollars ($50,000)~~ $50,000 annually without an election, for the purpose of provid-
ing improvements on runways of any such airport. Any governing body proposing to issue
such bonds shall publish a resolution to that effect in a newspaper of general circulation
within the city or county, as applicable. Such resolution shall be published once each week
for three consecutive weeks. If, within ~~sixty (60)~~ 60 days following the final such publication,
a petition signed by not less than ~~five percent (5%)~~ 5% of the qualified electors of such city
or county, as applicable, is presented to the county election officer, no such bonds shall be
issued until approved by a majority of the qualified electors voting thereon at the next county
or city general election following the presentation of the petition.

In lieu of issuing such bonds for the purchase or acquisition of an airport, the governing
body of the municipality may levy an annual tax of not to exceed one mill on the dollar on
all the taxable tangible property in such municipality for not to exceed three years for the
purpose of creating a special fund to be used to pay the expenses of purchasing or acquiring
such airports or flying fields and to pay a portion of the principal and interest on bonds
issued under the authority of K.S.A. 12-1774, and amendments thereto, by cities located in
the county. Any such governing bodies are hereby further authorized to levy an annual tax
~~not to exceed the limitation prescribed by K.S.A. 79-1947, 79-1948, 79-1949, 79-1950, 79-~~
~~1951, 79-1952 and 79-1953, and amendments thereto, per year,~~ for the support, mainte-
nance and operation of such airports and to pay a portion of the principal and interest on
bonds issued under the authority of K.S.A. 12-1774, and amendments thereto, by cities
located in the county. Such support, maintenance and operation expenses shall be borne in
the proportion agreed upon by the municipalities in case such airports are not leased.

Sec. 32. K.S.A. 12-1617h is hereby amended to read as follows: 12-1617h. Cities are
hereby authorized to levy annually upon all the taxable tangible property within the city a
tax ~~not to exceed the limitation prescribed by K.S.A. 79-1948, 79-1949, 79-1950, 79-1951,~~
~~79-1952 and 79-1953, and amendments thereto,~~ for the purpose of creating a fund to be
used in securing or retaining industries or manufacturing institutions for such city or near
its environs and to pay a portion of the principal and interest on bonds issued by such city
under the authority of K.S.A. 12-1774, and amendments thereto. No such levy shall be made
until the governing body is instructed to do so by a majority of all the votes cast on this
proposition at an election held at any city or general election.

Such election shall be held as provided by law for bond elections. If any such city shall
not make such tax levy in any year, after the third year following the approval of such tax
levy by the voters, then it shall be necessary to resubmit the issue to the voters before any
such tax levy shall be imposed again. ~~The tax levy herein authorized shall be in addition to~~
~~all other levies authorized by law and shall not be subject to any of the limitations prescribed~~
~~by article 19 of chapter 79 of the Kansas Statutes Annotated or acts amendatory thereof~~
~~and supplemental thereto.~~

Nothing in this section shall be construed as restricting the authority of cities to utilize
the general fund or other revenue sources for the purpose of promoting or securing the
location or expansion of business and industry.

Sec. 33. K.S.A. 19-236 is hereby amended to read as follows: 19-236. That in addition
to the powers already given by law, the board of county commissioners of each county shall
have power at any meeting, in case of great loss or damage to life or property, to assist in
burying the dead, caring for the wounded, rendering temporary aid to the distressed, pre-
venting disease and pestilence, and cleaning up debris, and to issue no-fund warrants of the
county therefor not exceeding ~~one percent (1%)~~ 1% of the taxable property of the county,
and to levy a tax at the first tax levying period thereafter to pay such warrants. ~~All such tax~~
~~levies shall be in addition to all other levies authorized or limited by law and shall not be~~
~~subject to the aggregate tax levy prescribed in article 19 of chapter 79 of the Kansas Statutes~~
~~Annotated, and amendments thereto.~~ Such warrants shall be issued, registered, redeemed
and bear interest in the manner and in the form prescribed by K.S.A. 79-2940 and amend-
ments thereto, except they shall not bear the notation required by ~~said~~ such section and shall
be issued without the approval of the state board of tax appeals.

Sec. 34. K.S.A. 19-2803 is hereby amended to read as follows: 19-2803. The board of
county commissioners is authorized to levy a tax ~~not to exceed the limitation prescribed by~~
~~K.S.A. 79-1947, and amendments thereto,~~ for the creation of a fund to be used for the
purposes set forth in K.S.A. 19-2801 and amendments thereto and for the purpose of paying
a portion of the principal and interest on bonds issued under the authority of K.S.A. ~~1979~~
~~Supp.~~ 12-1774, and amendments thereto, by cities located in the county.

Sec. 35. K.S.A. 19-2803e is hereby amended to read as follows: 19-2803e. Whenever a
county lake and recreational grounds shall be established under the authority of this act,
the board of county commissioners of such county shall make an annual tax levy ~~in an amount~~
~~not to exceed the limitation prescribed by K.S.A. 1979 Supp. 79-1947,~~ for the creation of a
lake and recreational grounds fund to be used for the supervision, maintenance and im-
provement of ~~said~~ the lake and recreational grounds and to pay a portion of the principal
and interest on bonds issued under the authority of K.S.A. ~~1979 Supp.~~ 12-1774, and amend-
ments thereto, by cities located in the county. ~~Said tax levy shall be in addition to all the tax~~
~~levies authorized or limited by law and shall not be subject to or within any aggregate tax~~
~~levy limit prescribed by K.S.A. 1979 Supp. 79-1947, or acts amendatory thereof or supple-~~
~~mental thereto.~~

Sec. 36. K.S.A. 19-3105 is hereby amended to read as follows: 19-3105. The board of
county commissioners is hereby authorized to make an annual tax levy ~~not to exceed the~~
~~limitation prescribed by K.S.A. 1979 Supp. 79-1947~~ on all taxable tangible property of the
county for the purpose of providing a fund to be used for the maintenance and care of any
cemetery acquired under the provisions of this act and for the purpose of obtaining addi-
tional land for any such cemetery and to pay a portion of the principal and interest on bonds
issued under the authority of K.S.A. ~~1979 Supp.~~ 12-1774, and amendments thereto, by cities
located in the county. ~~The tax levy authorized by this section shall be in addition to all other~~
~~county tax levies authorized by law and shall not be subject to any aggregate tax levy limi-~~
~~tation prescribed by law.~~

Sec. 37. K.S.A. 19-3106 is hereby amended to read as follows: 19-3106. In any county
in this state in which there is located a cemetery or other burial place in which three or
more human bodies have been interred, and which cemetery or burial place has been
abandoned and not cared for, for a period of at least five years, the board of county com-
missioners of ~~said~~ the county is hereby authorized to provide for the care of such cemetery
or burial place. For the purpose of providing funds for such care and to pay a portion of
the principal and interest on bonds issued under the authority of K.S.A. ~~1979 Supp.~~ 12-
1774, and amendments thereto, by cities located in the county, the board of county com-
missioners is authorized to make an annual tax levy ~~not to exceed the limitation prescribed~~
~~by K.S.A. 1979 Supp. 79-1947,~~ on all taxable tangible property of ~~said~~ the county. ~~Said tax~~
~~levy shall be in addition to all other levies authorized or limited by law, and shall not be~~
~~subject to or within any aggregate tax levy limitation prescribed by article 19 of chapter 79~~
~~of the Kansas Statutes Annotated or acts amendatory thereof or supplementary thereto.~~

Sec. 38. K.S.A. 19-3305 is hereby amended to read as follows: 19-3305. For the purpose
of maintaining and operating such flood control works as shall be constructed by the United
States army corps of engineers or other agency of the United States government, when the
same shall have been completed and turned over to the county and to pay a portion of the
principal and interest on bonds issued under the authority of K.S.A. ~~1979 Supp.~~ 12-1774,
and amendments thereto, by cities located in the county, the board of county commissioners
of such county shall be empowered to make an annual tax levy upon all of the taxable tangible
property within ~~said~~ the county~~, in an amount not to exceed the limitation prescribed by~~
~~K.S.A. 1979 Supp. 79-1947, and such levy shall be in addition to all other levies authorized~~
~~or limited by law~~. It shall be the duty of the board of county commissioners and the county
engineer to keep all such flood control works in serviceable condition and to make such
repairs as ~~may~~, from time to time, may be necessary.

Sec. 39. K.S.A. 19-4004 is hereby amended to read as follows: 19-4004. In all counties
wherein the board or boards of county commissioners in the event of a combination of
counties has established a governing board, the respective board or boards of county com-
missioners may levy an annual tax upon all taxable tangible property in such county~~, which~~
~~tax shall not exceed the limitation prescribed by K.S.A. 1979 Supp. 79-1947,~~ for mental
health services and to pay a portion of the principal and interest on bonds issued under the
authority of K.S.A. ~~1979 Supp.~~ 12-1774, and amendments thereto, by cities located in the
county. The respective board or boards of county commissioners may also levy an additional
annual tax upon all taxable tangible property in such county~~, which tax shall not exceed the~~
~~limitation prescribed by K.S.A. 1979 Supp. 79-1947,~~ for mental retardation services and to
pay a portion of the principal and interest on bonds issued under the authority of K.S.A.
~~1979 Supp.~~ 12-1774, and amendments thereto, by cities located in the county. The additional
levy authorized by this section for mental retardation services shall not be made until a
notice of intent to make such levy has been published in a newspaper of general circulation
in the county or counties involved by the board or boards of county commissioners proposing
to make such levy, and such notice shall state that if a petition signed by ~~five percent (5%)~~
5% of the electors of the county shall file a protest petition within ~~sixty (60)~~ 60 days of the
date of such publication a proposition will be submitted at an election called for the purpose
in the county for approval of the levy; if such proposition is approved or if no sufficient
protest is made, then the board or boards of county commissioners shall levy such tax, but
if a sufficient protest is made and such proposition is not approved, the levy will not be
made. The proceeds thereof shall be placed in the hands of the appropriate governing board
to be administered as provided by this act.

In addition thereto, to provide for the purchase of or the construction of facilities for the
community mental health center, and/or facility for the mentally retarded, the board or
boards of county commissioners may, upon petition of the governing board, levy an annual
tax on all taxable tangible property in their county~~, which tax shall not exceed the limitation~~
~~prescribed by K.S.A. 1979 Supp. 79-1947,~~ and to issue and sell general obligation bonds of
such county, for the purpose of creating and providing a special fund to be used in acquiring
a site for, and the building, equipping, repairing, remodeling and furnishing of a community
mental health center, and/or facilities for the mentally retarded, or for any one or more of
such purposes. The additional levy authorized by this section shall not be made until a notice
of intent to make such levy has been published in a newspaper of general circulation in the
county or counties involved by the board or boards of county commissioners proposing to
make such levy, and such notice shall state that if a petition signed by ~~five percent (5%)~~ 5%
of the electors of the county shall file a protest petition within ~~sixty (60)~~ 60 days of the date
of such publication a proposition will be submitted at an election called for the purpose in
the county for approval of the levy; if such proposition is approved or if no sufficient protest
is made, then the board of county commissioners will make the levy of such tax, but if a
sufficient protest is made and such proposition is not approved, the levy will not be made.
The board of county commissioners shall proceed in the manner prescribed to be followed
in such notice. ~~Said~~ The tax levy may be made annually until sufficient funds have been
created for ~~said~~ the purpose or purposes, or if the county has issued and sold general
obligation bonds, the proceeds raised by the annual tax levy shall be used to retire the
general obligation bonds and ~~said~~ the tax levy shall continue until the general obligation
bonds have been retired. Such federal, state or private funds as may be available may be
accepted by the board of county commissioners to be placed in the fund for operation of
or construction of a community mental health center, and/or facility for the mentally re-
tarded, as the case may be. Title to the building or buildings of the community mental health
center, and/or facility for the mentally retarded, shall vest in the governing board which is
responsible for the maintenance and operation of the facilities if a combination of counties
has established the center, but, if only one county has established the mental health center
or facilities for the mentally retarded, title shall vest in the board of county commissioners
of such county. If the board of county commissioners has contracted with a nonprofit cor-
poration to provide mental health services under K.S.A. 19-4007 ~~or any~~, and amendments
thereto, the title to ~~said~~ the building or buildings shall vest in the board of county commis-
sioners and they may allow the nonprofit corporation to use the buildings without charge.

Sec. 40. K.S.A. 19-4011 is hereby amended to read as follows: 19-4011. The county
commissioners of a county entering into such an agreement with a community mental health
center is hereby authorized to levy an annual tax ~~in an amount not to exceed the limitation~~
~~prescribed by K.S.A. 1979 Supp. 79-1947,~~ upon all of the taxable tangible property in such
county for the purpose of providing revenue to pay for the mental health services contracted
for with the center and to pay a portion of the principal and interest on bonds issued under
the authority of K.S.A. ~~1979 Supp.~~ 12-1774, and amendments thereto, by cities located in
the county. The county commissioners of a county entering into such an agreement with a
community facility for the mentally retarded is hereby authorized to levy an annual tax in
~~an amount not to exceed the limitation prescribed by K.S.A. 1979 Supp. 79-1947,~~ upon all
of the taxable tangible property in such county for the purpose of providing revenue to pay
for the mental retardation services contracted for with the facility and to pay a portion of
the principal and interest on bonds issued under the authority of K.S.A. ~~1979 Supp.~~ 12-
1774, and amendments thereto, by cities located in the county. Upon receipt of such tax
moneys, the county commissioners shall pay the amount agreed upon to the governing body
of the center and/or community facilities for the mentally retarded and ~~said~~ the governing
body is authorized to receive and expend such moneys to provide community mental health
services.

Sec. 41. K.S.A. 19-4102 is hereby amended to read as follows: 19-4102. The board of
county commissioners of any such county may, by resolution, provide for the establishment
of a countywide economic development program and may provide for the financing thereof
from its general operating fund, or may levy a tax annually upon all the taxable tangible
property of the county ~~in an amount not exceeding the limitation prescribed by K.S.A. 79-~~
~~1947, and amendments thereto,~~ for the purpose of creating a fund therefor and to pay a
portion of the principal and interest on bonds issued under the authority of K.S.A. 12-1774,
and amendments thereto, by cities located in the county. ~~The tax levy herein authorized~~
~~shall be in addition to all other levies authorized by law.~~ In any year in which the board of
county commissioners of any county shall elect to levy any tax under the authority of this
section, such board shall cause a notice of its intention to make such levy to be published
in the official newspaper of the county, and if within 30 days next following the date of the
publication of such notice a petition, signed by electors equal in number to not less than
5% of the electors of the county, requesting an election thereon, shall be filed in the office
of county election officer, no such levy shall be made without such proposition having first
been submitted to and having been approved by a majority of the electors of the county
voting at an election called and held thereon. Any election held under provisions of this
section shall be subject to election laws applicable to elections for approval of bonds issued
by such county.

Sec. 42. K.S.A. 65-212 is hereby amended to read as follows: 65-212. The board of
county commissioners of any such county may, upon the establishment of such mental health
clinic, levy an annual tax ~~in an amount not exceeding the limitation prescribed by K.S.A.~~
~~79-1947, and amendments thereto,~~ upon all taxable tangible property in such county for the
operation of such mental health clinic, and in addition thereto to provide for the construction
of facilities for such mental health clinic and to pay a portion of the principal of and interest
on bonds issued under the authority of K.S.A. 12-1774, and amendments thereto, by cities
located in the county. In addition to the levy authorized for the operation of such mental
health clinic, the board of county commissioners may levy an annual tax ~~in an amount not~~
~~exceeding the limitation prescribed by K.S.A. 79-1947, and amendments thereto,~~ on all
taxable tangible property in their county and may issue and sell general obligation bonds of
such county, for the purpose of creating and providing a special fund to be used in acquiring
a site for, and the building, equipping, repairing, remodeling and furnishing of a mental
health clinic or for any one or more of such purposes. Such levy may also be used to pay a
portion of the principal of and interest on bonds issued under the authority of K.S.A. 12-
1774, and amendments thereto, by cities located in the county. Such additional tax levy may
be made annually until sufficient funds have been created for such purpose or purposes, or
if the county has issued and sold general obligation bonds, the proceeds raised by the annual
tax levy shall be used to retire the general obligation bonds and such tax levy shall continue
until the general obligation bonds have been retired. Such federal, state or private funds as
may be available may be accepted by the board of county commissioners to be placed in
the fund for operation of or construction of a mental health clinic as the case may be. Title
to the building or buildings of the mental health clinic shall vest in the board of county
commissioners and they may allow the mental health clinic which is subject to the jurisdic-
tion of the joint board of health pursuant to K.S.A. 65-211, and amendments thereto, to use
the building without charge. The proceeds thereof shall be placed in the hands of the
treasurer of the joint board of health, to be administered as provided by K.S.A. 65-206, and
amendments thereto. No levy shall be made under the provisions of this act until a resolution
authorizing the making of such levies is passed by the board of county commissioners and
published in three successive issues in a newspaper of general circulation within the county,
whereupon such levies may be made unless a petition in opposition to the same, signed by
electors equal in number to not less than 10% of the qualified electors of such county who
voted for the office of secretary of state in the last preceding election, is filed with the county
clerk of such county within 30 days following the last publication of such resolution.

