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16  AN ACT relating to the financing of unified school districts [certain
17    political subdivisions of the state] [enacting the property tax re-
18    lief act of 1997]; concerning the property tax levy required therefor
19    [property taxation]; amending K.S.A. 1996 Supp. 72-6431[, 79-412]
20    and 79-5105 and repealing the existing sections [section]; also re-
21    pealing K.S.A. 1996 Supp. 72-6431a. [enacting the education and
22    tax reform act of 1997; amending K.S.A. 72-6414, [79-1587,] 79-
23    4505, 79-4508 and K.S.A. 1996 Supp. 72-6407, 72-6410, 72-
24    6412, 72-6431, 72-6442, [79-1541a, 79-1541b, 79-1542, 79-1564,
25    79-1569, 79-1570, 79-1571, 79-1572, 79-1574, 79-1575, 79-1576,
26    79-1579, 79-1580,] 79-32,110, 79-3603, 79-4502 and 79-5105
27    and repealing the existing sections; also repealing K.S.A. [79-
28    1538, 79-1548, 79-1554, 79-1557, 79-1566, 79-1584, 79-1584a,
29    79-1584b, 79-1584c, 79-1585, 79-1586 and] 79-4520 and[,]
30    K.S.A. 1996 Supp. 72-6412a, 72-6431a, 72-6442a, 72-8191 and
31    72-8192[, 79-1537, 79-1537b, 79-1537c, 79-1537e, 79-1537f, 79-
32    1538a, 79-1539, 79-1540, 79-1541, 79-1542a, 79-1543, 79-1545,
33    79-1547, 79-1549, 79-1550, 79-1551, 79-1552, 79-1553, 79-1555,
34    79-1556, 79-1557a, 79-1559, 79-1560, 79-1561, 79-1562, 79-
35    1563, 79-1563a, 79-1565, 79-1567, 79-1567a, 79-1568 and 79-
36    1573].] 72-6414, 79-3634, 79-3635, 79-4505 and 79-4508 and
37    K.S.A. 1996 Supp. 72-6407, 72-6410, 72-6412, 72-6431, 72-6438,
38    72-6441, 72-6442, 79-32,110, 79-3603 and, 79-4502 and 79-5105
39    and repealing the existing sections; also repealing K.S.A. 79-4520
40    and K.S.A. 1996 Supp. 72-6412a, 72-6431a and[,]  72-6442a[,
41    72-8191 and 72-8192].
428192  
HB 2031--Am. by SCW
                                     

 1  Be it enacted by the Legislature of the State of Kansas:
 2    [New Section 1.  (a) For tax year 1997, the following described
 3  property, to the extent herein specified, shall be and is hereby
 4  exempt from the property tax levied pursuant to the provisions of
 5  K.S.A. 1996 Supp. 72-6431, and amendments thereto:  Property
 6  used as a single family residence, to the extent of $50,000 of its
 7  appraised valuation.
 8    [(b)  During the following fiscal year, the director of the
 9  budget, after consultation with the commissioner of education,
10  shall certify to the director of accounts and reports monthly
11  amounts for revenue transfer from the state general fund to the
12  state school district finance fund in an amount not to exceed the
13  following total amount within the specified fiscal year:
14    [For the fiscal year beginning on July 1, 1997 .................. $1,509,987,095
15    [(c)  There is hereby created a state school district supplemen-
16  tal aid finance fund within the state treasury. During the following
17  fiscal year, the director of the budget, after consultation with the
18  commissioner of education, shall certify to the director of accounts
19  and reports monthly amounts for revenue transfer from the state
20  general fund to the state school district supplemental aid finance
21  fund in an amount not to exceed the following total amount within
22  the specified fiscal year:
23    [For the fiscal year beginning on July 1, 1997 ..................... $52,089,000
24    [(d)  There is hereby created a state school district enhance-
25  ment fund within the state treasury. During each of the following
26  fiscal years, the director of the budget, after consultation with the
27  commissioner of education, shall certify to the director of accounts
28  and reports monthly amounts for revenue transfer from the state
29  general fund to the state school district enhancement fund in an
30  amount not to exceed the following total amount within the spec-
31  ified fiscal year:
32    [For the fiscal year beginning on July 1, 1997 .................... $28,800,000]
33    [Section 1.  On July 1, 1997, K.S.A. 1996 Supp. 72-6407 shall
34  be and is hereby amended to read as follows: 72-6407. (a) ``Pupil''
35  means any person who is regularly enrolled in a district and at-
36  tending kindergarten or any of the grades one through 12 main-
37  tained by the district or who is regularly enrolled in a district and
38  attending kindergarten or any of the grades one through 12 in
39  another district in accordance with an agreement entered into un-
40  der authority of K.S.A. 72-8233, and amendments thereto, or who
41  is regularly enrolled in a district and attending special education
42  services provided for preschool-aged exceptional children by the
43  district. Except as otherwise provided in this subsection, a pupil in
HB 2031--Am. by SCW
                                     

 1  attendance full time shall be counted as one pupil. A pupil in at-
 2  tendance part time shall be counted as that proportion of one pupil
 3  (to the nearest 1/10) that the pupil's attendance bears to full-time
 4  attendance. A pupil attending kindergarten shall be counted as 1/2
 5  pupil. A pupil enrolled in and attending an institution of postse-
 6  condary education which is authorized under the laws of this state
 7  to award academic degrees shall be counted as one pupil if the
 8  pupil's postsecondary education enrollment and attendance to-
 9  gether with the pupil's attendance in either of the grades 11 or 12
10  is at least 5/6 time, otherwise the pupil shall be counted as that
11  proportion of one pupil (to the nearest 1/10) that the total time of
12  the pupil's postsecondary education attendance and attendance in
13  grade 11 or 12, as applicable, bears to full-time attendance. A pupil
14  enrolled in and attending an area vocational school, area voca-
15  tional-technical school or approved vocational education program
16  shall be counted as one pupil if the pupil's vocational education
17  enrollment and attendance together with the pupil's attendance in
18  any of grades nine through 12 is at least 5/6 time, otherwise the
19  pupil shall be counted as that proportion of one pupil (to the near-
20  est 1/10) that the total time of the pupil's vocational education at-
21  tendance and attendance in any of grades nine through 12 bears
22  to full-time attendance. A pupil enrolled in a district and attending
23  special education services, except special education services for
24  preschool-aged exceptional children, provided for by the district
25  shall be counted as one pupil. A pupil enrolled in a district and
26  attending special education services for preschool-aged excep-
27  tional children provided for by the district shall be counted as 1/2
28  pupil.  A pupil in the custody of the secretary of social and reha-
29  bilitation services and enrolled in unified school district No. 259,
30  Sedgwick county, Kansas, but housed, maintained, and receiving
31  educational services at the Judge James V. Riddel Boys Ranch,
32  shall be counted as two pupils. A pupil residing at the Flint Hills
33  job corps center shall not be counted. A pupil confined in and
34  receiving educational services provided for by a district at a ju-
35  venile detention facility shall not be counted. A pupil enrolled in
36  a district but housed, maintained, and receiving educational serv-
37  ices at a state institution shall not be counted.
38    [(b)  ``Preschool-aged exceptional children'' means exceptional
39  children, except gifted children, who have attained the age of
40  three years but are under the age of eligibility for attendance at
41  kindergarten.
42    [(c)  ``At-risk pupils'' means pupils who are eligible for free
43  meals under the national school lunch act and for whom who are
HB 2031--Am. by SCW
                                     

 1  enrolled in a district which maintains an approved at-risk pupil as-
 2  sistance plan.
 3    [(d)  ``Enrollment'' means, for districts scheduling the school
 4  days or school hours of the school term on a trimestral or quarterly
 5  basis, the number of pupils regularly enrolled in the district on
 6  September 20 plus the number of pupils regularly enrolled in the
 7  district on February 20 less the number of pupils regularly en-
 8  rolled on February 20 who were counted in the enrollment of the
 9  district on September 20; and for districts not hereinbefore spec-
10  ified, the number of pupils regularly enrolled in the district on
11  September 20. Notwithstanding the foregoing, if enrollment in a
12  district in any school year has decreased from enrollment in the
13  preceding school year, enrollment of the district in the current
14  school year may be computed by adding one-half the number of pupils
15  by which enrollment in the current school year has decreased from en-
16  rollment in the preceding school year to enrollment in the current school
17  year, except that such computation shall not be applied to decreases in
18  enrollment in the current school year that are in excess of 4% on the basis
19  by adding one-half the number of pupils by which enrollment in the
20  current school year has decreased from enrollment in the preceding
21  school year to enrollment in the current school year, except that
22  such computation shall not be applied to decreases in enrollment
23  in the current school year that are in excess of 4% [on the basis] of
24  enrollment in the preceding school year.
25    [(e)  ``Adjusted enrollment'' means enrollment adjusted by add-
26  ing at-risk pupil weighting, program weighting, low enrollment
27  weighting, if any, correlation weighting, if any, school facilities
28  weighting, if any, ancillary school facilities weighting, if any, and
29  transportation weighting to enrollment.
30    [(f)  ``At-risk pupil weighting'' means an addend component as-
31  signed to enrollment of districts on the basis of enrollment of at-
32  risk pupils.
33    [(g)  ``Program weighting'' means an addend component as-
34  signed to enrollment of districts on the basis of pupil attendance
35  in educational programs which differ in cost from regular educa-
36  tional programs.
37    [(h)  ``Low enrollment weighting'' means, for any school year in
38  which the provisions of K.S.A. 1996 Supp. 72-6442a are operational, an
39  addend component assigned to enrollment of districts having
40  1,800-1,899 or under enrollment on the basis of costs attributable to
41  maintenance of educational programs by such districts in comparison with
42  costs attributable to maintenance of educational programs by districts
43  having 1,800-1,899 or over enrollment, for the school year in which the
HB 2031--Am. by SCW
                                     

 1  provisions of K.S.A. 1996 Supp. 72-6442 become operational and each
 2  school year thereafter, an addend component assigned to enrollment of
 3  districts having under 1,800 enrollment on the basis of costs attrib-
 4  utable to maintenance of educational programs by such districts
 5  in comparison with costs attributable to maintenance of educa-
 6  tional programs by districts having 1,800 or over enrollment.
 7    [(i)  ``School facilities weighting'' means an addend component
 8  assigned to enrollment of districts on the basis of costs attributable
 9  to commencing operation of new school facilities. School facilities
10  weighting may be assigned to enrollment of a district only if the
11  district has adopted a local option budget and budgeted therein
12  the total amount authorized for the school year. School facilities
13  weighting may be assigned to enrollment of the district only in the
14  school year in which operation of a new school facility is com-
15  menced and in the next succeeding school year.
16    [(j)  ``Transportation weighting'' means an addend component
17  assigned to enrollment of districts on the basis of costs attributable
18  to the provision or furnishing of transportation.
19    [(k)  ``Correlation weighting'' means, for any school year in which
20  the provisions of K.S.A. 1996 Supp. 72-6442a are operational, an addend
21  component assigned to enrollment of districts having 1,800-1,899
22  or over enrollment on the basis of costs attributable to maintenance of
23  educational programs by such districts as a correlate to low enrollment
24  weighting assigned to enrollment of districts having 1,800-1,899 or under
25  enrollment, for the school year in which the provisions of K.S.A. 1996
26  Supp. 72-6442 become operational and each school year thereafter, an
27  addend component assigned to enrollment of districts having 1,800 or
28  over enrollment on the basis of costs attributable to maintenance
29  of educational programs by such districts as a correlate to low en-
30  rollment weighting assigned to enrollment of districts having un-
31  der 1,800 enrollment.
32    (l)  ``Ancillary school facilities weighting'' means an addend
33  component assigned to enrollment of districts to which the provi-
34  sions of K.S.A. 1996 Supp. 72-6441, and amendments thereto, apply
35  on the basis of costs attributable to commencing operation of new
36  school facilities. Ancillary school facilities weighting may be as-
37  signed to enrollment of a district only if the district has levied a tax
38  under authority of K.S.A. 1996 Supp. 72-6441, and amendments
39  thereto, and remitted the proceeds from such tax to the state treas-
40  urer. Ancillary school facilities weighting is in addition to assign-
41  ment of school facilities weighting to enrollment of any district el-
42  igible for such weighting.
43    [Sec. 2.  On July 1, 1997, K.S.A. 1996 Supp. 72-6410 shall be
HB 2031--Am. by SCW
                                     

 1  and is hereby amended to read as follows: 72-6410. (a) ``State fi-
 2  nancial aid'' means an amount equal to the product obtained by
 3  multiplying base state aid per pupil by the adjusted enrollment of
 4  a district.
 5    [(b)  ``Base state aid per pupil'' means an amount of state finan-
 6  cial aid per pupil. Subject to the other provisions of this subsection,
 7  the amount of base state aid per pupil is $3,648 $3,670. The amount
 8  of base state aid per pupil is subject to reduction commensurate
 9  with any reduction under K.S.A. 1996 Supp. 75-6704, and amend-
10  ments thereto, in the amount of the appropriation from the state
11  general fund for general state aid. If the amount of appropriations
12  for general state aid is insufficient to pay in full the amount each
13  district is entitled to receive for any school year, the amount of
14  base state aid per pupil for such school year is subject to reduction
15  commensurate with the amount of the insufficiency.
16    [(c)  ``Local effort'' means the sum of an amount equal to the
17  proceeds from the tax levied under authority of K.S.A. 72-6431,
18  and amendments thereto, and an amount equal to any unexpended
19  and unencumbered balance remaining in the general fund of the
20  district, except amounts received by the district and authorized to
21  be expended for the purposes specified in K.S.A. 72-6430, and
22  amendments thereto, and an amount equal to any unexpended and
23  unencumbered balances remaining in the program weighted funds
24  of the district, except any amount in the vocational education fund
25  of the district if the district is operating an area vocational school,
26  and an amount equal to any remaining proceeds from taxes levied
27  under authority of K.S.A. 72-7056 and 72-7072, and amendments
28  thereto, prior to the repeal of such statutory sections, and an
29  amount equal to the amount deposited in the general fund in the
30  current school year from amounts received in such year by the
31  district under the provisions of subsection (a) of K.S.A. 72-1046a,
32  and amendments thereto, and an amount equal to the amount de-
33  posited in the general fund in the current school year from
34  amounts received in such year by the district pursuant to contracts
35  made and entered into under authority of K.S.A. 72-6757, and
36  amendments thereto, and an amount equal to the amount credited
37  to the general fund in the current school year from amounts dis-
38  tributed in such year to the district under the provisions of articles
39  17 and 34 of chapter 12 of Kansas Statutes Annotated and under
40  the provisions of articles 42 and 51 of chapter 79 of Kansas Statutes
41  Annotated, and an amount equal to the federal impact aid of a
42  district.
43    [(d)  ``Federal impact aid'' means an amount equal to the fed-
HB 2031--Am. by SCW
                                     

 1  erally qualified percentage of the amount of moneys a district re-
 2  ceives in the current school year under the provisions of title I of
 3  public law 874 and congressional appropriations therefor, exclud-
 4  ing amounts received for assistance in cases of major disaster and
 5  amounts received under the low-rent housing program. The
 6  amount of federal impact aid defined herein as an amount equal
 7  to the federally qualified percentage of the amount of moneys pro-
 8  vided for the district under title I of public law 874 shall be deter-
 9  mined by the state board in accordance with terms and conditions
10  imposed under the provisions of the public law and rules and reg-
11  ulations thereunder.
12    [Sec. 3.  On July 1, 1997, K.S.A. 1996 Supp. 72-6412 shall be
13  and is hereby amended to read as follows:  72-6412. For the school
14  year in which the provisions of K.S.A. 1996 Supp. 72-6442 become op-
15  erational and each school year thereafter, The low enrollment weight-
16  ing of each district with under 1,800 enrollment shall be deter-
17  mined by the state board as follows:
18    [(a)  Determine the amount of the median budget per pupil for
19  the 1991-92 school year of districts with 75-125 enrollment in such
20  school year;
21    [(b)  determine the amount of the median budget per pupil for
22  the 1991-92 school year of districts with 200-399 enrollment in
23  such school year;
24    [(c)  determine the amount of the median budget per pupil for
25  the 1991-92 school year of districts with 1,900 or over enrollment;
26    [(d)  prescribe a schedule amount for each of the districts by
27  preparing a schedule based upon an accepted mathematical for-
28  mula and derived from a linear transition between (1) the median
29  budgets per pupil determined under (a) and (b), and (2) the median
30  budgets per pupil determined under (b) and (c). The schedule
31  amount for districts with 0-99 enrollment is an amount equal to
32  the amount of the median budget per pupil determined under (a).
33er  The schedule amount for districts with 100-299 enrollment is the
34  amount derived from the linear transition under (1). The schedule
35  amount for districts with 300-1,899 enrollment is the amount de-
36  rived from the linear transition under (2);
37    [(e)  for districts with 0-99 enrollment:
38    [(1)  Subtract the amount determined under (c) from the
39  amount determined under (a);
40    [(2)  divide the remainder obtained under (1) by the amount
41  determined under (c);
42    [(3)  multiply the quotient obtained under (2) by the enrollment
43  of the district in the current school year. The product is the low
HB 2031--Am. by SCW
                                     