In the event such petition is filed it shall be the duty of the board of county commissioners
to submit the question to the voters at an election called for such purpose or at the next
general election. None of the debt limitations prescribed by law for any such county shall
apply to any bonds issued under the authority conferred by this act. The provisions of this
act shall be supplemental to other existing health laws in the counties affected thereby, but
shall in no way abrogate or amend any such other existing health laws.

Sec. 43. K.S.A. 68-166 is hereby amended to read as follows: 68-166. The board of
county commissioners shall pay any expense incurred under the authority conferred by this
act from the general fund, road fund, bridge fund or road and bridge fund of the county.
If such board shall deem it necessary, in order to provide sufficient revenue for the purpose
of installing, maintaining and operating any such lighting system, it is hereby authorized to
levy an annual tax ~~in an amount not to exceed the limitation prescribed by K.S.A. 79-1947,~~
on all the taxable tangible property in such county for the purpose of providing revenue for
such purposes and to pay a portion of the principal and interest on bonds issued under the
authority of K.S.A. 12-1774, and amendments thereto, by cities located in the county. ~~Such~~
~~tax levy shall be in addition to all other tax levies authorized or limited by law and shall not~~
~~be subject to or within the aggregate tax levy limitation prescribed by K.S.A. 79-1947 or~~
~~acts amendatory thereof.~~ All moneys derived from such tax levy except an amount to pay a
portion of the principal and interest on bonds issued under the authority of K.S.A. 12-1774,
and amendments thereto, by cities located in the county shall be placed in a special fund
by the county treasurer and shall ~~only~~ be used only for the purposes for which the tax was
levied.

Sec. 44. K.S.A. 68-582 is hereby amended to read as follows: 68-582. The board of any
county and the governing body of any city may by resolution propose the designation as a
secondary arterial highway any existing street (or a portion thereof), or a proposed new
street within a city in such county which is or would be a connecting link between county
roads and may enter into an agreement providing for the cooperative financing of the con-
struction, reconstruction, maintenance and repair of such proposed secondary arterial high-
way under such terms as the board and governing body shall agree upon. Such designation
and agreement shall set out the secondary arterial highway designation and its location, a
general description of the proposed improvement and an estimate of the total cost thereof
to each such city and county exclusive of any grants from any other public agency, and shall
become effective upon publication by the city in its official newspaper and by the county in
its official newspaper. Such agreement may be part of an agreement between the secretary
of transportation, the county and the city. Any such agreement shall provide for sharing the
costs of engineering and construction or other improvement of the designated secondary
arterial highway, and for future maintenance by the city or by the county, upon such terms
as the board and governing body may agree. The board and governing body of any county
and city which have entered into such agreements may use any public funds available to
such county or city for the construction, improvement or maintenance of such secondary
arterial highway in like manner as if it were a normal county road or a city street, may each
issue bonds as provided in K.S.A. 68-584, and amendments thereto and may each levy an
annual tax upon the assessed tangible valuation in such county or city ~~not to exceed the~~
~~limitations prescribed by K.S.A. 79-1947, 79-1948, 79-1949, 79-1950, 79-1951, 79-1952 and~~
~~79-1953~~ for such purpose and to pay a portion of the principal and interest on bonds issued
under the authority of K.S.A. 12-1774, and amendments thereto, by cities located in the
county.

Sec. 45. K.S.A. 73-407 is hereby amended to read as follows: 73-407. The management
and control of a county building shall be vested in a board of three trustees to be appointed
by the county commissioners, and if a city building, shall be appointed by the mayor of ~~said~~
the city. Such trustees shall be residents of the county or city wherein the building is located
except that at least two of ~~said~~ the trustees shall have seen service in the army, navy or
marine corps of the United States in time of war. One trustee shall be appointed for one
year, one trustee for two years and one trustee for three years, and thereafter each trustee
shall be appointed for three years. ~~Said trustee~~ Trustees shall serve without compensation
and shall make annual reports and recommendations to the proper county and the city
officials.

The expense of maintenance of ~~said~~ the memorial shall be paid out of the general fund
of the county or city, or ~~in case the same shall not be sufficient, shall be paid~~ out of a special
fund ~~which shall be created, for which the counties~~. Counties or cities are authorized to
make a levy upon all taxable tangible property in the county or city ~~in an amount not~~
~~exceeding the limitation prescribed by K.S.A. 79-1947, 79-1948, 79-1949, 79-1950, 79-1951,~~
~~79-1952 and 79-1953~~ for such purpose and to pay a portion of the principal and interest on
bonds issued under the authority of K.S.A. 12-1774, and amendments thereto, by cities
located in the county~~; and in counties having a population of more than seventeen thousand~~
~~(17,000) and less than twenty-two thousand (22,000), which contain a first-class city, tax levy~~
~~shall be in addition to all other levies authorized or limited by law and shall not be subject~~
~~to nor within any aggregate levy prescribed by article 19 of chapter 79 of the Kansas Statutes~~
~~Annotated, and any acts amendatory thereof~~. The board of trustees shall have full authority
to lease all or any part of ~~said~~ the building for hire to any person or persons desiring to lease
the same for a term not to exceed one year at a time and fix the rate and terms upon which
the charge shall be made and collected therefor. The board of trustees of any such memorial
in any city of the second class located in a county with a population of not less than ~~twelve~~
~~thousand (12,000)~~ 12,000 and not more than ~~fifteen thousand (15,000)~~ 15,000 and having
an assessed tangible valuation of not less than ~~thirty-two million dollars ($32,000,000)~~
$32,000,000 and not more than ~~thirty-five million dollars ($35,000,000)~~ $35,000,000 is
hereby authorized to lease all or any part of ~~said~~ the memorial to the Kansas national guard
for a term of not to exceed ~~ten (10)~~ 10 years and to fix the rate and terms upon which the
charge shall be made and collected therefor. The board of trustees of any such memorial
in any city having a commission form of government, and a population of more than ~~one~~
~~hundred fifty thousand (150,000)~~ 150,000, shall have full authority to lease any suitable
portion or portions of ~~said~~ the building to any concessionaire desiring to lease the same, for
a term of not to exceed ~~ten (10)~~ 10 years, and to fix the rate and terms upon which the
charge shall be made and collected therefor.

Sec. 46. K.S.A. 76-326a is hereby amended to read as follows: 76-326a. The boards of
county commissioners of the several counties of this state are hereby authorized to contrib-
ute in the aid of work authorized by ~~section 1 of chapter 48 of the 1919 Kansas Session~~
~~Laws (now included by reference in K.S.A. 76-326)~~ K.S.A. 76-326, and amendments thereto,
under the ~~directions~~ direction of the state geologist~~, such amounts from the general revenue~~
~~fund of their counties as they may determine or from the proceeds of a special tax levy in~~
~~an amount not to exceed the limitation prescribed by K.S.A. 79-1947, which said~~. Such
boards are hereby authorized to make a tax levy for ~~said~~ such purpose and to pay a portion
of the principal and interest on bonds issued under the authority of K.S.A. 12-1774, and
amendments thereto, by cities located in the county ~~in addition to all other tax levies pro-~~
~~vided by law and outside any aggregate levy limit prescribed by article 19 of chapter 79 of~~
~~the Kansas Statutes Annotated. No such contribution shall be made by any county to said~~
~~work in any one year to an amount that will exceed one-tenth of one mill upon the dollar~~
~~of the assessed tangible valuation of such counties~~.

Sec. 47. K.S.A. 82a-308 is hereby amended to read as follows: 82a-308. Any expenses
incurred in removing such obstructions as are mentioned in K.S.A. 82a-307 and amendments
thereto, or damage to private property, shall be paid out of the general fund of the respective
counties but if it shall appear that the obstructions were caused by owners of adjoining
property, the expenses shall be charged to the adjoining property as a special tax to be levied
and collected as other special taxes and assessments. In the event that the general fund of
any county shall not be sufficient to bear the cost of the operations mentioned in this section,
including the maintenance of such streams or watercourses, then the board of county com-
missioners of such county may levy an annual tax ~~not to exceed the limitation prescribed by~~
~~K.S.A. 79-1947,~~ upon all property in ~~said~~ the county for the purpose of creating a fund
known as ``stream maintenance fund'' from which fund the costs and expenses of the op-
eration herein provided for shall be paid and for the purpose of paying a portion of the
principal and interest on bonds issued under the authority of K.S.A. 12-1774, and amend-
ments thereto, by cities located in the county.

Sec. 48. K.S.A. 12-1403 is hereby amended to read as follows: 12-1403. For the purpose
of providing a fund to obtain land for cemetery purposes, the township trustees shall have
authority to levy a tax ~~not exceeding the limitation prescribed by K.S.A. 79-1962, in any one~~
~~year~~ upon all of the taxable tangible property in such township~~, to be levied and collected~~
~~as other taxes for township purposes are levied and collected. The funds derived from such~~
~~tax shall not be applied to any purpose other than the object of the levy~~.

Sec. 49. K.S.A. 12-1405 is hereby amended to read as follows: 12-1405. All cities owning
and controlling municipal cemeteries, are hereby authorized to make an annual levy of a
tax upon all taxable tangible property in the city and townships, owning and controlling
municipal or township cemeteries are hereby authorized to make an annual levy of a tax
upon all taxable tangible property in the city or township to be expended in making per-
manent improvements in such cemeteries and upkeep of the same and, in the case of cities,
to pay a portion of the principal and interest on bonds issued by such city under the authority
of K.S.A. 12-1774, and amendments thereto. ~~The tax levies herein authorized for townships~~
~~shall not exceed the limitation prescribed by K.S.A. 79-1962 and shall be in addition to all~~
~~other tax levies authorized or limited by law and shall not be subject to or within any~~
~~aggregate tax levy limit prescribed by K.S.A. 79-1962 or any amendments thereto.~~

Sec. 50. K.S.A. 19-807d is hereby amended to read as follows: 19-807d. The township
board in any township which is located in a county in which is located a city having a
population in excess of ~~one hundred thousand (100,000)~~ 100,000 is hereby authorized to
contribute funds to the county for the purpose of providing sheriff's deputies in addition to
those otherwise provided, for the purpose of providing additional police protection within
such township and for the purpose of providing and maintaining motorized equipment and
radio equipment therefor. The township board shall have power to determine the amount
of such contribution and the conditions under which such contributions shall be made.

When the township board informs the sheriff that such board intends to make a contri-
bution pursuant to this section, the sheriff and the township board shall enter into an agree-
ment within ~~twenty (20)~~ 20 days thereafter, which agreement shall specify the additional
police protection to be provided and the funds to be contributed. Any and all such agree-
ments relating to contribution of funds shall be by and between the township board and the
sheriff with the approval of the board of county commissioners. For the purpose of providing
funds to make such contributions, the township board is ~~hereby~~ authorized ~~and empowered~~
to levy ~~annually a~~ an annual tax ~~not to exceed the limitation prescribed by K.S.A. 79-1962,~~
upon all taxable tangible property in such township ~~and such tax shall be in addition to all~~
~~other levies authorized or limited by law and shall not be subject to, or within the aggregate~~
~~tax levy limits prescribed by K.S.A. 79-1962 and acts amendatory thereto~~.

Sec. 51. K.S.A. 68-518c is hereby amended to read as follows: 68-518c. (a) The town-
ship board of any township located in a county not operating under the county road unit
system, is hereby authorized to make an annual tax levy~~, in addition to all other tax levies~~
~~now or otherwise authorized by law,~~ of not to exceed five mills for road purposes ~~in an~~
~~amount~~ which will be sufficient, when added to other revenues available for such purposes,
to finance the adopted budget of expenditures for road purposes. ~~Except as otherwise here-~~
~~inafter provided, the annual tax levy made under the authority conferred by this section~~
~~shall not exceed the limitation prescribed by K.S.A. 79-1962.~~

(b) The township board of any such township desiring to ~~levy an annual tax for road~~
~~purposes in an amount exceeding the limitation prescribed by K.S.A. 79-1962, but in an~~
~~amount not exceeding eight mills,~~ increase the authorized limit existing on the effective date
of this act may adopt a resolution authorizing such levy and shall publish the same once
each week for three consecutive weeks in a newspaper of general circulation in the township.
If within ~~thirty~~ 30 days after the date of the last publication of such resolution a petition,
signed by electors of the township equal in number to not less than ~~ten percent~~ 10% of the
qualified electors of the township who voted for the office of governor at the last general
election for such office, is filed in the office of the county election officer no such increased
levy shall be made without having been approved by a majority of the electors of the town-
ship voting at an election called and held thereon. All elections held under the provisions
of this section shall be called and held in the manner prescribed by K.S.A. 10-120, and
amendments thereto.

~~Such additional tax levy~~ (c) Taxes imposed under this section shall be levied on all the
taxable tangible property in the township outside of incorporated cities~~, and such tax levy~~
~~shall not be subject to or within any aggregate tax levy limit prescribed by K.S.A. 79-1962,~~
~~or acts amendatory thereof or supplemental thereto~~, and the moneys derived therefrom
shall be used for the construction, reconstruction, improvement, repair and maintenance of
township roads and culverts.

Sec. 52. K.S.A. 80-115 is hereby amended to read as follows: 80-115. The township
board of any township which has a township hall, or which uses part of a township water
department building or township fire department building as its township hall, is hereby
authorized and empowered to levy an annual tax ~~in an amount not to exceed the limitation~~
~~prescribed by K.S.A. 79-1962, and amendments thereto,~~ on the taxable tangible property in
such township, to provide a special fund for the purpose of acquiring, repairing, equipping
and maintaining such township hall~~, or to be used in purchasing and moving, or constructing~~
~~a building and acquiring a site for, and the furnishing and equipping of any such building,~~
~~or a part of any site or building in conjunction with a site or building for other township~~
~~uses. No levy shall exceed a rate, which multiplied by the total assessed tangible valuation~~
~~of the township will result in producing more than the amount prescribed by K.S.A. 79-~~
~~1962, and amendments thereto, in any one year. Any unexpended balance remaining in such~~
~~special fund at the end of any fiscal year of the township may be retained in such special~~
~~fund and be expended in future years for any of the purposes herein enumerated~~.

Sec. 53. K.S.A. 80-119 is hereby amended to read as follows: 80-119. Whenever no-
fund warrants are issued under the authority of this act the township board shall make a tax
levy or levies sufficient to pay such warrants and the interest thereon. Such warrants may
mature serially at such yearly dates as to be payable by not more than five ~~(5)~~ tax levies. ~~All~~
~~such tax levies shall be in addition to all other levies authorized or limited by law and shall~~
~~not be subject to the aggregate tax levy limitation prescribed in article 19 of chapter 79 of~~
~~the Kansas Statutes Annotated and amendments thereto.~~ Such warrants shall be issued,
registered, redeemed and bear interest in the manner and be in the form prescribed by
K.S.A. 79-2940, ~~or any~~ and amendments thereto, except they shall not bear the notation
required by ~~said~~ such section and may be issued without the approval of the state board of
tax appeals.

Sec. 54. K.S.A. 80-808 is hereby amended to read as follows: 80-808. The township
board of any township which maintains and operates a township library which is known as
a Carnegie library is hereby authorized and empowered to issue no-fund warrants in an
amount not exceeding ~~four thousand dollars ($4,000)~~ $4,000 for the purpose of providing
funds for the repair and reconstruction of the Carnegie library building of such township.
Whenever any township board shall issue warrants under the provisions of this section ~~said~~,
such board shall make a tax levy at the first tax levying period after such warrants are issued
sufficient to pay the same and the interest thereon~~: Provided, That~~. If the township board
~~shall deem~~ deems it advisable not to make all of such levy in any one year, then ~~said~~ such
township board may make an annual tax levy at not more than the next three ~~(3)~~ tax levying
periods occurring after the issuance of such warrants, the total of which levies shall be
sufficient to pay ~~said~~ such warrants and the interest thereon. The warrants shall be issued,
registered, redeemed and bear interest in the manner and be in the form prescribed by
K.S.A. 79-2940, and amendments thereto, except that such warrants shall not bear the no-
tation required by ~~said section~~ K.S.A. 79-2940, and amendments thereto, and may be issued
without the approval of the state board of tax appeals, and any surplus existing after the
issuance of ~~said~~ such warrants shall be handled in the manner prescribed by ~~said section~~
K.S.A. 79-2940, and amendments thereto. Such township board is hereby authorized and
empowered to expend all moneys raised by no-fund warrants issued under the provisions
of this section although such expenditures were not included in the budget for the year in
which such warrants were issued. ~~The tax levy herein authorized shall be in addition to all~~
~~other tax levies authorized or limited by law and shall not be subject to or within the~~
~~aggregate tax levy limit prescribed by K.S.A. 79-1962.~~

Sec. 55. K.S.A. 80-903 is hereby amended to read as follows: 80-903. Any township
issuing bonds under this act shall annually levy a tax sufficient to pay the interest thereon,
and after five ~~(5)~~ years an amount sufficient to create a sinking fund to pay the principal at
maturity; and any township purchasing or acquiring or acting as trustee for grounds for a
park or parks, or cemetery or cemeteries is empowered and authorized to annually levy and
collect a tax~~, not exceeding the limitation prescribed by K.S.A. 79-1962, in any one (1) year~~
to provide a fund for the purpose of meeting the annual expense of such grounds, and such
other improvements as the township board ~~may deem~~ deems necessary.

Sec. 56. K.S.A. 80-932 is hereby amended to read as follows: 80-932. The township
board of any township is hereby authorized and empowered to levy an annual tax ~~in an~~
~~amount not to exceed the limitation prescribed by K.S.A. 79-1962,~~ on all taxable tangible
property in such townships, including such property of cities of the third class, for the
purpose of providing funds to be used for the care and maintenance of cemeteries in such
townships for which no provision is made by law for the levying of taxes for such care and
maintenance~~, or said township board may expend a sum not to exceed fifty dollars ($50) per~~
~~year from the general fund of the township in lieu of said levy. The tax levy herein authorized~~
~~shall be in addition to all other tax levies authorized by law and shall not be subject to the~~
~~aggregate tax levy limit prescribed by K.S.A. 79-1962 or any amendments thereto~~.

Sec. 57. K.S.A. 80-1417 is hereby amended to read as follows: 80-1417. The governing
body of any city of the third class having a population of not to exceed ~~three hundred (300)~~
300, located within a township having a township hall and in a county with a population of
not less than ~~forty-five hundred (4,500)~~ 4,500 nor more than ~~fifty-five hundred (5,500)~~ 5,500
is hereby authorized and empowered to enter into a contract with the township board of
~~said~~ the township for the joint ownership, maintenance, repair, remodeling, and equipping
of ~~said~~ the township hall~~: Provided, That~~, but before such an agreement may be entered
into, a petition signed by at least ~~fifty percent (50%)~~ 50% of the residents of ~~said~~ such city
as determined by the total vote cast for secretary of state at the last preceding election, shall
be submitted to the governing body of ~~said~~ such city requesting that such a contract be
entered into. When the governing body determines that such petition is proper, ~~they~~ the
governing body shall then adopt a resolution authorizing the city to enter into such a con-
tract.

The township board, upon receipt of such resolution, shall meet and if ~~they determine~~
determined that a contract should be entered into, the board shall adopt a resolution au-
thorizing such contract. Thereafter, the governing body of the city and the township board
are authorized to enter into a contract, which contract shall provide that the township hall
shall be under the joint ownership of the city and township and shall be maintained, re-
modeled, equipped and kept in repair jointly by ~~said~~ such township and city. ~~Said~~ The
contract shall be approved by a majority of the governing body of the city and of the township
board.

After ~~said~~ the contract has been entered into, the township board is authorized and em-
powered to levy an annual tax ~~for the years 1951 and 1952 of not to exceed five (5) mills,~~
~~and thereafter, an annual tax~~ of not to exceed two ~~(2)~~ mills on the dollar on all of the taxable
tangible property of ~~said~~ such cities of the third class for the purpose of providing funds to
be used for the maintenance, equipping, remodeling and repair of ~~said~~ the township hall.
~~Said tax levies shall be in addition to all other tax levies authorized or limited by law and~~
~~shall not be subject to any aggregate tax levy limits prescribed by article 19 of chapter 79~~
~~of the General Statutes of 1949.~~

Sec. 58. K.S.A. 80-1503 is hereby amended to read as follows: 80-1503. (a) Townships
are hereby authorized and empowered to levy a special tax not to exceed one mill on all
tangible property in the township not including a corporate city in a sufficient amount to
join with a municipality or township for the purposes as provided in K.S.A. 80-1501, and
amendments thereto, or to pay the compensation agreed upon by contract under authority
of K.S.A. 80-1502, and amendments thereto.

(b) The township board, by adopting the appropriate resolution, may levy a tax of more
than one mill for the purposes authorized by subsection (a). Any resolution increasing the
amount of the tax currently levied by the township board and any subsequent increase
thereof shall be published once each week for two consecutive weeks in a paper of general
circulation within the township. The township board may make such levy unless, within 30
days following final publication of the resolution, a protest petition signed by 10% of the
qualified voters of the township is filed with the township clerk. If a sufficient petition is
filed, such additional tax shall not be levied until 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. If a levy is imposed pursuant to this subsection, no other levies for
the purposes authorized by subsection (a) shall be made on such property.

(c) Counties are hereby authorized and empowered to levy an annual tax ~~of not to~~
~~exceed 1/2 mill on the dollar~~ on all the taxable tangible property in such county for the
purposes as provided in K.S.A. 80-1501, and amendments thereto, or to pay the compen-
sation agreed upon by contract under authority of K.S.A. 80-1502, and amendments thereto,
and to pay a portion of the principal and interest on bonds issued under the authority of
K.S.A. 12-1774, and amendments thereto, by cities located in the county.

~~Such tax levy shall be in addition to all other tax levies authorized or limited by law and~~
~~shall not be subject to the aggregate tax levy limit prescribed by K.S.A. 79-1947, and amend-~~
~~ments thereto.~~

Sec. 59. K.S.A. 80-1509 is hereby amended to read as follows: 80-1509. The township
board shall annually ~~provide for the levying of a tax of not to exceed .50 mills~~ levy a tax
upon the tangible taxable property in ~~said~~ such benefit district and within the township
sufficient to pay the compensation agreed upon in the contract with the municipality. ~~Such~~
~~tax levy shall be in addition to all other tax levies authorized or limited by law and shall not~~
~~be subject to any of the limitations prescribed by K.S.A. 79-1962 or acts amendatory thereof~~
~~or supplemental thereto.~~

Sec. 60. K.S.A. 80-1537 is hereby amended to read as follows: 80-1537. Annual tax
levies may be made by such township ~~in an amount not to exceed the limitation prescribed~~
~~by K.S.A. 79-1962,~~ on all the taxable tangible property of the township, including such
property of the city which is a party to such agreement. ~~Such levy shall be in addition to all~~
~~other levies authorized by law and shall be outside the aggregate levy limitations provided~~
~~in K.S.A. 79-1962, and acts amendatory thereof or supplemental thereto.~~

Sec. 61. K.S.A. 80-1806 is hereby amended to read as follows: 80-1806. Any township
or townships of the urban class in the state of Kansas is hereby authorized and empowered
to make a tax levy in such amount as may be necessary in order to provide the necessary
funds for the payment of the township share of registration and election expenses. ~~Such tax~~
~~levy shall be in addition to all other tax levies authorized or limited by law and the provisions~~
~~of K.S.A. 79-1962 and 79-1962a, or any amendments thereto, shall not be applicable to such~~
~~tax levy.~~ All money raised by such tax levy shall be credited by the county treasurer to a
special fund and the county shall be reimbursed from such fund for the registration and
election expenses which it has paid on behalf of such township, but if there be an insufficient
amount in such fund to pay the cost chargeable to such township, the county shall be
reimbursed for the remainder from the township general fund. If the township does not
make the levy authorized by this act, then the county shall be reimbursed for registration
and election expenses paid on behalf of such township from the township general fund. No
money raised under the tax levy authorized by this act shall be withdrawn from the county
treasury by the township and if there be a balance existing therein after the payment of
registration and election expenses for any year, the same shall be held in the county treasury
to the credit of such township and used to pay registration and election expenses incurred
in subsequent years.

Sec. 62. K.S.A. 80-1903 is hereby amended to read as follows: 80-1903. The township
board of any such township shall have power to levy a tax ~~not exceeding the limitation~~
~~prescribed by K.S.A. 79-1962, and amendments thereto,~~ upon all taxable tangible property
within such township, for the purpose of paying the expense of providing rescue service and
equipping, operating and maintaining such fire department or contracting with another fire
department for the furnishing of rescue service or fire protection. ~~Such tax levy shall be in~~
~~addition to all other tax levies authorized or limited by law. In any county having a population~~
~~of more than 150,000 and less than 250,000 the township levy herein authorized shall not~~
~~exceed the limitation prescribed therefor by K.S.A. 79-1962, and amendments thereto, on~~
~~all taxable tangible property of the township, for the purposes specified in this section. The~~
~~tax levy shall be in addition to all other tax levies authorized or limited by law.~~

Sec. 63. K.S.A. 80-1909 is hereby amended to read as follows: 80-1909. In any township
where a township fire department has been created under the provisions of this act, the
township board shall have authority, subject to an election as hereinafter provided, to issue
bonds for the purpose of purchasing land, constructing or purchasing buildings to be used
as fire stations, constructing or purchasing fire equipment and supplies and for the payment
of other necessary expenses incident thereto. Before any such bonds are issued, the question
of ~~their~~ issuance shall be submitted to the voters of such township at a general or special
election to be called by the township board by resolution and to be held under the provisions
of article 1, chapter 10 of the Kansas Statutes Annotated, and the affirmative vote of a
majority of the votes cast at such election shall be sufficient to authorize the issuance of
such bonds.

The township board may also submit, at such election, the question whether the tax levy
provided in K.S.A. 80-1903 ~~hereof~~, and amendments thereto, shall be in excess of ~~the ag-~~
~~gregate tax limitations provided for townships by K.S.A. 79-1962 and any other limitations~~
~~provided by law~~ two mills, or four mills for townships in counties having a population of
more than 150,000 and less than 250,000, and if a majority of the votes cast at such election
shall be in the affirmative, the township board shall thereafter be authorized to make such
levy without regard to such limitations. The expense of any special election called under the
provisions hereof may be paid out of the proceeds of the bond issue, if such bonds shall be
authorized at such election, otherwise from the general fund of the township~~: Provided,~~
~~however, That~~. Only a single election board shall serve in any precinct at any such special
election.

Sec. 64. K.S.A. 80-1916 is hereby amended to read as follows: 80-1916. Any such town-
ship may create a township fire department to furnish fire protection within such township
and such fire department shall be operated under the direction of the township board and
~~said~~ such board shall have power to levy an annual tax ~~not to exceed the limitation prescribed~~
~~by K.S.A. 79-1962,~~ on all the taxable tangible property in such township, for the purpose of
paying the expenses of equipping, operating and maintaining such fire department. ~~Said tax~~
~~levy shall be in addition to all other tax levies authorized or limited by law and shall not be~~
~~subject to the aggregate tax levy limit prescribed by K.S.A. 79-1962, or acts amendatory~~
~~thereof.~~

Sec. 65. K.S.A. 80-1920 is hereby amended to read as follows: 80-1920. Subject to the
provisions of K.S.A. ~~1986 Supp.~~ 19-270, and amendments thereto, and upon the presentation
of such petition, the township board of any such township shall create a township fire
department. Such township board is hereby authorized and empowered to purchase fire-
fighting equipment for the use of the fire department and to provide buildings for the
housing and storage of the same. For the purpose of raising funds to pay the cost of such
equipment and housing facilities, the township board is hereby empowered to issue no-fund
warrants in an amount not exceeding $12,000. After the issuance of such no-fund warrants,
the township board shall make a tax levy at the first tax-levying period after such warrants
are issued, sufficient to pay such warrants and the interest thereon. In lieu of making only
one tax levy, such board, if it deems it advisable, may make a tax levy each year for not to
exceed five years in approximately equal installments for the purpose of paying the warrants
and the interest thereon.

~~All such tax levies shall be in addition to all other levies authorized or limited by law and~~
~~shall not be subject to the aggregate tax levy limitation prescribed by K.S.A. 79-1962, and~~
~~amendments thereto.~~ Such warrants shall be issued, registered, redeemed and bear interest
in the manner and be in the form prescribed by K.S.A. 79-2940, and amendments thereto,
except they shall not bear the notation required therein and may be issued without the
approval of the board of tax appeals. Any surplus existing after the redemption of the war-
rants shall be handled in the manner prescribed by K.S.A. 79-2940, and amendments
thereto. None of the provisions of the cash-basis and budget laws of this state shall apply to
any expenditures made, the payment of which has been provided for by the issuance of such
no-fund warrants.

Sec. 66. K.S.A. 80-1921 is hereby amended to read as follows: 80-1921. The township
board of any such township shall have full direction and control over the operation of such
township fire department and shall provide for the organization of volunteer members of
such department, to be compensated at a specified rate when attending fires, and may
provide special clothing and equipment for such volunteers, and may insure such volunteers
against accidental death and injury in the performance of their duties, and may do all other
things necessary or desirable to maintain and operate such department so as to furnish fire
protection to the inhabitants of such township. Such township board may levy an annual tax
~~of not to exceed the limitation prescribed by K.S.A. 79-1962, and amendments thereto,~~ on
all the taxable tangible property in such township for the purpose of paying the expenses of
equipping, operating and maintaining such fire department. Any tax levy authorized by this
section ~~shall be in addition to all other tax levies authorized or limited by law and shall not~~
~~be subject to the aggregate tax levy limit prescribed by K.S.A. 79-1962, and amendments~~
~~thereto, and~~ shall be in addition to the tax levy made to pay for no-fund warrants issued
pursuant to K.S.A. 80-1920, and amendments thereto. Except as otherwise specifically pro-
vided in this act, the provisions of K.S.A. 80-1906 and 80-1907, and amendments thereto,
shall apply to townships adopting the provisions of this act.

In addition to the tax levy herein authorized, the township board of Kickapoo, Tonganoxie,
Easton, Fairmount, Sherman and Delaware townships located in Leavenworth county may
levy an annual tax of not to exceed two mills on all the taxable tangible property in such
township for the purpose of purchasing additional equipment for such fire department. If
a petition in opposition to the tax levy authorized herein, signed by not less than 5% of the
qualified electors of such township is filed with the township board of such township, within
40 days after the effective date of this act, the tax levy shall not be made unless first approved
as a question submitted at the next general election or at a special election called for the
purpose of submitting the question. If such a petition is filed, the township board may cause
to be placed on the ballot at the next general election the question of whether such tax shall
be levied. If a majority of the votes cast and counted at such election are in favor of the
resolution, such governing body may levy the tax authorized herein. Upon this act taking
effect it shall be published once each week for two consecutive weeks in a newspaper having
general circulation in the township.