 1  enrollment weighting of the district;
 2    [(f)  for districts with 100-299 enrollment:
 3    [(1)  Subtract the amount determined under (c) from the sched-
 4  ule amount of the district;
 5    [(2)  divide the remainder obtained under (1) by the amount
 6  determined under (c);
 7    [(3)  multiply the quotient obtained under (2) by the enrollment
 8  of the district in the current school year. The product is the low
 9  enrollment weighting of the district;
10    [(g)  for districts with 300-1,799 enrollment:
11    [(1)  Subtract the amount determined under (c) from the sched-
12  ule amount of the district;
13    [(2)  divide the remainder obtained under (1) by the amount
14  determined under (c);
15    [(3)  multiply the quotient obtained under (2) by the enrollment
16  of the district in the current school year. The product is the low
17  enrollment weighting of the district.
18    [Sec. 4.  On July 1, 1997, K.S.A. 72-6414 shall be and is hereby
19  amended to read as follows: 72-6414. (a) The at-risk pupil weight-
20  ing of each district shall be determined by the state board by mul-
21  tiplying the number of at-risk pupils included in enrollment of the
22  district by .05 .065 .06 [.065]. The product is the at-risk pupil
23  weighting of the district.
24    [(b)  The provisions of this section shall take effect and be in force
25  from and after July 1, 1992.]
26    New Sec. 5.  (a) The ancillary school facilities weighting of each
27  district shall be determined in each school year in which such
28  weighting may be assigned to enrollment of the district as follows:
29    (1)  Add the amount authorized under subsection (a) of K.S.A.
30  1996 Supp. 72-6441, and amendments thereto, to be produced by a
31  tax levy and certified to the state board by the board of tax appeals
32  to the amount, if any, computed under subsection (b) of K.S.A. 1996
33  Supp. 72-6441, and amendments thereto, to be produced by a tax
34  levy;
35    (2)  divide the sum obtained under (1) by base state aid per pu-
36  pil. The quotient is the ancillary school facilities weighting of the
37  district.
38    (b)  The provisions of this section shall take effect and be in force
39  from and after July 1, 1997.
40    Section 1 [Sec. 5 6].  On July 1, 1997, K.S.A. 1996 Supp. 72-6431
41  shall be and is hereby amended to read as follows: 72-6431. (a) The
42  board of each district shall levy an ad valorem tax upon the taxable tan-
43  gible property of the district in the school years specified in subsection
HB 2031--Am. by SCW
                                     

 1    (b) for the purpose of:
 2    (1)  Financing that portion of the district's general fund budget which
 3  is not financed from any other source provided by law;
 4    (2)  paying a portion of the costs of operating and maintaining public
 5  schools in partial fulfillment of the constitutional obligation of the legis-
 6  lature to finance the educational interests of the state; and
 7    (3)  with respect to any redevelopment district established prior to July
 8  1, 1996, pursuant to K.S.A. 12-1771, and amendments thereto, paying a
 9  portion of the principal and interest on bonds issued by cities under au-
10  thority of K.S.A. 12-1774, and amendments thereto, for the financing of
11  redevelopment projects upon property located within the district.
12    (b)  The tax required under subsection (a) shall be levied at a rate of
13  35 mills in the 1996-97 school year, 33 29 [27] 29 [27] mills in the 1997-
14  98 school year and not exceeding 31 25 mills in the 1998-99 school year
15  [the rate determined and published by the director of accounts
16  and reports on or before October 15, 1997, in the 1997-98 school
17  year, which is equal to the quotient of the revenue received pur-
18  suant to this subsection in the 1996-97 school year less
19  $100,000,000 divided by the assessed valuation of taxable tangible
20  property statewide].
21    (c)  The proceeds from the tax levied by a district under authority of
22  this section, except the proceeds of such tax levied for the purpose of
23  paying a portion of the principal and interest on bonds issued by cities
24  under authority of K.S.A. 12-1774, and amendments thereto, for the fi-
25  nancing of redevelopment projects upon property located within the dis-
26  trict, shall be deposited in the general fund of the district.
27    (d)  On June 1 of each year, the amount, if any, by which a district's
28  local effort exceeds the amount of the district's state financial aid, as
29  determined by the state board, shall be remitted to the state treasurer.
30  Upon receipt of any such remittance, the state treasurer shall deposit the
31  same in the state treasury to the credit of the state school district finance
32  fund.
33    (e)  No district shall proceed under K.S.A. 79-1964, 79-1964a or 79-
34  1964b, and amendments to such sections.
35    Sec. 7.  On July 1, 1997, K.S.A. 1996 Supp. 72-6438 shall be and
36  is hereby amended to read as follows: 72-6438. (a) The state school
37  district finance fund, established by K.S.A. 1991 Supp. 72-7081
38  prior to its repeal by this act, is hereby continued in existence and
39  shall consist of (1) all moneys credited to such fund under K.S.A.
40  72-6418 and 72-6431 and K.S.A. 1996 Supp. 72-6441, and amend-
41  ments thereto, and (2) all amounts transferred to such fund.
42    (b)  The state school district finance fund shall be used for the
43  purpose of school district finance and for no other governmental
HB 2031--Am. by SCW
                                     

 1  purpose. It is the intent of the legislature that the fund shall remain
 2  intact and inviolate for such purpose, and moneys in the fund shall
 3  not be subject to the provisions of K.S.A. 75-3722, 75-3725a and
 4  75-3726a, and amendments thereto.
 5    (c)  Amounts in the state school district finance fund shall be
 6  allocated and distributed to school districts as a portion of general
 7  state aid entitlements provided for under this act.
 8    Sec. 8.  On July 1, 1997, K.S.A. 1996 Supp. 72-6441 shall be and
 9  is hereby amended to read as follows: 72-6441. (a) (1) The board
10  of any district to which the provisions of this subsection apply may
11  levy an ad valorem tax on the taxable tangible property of the dis-
12  trict each year for a period of time not to exceed two years in an
13  amount not to exceed the amount authorized by the state board of
14  tax appeals under this subsection for the purpose of financing that
15  portion of the costs incurred by the state that are directly attributable
16  to commencing operation of one or more new school facilities which is
17  not financed from any other source provided by law assignment of ancil-
18  lary school facilities weighting to enrollment of the district. The state
19  board of tax appeals may authorize the district to make a levy which
20  will produce an amount that is not greater than the difference be-
21  tween the amount of costs directly attributable to commencing op-
22  eration of one or more new school facilities and the amount that is
23  financed from any other source provided by law for such purpose under
24  the school district finance and quality performance act, including any
25  amount attributable to assignment of school facilities weighting to enroll-
26  ment of the district for each school year in which the district is eligible
27  for such weighting. If the district is not eligible, or will be ineligible,
28  for school facilities weighting in any one or more years during the
29  two-year period for which the district is authorized to levy a tax
30  under this subsection, the state board of tax appeals may authorize
31  the district to make a levy, in such year or years of ineligibility,
32  which will produce an amount that is not greater than the actual
33  amount of costs attributable to commencing operation of the facility
34  or facilities.
35    (2)  The board of tax appeals shall certify to the state board of edu-
36  cation the amount authorized to be produced by the levy of a tax under
37  subsection (a).
38    (2) (3)  The state board of tax appeals may adopt rules and reg-
39  ulations necessary to properly effectuate the provisions of this sub-
40  section, including rules relating to the evidence required in support
41  of a district's claim that the costs attributable to commencing op-
42  eration of one or more new school facilities are in excess of the
43  amount that is financed from any other source provided by law for such
HB 2031--Am. by SCW
                                     

 1  purpose under the school district finance and quality performance act.
 2    (3) (4)  The provisions of this subsection apply to any district that
 3  (A) commenced operation of one or more new school facilities in the
 4  school year preceding the current school year or has commenced or
 5  will commence operation of one or more new school facilities in the
 6  current school year or any or all of the foregoing, and (B) is au-
 7  thorized to adopt and has adopted a local option budget in an
 8  amount equal to the state prescribed percentage of the amount of
 9  state financial aid determined for the district in the current school
10  year, and (C) is experiencing extraordinary enrollment growth as
11  determined by the state board of education.
12    (b)  The board of any district that has levied an ad valorem tax
13  on the taxable tangible property of the district each year for a pe-
14  riod of two years under authority of subsection (a) for the purpose
15  of financing a portion of the costs attributable to commencing operation
16  of one or more new school facilities may continue to levy such a tax
17  for such purpose under authority of this subsection each year for an
18  additional period of time not to exceed three years in an amount
19  not to exceed the amount computed by the state board of education
20  as provided in this subsection if the board of the district determines
21  that the costs attributable to commencing operation of such one or
22  more new school facility or facilities are significantly greater than
23  the costs attributable to the operation of other school facilities in
24  the district. The tax authorized under this subsection may be levied
25  at a rate which will produce an amount that is not greater than the
26  amount computed by the state board of education as provided in
27  this subsection. In computing such amount, the state board shall (1)
28  determine the amount produced by the tax levied by the district
29  under authority of subsection (a) in the second year for which such
30  tax was levied and add to such amount the amount of general state
31  aid directly attributable to school facilities weighting that was re-
32  ceived by the district in the same year, and (2) compute 75% of the
33  amount of the sum obtained under (1), which computed amount is
34  the amount the district may levy in the first year of the three-year
35  period for which the district may levy a tax under authority of this
36  subsection, and (3) compute 50% of the amount of the sum obtained
37  under (1), which computed amount is the amount the district may
38  levy in the second year of the three-year period for which the dis-
39  trict may levy a tax under authority of this subsection, and (4) com-
40  pute 25% of the amount of the sum obtained under (1), which com-
41  puted amount is the amount the district may levy in the third year
42  of the three-year period for which the district may levy a tax under
43  authority of this subsection.
HB 2031--Am. by SCW
                                     