Sec. 67. K.S.A. 80-1924 is hereby amended to read as follows: 80-1924. The governing
body of the benefit district shall annually provide for the levying of a tax ~~of not to exceed~~
~~one-half (1/2) mill~~ upon the taxable tangible property in such benefit district and within the
township sufficient to pay the compensation agreed upon in the contract with the township
maintaining the fire department. ~~Such tax levy shall be in addition to all other tax levies~~
~~authorized or limited by law and shall not be subject to the aggregate tax levy limitation~~
~~prescribed by K.S.A. 79-1962 or acts amendatory thereof or supplemental thereto.~~

Sec. 68. K.S.A. 80-2006 is hereby amended to read as follows: 80-2006. (a) Whenever
authorized by an election as herein provided, the costs and expenses of constructing such
main, intercepting and outfall sewers and appurtenances, with or without sewage-disposal
plant, as above provided, together with the cost of acquiring land, engineering, appraisers,
legal and other incidental expense, excepting only such part of the cost as may be borne by
grant from the federal government, shall be assessed against the lots and pieces of ground
contained within the sewage district, and shall be levied and collected as one tax, in addition
to the other taxes and assessments, and shall be certified by the governing body of such
sewage district to the county clerk, and be placed by ~~him or her~~ such clerk upon the tax roll
for collection, subject to the same penalties, entitled to the same rebates, and collected in
the same manner as other taxes~~: Provided, That~~. The governing body may, in its discretion,
provide for the payment of the cost thereof by installments instead of levying the entire tax
or special assessment for such cost at one time; and for such installments, they may issue
bonds of the sewage district, which bonds may mature serially or otherwise during a period
of not more than ~~twenty-five~~ 25 years from the date of issuance, and, except as herein
provided, shall be subject to all of the provisions of article 1, chapter 10, of the Kansas
Statutes Annotated. Any bonds issued for such purposes shall be in addition to and may
exceed the limits of bonds for any other purposes as provided by law.

(b) ~~That~~ If the county planning board and the board of county commissioners of any
county in which a township sewage district has been created pursuant to the act of which
this section is amendatory, each shall declare by resolution that a main, intercepting, or
outfall sewer system or systems of such district, the plans and specifications of which have
been finally approved, as provided in K.S.A. 80-2004, and amendments thereto, to be of
public utility and necessary for the growth and needs of said county and necessary for the
protection of the public health, the bonds issued under the authority of subsection (a) of
~~this section~~ shall be, in addition to being obligations of the township sewage district, general
obligations of the county. In case of default in the payment of such bonds or the interest
thereon by the sewage district, the board of county commissioners of the county in which
such sewage district is located shall levy a tax on the tangible property in such county
sufficient to pay such bonds and interest~~, which tax levy shall be in addition to all other tax~~
~~levies authorized or limited by law and shall not be subject to or within the aggregate tax~~
~~levy limit prescribed by K.S.A. 79-1947 or acts amendatory thereof or supplemental thereto~~.

No statute limiting the amount of bonded indebtedness of any county shall apply to any
bonds issued under the authority of this section and such bonds shall not be considered in
applying any statute limiting bonded indebtedness.

Sec. 69. K.S.A. 80-2021 is hereby amended to read as follows: 80-2021. The governing
body of such sewage district shall have authority to ~~and shall~~ levy an annual tax ~~which shall~~
~~not exceed ten mills upon the dollar of assessed valuation of all real property~~ upon taxable
tangible property within such sewage district, for the purpose of paying the expense of
operation and maintenance of the sewage system within such district~~; and may use the~~
~~proceeds of such tax for the maintenance of all sewers in such district, including lateral~~
~~sewers, however constructed, for the operation of sewage disposal plant,~~ and for the payment
to any adjoining city or township, with which such sewage district may have contracted for
the disposal of sewage~~, of the contract price therefor, and for all other expense incident to~~
~~the operation and maintenance of such sewage system~~.

~~Whenever a sewage district has made tax levies as authorized by this act and has accu-~~
~~mulated a fund for the operation and maintenance of the sewage system and has contracted~~
~~with an adjacent city or township for the disposal of sewage and other expenses incidental~~
~~to the operation and maintenance of such sewage system and when such district has accu-~~
~~mulated unexpended funds which are no longer necessary for the operation and mainte-~~
~~nance of such system, the governing board of the sewage district may transfer the whole or~~
~~any portion of such accumulated and unexpended funds to the township road fund or the~~
~~fire department fund or to the general fund of the township in which the sewage district~~
~~was established. All levies of taxes authorized in this act shall be in addition to all other~~
~~levies authorized or limited by law, and the provisions of K.S.A. 79-1962, and any other~~
~~limitations provided for township tax levies, shall not be applicable thereto.~~

Sec. 70. K.S.A. 80-2201 is hereby amended to read as follows: 80-2201. The township
board of any township, having a population of more than ~~seven thousand five hundred~~
~~(7,500)~~ 7,500 and located in a county adjoining two cities either within or without the state
each of which has a population in excess of ~~one hundred twenty thousand (120,000)~~ 120,000,
if by resolution ~~they deem~~ the township board deems it necessary to protect the public
health and welfare of the inhabitants of such township, may acquire land by lease, purchase,
or under the provisions of K.S.A. 26-501 to 26-516, inclusive, and amendments thereto, by
condemnation, within or without such township, to be used for the disposal of trash and
garbage collected from the inhabitants of such township. For the purpose of acquiring such
land and maintenance thereof, a tax levy ~~in an amount not to exceed the limitation prescribed~~
~~by K.S.A. 79-1962, on all taxable tangible property may be made for the first year, and~~
~~thereafter a levy not to exceed the limitation prescribed therefor by K.S.A. 79-1962,~~ on all
taxable tangible property may be made annually~~, which said levies and each of them shall~~
~~be in addition to and outside of any other limit or aggregate limit fixed by law for such~~
~~township~~. The funds derived from such levies shall be placed in ~~a fund known as the ``garbage~~
~~and trash fund'' and be used only for the purpose of this act~~ the garbage and trash fund.

Sec. 71. K.S.A. 80-2204 is hereby amended to read as follows: 80-2204. Whenever the
township board of any township located in a county having a population of more than ~~fifty-~~
~~five thousand (55,000)~~ 55,000 and less than ~~one hundred thousand (100,000)~~ 100,000 finds
and determines by resolution ~~that~~ it is necessary to acquire a site or sites for the disposal of
garbage, rubbish and trash within or without the township, it the township board may acquire
such site or sites by gift, purchase or condemnation and may construct necessary facilities
thereon and purchase necessary equipment for the disposal of such garbage, rubbish and
trash. In the event the township board of any such township finds ~~that~~ it is necessary to
acquire such site or sites by condemnation the governing body of the county shall proceed
under the provisions of chapter 26 of the Kansas Statutes Annotated, and all acts amendatory
thereof and supplemental thereto, or in substitution thereof. Whenever any such township
shall so condemn such a site or sites, such township shall acquire a fee simple title thereto.

In order to pay for such site or sites and the construction of all necessary facilities and
equipment to be used in the disposal of garbage, rubbish and trash, the township board of
such township is authorized to issue general obligation bonds of the township in the manner
provided by the general bond law. Whenever such a site has been acquired, the township
board may pay the cost of the operation and maintenance of the same from the general
fund ~~of the township~~ or it may levy a special tax therefor ~~at a rate not to exceed the limitation~~
~~prescribed by K.S.A. 79-1962,~~ on all taxable tangible property of the township. Any two ~~(2)~~
or more of such townships may join in the acquisition of a site or sites for the disposal of
garbage, rubbish and trash and the operation and maintenance of ~~said~~ such sites as here-
tofore provided in this section; and the township boards of such townships are hereby
authorized and empowered to enter into agreements for such purposes.

New Sec. 72. In 1999, and in each year thereafter, all existing statutory fund mill levy
rate and aggregate levy rate limitations on taxing subdivisions are hereby suspended.

Section 73. K.S.A. 1998 Supp. 79-201a is hereby amended to read as follows: 79-201a.
The following described property, to the extent herein specified, shall be exempt from all
property or ad valorem taxes levied under the laws of the state of Kansas:

First. All property belonging exclusively to the United States, except property which
congress has expressly declared to be subject to state and local taxation.

Second. All property used exclusively by the state or any municipality or political subdi-
vision of the state. All property owned, being acquired pursuant to a lease-purchase agree-
ment or operated by the state or any municipality or political subdivision of the state, in-
cluding property which is vacant or lying dormant, which is used or is to be used for any
governmental or proprietary function and for which bonds may be issued or taxes levied to
finance the same, shall be considered to be used exclusively by the state, municipality or
political subdivision for the purposes of this section. The lease by a municipality or political
subdivision of the state of any real property owned or being acquired pursuant to a lease-
purchase agreement for the purpose of providing office space necessary for the performance
of medical services by a person licensed to practice medicine and surgery or osteopathic
medicine by the board of healing arts pursuant to K.S.A. 65-2801 et seq., and amendments
thereto, dentistry services by a person licensed by the Kansas dental board pursuant to
K.S.A. 65-1401 et seq., and amendments thereto, optometry services by a person licensed
by the board of examiners in optometry pursuant to K.S.A. 65-1501 et seq., and amendments
thereto, or K.S.A. 74-1501 et seq., and amendments thereto, podiatry services by a person
licensed by the board of healing arts pursuant to K.S.A. 65-2001 et seq., and amendments
thereto, or the practice of psychology by a person licensed by the behavioral sciences reg-
ulatory board pursuant to K.S.A. 74-5301 et seq., and amendments thereto, shall be con-
strued to be a governmental function, and such property actually and regularly used for
such purpose shall be deemed to be used exclusively for the purposes of this paragraph.
The lease by a municipality or political subdivision of the state of any real property, or
portion thereof, owned or being acquired pursuant to a lease-purchase agreement to any
entity for the exclusive use by it for an exempt purpose, including the purpose of displaying
or exhibiting personal property by a museum or historical society, if no portion of the lease
payments include compensation for return on the investment in such leased property shall
be deemed to be used exclusively for the purposes of this paragraph. All property leased,
other than property being acquired pursuant to a lease-purchase agreement, to the state or
any municipality or political subdivision of the state by any private entity shall not be con-
sidered to be used exclusively by the state or any municipality or political subdivision of the
state for the purposes of this section except that the provisions of this sentence shall not
apply to any such property subject to lease on the effective date of this act until the term
of such lease expires but property taxes levied upon any such property prior to tax year
1989, shall not be abated or refunded. Any property constructed or purchased with the
proceeds of industrial revenue bonds issued prior to July 1, 1963, as authorized by K.S.A.
12-1740 to 12-1749, or purchased with proceeds of improvement district bonds issued prior
to July 1, 1963, as authorized by K.S.A. 19-2776, or with proceeds of bonds issued prior to
July 1, 1963, as authorized by K.S.A. 19-3815a and 19-3815b, or any property improved,
purchased, constructed, reconstructed or repaired with the proceeds of revenue bonds is-
sued prior to July 1, 1963, as authorized by K.S.A. 13-1238 to 13-1245, inclusive, or any
property improved, reimproved, reconstructed or repaired with the proceeds of revenue
bonds issued after July 1, 1963, under the authority of K.S.A. 13-1238 to 13-1245, inclusive,
which had previously been improved, reconstructed or repaired with the proceeds of rev-
enue bonds issued under such act on or before July 1, 1963, shall be exempt from taxation
for so long as any of the revenue bonds issued to finance such construction, reconstruction,
improvement, repair or purchase shall be outstanding and unpaid. Any property constructed
or purchased with the proceeds of any revenue bonds authorized by K.S.A. 13-1238 to 13-
1245, inclusive, 19-2776, 19-3815a and 19-3815b, and amendments thereto, issued on or
after July 1, 1963, shall be exempt from taxation only for a period of 10 calendar years after
the calendar year in which the bonds were issued. Any property, all or any portion of which
is constructed or purchased with the proceeds of revenue bonds authorized by K.S.A. 12-
1740 to 12-1749, inclusive, and amendments thereto, issued on or after July 1, 1963 and
prior to July 1, 1981, shall be exempt from taxation only for a period of 10 calendar years
after the calendar year in which the bonds were issued. Except as hereinafter provided, any
property constructed or purchased wholly with the proceeds of revenue bonds issued on or
after July 1, 1981, under the authority of K.S.A. 12-1740 to 12-1749, inclusive, and amend-
ments thereto, shall be exempt from taxation only for a period of 10 calendar years after
the calendar year in which the bonds were issued. Except as hereinafter provided, any
property constructed or purchased in part with the proceeds of revenue bonds issued on or
after July 1, 1981, under the authority of K.S.A. 12-1740 to 12-1749, inclusive, and amend-
ments thereto, shall be exempt from taxation to the extent of the value of that portion of
the property financed by the revenue bonds and only for a period of 10 calendar years after
the calendar year in which the bonds were issued. The exemption of that portion of the
property constructed or purchased with the proceeds of revenue bonds shall terminate upon
the failure to pay all taxes levied on that portion of the property which is not exempt and
the entire property shall be subject to sale in the manner prescribed by K.S.A. 79-2301 et
seq., and amendments thereto. Property constructed or purchased in whole or in part with
the proceeds of revenue bonds issued on or after January 1, 1995, under the authority of
K.S.A. 12-1740 to 12-1749, inclusive, and amendments thereto, and used in any retail en-
terprise identified under the standard industrial classification codes, major groups 52
through 59, inclusive, except facilities used exclusively to house the headquarters or back
office operations of such retail enterprises identified thereunder, shall not be exempt from
taxation. For the purposes of the preceding provision ``standard industrial classification
code'' means a standard industrial classification code published in the Standard Industrial
Classification manual, 1987, as prepared by the statistical policy division of the office of
management and budget of the office of the president of the United States. ``Headquarters
or back office operations'' means a facility from which the enterprise is provided direction,
management, administrative services, or distribution or warehousing functions in support
of transactions made by the enterprise. Property purchased, constructed, reconstructed,
equipped, maintained or repaired with the proceeds of industrial revenue bonds issued
under the authority of K.S.A. 12-1740 et seq., and amendments thereto, which is located in
a redevelopment project area established under the authority of K.S.A. 12-1770 et seq. shall
not be exempt from taxation. Property purchased, acquired, constructed, reconstructed,
improved, equipped, furnished, repaired, enlarged or remodeled with all or any part of the
proceeds of revenue bonds issued under authority of K.S.A. 12-1740 to 12-1749a, inclusive,
and amendments thereto for any poultry confinement facility on agricultural land which is
owned, acquired, obtained or leased by a corporation, as such terms are defined by K.S.A.
17-5903 and amendments thereto, shall not be exempt from such taxation. Property pur-
chased, acquired, constructed, reconstructed, improved, equipped, furnished, repaired, en-
larged or remodeled with all or any part of the proceeds of revenue bonds issued under the
authority of K.S.A. 12-1740 to 12-1749a, inclusive, and amendments thereto, for a rabbit
confinement facility on agricultural land which is owned, acquired, obtained or leased by a
corporation, as such terms are defined by K.S.A. 17-5903 and amendments thereto, shall
not be exempt from such taxation.

Third. All works, machinery and fixtures used exclusively by any rural water district or
township water district for conveying or production of potable water in such rural water
district or township water district, and all works, machinery and fixtures used exclusively by
any entity which performed the functions of a rural water district on and after January 1,
1990, and the works, machinery and equipment of which were exempted hereunder on
March 13, 1995.

Fourth. All fire engines and other implements used for the extinguishment of fires, with
the buildings used exclusively for the safekeeping thereof, and for the meeting of fire com-
panies, whether belonging to any rural fire district, township fire district, town, city or village,
or to any fire company organized therein or therefor.

Fifth. All property, real and personal, owned by county fair associations organized and
operating under the provisions of K.S.A. 2-125 et seq. and amendments thereto.

Sixth. Property acquired and held by any municipality under the municipal housing law
(K.S.A. 17-2337 et seq.) and amendments thereto, except that such exemption shall not
apply to any portion of the project used by a nondwelling facility for profit making enterprise.

Seventh. All property of a municipality, acquired or held under and for the purposes of
the urban renewal law (K.S.A. 17-4742 et seq.) and amendments thereto except that such
tax exemption shall terminate when the municipality sells, leases or otherwise disposes of
such property in an urban renewal area to a purchaser or lessee which is not a public body
entitled to tax exemption with respect to such property.

Eighth. All property acquired and held by the Kansas armory board for armory purposes
under the provisions of K.S.A. 48-317, and amendments thereto.

Ninth. All property acquired and used by the Kansas turnpike authority under the au-
thority of K.S.A. 68-2001 et seq., and amendments thereto, K.S.A. 68-2030 et seq., and
amendments thereto, K.S.A. 68-2051 et seq., and amendments thereto, and K.S.A. 68-2070
et seq., and amendments thereto.

Tenth. All property acquired and used for state park purposes by the Kansas department
of wildlife and parks.

Eleventh. The state office building constructed under authority of K.S.A. 75-3607 et seq.,
and amendments thereto, and the site upon which such building is located.

Twelfth. All buildings erected under the authority of K.S.A. 76-6a01 et seq., and amend-
ments thereto, and all other student union buildings and student dormitories erected upon
the campus of any institution mentioned in K.S.A. 76-6a01, and amendments thereto, by
any other nonprofit corporation.

Thirteenth. All buildings, as the same is defined in subsection (c) of K.S.A. 76-6a13, and
amendments thereto, which are erected, constructed or acquired under the authority of
K.S.A. 76-6a13 et seq., and amendments thereto, and building sites acquired therefor.

Fourteenth. All that portion of the waterworks plant and system of the city of Kansas City,
Missouri, now or hereafter located within the territory of the state of Kansas pursuant to
the compact and agreement adopted by chapter 304 of the 1921 Session Laws of the state
of Kansas. [See K.S.A. 79-205].

Fifteenth. All property, real and personal, owned by a groundwater management district
organized and operating pursuant to K.S.A. 82a-1020, and amendments thereto.

Sixteenth. All property, real and personal, owned by the joint water district organized and
operating pursuant to K.S.A. 80-1616 et seq., and amendments thereto.

Seventeenth. All property, including interests less than fee ownership, acquired for the
state of Kansas by the secretary of transportation or a predecessor in interest which is used
in the administration, construction, maintenance or operation of the state system of high-
ways, regardless of how or when acquired.

Eighteenth. Any building used primarily as an industrial training center for academic or
vocational education programs designed for and operated under contract with private in-
dustry, and located upon a site owned, leased or being acquired by or for an area vocational
school, an area vocational-technical school, a technical college, or a community college, as
defined by K.S.A. 72-4412, and amendments thereto, and the site upon which any such
building is located.

Nineteenth. For all taxable years commencing after December 31, 1997, all buildings of
an area vocational school, an area vocational-technical school, a technical college or a com-
munity college, as defined by K.S.A. 72-4412, and amendments thereto, which are owned
and operated by any such school or college as a student union or dormitory, and the site
upon which any such building is located.

Except as otherwise specifically provided, the provisions of this section shall apply to all
taxable years commencing after December 31, ~~1997~~ 1998.

Sec. 74. K.S.A. 1998 Supp. 79-201b is hereby amended to read as follows: 79-201b.
The following described property, to the extent herein specified, shall be and is hereby
exempt from all property or ad valorem taxes levied under the laws of the state of Kansas:

First. All real property, and tangible personal property, actually and regularly used exclu-
sively for hospital purposes by a hospital as the same is defined by K.S.A. 65-425, and
amendments thereto, or a psychiatric hospital as the same was defined by K.S.A. 59-2902,
and amendments thereto, as in effect on January 1, 1976, which hospital or psychiatric
hospital is operated by a corporation organized not for profit under the laws of the state of
Kansas or by a corporation organized not for profit under the laws of another state and duly
admitted to engage in business in this state as a foreign, not-for-profit corporation, or a
public hospital authority; and all intangible property including moneys, notes and other
evidences of debt, and the income therefrom, belonging exclusively to such a corporation
and used exclusively for hospital, psychiatric hospital or public hospital authority purposes.
This exemption shall not be deemed inapplicable to property which would otherwise be
exempt pursuant to this paragraph because any such hospital, psychiatric hospital or public
hospital authority: (a) Uses such property for a nonexempt purpose which is minimal in
scope and insubstantial in nature if such use is incidental to the exempt purpose enumerated
in this paragraph; or (b) is reimbursed for the actual expense of using such property for the
exempt purposes enumerated in this paragraph or paragraph second of K.S.A. 79-201, and
amendments thereto; or (c) permits the use of such property for the exempt purposes
enumerated in this paragraph or paragraph second of K.S.A. 79-201, and amendments
thereto, by more than one agency or organization for one or more of such purposes.

Second. All real property, and tangible personal property, actually and regularly used
exclusively for adult care home purposes by an adult care home as the same is defined by
K.S.A. 39-923, and amendments thereto, which is operated by a corporation organized not
for profit under the laws of the state of Kansas or by a corporation organized not for profit
under the laws of another state and duly admitted to engage in business in this state as a
foreign, not-for-profit corporation, charges to residents for services of which produce an
amount which in the aggregate is less than the actual cost of operation of the home or the
services of which are provided to residents at the lowest feasible cost, taking into consid-
eration such items as reasonable depreciation, interest on indebtedness, acquisition costs,
interest and other expenses of financing acquisition costs, lease expenses and costs of services
provided by a parent corporation at its costs, and contributions to which are deductible
under the Kansas income tax act; and all intangible property including moneys, notes and
other evidences of debt, and the income therefrom, belonging exclusively to such corpo-
ration and used exclusively for adult care home purposes. For purposes of this paragraph
and for all taxable years commencing after December 31, 1976, an adult care home which
uses its property in a manner which is consistent with the federal internal revenue service
ruling 72-124 issued pursuant to section 501(c)(3) of the federal internal revenue code, shall
be deemed to be operating at the lowest feasible cost. The fact that real property or real or
tangible personal property may be leased from a not-for-profit corporation, which is exempt
from federal income taxation pursuant to section 501(c)(3) of the internal revenue code of
1986, and amendments thereto, and which is the parent corporation to the not-for-profit
operator of an adult care home, shall not be grounds to deny exemption or deny that such
property is actually and regularly used exclusively for adult care home purposes by an adult
care home, nor shall the terms of any such lease be grounds for any such denial. For all
taxable years commencing after December 31, 1995, such property shall be deemed to be
used exclusively for adult care home purposes when used as a not-for-profit day care center
for children which is licensed pursuant to K.S.A. 65-501 et seq., and amendments thereto.

Third. All real property, and tangible personal property, actually and regularly used ex-
clusively for private children's home purposes by a private children's home as the same is
defined by K.S.A. 75-3329, and amendments thereto, which is operated by a corporation
organized not for profit under the laws of the state of Kansas or by a corporation organized
not for profit under the laws of another state and duly admitted to engage in business in
this state as a foreign, not-for-profit corporation, charges to residents for services of which
produce an amount which in the aggregate is less than the actual cost of operation of the
home or the services of which are provided to residents at the lowest feasible cost, taking
into consideration such items as reasonable depreciation and interest on indebtedness, and
contributions to which are deductible under the Kansas income tax act; and all intangible
property including moneys, notes and other evidences of debt, and the income therefrom,
belonging exclusively to such a corporation and used exclusively for children's home pur-
poses.

Fourth. All real property and tangible personal property, actually and regularly used ex-
clusively for housing for elderly and handicapped persons having a limited or lower income,
or used exclusively for cooperative housing for persons having a limited or low income,
assistance for the financing of which was received under 12 U.S.C.A. 1701 et seq., or under
42 U.S.C.A. 1437 et seq., which is operated by a corporation organized not for profit under
the laws of the state of Kansas or by a corporation organized not for profit under the laws
of another state and duly admitted to engage in business in this state as a foreign, not-for-
profit corporation; and all intangible property including moneys, notes and other evidences
of debt, and the income therefrom, belonging exclusively to such a corporation and used
exclusively for the purposes of such housing. For the purposes of this subsection, cooperative
housing shall mean those not-for-profit cooperative housing projects operating pursuant to
sections 236 or 221(d)(3), or both, of the national housing act and which have been approved
as a cooperative housing project pursuant to applicable federal housing administration and
U.S. Department of Housing and Urban Development statutes, and rules and regulations,
during such time as the use of such properties are restricted pursuant to such act, statutes
or rules and regulations.

Fifth. All real property and tangible personal property, actually and regularly used exclu-
sively for housing for elderly persons, which is operated by a corporation organized not for
profit under the laws of the state of Kansas or by a corporation organized not for profit
under the laws of another state and duly admitted to engage in business in this state as a
foreign, not-for-profit corporation, in which charges to residents produce an amount which
in the aggregate is less than the actual cost of operation of the housing facility or the services
of which are provided to residents at the lowest feasible cost, taking into consideration such
items as reasonable depreciation and interest on indebtedness and contributions to which
are deductible under the Kansas income tax act; and all intangible property including mon-
eys, notes and other evidences of debt, and the income therefrom, belonging exclusively to
such corporation and used exclusively for the purpose of such housing. For purposes of this
paragraph and for all taxable years commencing after December 31, 1976, an adult care
home which uses its property in a manner which is consistent with the federal internal
revenue service ruling 72-124 issued pursuant to section 501(c)(3) of the federal internal
revenue code, shall be deemed to be operating at the lowest feasible cost. For all taxable
years commencing after December 31, 1995, such property shall be deemed to be used
exclusively for housing for elderly persons purposes when used as a not-for-profit day care
center for children which is licensed pursuant to K.S.A. 65-501 et seq., and amendments
thereto.

Sixth. All real property and tangible personal property actually and regularly used exclu-
sively for the purpose of group housing of mentally ill or retarded and other handicapped
persons which is operated by a corporation organized not for profit under the laws of the
state of Kansas or by a corporation organized not for profit under the laws of another state
and duly admitted to engage in business in this state as a foreign, not-for-profit corporation,
in which charges to residents produce an amount which in the aggregate is less than the
actual cost of operation of the housing facility or the services of which are provided to
residents at the lowest feasible cost, taking into consideration such items as reasonable
depreciation and interest on indebtedness and contributions to which are deductible under
the Kansas income tax act, and which is licensed as a facility for the housing of mentally ill
or retarded and other handicapped persons under the provisions of K.S.A. 75-3307b, and
amendments thereto, or as a rooming or boarding house used as a facility for the housing
of mentally retarded and other handicapped persons which is licensed as a lodging estab-
lishment under the provisions of K.S.A. 36-501 et seq., and amendments thereto.

The provisions of this section, except as otherwise specifically provided, shall apply to all
taxable years commencing after December 31, ~~1995~~ 1998.

Sec. 75. From and after April 1, 2000, K.S.A. 1998 Supp. 79-3606, as amended by
section 6 of this act, is hereby amended to read as follows: 79-3606. The following shall be
exempt from the tax imposed by this act:

(a) All sales of motor-vehicle fuel or other articles upon which a sales or excise tax has
been paid, not subject to refund, under the laws of this state except cigarettes as defined
by K.S.A. 79-3301 and amendments thereto, cereal malt beverages and malt products as
defined by K.S.A. 79-3817 and amendments thereto, including wort, liquid malt, malt syrup
and malt extract, which is not subject to taxation under the provisions of K.S.A. 79-41a02
and amendments thereto, motor vehicles taxed pursuant to K.S.A. 79-5117, and amend-
ments thereto, tires taxed pursuant to K.S.A. 1998 Supp. 65-3424d, and amendments
thereto, and drycleaning and laundry services taxed pursuant to K.S.A. 1998 Supp. 65-
34,150, and amendments thereto;

(b) all sales of tangible personal property or service, including the renting and leasing
of tangible personal property, purchased directly by the state of Kansas, a political subdi-
vision thereof, other than a school or educational institution, or purchased by a public or
private nonprofit hospital or public hospital authority or nonprofit blood, tissue or organ
bank and used exclusively for state, political subdivision, hospital or public hospital authority
or nonprofit blood, tissue or organ bank purposes, except when: (1) Such state, hospital or
public hospital authority is engaged or proposes to engage in any business specifically taxable
under the provisions of this act and such items of tangible personal property or service are
used or proposed to be used in such business, or (2) such political subdivision is engaged
or proposes to engage in the business of furnishing gas, water, electricity or heat to others
and such items of personal property or service are used or proposed to be used in such
business;

(c) all sales of tangible personal property or services, including the renting and leasing
of tangible personal property, purchased directly by a public or private elementary or sec-
ondary school or public or private nonprofit educational institution and used primarily by
such school or institution for nonsectarian programs and activities provided or sponsored
by such school or institution or in the erection, repair or enlargement of buildings to be
used for such purposes. The exemption herein provided shall not apply to erection, con-
struction, repair, enlargement or equipment of buildings used primarily for human habita-
tion;

(d) all sales of tangible personal property or services purchased by a contractor for the
purpose of constructing, equipping, reconstructing, maintaining, repairing, enlarging, fur-
nishing or remodeling facilities for any public or private nonprofit hospital or public hospital
authority, public or private elementary or secondary school or a public or private nonprofit
educational institution, which would be exempt from taxation under the provisions of this
act if purchased directly by such hospital or public hospital authority, school or educational
institution; and all sales of tangible personal property or services purchased by a contractor
for the purpose of constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities for any political subdivision of the state, the total cost of
which is paid from funds of such political subdivision and which would be exempt from
taxation under the provisions of this act if purchased directly by such political subdivision.
Nothing in this subsection or in the provisions of K.S.A. 12-3418 and amendments thereto,
shall be deemed to exempt the purchase of any construction machinery, equipment or tools
used in the constructing, equipping, reconstructing, maintaining, repairing, enlarging, fur-
nishing or remodeling facilities for any political subdivision of the state. As used in this
subsection, K.S.A. 12-3418 and 79-3640, and amendments thereto, ``funds of a political
subdivision'' shall mean general tax revenues, the proceeds of any bonds and gifts or grants-
in-aid. Gifts shall not mean funds used for the purpose of constructing, equipping, recon-
structing, repairing, enlarging, furnishing or remodeling facilities which are to be leased to
the donor. When any political subdivision of the state, public or private nonprofit hospital
or public hospital authority, public or private elementary or secondary school or public or
private nonprofit educational institution shall contract for the purpose of constructing,
equipping, reconstructing, maintaining, repairing, enlarging, furnishing or remodeling fa-
cilities, it shall obtain from the state and furnish to the contractor an exemption certificate
for the project involved, and the contractor may purchase materials for incorporation in
such project. The contractor shall furnish the number of such certificate to all suppliers
from whom such purchases are made, and such suppliers shall execute invoices covering
the same bearing the number of such certificate. Upon completion of the project the con-
tractor shall furnish to the political subdivision, hospital or public hospital authority, school
or educational institution concerned a sworn statement, on a form to be provided by the
director of taxation, that all purchases so made were entitled to exemption under this sub-
section. As an alternative to the foregoing procedure, any such contracting entity may apply
to the secretary of revenue for agent status for the sole purpose of issuing and furnishing
project exemption certificates to contractors pursuant to rules and regulations adopted by
the secretary establishing conditions and standards for the granting and maintaining of such
status. All invoices shall be held by the contractor for a period of five years and shall be
subject to audit by the director of taxation. If any materials purchased under such a certif-
icate are found not to have been incorporated in the building or other project or not to have
been returned for credit or the sales or compensating tax otherwise imposed upon such
materials which will not be so incorporated in the building or other project reported and
paid by such contractor to the director of taxation not later than the 20th day of the month
following the close of the month in which it shall be determined that such materials will not
be used for the purpose for which such certificate was issued, the political subdivision,
hospital or public hospital authority, school or educational institution concerned shall be
liable for tax on all materials purchased for the project, and upon payment thereof it may
recover the same from the contractor together with reasonable attorney fees. Any contractor
or any agent, employee or subcontractor thereof, who shall use or otherwise dispose of any
materials purchased under such a certificate for any purpose other than that for which such
a certificate is issued without the payment of the sales or compensating tax otherwise im-
posed upon such materials, shall be guilty of a misdemeanor and, upon conviction therefor,
shall be subject to the penalties provided for in subsection (g) of K.S.A. 79-3615, and amend-
ments thereto;