 1    (c)  The proceeds from the tax levied by a district under author-
 2  ity of this section shall be deposited in the supplemental general fund
 3  of the district, budgeted in the local option budget of the district as an
 4  addition to the amount of such budget adopted under authority of and in
 5  accordance with the provisions of K.S.A. 72-6433, and amendments
 6  thereto, and used exclusively to supplement amounts expended from the
 7  general fund of the district for payment of the costs attributable to com-
 8  mencing operation of new school facilities remitted to the state treasurer.
 9  Upon receipt of such remittance, the state treasurer shall deposit the same
10  in the state treasury to the credit of the state school district finance fund.
11    [Sec. 6 9.  On July 1, 1997, K.S.A. 1996 Supp. 72-6442 shall be
12  and is hereby amended to read as follows: 72-6442. (a) In any school
13  year commencing after any school year in which the provisions of K.S.A.
14  1996 Supp. 72-6442a are operational, if the state board determines that
15  the amount of appropriations for general state aid, inclusive of the amount
16  determined necessary for effectuation of this section, is sufficient to pay
17  in full the amount each district is entitled to receive for the school year,
18  the provisions of this section shall become operational and The corre-
19  lation weighting of each district with 1,800 or over enrollment shall
20  be determined by the state board as follows:
21    [(1) (a)  Determine the schedule amount for a district with 1,800
22  enrollment as derived from the linear transition under (d) of K.S.A.
23  72-6412, and amendments thereto, and subtract the amount de-
24  termined under (c) of K.S.A. 72-6412, and amendments thereto,
25  from the schedule amount so determined;
26    [(2) (b)  divide the remainder obtained under (1) (a) by the
27  amount determined under (c) of K.S.A. 72-6412, and amendments
28  thereto, and multiply the quotient by the enrollment of the district
29  in the current school year. The product is the correlation weight-
30  ing of the district.
31    [(b)  The provisions of this section shall take effect and be in force
32  from and after July 1, 1995.]
33    New Sec. 10.  (a) For the purposes of the school district finance
34  and quality performance act, and notwithstanding any provision of
35  the act to the contrary, the school facilities weighting of each dis-
36  trict to which the provisions of this section apply shall be deter-
37  mined in the 1996-97 school year as follows:
38    (1)  Determine the number of pupils, included in enrollment of
39  the district, who are attending a new school facility;
40    (2)  multiply the number of pupils determined under (1) by .33.
41  The product is the school facilities weighting of the district.
42    (b)  For districts to which the provisions of this section apply,
43  the school facilities weighting prescribed under subsection (a) is in
HB 2031--Am. by SCW
                                     

 1  lieu of the school facilities weighting prescribed under K.S.A. 72-
 2  6415, and amendments thereto.
 3    (c)  For the purpose of assigning the school facilities weighting
 4  prescribed under subsection (a) to enrollment of the districts to
 5  which the provisions of this section apply, the term ``new school
 6  facility'' means any school facility which a district commenced op-
 7  erating in the 1995-96 school year or in the 1996-97 school year.
 8    (d)  The provisions of this section apply to any district that (1)
 9  commenced operation of one or more new school facilities in the
10  1992-93 school year or in any school year succeeding the 1992-93
11  school year up to and including the 1996-97 school year, and (2) is
12  authorized to adopt and has adopted a local option budget in an
13  amount equal to the state prescribed percentage of the amount of
14  state financial aid determined for the district in the current school
15  year, and (3) is experiencing extraordinary enrollment growth as
16  determined by the state board of education, and (4) has been au-
17  thorized to levy an ad valorem tax on the taxable tangible property
18  of the district under K.S.A. 1996 Supp. 72-6441, which statutory
19  section is repealed by this act, for the purpose of financing a portion
20  of the costs attributable to commencing operation of one or more
21  new school facilities [and amendments thereto].
22    (e)  The proceeds from the tax levied by a district under author-
23  ity of K.S.A. 1996 Supp. 72-6441, and amendments thereto, prior to
24  the effective date of this act shall be retained in the supplemental
25  general fund of the district and used exclusively to reduce the
26  amount of the tax levied by the district in the 1997-98 school year
27  under authority of K.S.A. 72-6435, and amendments thereto.
28    (f)  The provisions of this section [subsections (a) through (d)
29  shall expire on June 30, 1997. The provisions of subsection (e) and
30  this subsection] shall expire on June 30, 1998.
31    [New Sec. 11.  (a) For taxable years 1997 and 1998, the follow-
32  ing described property, to the extent herein specified, shall be and
33  is hereby exempt from the property tax levied pursuant to the pro-
34  visions of K.S.A. 1996 Supp. 72-6431, and amendments thereto:
35  Property used as a single family residence, to the extent of $20,000
36  of its appraised valuation.]
37    Sec. 7 11 [12].  On July 1, 1997, K.S.A. 1996 Supp. 79-5105 shall
38  be and is hereby amended to read as follows: 79-5105. (a) A tax is hereby
39  levied upon every motor vehicle, as the same is defined by K.S.A. 79-
40  5101, and amendments thereto, in an amount which shall be determined
41  in the manner hereinafter prescribed, except that: (1) (A) For 1995, the
42  tax on any motorcycle shall not be less than $6 and the tax on any other
43  motor vehicle shall not be less than $12; and (B) the tax on each motor
HB 2031--Am. by SCW
                                     

 1  vehicle the age of which is 15 years or older shall not be more than $12;
 2  and (2) for 1996, and each year thereafter: (A) The tax on any motorcycle
 3  shall not be less than $12 and the tax on any other motor vehicle shall
 4  not be less than $24, except as otherwise provided by clause (B) and (C);
 5  (B) the tax on any motorcycle the model year of which is 1980 or earlier
 6  shall be $6 and the tax on any other motor vehicle the model year of
 7  which is 1980 or earlier shall be $12; and (C) if the tax on any motorcycle
 8  in 1995 was more than $6 but less than $12, the tax shall be determined
 9  for 1996 and each year thereafter in the manner hereinafter prescribed
10  but shall not be less than $6, and if the tax on any other motor vehicle in
11  1995 was more than $12 but less than $24, the tax shall be determined
12  for 1996 and each year thereafter in the manner hereinafter prescribed
13  but shall not be less than $12.
14    (b)  The amount of such tax on a motor vehicle shall be computed by:
15    (1) Determining the amount representing the midpoint of the values in-
16  cluded within the class in which such motor vehicle is classified under
17  K.S.A. 79-5102 or 79-5103, and amendments thereto, except that the
18  midpoint of class 20 shall be $21,000 plus $2,000 for each $2,000 or
19  portion thereof by which the trade-in value of the vehicle exceeds
20  $22,000; (2) if the model year of the motor vehicle is a year other than
21  the year for which the tax is levied, by reducing such midpoint amount
22  by an amount equal to 16% in 1995, and all years prior thereto, and 15%
23  in 1996, and all years thereafter, of the remaining balance for each year
24  of difference between the model year of the motor vehicle and the year
25  for which the tax is levied if the model year of the motor vehicle is 1981
26  or a later year or (B) the remaining balance for each year of difference
27  between the year 1980 and the year for which the tax is levied if the
28  model year of the motor vehicle is 1980 or any year prior thereto; (3) by
29  multiplying the amount determined after application of clause (2) above
30  by 30% during calendar year 1995, 28.5% during the calendar year 1996,
31  26.5% during the calendar year 1997, 24.5% during the calendar year
32  1998, 22.5% during the calendar year 1999, and 20% during all calendar
33  years thereafter, which shall constitute the taxable value of the motor
34  vehicle; and (4) by multiplying the taxable value of the motor vehicle
35  produced under clause (3) above by the county average tax rate.
36    (c)  The ``county average tax rate'' means the total amount of general
37  property taxes levied within the county by the state, county and all other
38  taxing subdivisions levying such taxes within such county in the second
39  calendar year before the calendar year in which the owner's full registra-
40  tion year begins divided by the total assessed tangible valuation of prop-
41  erty within such county as of November 1 of such second calendar year
42  before the calendar year in which the owner's full registration year begins
43  as certified by the secretary of revenue, except that: (1) As of November
HB 2031--Am. by SCW
                                     

 1  1, 1994, such rate shall be computed without regard to 11.429% of the
 2  general property taxes levied by school districts pursuant to K.S.A. 72-
 3  6431, and amendments thereto; (2) as of November 1, 1995, such rate
 4  shall be computed without regard to 31.429% of the general property
 5  taxes levied by school districts pursuant to K.S.A. 72-6431, and amend-
 6  ments thereto; (3) as of November 1, 1996, such rate shall be computed
 7  without regard to 54.286% of the general property taxes levied by school
 8  districts pursuant to K.S.A. 72-6431, and amendments thereto; (4) as of
 9  November 1, 1997, such rate shall be computed without regard to 75.75%
10  72.403% [70.36%] 72.403% [70.36%] of the general property taxes
11  levied by school districts pursuant to K.S.A. 72-6431, and amendments
12  thereto; and (5) as of November 1, 1998, and such date in all years there-
13  after, such rate shall be computed without regard to the general property
14  taxes levied by school districts pursuant to K.S.A. 72-6431, and amend-
15  ments thereto.
16    [Sec. 3.  K.S.A. 1996 Supp. 79-412 is hereby amended to read
17  as follows: 79-412. It shall be the duty of the county or district
18  appraiser to value the land and improvements; but the value of the
19  land and improvements shall be entered on the assessment roll in
20  a single aggregate, except as hereinafter provided. Improvements
21  owned by entities other than a city and located on land owned by a city
22  may be assessed to the owners of such improvements, and the taxes im-
23  posed on such improvements may be collected by levy and sale of the
24  interests of such owners the same as in cases of the collection of taxes on
25  personal property.]
26    [New Sec. 4.  On or after the date prescribed by K.S.A. 79-1604,
27  and amendments thereto, for the preparation by the county clerk
28  and submission to the director of property valuation of the abstract
29  of the assessment rolls of the county, the county clerk, if such rolls
30  evidence an increase in total assessed valuation over the total as-
31  sessed valuation of the next preceding year, shall compute a tax
32  levy rate for every taxing subdivision based upon the amount of ad
33  valorem tax certified on or before August 25 of the next preceding
34  year by such subdivision to the county clerk for levy pursuant to
35  K.S.A. 79-1801, and amendments thereto. Such rates shall be pub-
36  lished in a newspaper of general circulation in the county once
37  each week for two consecutive weeks prior to August 1 of each
38  year.]
39    [New Sec. 8 12.  For all taxable years commencing after De-
40  cember 31, 1996, there shall be allowed as a credit against the tax
41  liability of a taxpayer imposed under the Kansas income tax act,
42  the privilege tax on net income of insurance companies imposed
43  under article 28 of chapter 40 of the Kansas Statutes Annotated and
HB 2031--Am. by SCW
                                     

 1  the privilege tax as measured by net income of financial institutions
 2  imposed pursuant to article 11 of chapter 79 of the Kansas Statutes
 3  Annotated, an amount equal to 10% of the property tax actually
 4  paid during an income or privilege taxable year upon commercial
 5  and industrial machinery and equipment classified for property
 6  taxation purposes pursuant to section 1 of article 11 of the Kansas
 7  constitution in subclass (5) of or (6) of class 2 and machinery and
 8  equipment classified for such purposes in subclass (2) of class 2. If
 9  the amount of such tax credit exceeds the taxpayer's income tax
10  liability for the taxable year, the amount thereof which exceeds
11  such tax liability shall be refunded to the taxpayer.
12    [Sec. 9 13.  On July 1, 1997, K.S.A. 1996 Supp. 79-32,110 shall
13  be and is hereby amended to read as follows: 79-32,110. (a) Resident
14  Individuals. Except as otherwise provided by subsection (a) of
15  K.S.A. 79-3220, and amendments thereto, a tax is hereby imposed
16  upon the Kansas taxable income of every resident individual,
17  which tax shall be computed in accordance with the following tax
18  schedules:
19    [(1)  Married individuals filing joint returns.
20  [If the taxable income is:                       The tax is:
21  [Not over $30,000                                3.5% of Kansas taxable income
22  [Over $30,000 but not over $60,000               $1,050 plus 6.25% of excess over $30,000
23  [Over $60,000                                    $2,925 plus 6.45% of excess over $60,000
24    [(2)  All other individuals.
25  [(A)  For tax year 1997:
26  [If the taxable income is:                       The tax is:
27  [Not over $20,000                                4.4% 4.1% of Kansas taxable income
28  [Over $20,000 but not over $30,000               $880 $820 plus 7.5% of excess over $20,000
29  [Over $30,000                                    $1,630 $1,570 plus 7.75% of excess over $30,000
30  [(B)  For tax year 1998:
31  [If the taxable income is:                       The tax is:
32  [Not over $15,000                                3.5% of Kansas taxable income
33  [Over $15,000 but not over $30,000               $525 plus 6.75% of excess over $15,000
34  [Over $30,000                                    $1,537.50 plus 7.75% of excess over $30,000
35  [(C)  For tax year 1999:
36  [If the taxable income is:                       The tax is:
37  [Not over $15,000                                3.5% of Kansas taxable income
38  [Over $15,000 but not over $30,000               $525 plus 6.25% of excess over $15,000
HB 2031--Am. by SCW
                                     

 1  [Over $30,000                                    $1,462.50 plus 7.45% of excess over $30,000]
 2  [(C)  For tax year 1999 [(D) For tax year 2000], and all tax
 3  years thereafter:
 4  [If the taxable income is:                       The tax is:
 5  [Not over $15,000                                3.5% of Kansas taxable income
 6  [Over $15,000 but not over $30,000               $525 plus 6.25% of excess over $15,000
 7  [Over $30,000                                    $1,462.50 plus 6.45% of excess over $30,000
 8    [(b)  Nonresident Individuals. A tax is hereby imposed upon the
 9  Kansas taxable income of every nonresident individual, which tax
10  shall be an amount equal to the tax computed under subsection (a)
11  as if the nonresident were a resident multiplied by the ratio of
12  modified Kansas source income to Kansas adjusted gross income.
13    [(c)  Corporations. A tax is hereby imposed upon the Kansas tax-
14  able income of every corporation doing business within this state
15  or deriving income from sources within this state. Such tax shall
16  consist of a normal tax and a surtax and shall be computed as fol-
17  lows:
18    [(1)  The normal tax shall be in an amount equal to 4% of the
19  Kansas taxable income of such corporation; and
20    [(2)  the surtax shall be in an amount equal to 3.35% of the
21  Kansas taxable income of such corporation in excess of $50,000.
22    [(d)  Fiduciaries. A tax is hereby imposed upon the Kansas taxa-
23  ble income of estates and trusts at the rates provided in paragraph
24    (2) of subsection (a) hereof.
25    [New Sec. 10 14.  (a) For all taxable years commencing after
26  December 31, 1996, there shall be allowed as a credit against the
27  tax liability of a resident individual imposed under the Kansas in-
28  come tax act an amount equal to 50% [25%] of the amount of the
29  credit allowed against such taxpayer's federal income tax liability
30  pursuant to section 23 determined without regard to subsection (c)
31  thereof of the federal internal revenue code for the taxable year
32  in which such credit was claimed against the taxpayer's federal
33  income tax liability.
34    [(b)  The credit allowed by subsection (a) shall not exceed the
35  amount of the tax imposed by K.S.A. 79-32,110, and amendments
36  thereto, reduced by the sum of any other credits allowable pur-
37  suant to law.
38    (b)  For all taxable years commencing after December 31, 1996,
39  there shall be allowed as a credit against the tax liability of a resi-
40  dent individual imposed under the Kansas income tax act an amount
41  equal to $3,000 [$1,500] for the taxable year in which occurs the
42  lawful adoption of a child in the custody of the secretary of social
HB 2031--Am. by SCW
                                     

 1  and rehabilitation services or a child with special needs, whether
 2  or not such individual is reimbursed for all or part of qualified
 3  adoption expenses or has received a public or private grant therefor.
 4  As used in this subsection, terms and phrases shall have the mean-
 5  ings ascribed thereto by the provisions of section 23 of the federal
 6  internal revenue code. No credit shall be allowed under subsection
 7    (a) for any qualified adoption expenses incurred in the adoption of
 8  a child described by this subsection.
 9    (c)  The credit allowed by subsections (a) and (b) shall not ex-
10  ceed the amount of the tax imposed by K.S.A. 79-32,110, and amend-
11  ments thereto, reduced by the sum of any other credits allowable
12  pursuant to law. If the amount of such tax credit exceeds the tax-
13  payer's income tax liability for such taxable year, the amount
14  thereof which exceeds such tax liability may be carried over for
15  deduction from the taxpayer's income tax liability in the next suc-
16  ceeding taxable year or years until the total amount of the tax cred-
17  its has been deducted from tax liability, except that no such tax
18  credit shall be carried over for deduction after the fifth taxable year
19  succeeding the taxable year in which the credit was claimed.
20    [Sec. 11 15.  On July 1, 1997, K.S.A. 1996 Supp. 79-3603 shall
21  be and is hereby amended to read as follows: 79-3603. For the
22  privilege of engaging in the business of selling tangible personal
23  property at retail in this state or rendering or furnishing any of
24  the services taxable under this act, there is hereby levied and there
25  shall be collected and paid a tax at the rate of 4.9%:
26    [(a)  The gross receipts received from the sale of tangible per-
27  sonal property at retail within this state;
28    [(b) (1)  the gross receipts from intrastate telephone or tele-
29  graph services and (2) the gross receipts received from the sale of
30  interstate telephone or telegraph services, which (A) originate
31  within this state and terminate outside the state and are billed to
32  a customer's telephone number or account in this state; or (B) orig-
33  inate outside this state and terminate within this state and are
34  billed to a customer's telephone number or account in this state
35  except that the sale of interstate telephone or telegraph service
36  does not include: (A) Any interstate incoming or outgoing wide
37  area telephone service or wide area transmission type service
38  which entitles the subscriber to make or receive an unlimited num-
39  ber of communications to or from persons having telephone serv-
40  ice in a specified area which is outside the state in which the station
41  provided this service is located; (B) any interstate private com-
42  munications service to the persons contracting for the receipt of
43  that service that entitles the purchaser to exclusive or priority use
HB 2031--Am. by SCW
                                     