(e) all sales of tangible personal property or services purchased by a contractor for the
erection, repair or enlargement of buildings or other projects for the government of the
United States, its agencies or instrumentalities, which would be exempt from taxation if
purchased directly by the government of the United States, its agencies or instrumentalities.
When the government of the United States, its agencies or instrumentalities shall contract
for the erection, repair, or enlargement of any building or other project, it shall obtain from
the state and furnish to the contractor an exemption certificate for the project involved, and
the contractor may purchase materials for incorporation in such project. The contractor
shall furnish the number of such certificates to all suppliers from whom such purchases are
made, and such suppliers shall execute invoices covering the same bearing the number of
such certificate. Upon completion of the project the contractor shall furnish to the govern-
ment of the United States, its agencies or instrumentalities concerned a sworn statement,
on a form to be provided by the director of taxation, that all purchases so made were entitled
to exemption under this subsection. As an alternative to the foregoing procedure, any such
contracting entity may apply to the secretary of revenue for agent status for the sole purpose
of issuing and furnishing project exemption certificates to contractors pursuant to rules and
regulations adopted by the secretary establishing conditions and standards for the granting
and maintaining of such status. All invoices shall be held by the contractor for a period of
five years and shall be subject to audit by the director of taxation. Any contractor or any
agent, employee or subcontractor thereof, who shall use or otherwise dispose of any ma-
terials purchased under such a certificate for any purpose other than that for which such a
certificate is issued without the payment of the sales or compensating tax otherwise imposed
upon such materials, shall be guilty of a misdemeanor and, upon conviction therefor, shall
be subject to the penalties provided for in subsection (g) of K.S.A. 79-3615 and amendments
thereto;

(f) tangible personal property purchased by a railroad or public utility for consumption
or movement directly and immediately in interstate commerce;

(g) sales of aircraft including remanufactured and modified aircraft, sales of aircraft
repair, modification and replacement parts and sales of services employed in the remanu-
facture, modification and repair of aircraft sold to persons using directly or through an
authorized agent such aircraft and aircraft repair, modification and replacement parts as
certified or licensed carriers of persons or property in interstate or foreign commerce under
authority of the laws of the United States or any foreign government or sold to any foreign
government or agency or instrumentality of such foreign government and all sales of aircraft,
aircraft parts, replacement parts and services employed in the remanufacture, modification
and repair of aircraft for use outside of the United States;

(h) all rentals of nonsectarian textbooks by public or private elementary or secondary
schools;

(i) the lease or rental of all films, records, tapes, or any type of sound or picture tran-
scriptions used by motion picture exhibitors;

(j) meals served without charge or food used in the preparation of such meals to em-
ployees of any restaurant, eating house, dining car, hotel, drugstore or other place where
meals or drinks are regularly sold to the public if such employees' duties are related to the
furnishing or sale of such meals or drinks;

(k) any motor vehicle, semitrailer or pole trailer, as such terms are defined by K.S.A.
8-126 and amendments thereto, or aircraft sold and delivered in this state to a bona fide
resident of another state, which motor vehicle, semitrailer, pole trailer or aircraft is not to
be registered or based in this state and which vehicle, semitrailer, pole trailer or aircraft will
not remain in this state more than 10 days;

(l) all isolated or occasional sales of tangible personal property, services, substances or
things, except isolated or occasional sale of motor vehicles specifically taxed under the pro-
visions of subsection (o) of K.S.A. 79-3603 and amendments thereto;

(m) all sales of tangible personal property which become an ingredient or component
part of tangible personal property or services produced, manufactured or compounded for
ultimate sale at retail within or without the state of Kansas; and any such producer, manu-
facturer or compounder may obtain from the director of taxation and furnish to the supplier
an exemption certificate number for tangible personal property for use as an ingredient or
component part of the property or services produced, manufactured or compounded;

(n) all sales of tangible personal property which is consumed in the production, man-
ufacture, processing, mining, drilling, refining or compounding of tangible personal prop-
erty, the treating of by-products or wastes derived from any such production process, the
providing of services or the irrigation of crops for ultimate sale at retail within or without
the state of Kansas; and any purchaser of such property may obtain from the director of
taxation and furnish to the supplier an exemption certificate number for tangible personal
property for consumption in such production, manufacture, processing, mining, drilling,
refining, compounding, treating, irrigation and in providing such services;

(o) all sales of animals, fowl and aquatic plants and animals, the primary purpose of
which is use in agriculture or aquaculture, as defined in K.S.A. 47-1901, and amendments
thereto, the production of food for human consumption, the production of animal, dairy,
poultry or aquatic plant and animal products, fiber or fur, or the production of offspring for
use for any such purpose or purposes;

(p) all sales of drugs, as defined by K.S.A. 65-1626 and amendments thereto, dispensed
pursuant to a prescription order, as defined by K.S.A. 65-1626 and amendments thereto,
by a licensed practitioner or a mid-level practitioner as defined by K.S.A. 65-1626, and
amendments thereto;

(q) all sales of insulin dispensed by a person licensed by the state board of pharmacy to
a person for treatment of diabetes at the direction of a person licensed to practice medicine
by the board of healing arts;

(r) all sales of prosthetic and orthopedic appliances prescribed in writing by a person
licensed to practice the healing arts, dentistry or optometry. For the purposes of this sub-
section, the term prosthetic and orthopedic appliances means any apparatus, instrument,
device, or equipment used to replace or substitute for any missing part of the body; used
to alleviate the malfunction of any part of the body; or used to assist any disabled person in
leading a normal life by facilitating such person's mobility; such term shall include acces-
sories attached or to be attached to motor vehicles, but such term shall not include motor
vehicles or personal property which when installed becomes a fixture to real property;

(s) all sales of tangible personal property or services purchased directly by a groundwater
management district organized or operating under the authority of K.S.A. 82a-1020 et seq.
and amendments thereto, which property or services are used in the operation or mainte-
nance of the district;

(t) all sales of farm machinery and equipment or aquaculture machinery and equipment,
repair and replacement parts therefor and services performed in the repair and maintenance
of such machinery and equipment. For the purposes of this subsection the term ``farm
machinery and equipment or aquaculture machinery and equipment'' shall include machin-
ery and equipment used in the operation of Christmas tree farming but shall not include
any passenger vehicle, truck, truck tractor, trailer, semitrailer or pole trailer, other than a
farm trailer, as such terms are defined by K.S.A. 8-126 and amendments thereto. Each
purchaser of farm machinery and equipment or aquaculture machinery and equipment
exempted herein must certify in writing on the copy of the invoice or sales ticket to be
retained by the seller that the farm machinery and equipment or aquaculture machinery
and equipment purchased will be used only in farming, ranching or aquaculture production.
Farming or ranching shall include the operation of a feedlot and farm and ranch work for
hire and the operation of a nursery;

(u) all leases or rentals of tangible personal property used as a dwelling if such tangible
personal property is leased or rented for a period of more than 28 consecutive days;

(v) all sales of food products to any contractor for use in preparing meals for delivery
to homebound elderly persons over 60 years of age and to homebound disabled persons or
to be served at a group-sitting at a location outside of the home to otherwise homebound
elderly persons over 60 years of age and to otherwise homebound disabled persons, as all
or part of any food service project funded in whole or in part by government or as part of
a private nonprofit food service project available to all such elderly or disabled persons
residing within an area of service designated by the private nonprofit organization, and all
sales of food products for use in preparing meals for consumption by indigent or homeless
individuals whether or not such meals are consumed at a place designated for such purpose;

(w) all sales of natural gas, electricity, heat and water delivered through mains, lines or
pipes: (1) To residential premises for noncommercial use by the occupant of such premises;
(2) for agricultural use and also, for such use, all sales of propane gas; (3) for use in the
severing of oil; and (4) to any property which is exempt from property taxation pursuant to
K.S.A. 79-201b Second through Sixth. As used in this paragraph, ``severing'' shall have the
meaning ascribed thereto by subsection (k) of K.S.A. 79-4216, and amendments thereto;

(x) all sales of propane gas, LP-gas, coal, wood and other fuel sources for the production
of heat or lighting for noncommercial use of an occupant of residential premises;

(y) all sales of materials and services used in the repairing, servicing, altering, maintain-
ing, manufacturing, remanufacturing, or modification of railroad rolling stock for use in
interstate or foreign commerce under authority of the laws of the United States;

(z) all sales of tangible personal property and services purchased directly by a port
authority or by a contractor therefor as provided by the provisions of K.S.A. 12-3418 and
amendments thereto;

(aa) all sales of materials and services applied to equipment which is transported into
the state from without the state for repair, service, alteration, maintenance, remanufacture
or modification and which is subsequently transported outside the state for use in the trans-
mission of liquids or natural gas by means of pipeline in interstate or foreign commerce
under authority of the laws of the United States;

(bb) all sales of used mobile homes or manufactured homes. As used in this subsection:
(1) ``Mobile homes'' and ``manufactured homes'' shall have the meanings ascribed thereto
by K.S.A. 58-4202 and amendments thereto; and (2) ``sales of used mobile homes or man-
ufactured homes'' means sales other than the original retail sale thereof;

(cc) all sales of tangible personal property or services purchased for the purpose of and
in conjunction with constructing, reconstructing, enlarging or remodeling a business or retail
business which meets the requirements established in K.S.A. 74-50,115 and amendments
thereto, and the sale and installation of machinery and equipment purchased for installation
at any such business or retail business. When a person shall contract for the construction,
reconstruction, enlargement or remodeling of any such business or retail business, such
person shall obtain from the state and furnish to the contractor an exemption certificate for
the project involved, and the contractor may purchase materials, machinery and equipment
for incorporation in such project. The contractor shall furnish the number of such certificates
to all suppliers from whom such purchases are made, and such suppliers shall execute
invoices covering the same bearing the number of such certificate. Upon completion of the
project the contractor shall furnish to the owner of the business or retail business a sworn
statement, on a form to be provided by the director of taxation, that all purchases so made
were entitled to exemption under this subsection. All invoices shall be held by the contractor
for a period of five years and shall be subject to audit by the director of taxation. Any
contractor or any agent, employee or subcontractor thereof, who shall use or otherwise
dispose of any materials, machinery or equipment purchased under such a certificate for
any purpose other than that for which such a certificate is issued without the payment of
the sales or compensating tax otherwise imposed thereon, shall be guilty of a misdemeanor
and, upon conviction therefor, shall be subject to the penalties provided for in subsection
(g) of K.S.A. 79-3615 and amendments thereto. As used in this subsection, ``business'' and
``retail business'' have the meanings respectively ascribed thereto by K.S.A. 74-50,114 and
amendments thereto;

(dd) all sales of tangible personal property purchased with food stamps issued by the
United States department of agriculture;

(ee) all sales of lottery tickets and shares made as part of a lottery operated by the state
of Kansas;

(ff) on and after July 1, 1988, all sales of new mobile homes or manufactured homes to
the extent of 40% of the gross receipts, determined without regard to any trade-in allowance,
received from such sale. As used in this subsection, ``mobile homes'' and ``manufactured
homes'' shall have the meanings ascribed thereto by K.S.A. 58-4202 and amendments
thereto;

(gg) all sales of tangible personal property purchased in accordance with vouchers issued
pursuant to the federal special supplemental food program for women, infants and children;

(hh) all sales of medical supplies and equipment purchased directly by a nonprofit skilled
nursing home or nonprofit intermediate nursing care home, as defined by K.S.A. 39-923,
and amendments thereto, for the purpose of providing medical services to residents thereof.
This exemption shall not apply to tangible personal property customarily used for human
habitation purposes;

(ii) all sales of tangible personal property purchased directly by a nonprofit organization
for nonsectarian comprehensive multidiscipline youth development programs and activities
provided or sponsored by such organization, and all sales of tangible personal property by
or on behalf of any such organization. This exemption shall not apply to tangible personal
property customarily used for human habitation purposes;

(jj) all sales of tangible personal property or services, including the renting and leasing
of tangible personal property, purchased directly on behalf of a community-based mental
retardation facility or mental health center organized pursuant to K.S.A. 19-4001 et seq.,
and amendments thereto, and licensed in accordance with the provisions of K.S.A. 75-3307b
and amendments thereto. This exemption shall not apply to tangible personal property
customarily used for human habitation purposes;

(kk) on and after January 1, 1989, all sales of 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 dis-
tribution facility, and all sales of repair and replacement parts and accessories purchased
for such machinery and equipment:

(1) For purposes of this subsection, machinery and equipment shall be deemed to be
used directly and primarily in the manufacture, assemblage, processing, finishing, storing,
warehousing or distributing of tangible personal property where such machinery and equip-
ment is used during a manufacturing, assembling, processing or finishing, storing, ware-
housing or distributing operation:

(A) To effect a direct and immediate physical change upon the tangible personal prop-
erty;

(B) to guide or measure a direct and immediate physical change upon such property
where such function is an integral and essential part of tuning, verifying or aligning the
component parts of such property;

(C) to test or measure such property where such function is an integral part of the
production flow or function;

(D) to transport, convey or handle such property during the manufacturing, processing,
storing, warehousing or distribution operation at the plant or facility; or

(E) to place such property in the container, package or wrapping in which such property
is normally sold or transported.

(2) For purposes of this subsection ``machinery and equipment used directly and pri-
marily'' shall include, but not be limited to:

(A) Mechanical machines or components thereof contributing to a manufacturing, as-
sembling or finishing process;

(B) molds and dies that determine the physical characteristics of the finished product
or its packaging material;

(C) testing equipment to determine the quality of the finished product;

(D) computers and related peripheral equipment that directly control or measure the
manufacturing process or which are utilized for engineering of the finished product; and

(E) computers and related peripheral equipment utilized for research and development
and product design.

(3) ``Machinery and equipment used directly and primarily'' shall not include:

(A) Hand tools;

(B) machinery, equipment and tools used in maintaining and repairing any type of ma-
chinery and equipment;

(C) transportation equipment not used in the manufacturing, assembling, processing,
furnishing, storing, warehousing or distributing process at the plant or facility;

(D) office machines and equipment including computers and related peripheral equip-
ment not directly and primarily used in controlling or measuring the manufacturing process;

(E) furniture and buildings; and

(F) machinery and equipment used in administrative, accounting, sales or other such
activities of the business;

(4) for purposes of this subsection, ``repair and replacement parts and accessories''
means all parts and accessories for exempt machinery and equipment, including but not
limited to dies, jigs, molds, and patterns which are attached to exempt machinery or which
are otherwise used in production, short-lived replaceable parts that can be readily detached
from exempt machinery or equipment, such as belts, drill bits, grinding wheels, cutting bars
and saws, and other replacement parts for production equipment, including refractory brick
and other refractory items for kiln equipment used in production operations;

(ll) all sales of educational materials purchased for distribution to the public at no charge
by a nonprofit corporation organized for the purpose of encouraging, fostering and con-
ducting programs for the improvement of public health;

(mm) all sales of seeds and tree seedlings; fertilizers, insecticides, herbicides, germi-
cides, pesticides and fungicides; and services, purchased and used for the purpose of pro-
ducing plants in order to prevent soil erosion on land devoted to agricultural use;

(nn) except as otherwise provided in this act, all sales of services rendered by an ad-
vertising agency or licensed broadcast station or any member, agent or employee thereof;

(oo) all sales of tangible personal property purchased by a community action group or
agency for the exclusive purpose of repairing or weatherizing housing occupied by low
income individuals;

(pp) all sales of drill bits and explosives actually utilized in the exploration and produc-
tion of oil or gas;

(qq) all sales of tangible personal property and services purchased by a nonprofit mu-
seum or historical society or any combination thereof, including a nonprofit organization
which is organized for the purpose of stimulating public interest in the exploration of space
by providing educational information, exhibits and experiences, which is exempt from fed-
eral income taxation pursuant to section 501(c)(3) of the federal internal revenue code of
1986;

(rr) all sales of tangible personal property which will admit the purchaser thereof to any
annual event sponsored by a nonprofit organization which is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal internal revenue code of 1986;

(ss) all sales of tangible personal property and services purchased by a public broad-
casting station licensed by the federal communications commission as a noncommercial
educational television or radio station;

(tt) all sales of tangible personal property and services purchased by or on behalf of a
not-for-profit corporation which is exempt from federal income taxation pursuant to section
501(c)(3) of the federal internal revenue code of 1986, for the sole purpose of constructing
a Kansas Korean War memorial;

(uu) all sales of tangible personal property and services purchased by or on behalf of
any rural volunteer fire-fighting organization for use exclusively in the performance of its
duties and functions;

(vv) all sales of tangible personal property purchased by any of the following organiza-
tions which are exempt from federal income taxation pursuant to section 501 (c)(3) of the
federal internal revenue code of 1986, for the following purposes, and all sales of any such
property by or on behalf of any such organization for any such purpose:

(1) The American Heart Association, Kansas Affiliate, Inc. for the purposes of providing
education, training, certification in emergency cardiac care, research and other related serv-
ices to reduce disability and death from cardiovascular diseases and stroke;

(2) the Kansas Alliance for the Mentally Ill, Inc. for the purpose of advocacy for persons
with mental illness and to education, research and support for their families;

(3) the Kansas Mental Illness Awareness Council for the purposes of advocacy for per-
sons who are mentally ill and to education, research and support for them and their families;

(4) the American Diabetes Association Kansas Affiliate, Inc. for the purpose of elimi-
nating diabetes through medical research, public education focusing on disease prevention
and education, patient education including information on coping with diabetes, and pro-
fessional education and training;

(5) the American Lung Association of Kansas, Inc. for the purpose of eliminating all
lung diseases through medical research, public education including information on coping
with lung diseases, professional education and training related to lung disease and other
related services to reduce the incidence of disability and death due to lung disease;

(6) the Kansas chapters of the Alzheimer's Disease and Related Disorders Association,
Inc. for the purpose of providing assistance and support to persons in Kansas with Alzhei-
mer's disease, and their families and caregivers; and

(ww) all sales of tangible personal property purchased by the Habitat for Humanity for
the exclusive use of being incorporated within a housing project constructed by such organ-
ization.