 1  of a communications channel or group of channels between ex-
 2  changes; (C) any value-added nonvoice service in which computer
 3  processing applications are used to act on the form, content, code
 4  or protocol of the information to be transmitted; (D) any telecom-
 5  munication service to a provider of telecommunication services
 6  which will be used to render telecommunications services, includ-
 7  ing carrier access services; or (E) any service or transaction de-
 8  fined in this section among entities classified as members of an
 9  affiliated group as provided by federal law (U.S.C. Section 1504);
10    [(c)  the gross receipts from the sale or furnishing of gas, water,
11  electricity and heat, which sale is not otherwise exempt from tax-
12  ation under the provisions of this act, and whether furnished by
13  municipally or privately owned utilities;
14    [(d)  the gross receipts from the sale of meals or drinks fur-
15  nished at any private club, drinking establishment, catered event,
16  restaurant, eating house, dining car, hotel, drugstore or other
17  place where meals or drinks are regularly sold to the public;
18    [(e)  the gross receipts from the sale of admissions to any place
19  providing amusement, entertainment or recreation services in-
20  cluding admissions to state, county, district and local fairs, but such
21  tax shall not be levied and collected upon the gross receipts re-
22  ceived from sales of admissions to any cultural and historical event
23  which occurs triennially;
24    [(f)  the gross receipts from the operation of any coin-operated
25  device dispensing or providing tangible personal property, amuse-
26  ment or other services except laundry services, whether automatic
27  or manually operated;
28    [(g)  the gross receipts from the service of renting of rooms by
29  hotels, as defined by K.S.A. 36-501 and amendments thereto;
30    [(h)  the gross receipts from the service of renting or leasing of
31  tangible personal property except such tax shall not apply to the
32  renting or leasing of machinery, equipment or other personal
33  property owned by a city and purchased from the proceeds of in-
34  dustrial revenue bonds issued prior to July 1, 1973, in accordance
35  with the provisions of K.S.A. 12-1740 through 12-1749, and amend-
36  ments thereto, and any city or lessee renting or leasing such ma-
37  chinery, equipment or other personal property purchased with the
38  proceeds of such bonds who shall have paid a tax under the pro-
39  visions of this section upon sales made prior to July 1, 1973, shall
40  be entitled to a refund from the sales tax refund fund of all taxes
41  paid thereon;
42    [(i)  the gross receipts from the rendering of dry cleaning,
43  pressing, dyeing and laundry services except laundry services ren-
HB 2031--Am. by SCW
                                     

 1  dered through a coin-operated device whether automatic or man-
 2  ually operated;
 3    [(j)  the gross receipts from the rendering of the services of
 4  washing and washing and waxing of vehicles;
 5    [(k)  the gross receipts from cable, community antennae and
 6  other subscriber radio and television services;
 7    [(l)  the gross receipts received from the sales of tangible per-
 8  sonal property to all contractors, subcontractors or repairmen of
 9  materials and supplies for use by them in erecting structures for
10  others, or building on, or otherwise improving, altering, or re-
11  pairing real or personal property of others;
12    [(m)  the gross receipts received from fees and charges by pub-
13  lic and private clubs, drinking establishments, organizations and
14  businesses for participation in sports, games and other recrea-
15  tional activities, but such tax shall not be levied and collected upon
16  the gross receipts received from: (1) Fees and charges by any po-
17  litical subdivision, or any youth recreation organization exclusively
18  providing services to persons 18 years of age or younger which is
19  exempt from federal income taxation pursuant to section 501(c)(3)
20  of the federal internal revenue code of 1986, for participation in
21  sports, games and other recreational activities; and (2) entry fees
22  and charges for participation in a special event or tournament
23  sanctioned by a national sporting association to which spectators
24  are charged an admission which is taxable pursuant to subsection
25    (e);
26    [(n)  the gross receipts received from dues charged by public
27  and private clubs, drinking establishments, organizations and busi-
28  nesses, payment of which entitles a member to the use of facilities
29  for recreation or entertainment;
30    [(o)  the gross receipts received from the isolated or occasional
31  sale of motor vehicles or trailers but not including: (1) The transfer
32  of motor vehicles or trailers by a person to a corporation solely in
33  exchange for stock securities in such corporation; or (2) the trans-
34  fer of motor vehicles or trailers by one corporation to another
35  when all of the assets of such corporation are transferred to such
36  other corporation; or (3) the sale of motor vehicles or trailers
37  which are subject to taxation pursuant to the provisions of K.S.A.
38  79-5101 et seq., and amendments thereto, by an immediate family
39  member to another immediate family member. For the purposes
40  of clause (3), immediate family member means lineal ascendants
41  or descendants, and their spouses. In determining the base for
42  computing the tax on such isolated or occasional sale, the fair mar-
43  ket value of any motor vehicle or trailer traded in by the purchaser
HB 2031--Am. by SCW
                                     

 1  to the seller may be deducted from the selling price;
 2    [(p)  the gross receipts received for the service of installing or
 3  applying tangible personal property which when installed or ap-
 4  plied is not being held for sale in the regular course of business,
 5  and whether or not such tangible personal property when installed
 6  or applied remains tangible personal property or becomes a part
 7  of real estate, except that no tax shall be imposed upon the service
 8  of installing or applying tangible personal property in connection
 9  with the original construction, reconstruction, restoration, remodeling,
10  renovation, repair or replacement of a building or facility or the con-
11  struction, reconstruction, restoration, replacement or repair of a
12  bridge or highway.
13    [For the purposes of this subsection:
14    [(1)  ``Original construction'' shall mean the first or initial construction
15  of a new building or facility. The term ``original construction'' shall include
16  the addition of an entire room or floor to any existing building or facility,
17  the completion of any unfinished portion of any existing building or fa-
18  cility and the restoration, reconstruction or replacement of a building or
19  facility damaged or destroyed by fire, flood, tornado, lightning, explosion
20  or earthquake, but such term shall not include replacement, remodeling,
21  restoration, renovation or reconstruction under any other circumstances;
22    [(2)(1)  ``Building'' shall mean only those enclosures within
23  which individuals customarily live or are employed, or which are
24  customarily used to house machinery, equipment or other prop-
25  erty, and including the land improvements immediately surround-
26  ing such building; and
27    [(3)(2)  ``facility'' shall mean a mill, plant, refinery, oil or gas
28  well, water well, feedlot or any conveyance, transmission or dis-
29  tribution line of any cooperative, nonprofit, membership corpo-
30  ration organized under or subject to the provisions of K.S.A. 17-
31  4601 et seq., and amendments thereto, or of any municipal or
32  quasi-municipal corporation, including the land improvements im-
33  mediately surrounding such facility;
34    [(q)  the gross receipts received for the service of repairing,
35  servicing, altering or maintaining tangible personal property, ex-
36  cept computer software described in subsection (s), and as other-
37  wise provided by subsection (p), which when such services are ren-
38  dered is not being held for sale in the regular course of business,
39  and whether or not any tangible personal property is transferred
40  in connection therewith. The Except as otherwise provided by sub-
41  section (p), the tax imposed by this subsection shall be applicable
42  to the services of repairing, servicing, altering or maintaining an
43  item of tangible personal property which has been and is fastened
HB 2031--Am. by SCW
                                     