(xx) all sales of tangible personal property and services purchased by a nonprofit zoo
which is exempt from federal income taxation pursuant to section 501 (c)(3) of the federal
internal revenue code of 1986, or on behalf of such zoo by an entity itself exempt from
federal income taxation pursuant to section 501(c)(3) of the federal internal revenue code
of 1986 contracted with to operate such zoo and all sales of tangible personal property or
services purchased by a contractor for the purpose of constructing, equipping, reconstruct-
ing, maintaining, repairing, enlarging, furnishing or remodeling facilities for any nonprofit
zoo which would be exempt from taxation under the provisions of this section if purchased
directly by such nonprofit zoo or the entity operating such zoo. Nothing in this subsection
shall be deemed to exempt the purchase of any construction machinery, equipment or tools
used in the constructing, equipping, reconstructing, maintaining, repairing, enlarging, fur-
nishing or remodeling facilities for any nonprofit zoo. When any nonprofit zoo shall contract
for the purpose of constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities, it shall obtain from the state and furnish to the contractor
an exemption certificate for the project involved, and the contractor may purchase materials
for incorporation in such project. The contractor shall furnish the number of such certificate
to all suppliers from whom such purchases are made, and such suppliers shall execute
invoices covering the same bearing the number of such certificate. Upon completion of the
project the contractor shall furnish to the nonprofit zoo concerned a sworn statement, on a
form to be provided by the director of taxation, that all purchases so made were entitled to
exemption under this subsection. All invoices shall be held by the contractor for a period
of five years and shall be subject to audit by the director of taxation. If any materials pur-
chased under such a certificate are found not to have been incorporated in the building or
other project or not to have been returned for credit or the sales or compensating tax
otherwise imposed upon such materials which will not be so incorporated in the building
or other project reported and paid by such contractor to the director of taxation not later
than the 20th day of the month following the close of the month in which it shall be deter-
mined that such materials will not be used for the purpose for which such certificate was
issued, the nonprofit zoo concerned shall be liable for tax on all materials purchased for the
project, and upon payment thereof it may recover the same from the contractor together
with reasonable attorney fees. Any contractor or any agent, employee or subcontractor
thereof, who shall use or otherwise dispose of any materials purchased under such a certif-
icate for any purpose other than that for which such a certificate is issued without the
payment of the sales or compensating tax otherwise imposed upon such materials, shall be
guilty of a misdemeanor and, upon conviction therefor, shall be subject to the penalties
provided for in subsection (g) of K.S.A. 79-3615, and amendments thereto;

(yy) all sales of tangible personal property and services purchased by a parent-teacher
association or organization, and all sales of tangible personal property by or on behalf of
such association or organization;

(zz) all sales of machinery and equipment purchased by over-the-air, free access radio
or television station which is used directly and primarily for the purpose of producing a
broadcast signal or is such that the failure of the machinery or equipment to operate would
cause broadcasting to cease. For purposes of this subsection, machinery and equipment
shall include, but not be limited to, that required by rules and regulations of the federal
communications commission, and all sales of electricity which are essential or necessary for
the purpose of producing a broadcast signal or is such that the failure of the electricity would
cause broadcasting to cease;

(aaa) all sales of tangible personal property and services purchased by a religious or-
ganization which is exempt from federal income taxation pursuant to section 501(c)(3) of
the federal internal revenue code, and used exclusively for religious purposes, and all sales
of tangible personal property or services purchased by a contractor for the purpose of
constructing, equipping, reconstructing, maintaining, repairing, enlarging, furnishing or re-
modeling facilities for any such organization which would be exempt from taxation under
the provisions of this section if purchased directly by such organization. Nothing in this
subsection shall be deemed to exempt the purchase of any construction machinery, equip-
ment or tools used in the constructing, equipping, reconstructing, maintaining, repairing,
enlarging, furnishing or remodeling facilities for any such organization. When any such
organization shall contract for the purpose of constructing, equipping, reconstructing, main-
taining, repairing, enlarging, furnishing or remodeling facilities, it shall obtain from the state
and furnish to the contractor an exemption certificate for the project involved, and the
contractor may purchase materials for incorporation in such project. The contractor shall
furnish the number of such certificate to all suppliers from whom such purchases are made,
and such suppliers shall execute invoices covering the same bearing the number of such
certificate. Upon completion of the project the contractor shall furnish to such organization
concerned a sworn statement, on a form to be provided by the director of taxation, that all
purchases so made were entitled to exemption under this subsection. All invoices shall be
held by the contractor for a period of five years and shall be subject to audit by the director
of taxation. If any materials purchased under such a certificate are found not to have been
incorporated in the building or other project or not to have been returned for credit or the
sales or compensating tax otherwise imposed upon such materials which will not be so
incorporated in the building or other project reported and paid by such contractor to the
director of taxation not later than the 20th day of the month following the close of the month
in which it shall be determined that such materials will not be used for the purpose for
which such certificate was issued, such organization concerned shall be liable for tax on all
materials purchased for the project, and upon payment thereof it may recover the same
from the contractor together with reasonable attorney fees. Any contractor or any agent,
employee or subcontractor thereof, who shall use or otherwise dispose of any materials
purchased under such a certificate for any purpose other than that for which such a certif-
icate is issued without the payment of the sales or compensating tax otherwise imposed upon
such materials, shall be guilty of a misdemeanor and, upon conviction therefor, shall be
subject to the penalties provided for in subsection (g) of K.S.A. 79-3615, and amendments
thereto. Sales tax paid on and after July 1, 1998, but prior to the effective date of this act
upon the gross receipts received from any sale exempted by the amendatory provisions of
this subsection shall be refunded. Each claim for a sales tax refund shall be verified and
submitted to the director of taxation upon forms furnished by the director and shall be
accompanied by any additional documentation required by the director. The director shall
review each claim and shall refund that amount of sales tax paid as determined under the
provisions of this subsection. All refunds shall be paid from the sales tax refund fund upon
warrants of the director of accounts and reports pursuant to vouchers approved by the
director or the director's designee;

(bbb) all sales of food for human consumption by an organization which is exempt from
federal income taxation pursuant to section 501 (c)(3) of the federal internal revenue code
of 1986, pursuant to a food distribution program which offers such food at a price below
cost in exchange for the performance of community service by the purchaser thereof;

(ccc) on and after July 1, 1999, all sales of tangible personal property and services
purchased by a primary care clinic or health center the primary purpose of which is to
provide services to medically underserved individuals and families, and which is exempt
from federal income taxation pursuant to section 501 (c)(3) of the federal internal revenue
code, and all sales of tangible personal property or services purchased by a contractor for
the purpose of constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities for any such clinic or center which would be exempt from
taxation under the provisions of this section if purchased directly by such clinic or center.
Nothing in this subsection shall be deemed to exempt the purchase of any construction
machinery, equipment or tools used in the constructing, equipping, reconstructing, main-
taining, repairing, enlarging, furnishing or remodeling facilities for any such clinic or center.
When any such clinic or center shall contract for the purpose of constructing, equipping,
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling facilities, it shall
obtain from the state and furnish to the contractor an exemption certificate for the project
involved, and the contractor may purchase materials for incorporation in such project. The
contractor shall furnish the number of such certificate to all suppliers from whom such
purchases are made, and such suppliers shall execute invoices covering the same bearing
the number of such certificate. Upon completion of the project the contractor shall furnish
to such clinic or center concerned a sworn statement, on a form to be provided by the
director of taxation, that all purchases so made were entitled to exemption under this sub-
section. All invoices shall be held by the contractor for a period of five years and shall be
subject to audit by the director of taxation. If any materials purchased under such a certif-
icate are found not to have been incorporated in the building or other project or not to have
been returned for credit or the sales or compensating tax otherwise imposed upon such
materials which will not be so incorporated in the building or other project reported and
paid by such contractor to the director of taxation not later than the 20th day of the month
following the close of the month in which it shall be determined that such materials will not
be used for the purpose for which such certificate was issued, such clinic or center concerned
shall be liable for tax on all materials purchased for the project, and upon payment thereof
it may recover the same from the contractor together with reasonable attorney fees. Any
contractor or any agent, employee or subcontractor thereof, who shall use or otherwise
dispose of any materials purchased under such a certificate for any purpose other than that
for which such a certificate is issued without the payment of the sales or compensating tax
otherwise imposed upon such materials, shall be guilty of a misdemeanor and, upon con-
viction therefor, shall be subject to the penalties provided for in subsection (g) of K.S.A.
79-3615, and amendments thereto;

(ddd) on and after January 1, 1999, and before January 1, 2000, all sales of materials
and services purchased by any class II or III railroad as classified by the federal surface
transportation board for the construction, renovation, repair or replacement of class II or
III railroad track and facilities used directly in interstate commerce. In the event any such
track or facility for which materials and services were purchased sales tax exempt is not
operational for five years succeeding the allowance of such exemption, the total amount of
sales tax which would have been payable except for the operation of this subsection shall
be recouped in accordance with rules and regulations adopted for such purpose by the
secretary of revenue; and

(eee) on and after January 1, 1999, and before January 1, 2000, all sales of materials
and services purchased for the original construction, reconstruction, repair or replacement
of grain storage facilities, including railroad sidings providing access thereto.

Sec. 76. From and after April 1, 2000, K.S.A. 1998 Supp. 79-3606, as amended by
section 6 of this act, and K.S.A. 1998 Supp. 79-3606, as amended by section 18 of House
Bill No. 2168, are hereby repealed.

Sec. 77. From and after July 1, 1999, K.S.A. 1998 Supp. 79-3602 is hereby repealed.

Sec. 78. K.S.A. 2-610, 2-1318, 2-1319, 2-1322, 2-2007, 3-121, 12-1403, 12-1405, 12-
1617h, 19-236, 19-807d, 19-2803, 19-2803e, 19-3105, 19-3106, 19-3305, 19-4004, 19-4011,
19-4102, 65-212, 68-166, 68-518c, 68-582, 73-407, 76-326a, 79-201, 79-5a01, 79-1945, 79-
1946, 79-1947, 79-1947b, 79-1948, 79-1949, 79-1950, 79-1951, 79-1952, 79-1953, 79-1962,
79-32,197, 79-32,201, 80-115, 80-119, 80-808, 80-903, 80-932, 80-1417, 80-1503, 80-1509,
80-1537, 80-1806, 80-1903, 80-1909, 80-1916, 80-1920, 80-1921, 80-1924, 80-2006, 80-
2021, 80-2201, 80-2204 and 82a-308 and K.S.A. 1998 Supp. 79-201a, 79-201b, 79-32,117,
79-32,195 and 79-3606 are hereby repealed.

Sec. 79. This act shall take effect and be in force from and after its publication in the
Kansas register.'';

On page 1, in the title, by striking all of lines 10 to 12, inclusive; after line 12, by inserting:

``AN ACT enacting the tax reform and relief act of 1999; amending K.S.A. 2-610, 2-1318,
2-1319, 2-1322, 2-2007, 3-121, 12-1403, 12-1405, 12-1617h, 19-236, 19-807d, 19-2803, 19-
2803e, 19-3105, 19-3106, 19-3305, 19-4004, 19-4011, 19-4102, 65-212, 68-166, 68-518c,
68-582, 73-407, 76-326a, 79-201, 79-5a01, 79-1945, 79-1946, 79-1962, 79-32,197, 79-32,201,
80-115, 80-119, 80-808, 80-903, 80-932, 80-1417, 80-1503, 80-1509, 80-1537, 80-1806, 80-
1903, 80-1909, 80-1916, 80-1920, 80-1921, 80-1924, 80-2006, 80-2021, 80-2201, 80-2204
and 82a-308 and K.S.A. 1998 Supp. 79-201a, 79-201b, 79-32,117, 79-32,195, 79-3602, 79-
3606 and 79-3606, as amended by section 6 of this act, and repealing the existing sections;
also repealing K.S.A. 79-1947, 79-1947b, 79-1948, 79-1949, 79-1950, 79-1951, 79-1952 and
79-1953 and K.S.A. 1998 Supp. 79-3606, as amended by section 18 of House Bill No. 2168.'';

\ And your committee on conference recommends the adoption of this report.

David Adkins

Clay Aurand

Melvin Minor
Conferees on the part of House

Audrey Langworthy

David R. Corbin

Janis K. Lee
Conferees on part of Senate

Senator Langworthy moved the Senate adopt the Conference Committee Report on SB
45.

On roll call, the vote was: Yeas 38, nays 1, present and passing 0; absent or not voting 1.

Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin, Donovan, Downey,
Emert, Feleciano, Gilstrap, Gooch, Goodwin, Harrington, Hensley, Jones, Jordan, Kerr,
Langworthy, Lawrence, Lee, Morris, Oleen, Petty, Praeger, Pugh, Ranson, Salisbury, Sal-
mans, Steffes, Steineger, Stephens, Tyson, Umbarger, Vidricksen, Vratil.

Nays: Huelskamp.

Absent or not voting: Hardenburger.

The Conference Committee report was adopted.

EXPLANATION OF VOTE
Mr. President: I am voting for SB 45 but there is one provision that is wrong. With
the passage of this legislation all governing bodies have to pass a resolution if they intend
to increase property taxes except one. I believe the legislature should lead by example and
by exempting ourselves we fail our leadership responsibility.--Stan Clark

Mr. President: What is so special about this legislature that we set rules for others that
we are not willing to live under ourselves? We seek to require truth in taxation for all local
governments, but we exclude ourselves from that requirement in this bill. Isn't that the very
definition of tyranny?

While I strongly support the tax relief in this bill, I can not support a mandate on local
governments we are not requiring of this legislature.--Tim Huelskamp

Mr. President: I vote yes on SB 45, but I raise a serious issue regarding the section
dealing with property taxes and local government control. I agree with the intent of this
section of the legislation. It is very important that the public has the right to know whenever
local government wants to reap a windfall due to higher valuations. However, with the sunset
of the property tax lid, there is no longer a limit or control on local spending. Several
proposals have been made which would give the public the right to vote on increases, and
I am very concerned that this legislation gives no such provision for a public vote. At the
least, there should have been a provision allowing protest petitions, providing a fair, simple
outlet to call into doubt the decision of a local government when it chooses to benefit from
higher property valuations.--Marge Petty

Senators Feleciano, Hensley and Stephens request the record to show they concur with
the ``Explanation of Vote'' offered by Senator Petty on SB 45.

CONFERENCE COMMITTEE REPORT
Mr. President and Mr. Speaker: Your committee on conference on Senate amend-
ments to HB 2092, submits the following report:

The House accedes to all Senate amendments to the bill, and your committee on con-
ference further agrees to amend the bill, as printed with Senate Committee of the Whole
amendments, as follows:

On page 1, by striking all in lines 22 through 43;

By striking all on pages 2 through 5;

On page 6, preceding line 1, by inserting new material to read as follows:

``New Section 1. (a) The Kansas youth authority established by K.S.A. 75-7008 prior to
amendment by this act hereby is abolished.

(b) All of the powers, duties and functions of the Kansas youth authority are hereby
transferred to and conferred and imposed upon the Kansas advisory group on juvenile justice
and delinquency prevention.

(c) The Kansas advisory group on juvenile justice and delinquency prevention shall be
the successor in every way to the powers, duties and functions of the Kansas youth authority
in which the same were vested prior to the effective date of this act. Every act performed
in the exercise of such powers, duties and functions by or under the authority of the Kansas
advisory group on juvenile justice and delinquency prevention shall be deemed to have the
same force and effect as if performed by the Kansas youth authority in which such powers,
duties and functions were vested prior to the effective date of this act.

(d) Whenever the Kansas youth authority is referred to or designated by a statute,
contract or other document, such reference or designation shall be deemed to apply to the
Kansas advisory group on juvenile justice and delinquency prevention.

(e) All of the records, memoranda, writings and property of the Kansas youth authority
shall be and hereby are transferred to the Kansas advisory group on juvenile justice and
delinquency prevention and such advisory group shall have legal custody of the same.

New Sec. 2. (a) (1) Whenever a person is adjudicated as a juvenile offender, the court
upon motion of the state, shall hold a hearing to consider imposition of a departure sentence.
The motion shall state that a departure is sought and the reasons and factors relied upon.
The hearing shall be scheduled so that the parties have adequate time to prepare and present
arguments regarding the issues of departure sentencing. The victim of a crime or the victim's
family shall be notified of the right to be present at the hearing for the convicted person by
the county or district attorney. The parties may submit written arguments to the court prior
to the date of the hearing and may make oral arguments before the court at the hearing.
The court shall review the victim impact statement, if available. Prior to the hearing, the
court shall transmit to the defendant or the defendant's attorney and the prosecuting attor-
ney copies of the predispositional investigation report.

(2) At the conclusion of the hearing or within 20 days thereafter, the court shall issue
findings of fact and conclusions of law regarding the issues submitted by the parties, and
shall enter an appropriate order.

(3) If a factual aspect of a crime is a statutory element of the crime or is used to
determine crime severity, that aspect of the current crime of conviction may be used as an
aggravating factor only if the criminal conduct constituting that aspect of the current crime
of conviction is significantly different from the usual criminal conduct captured by the aspect
of the crime. Subject to this provision, the nonexclusive lists of aggravating factors provided
in subsection (b)(2) of K.S.A. 21-4716, and amendments thereto, and in subsection (a) of
K.S.A. 21-4717, and amendments thereto, may be considered in determining whether sub-
stantial and compelling reasons exist.

(b) If the court decides to depart on its own volition, without a motion from the state,
the court must notify all parties of its intent and allow reasonable time for either party to
respond if they request. The notice shall state that a departure is intended by the court and
the reasons and factors relied upon.

(c) In each case in which the court imposes a sentence that deviates from the pre-
sumptive sentence, the court shall make findings of fact as to the reasons for departure
regardless of whether a hearing is requested.

(d) If the sentencing judge departs from the presumptive sentence, the judge shall state
on the record at the time of sentencing the substantial and compelling reasons for the
departure. When a departure sentence is appropriate, the sentencing judge may depart from
the matrix as provided in this section. When a sentencing judge departs in setting the
duration of a presumptive term of imprisonment:

(1) The presumptive term of imprisonment set in such departure shall not total more
than double the maximum duration of the presumptive imprisonment term;

(2) the court shall have no authority to reduce the minimum term of confinement as
defined within the sentencing matrix; and

(3) the maximum term for commitment of any juvenile offender to a juvenile correc-
tional facility is age 22 years, 6 months.

(e) A departure sentence may be appealed as provided in K.S.A. 38-1681, and amend-
ments thereto.

New Sec. 3. (a) A permanent guardian may be appointed after a finding of unfitness
pursuant to K.S.A. 38-1583 and amendments thereto or with the consent and agreement of
the parents.

(b) Upon appointment of the permanent guardian, the child in need of care proceeding
shall be dismissed.

Sec. 4. K.S.A. 1998 Supp. 38-1502 is hereby amended to read as follows: 38-1502. As
used in this code, unless the context otherwise indicates:

(a) ``Child in need of care'' means a person less than 18 years of age who:

(1) Is without adequate parental care, control or subsistence and the condition is not
due solely to the lack of financial means of the child's parents or other custodian;

(2) is without the care or control necessary for the child's physical, mental or emotional
health;

(3) has been physically, mentally or emotionally abused or neglected or sexually abused;

(4) has been placed for care or adoption in violation of law;

(5) has been abandoned or does not have a known living parent;

(6) is not attending school as required by K.S.A. 72-977 or 72-1111, and amendments
thereto;

(7) except in the case of a violation of K.S.A. 41-727, subsection (j) of K.S.A. 74-8810
or subsection (m) or (n) of K.S.A. 79-3321, and amendments thereto, or, except as provided
in subsection (a)(12) of K.S.A. 21-4204a and amendments thereto, does an act which, when
committed by a person under 18 years of age, is prohibited by state law, city ordinance or
county resolution but which is not prohibited when done by an adult;

(8) while less than 10 years of age, commits any act which if done by an adult would
constitute the commission of a felony or misdemeanor as defined by K.S.A. 21-3105 and
amendments thereto;

(9) is willfully and voluntarily absent from the child's home without the consent of the
child's parent or other custodian;

(10) is willfully and voluntarily absent at least a second time from a court ordered or
designated placement, or a placement pursuant to court order, if the absence is without the
consent of the person with whom the child is placed or, if the child is placed in a facility,
without the consent of the person in charge of such facility or such person's designee;

(11) has been residing in the same residence with a sibling or another person under 18
years of age, who has been physically, mentally or emotionally abused or neglected, or
sexually abused; or

(12) while less than 10 years of age commits the offense defined in K.S.A. 21-4204a and
amendments thereto.

(b) ``Physical, mental or emotional abuse or neglect'' means the infliction of physical,
mental or emotional injury or the causing of a deterioration of a child and may include, but
shall not be limited to, failing to maintain reasonable care and treatment, negligent treatment
or maltreatment or exploiting a child to the extent that the child's health or emotional well-
being is endangered. A parent legitimately practicing religious beliefs who does not provide
specified medical treatment for a child because of religious beliefs shall not for that reason
be considered a negligent parent; however, this exception shall not preclude a court from
entering an order pursuant to subsection (a)(2) of K.S.A. 38-1513 and amendments thereto.

(c) ``Sexual abuse'' means any act committed with a child which is described in article
35, chapter 21 of the Kansas Statutes Annotated and those acts described in K.S.A. 21-3602
or 21-3603, and amendments thereto, regardless of the age of the child.

(d) ``Parent,'' when used in relation to a child or children, includes a guardian, conser-
vator and every person who is by law liable to maintain, care for or support the child.

(e) ``Interested party'' means the state, the petitioner, the child, any parent and any
person found to be an interested party pursuant to K.S.A. 38-1541 and amendments thereto.

(f) ``Law enforcement officer'' means any person who by virtue of office or public em-
ployment is vested by law with a duty to maintain public order or to make arrests for crimes,
whether that duty extends to all crimes or is limited to specific crimes.

(g) ``Youth residential facility'' means any home, foster home or structure which provides
24-hour-a-day care for children and which is licensed pursuant to article 5 of chapter 65 of
the Kansas Statutes Annotated.

(h) ``Shelter facility'' means any public or private facility or home other than a juvenile
detention facility that may be used in accordance with this code for the purpose of providing
either temporary placement for the care of children in need of care prior to the issuance of
a dispositional order or longer term care under a dispositional order.

(i) ``Juvenile detention facility'' means any secure public or private facility used for the
lawful custody of accused or adjudicated juvenile offenders which must not be a jail.

(j) ``Adult correction facility'' means any public or private facility, secure or nonsecure,
which is used for the lawful custody of accused or convicted adult criminal offenders.

(k) ``Secure facility'' means a facility which is operated or structured so as to ensure that
all entrances and exits from the facility are under the exclusive control of the staff of the
facility, whether or not the person being detained has freedom of movement within the
perimeters of the facility, or which relies on locked rooms and buildings, fences or physical
restraint in order to control behavior of its residents. No secure facility shall be in a city or
county jail.

(l) ``Ward of the court'' means a child over whom the court has acquired jurisdiction by
the filing of a petition pursuant to this code and who continues subject to that jurisdiction
until the petition is dismissed or the child is discharged as provided in K.S.A. 38-1503 and
amendments thereto.

(m) ``Custody,'' whether temporary, protective or legal, means the status created by
court order or statute which vests in a custodian, whether an individual or an agency, the
right to physical possession of the child and the right to determine placement of the child,
subject to restrictions placed by the court.

(n) ``Placement'' means the designation by the individual or agency having custody of
where and with whom the child will live.

(o) ``Secretary'' means the secretary of social and rehabilitation services.

(p) ``Relative'' means a person related by blood, marriage or adoption but, when refer-
ring to a relative of a child's parent, does not include the child's other parent.

(q) ``Court-appointed special advocate'' means a responsible adult other than an attorney
guardian ad litem who is appointed by the court to represent the best interests of a child,
as provided in K.S.A. 38-1505a and amendments thereto, in a proceeding pursuant to this
code.

(r) ``Multidisciplinary team'' means a group of persons, appointed by the court or by
the state department of social and rehabilitation services under K.S.A. 38-1523a and amend-
ments thereto, which has knowledge of the circumstances of a child in need of care.

(s) ``Jail'' means:

(1) An adult jail or lockup; or

(2) a facility in the same building or on the same grounds as an adult jail or lockup,
unless the facility meets all applicable standards and licensure requirements under law and
there is (A) total separation of the juvenile and adult facility spatial areas such that there
could be no haphazard or accidental contact between juvenile and adult residents in the
respective facilities; (B) total separation in all juvenile and adult program activities within
the facilities, including recreation, education, counseling, health care, dining, sleeping, and
general living activities; and (C) separate juvenile and adult staff, including management,
security staff and direct care staff such as recreational, educational and counseling.

(t) ``Kinship care'' means the placement of a child in the home of the child's relative or
in the home of another adult with whom the child or the child's parent already has a close
emotional attachment.

(u) ``Juvenile intake and assessment worker'' means a responsible adult authorized to
perform intake and assessment services as part of the intake and assessment system estab-
lished pursuant to K.S.A. 75-7023, and amendments thereto.

(v) ``Abandon'' means to forsake, desert or cease providing care for the child without
making appropriate provisions for substitute care.

(w) ``Permanent guardianship'' means a judicially created relationship between child
and caretaker which is intended to be permanent and self-sustaining without ongoing state
oversight or intervention. The permanent guardian stands in loco parentis and exercises all
the rights and responsibilities of a parent. Upon appointment of a permanent guardian, the
child in need of care proceedings shall be dismissed. A permanent guardian may be appointed
after termination of parental rights.

(x) ``Aggravated circumstances'' means the abandonment, torture, chronic abuse, sexual
abuse or chronic, life threatening neglect of a child.

(y) ``Permanency hearing'' means a notice and opportunity to be heard is provided to
interested parties, foster parents, preadoptive parents or relatives providing care for the
child. The court, after consideration of the evidence, shall determine whether progress
toward the case plan goal is adequate or reintegration is a viable alternative, or if the case
should be referred to the county or district attorney for filing of a petition to terminate
parental rights or to appoint a permanent guardian.

(z) ``Extended out of home placement'' means a child has been in the custody of the
secretary and placed with neither parent for 15 of the most recent 22 months beginning 60
days after the date at which a child in the custody of the secretary was removed from the
home.

(aa) ``Educational institution'' means all schools at the elementary and secondary levels.

(bb) ``Educator'' means any administrator, teacher or other professional or paraprofes-
sional employee of an educational institution who has exposure to a pupil specified in sub-
section (a) of K.S.A. 1998 Supp. 72-89b03 and amendments thereto.

Sec. 5. K.S.A. 1998 Supp. 38-1528 is hereby amended to read as follows: 38-1528. (a)
To the extent possible, when any law enforcement officer takes into custody a child under
the age of 18 years, without a court order, the child shall forthwith be delivered to the
custody of the child's parent or other custodian unless there are reasonable grounds to
believe that such action would not be in the best interests of the child. Except as provided
in subsection (b), if the child is not delivered to the custody of the child's parent or other
custodian, the child shall forthwith be delivered to a facility or person designated by the
secretary or to a court designated shelter facility, court services officer, juvenile intake and
assessment worker, licensed attendant care center or other person. If, after delivery of the
child to a shelter facility, the person in charge of the shelter facility at that time and the law
enforcement officer determine that the child will not remain in the shelter facility, the law
enforcement officer shall deliver the child to a juvenile detention facility or other secure
facility, designated by the court, where the child shall be detained for not more than 24
hours, excluding Saturdays, Sundays and legal holidays. It shall be the duty of the law
enforcement officer to furnish to the county or district attorney, without unnecessary delay,
all the information in the possession of the officer pertaining to the child, the child's parents
or other persons interested in or likely to be interested in the child and all other facts and
circumstances which caused the child to be taken into custody.

(b) When any law enforcement officer takes into custody any child as provided in sub-
section (c) of K.S.A. 38-1527 and amendments thereto, proceedings shall be initiated in
accordance with the provisions of the interstate compact on juveniles, K.S.A. 38-1001 et
seq. and amendments thereto. Any child taken into custody pursuant to the interstate com-
pact on juveniles may be detained in a juvenile detention facility or other secure facility.

(c) Whenever a child under the age of 18 years is taken into custody by a law enforce-
ment officer without a court order and is thereafter placed in the custody of a shelter facility,
court services officer, juvenile intake and assessment worker, licensed attendant care center
or other person as authorized by this code, the facility or person shall have physical custody
and provide care and supervision for the child upon written application of the law enforce-
ment officer. The application shall state:

(1) The name and address of the child, if known;

(2) the names and addresses of the child's parents or nearest relatives and persons with
whom the child has been residing, if known; and

(3) the officer's belief that the child is a child in need of care and that there are rea-
sonable grounds to believe that the circumstances or condition of the child is such that,
unless the child is placed in the immediate custody of the shelter facility or other person,
it would be harmful to the child.

(d) A copy of the application shall be furnished by the facility or person receiving the
child to the county or district attorney without unnecessary delay.

(e) The shelter facility or other person designated by the court who has custody of the
child pursuant to this section shall discharge the child not later than 48 72 hours following
admission, excluding Saturdays, Sundays and legal holidays, unless a court has entered an
order pertaining to temporary custody or release.

(f) In absence of a court order to the contrary, the county or district attorney or the
placing law enforcement agency shall have the authority to direct at any time the release of
the child.

(g) When any law enforcement officer takes into custody any child as provided in sub-
section (d) of K.S.A. 38-1527, and amendments thereto, the child shall forthwith be deliv-
ered to the school in which the child is enrolled, any location designated by the school in
which the child is enrolled to address truancy issues or the child's parent or other custodian.

Sec. 6. K.S.A. 38-1542 is hereby amended to read as follows: 38-1542. (a) The court
upon verified application may issue ex parte an order directing that a child be held in
protective custody and, if the child has not been taken into custody, an order directing that
the child be taken into custody. The application shall state:

(1) The applicant's belief that the child is a child in need of care and is likely to sustain
harm if not immediately afforded protective custody; and

(2) the specific facts which are relied upon to support the belief.

(b) (1) The order of protective custody may be issued only after the court has deter-
mined there is probable cause to believe the allegations in the application are true. The
order shall remain in effect until the temporary custody hearing provided for in K.S.A. 38-
1543 and amendments thereto, unless earlier rescinded by the court.

(2) ~~Prior to July 1, 1993,~~ No child shall be held in protective custody for more than 72
hours, excluding Saturdays, Sundays