 1  to, connected with or built into real property;
 2    [(r)  the gross receipts from fees or charges made under service
 3  or maintenance agreement contracts for services, charges for the
 4  providing of which are taxable under the provisions of subsection
 5    (p) or (q);
 6    [(s)  the gross receipts received from the sale of computer soft-
 7  ware, and the sale of the services of modifying, altering, updating
 8  or maintaining computer software. As used in this subsection,
 9  ``computer software'' means information and directions loaded
10  into a computer which dictate different functions to be performed
11  by the computer. Computer software includes any canned or pre-
12  written program which is held or existing for general or repeated
13  sale, even if the program was originally developed for a single end
14  user as custom computer software. The sale of computer software
15  or services does not include: (1) The initial sale of any custom com-
16  puter program which is originally developed for the exclusive use
17  of a single end user; or (2) those services rendered in the modifi-
18  cation of computer software when the modification is developed
19  exclusively for a single end user only to the extent of the modifi-
20  cation and only to the extent that the actual amount charged for
21  the modification is separately stated on invoices, statements and
22  other billing documents provided to the end user. The services of
23  modification, alteration, updating and maintenance of computer
24  software shall only include the modification, alteration, updating
25  and maintenance of computer software taxable under this subsec-
26  tion whether or not the services are actually provided; and
27    [(t)  the gross receipts received for telephone answering serv-
28  ices, including mobile phone services, beeper services and other
29  similar services.
30    [New Sec. 12.  (a) There shall be allowed as a credit against the
31  tax liability of a resident individual imposed under the Kansas in-
32  come tax act an amount equal to 10% for tax year 1997 and 15%
33  for all tax years thereafter, of the amount of the earned income
34  credit allowed against such taxpayer's federal income tax liability
35  pursuant to section 32 of the federal internal revenue code for the
36  taxable year in which such credit was claimed against the taxpay-
37  er's federal income tax liability.
38    [(b)  If the amount of the credit allowed by subsection (a) ex-
39  ceeds the taxpayer's income tax liability imposed under the Kansas
40  income tax act, such excess amount shall be refunded to the tax-
41  payer.
42    [(c)  The provisions of this section shall be applicable to all tax-
43  able years commencing after December 31, 1996.
HB 2031--Am. by SCW
                                     

 1    Sec. 12 16.  On and after October 16, 1997, K.S.A. 79-3634 is
 2  hereby amended to read as follows: 79-3634. The right to file a
 3  claim for a refund under K.S.A. 79-3620 and 79-3632 to 79-3639 shall
 4  be personal to the claimant and shall not survive his or her death, but
 5  such right et seq. may be exercised on behalf of a claimant by his or
 6  her legal guardian, conservator or attorney-in-fact. When a claim-
 7  ant dies after having filed a timely claim the amount thereof shall
 8  be disbursed to another member of the household as determined by
 9  the director of taxation. If the claimant was the only member of his
10  or her household, the claim may be paid to his or her executor or
11  administrator, but if neither is appointed and qualified, the amount
12  of the claim may be paid upon a claim duly made to any heir at
13  law. In the absence of any such claim within two (2) years of the
14  filing of the claim, the amount of the claim shall escheat to the state.
15  When a person who would otherwise be entitled to file a claim under the
16  provisions of this act dies prior to filing such claim, another member of
17  such person's household may file such claim in the name of such decedent,
18  subject to the deadline prescribed by K.S.A. 79-4505, and amendments
19  thereto, and the director shall pay the amount to which the decedent
20  would have been entitled to such person filing the claim. If the decedent
21  was the only member of his or her household, the decedent's executor or
22  administrator may file such claim in the name of the decedent, and the
23  claim shall be paid to said executor or administrator. In the event that
24  neither an executor or administrator is appointed and qualified, such
25  claim may be made by any heir at law and the claim shall be payable to
26  such heir at law. Any of the foregoing provisions shall be applicable in
27  any case where the decedent dies in the calendar year preceding the year
28  in which a claim may be made under the provisions of this act, if such
29  decedent was a resident of or domiciled in this state during the entire part
30  of such year that such decedent was living. Where decedent's death occurs
31  during the calendar year preceding the year in which a claim may be
32  made hereunder, the amount of the claim that would have been allowable
33  if the decedent had been a resident of or domiciled in this state the entire
34  calendar year of his or her death shall be reduced in a proportionate
35  amount equal to a fraction of the claim otherwise allowable, the numerator
36  of which fraction is the number of months in such calendar year following
37  the month of decedent's death and the denominator of which is 12.
38    Sec. 13 17.  On and after October 16, 1997, K.S.A. 79-3635 is
39  hereby amended to read as follows: 79-3635. (a) A claimant shall
40  be entitled to a refund of retailers' sales taxes paid upon food during
41  the calendar year 1986 1997 and each year thereafter in the amount
42  hereinafter provided. For households having a household income of
43  less than $5,000, a refund in the amount of $40 $80 shall be allowed
HB 2031--Am. by SCW
                                     

 1  for the head of household and a refund of $30 $60 shall be allowed
 2  for each additional member of the household. For households hav-
 3  ing a household income of at least $5,000 but less than $10,000, a
 4  refund in the amount of $30 $60 shall be allowed for the head of
 5  household and a refund of $25 $50 shall be allowed for each addi-
 6  tional member of the household. For households having a household
 7  income of at least $10,000 but not more than $13,000 $15,000, a
 8  refund in the amount of $20 $40 shall be allowed for the head of
 9  household and a refund of $15 $30 shall be allowed for each addi-
10  tional member of the household. For households having a household
11  income of at least $15,000 but not more than $20,000, a refund in the
12  amount of $30 shall be allowed for the head of the household and a refund
13  of $20 shall be allowed for each additional member of the household. For
14  households having a household income of at least $20,000 but not more
15  than $25,000, a refund in the amount of $20 shall be allowed for the head
16  of household and a refund of $10 shall be allowed for each additional
17  member of the household. All such claims shall be paid from the sales
18  tax refund fund upon warrants of the director of accounts and re-
19  ports pursuant to vouchers approved by the director of taxation or
20  by a person or persons designated by the director, except that no
21  warrant shall be drawn in an amount less than $5.
22    (b)  A head of household shall make application for refunds for
23  all members of the same household upon a common form provided
24  for the making of joint claims. All claims paid to members of the
25  same household shall be paid as a joint claim by means of a single
26  warrant.
27    (c)  No claim for a refund of taxes under the provisions of K.S.A.
28  79-3620 and 79-3632 to 79-3639 et seq. shall be paid or allowed unless
29  such claim is actually filed with and in the possession of the de-
30  partment of revenue on or before October April 15 of the year next
31  succeeding the year in which said such taxes were paid. The director
32  of taxation may: (1) Extend the time for filing any claim under the
33  provisions of this act when good cause exists therefor; or (2) accept
34  a claim filed after the deadline for filing in the case of sickness,
35  absence or disability of the claimant if said claim has been filed
36  within four (4) years of said deadline.
37    [Sec. 13 14  18 [15].  On and after October 16, 1997, K.S.A. 1996
38  Supp. 79-4502 is hereby amended to read as follows: 79-4502. As
39  used in this act, unless the context clearly indicates otherwise:
40    [(a)  ``Income'' means the sum of adjusted gross income under
41  the Kansas income tax act, maintenance, support money, cash pub-
42  lic assistance and relief (not including any refund granted under
43  this act), the gross amount of any pension or annuity (including all
HB 2031--Am. by SCW
                                     

 1  monetary retirement benefits from whatever source derived, in-
 2  cluding but not limited to, railroad retirement benefits, all pay-
 3  ments received under the federal social security act and veterans
 4  disability pensions), all dividends and interest from whatever
 5  source derived not included in adjusted gross income, workers
 6  compensation and the gross amount of ``loss of time'' insurance. It
 7  does not include gifts from nongovernmental sources or surplus
 8  food or other relief in kind supplied by a governmental agency,
 9  nor shall net operating losses and net capital losses be considered in the
10  determination of income.
11    [(b)  ``Household'' means a claimant, a claimant and spouse who
12  occupy the homestead or a claimant and one or more individuals
13  not related as husband and wife who together own or rent and oc-
14  cupy a homestead.
15    [(c)  ``Household income'' means all income received by all per-
16  sons of a household in a calendar year while members of such
17  household.
18    [(d)  ``Homestead'' means the dwelling, or any part thereof,
19  whether owned or rented, which is occupied as a residence by the
20  household and so much of the land surrounding it, as defined as a
21  home site for ad valorem tax purposes, and may consist of a part
22  of a multi-dwelling or multi-purpose building and a part of the land
23  upon which it is built or a manufactured home or mobile home
24  and the land upon which it is situated. ``Owned'' includes a vendee
25  in possession under a land contract, a life tenant, a beneficiary
26  under a trust and one or more joint tenants or tenants in common.
27    [(e)  ``Claimant'' means a person who has filed a claim under
28  the provisions of this act and was, during the entire calendar year
29  preceding the year in which such claim was filed for refund under
30  this act, except as provided in K.S.A. 79-4503, and amendments
31  thereto, both domiciled in this state and was: (1) A person having
32  a disability; (2) a person who is 55 years of age or older or (3) a
33  person other than a person included under (1) or (2) having one
34  or more dependent children under 18 years of age residing at the
35  person's homestead during the calendar year immediately preced-
36  ing the year in which a claim is filed under this act.
37    [When a homestead is occupied by two or more individuals and
38  more than one of the individuals is able to qualify as a claimant,
39  the individuals may determine between them as to whom the
40  claimant will be. If they are unable to agree, the matter shall be
41  referred to the secretary of revenue whose decision shall be final.
42    [(f)  ``Property taxes accrued'' means property taxes, exclusive
43  of special assessments, delinquent interest and charges for service,
HB 2031--Am. by SCW
                                     

 1  levied on a claimant's homestead in 1979 or any calendar year
 2  thereafter by the state of Kansas and the political and taxing sub-
 3  divisions of the state. When a homestead is owned by two or more
 4  persons or entities as joint tenants or tenants in common and one
 5  or more of the persons or entities is not a member of claimant's
 6  household, ``property taxes accrued'' is that part of property taxes
 7  levied on the homestead that reflects the ownership percentage of
 8  the claimant's household. For purposes of this act, property taxes
 9  are ``levied'' when the tax roll is delivered to the local treasurer
10  with the treasurer's warrant for collection. When a claimant and
11  household own their homestead part of a calendar year, ``property
12  taxes accrued'' means only taxes levied on the homestead when
13  both owned and occupied as a homestead by the claimant's house-
14  hold at the time of the levy, multiplied by the percentage of 12
15  months that the property was owned and occupied by the house-
16  hold as its homestead in the year. When a household owns and
17  occupies two or more different homesteads in the same calendar
18  year, property taxes accrued shall be the sum of the taxes allocable
19  to those several properties while occupied by the household as its
20  homestead during the year. Whenever a homestead is an integral
21  part of a larger unit such as a multi-purpose or multi-dwelling
22  building, property taxes accrued shall be that percentage of the
23  total property taxes accrued as the value of the homestead is of the
24  total value. For the purpose of this act, the word ``unit'' refers to
25  that parcel of property covered by a single tax statement of which
26  the homestead is a part.
27    [(g)  ``Disability'' means:
28    [(1)  Inability to engage in any substantial gainful activity by
29  reason of any medically determinable physical or mental impair-
30  ment which can be expected to result in death or has lasted or can
31  be expected to last for a continuous period of not less than 12
32  months, and an individual shall be determined to be under a dis-
33  ability only if the physical or mental impairment or impairments
34  are of such severity that the individual is not only unable to do the
35  individual's previous work but cannot, considering age, education
36  and work experience, engage in any other kind of substantial gain-
37  ful work which exists in the national economy, regardless of
38  whether such work exists in the immediate area in which the in-
39  dividual lives or whether a specific job vacancy exists for the in-
40  dividual, or whether the individual would be hired if application
41  was made for work. For purposes of the preceding sentence (with
42  respect to any individual), ``work which exists in the national econ-
43  omy'' means work which exists in significant numbers either in the
HB 2031--Am. by SCW
                                     

 1  region where the individual lives or in several regions of the coun-
 2  try; for purposes of this subsection, a ``physical or mental impair-
 3  ment'' is an impairment that results from anatomical, physiological
 4  or psychological abnormalities which are demonstrable by medi-
 5  cally acceptable clinical and laboratory diagnostic techniques; or
 6    [(2)  blindness and inability by reason of blindness to engage in
 7  substantial gainful activity requiring skills or abilities comparable
 8  to those of any gainful activity in which the individual has previ-
 9  ously engaged with some regularity and over a substantial period
10  of time.
11    [(h)  ``Blindness'' means central visual acuity of 20/200 or less
12  in the better eye with the use of a correcting lens. An eye which is
13  accompanied by a limitation in the fields of vision such that the
14  widest diameter of the visual field subtends an angle no greater
15  than 20 degrees shall be considered for the purpose of this para-
16  graph as having a central visual acuity of 20/200 or less.
17    [(i)  ``Rent constituting property taxes accrued'' means 15%
18  [20%] of the gross rent actually paid in cash or its equivalent in
19  1979 or any taxable year thereafter by a claimant and claimant's
20  household solely for the right of occupancy of a Kansas homestead
21  on which ad valorem property taxes were levied in full for that
22  year. When a household occupies two or more different home-
23  steads in the same calendar year, rent constituting property taxes
24  accrued shall be computed by adding the rent constituting prop-
25  erty taxes accrued for each property rented by the household while
26  occupied by the household as its homestead during the year.
27    [(j)  ``Gross rent'' means the rental paid at arm's length solely
28  for the right of occupancy of a homestead or space rental paid to
29  a landlord for the parking of a mobile home, exclusive of charges
30  for any utilities, services, furniture and furnishings or personal
31  property appliances furnished by the landlord as a part of the
32  rental agreement, whether or not expressly set out in the rental
33  agreement. Whenever the director of taxation finds that the land-
34  lord and tenant have not dealt with each other at arms length and
35  that the gross rent charge was excessive, the director may adjust
36  the gross rent to a reasonable amount for the purposes of the
37  claim.
38    [Sec. 14 15 19 [16].  On and after October 16, 1997, K.S.A. 79-
39  4505 is hereby amended to read as follows: 79-4505. Except as
40  provided in K.S.A. 79-4517, and amendments thereto, no claim in
41  respect of property taxes levied in any year shall be paid or allowed
42  unless such claim is actually filed with and in the possession of the
43  department of revenue on or before October April 15 of the year
HB 2031--Am. by SCW
                                     

 1  next succeeding the year in which said taxes were levied.
 2    [Sec. 15 16 20 [17].  On and after October 16, 1997, K.S.A. 79-
 3  4508 is hereby amended to read as follows: 79-4508. The amount
 4  of any claim pursuant to this act shall be computed by deducting
 5  the amount computed under column (2) from the amount of clai-
 6  mant's property tax accrued and/or rent constituting property tax
 7  accrued.
 8  [(1)                                  (2)
 9  [Claimants household[income           Deduction from property tax accruedand/or rent constituting
10  [At least         But not more than             property tax accrued
11  [$0               $3,000                        0
12  [$3,000.0         3,500                         1% of income in excess of $3,000
13  [3,500.01         4,000                         $ 5 plus 2% of income in excess of $3,500
14  [4,000.01         4,500                         $ 15 plus 3% of income in excess of $4,000
15  [4,500.01         7,000                         $ 30 plus 4% of income in excess of $4,500
16  [7,000.01                                       $130 plus 4 1/2% of income in excess of $7,000
17  [$0               $3,000                        $0
18  [3,001            4,000                         12%
19  [4,001            25,000                        12% plus 4% of every $1,000, or fraction thereof, of income in
     excess of $4,001]
20    [The director of taxation shall prepare a table under which
21  claims under this act shall be determined. The amount of claim for
22  each bracket shall be computed only to the nearest one dollar ($1)
23  $1.
24    [The claimant may elect not to record the amount claimed on
25  the claim. The claim allowable to persons making this election shall
26  be computed by the department which shall notify the claimant by
27  mail of the amount of the allowable claim.
28    [New Sec. 16.  (a) For tax year 1997, the following described
29  property, to the extent herein specified, shall be and is hereby
30  exempt from the property tax levied pursuant to the provisions of
31  K.S.A. 1996 Supp. 72-6431, and amendments thereto:  Property
32  used as a single family residence, to the extent of $40,000 of its
33  appraised valuation.
34    [(b)  During the following fiscal year, the director of the
35  budget, after consultation with the commissioner of education,
36  shall certify to the director of accounts and reports monthly
37  amounts for revenue transfer from the state general fund to the
38  state school district finance fund in an amount not to exceed the
39  following total amount within the specified fiscal year:
40    [For the fiscal year beginning on July 1, 1997 .................. $1,500,887,276
41    [(c)  There is hereby created a state school district supplemen-
HB 2031--Am. by SCW
                                     

 1  tal aid finance fund within the state treasury. During the following
 2  fiscal year, the director of the budget, after consultation with the
 3  commissioner of education, shall certify to the director of accounts
 4  and reports monthly amounts for revenue transfer from the state
 5  general fund to the state school district supplemental aid finance
 6  fund in an amount not to exceed the following total amount within
 7  the specified fiscal year:
 8    For the fiscal year beginning on July 1, 1997 ...................... $52,089,000
 9    [(d)  There is hereby created a state school district enhance-
10  ment fund within the state treasury. During each of the following
11  fiscal years, the director of the budget, after consultation with the
12  commissioner of education, shall certify to the director of accounts
13  and reports monthly amounts for revenue transfer from the state
14  general fund to the state school district enhancement fund in an
15  amount not to exceed the following total amount within the spec-
16  ified fiscal year:
17    [For the fiscal year beginning on July 1, 1997 .................... $34,900,000]
18    [New Sec. 17.  For all purposes associated with property taxa-
19  tion, the provisions of K.S.A. 79-412 notwithstanding, that portion
20  of the fair market value of real property attributable to the leasing
21  of real property, or the creation of any other interest of less than
22  fee simple in real property, for the purpose of the placement of a
23  wireless communications tower, antenna or relay site upon the real
24  property, shall be entered on the assessment roll separate from
25  the remaining fair market value. Such portion of the fair market
26  value shall be separately taxed to the owner of such wireless com-
27  munications tower, antenna or relay site as real property at the
28  same classification and same tax rate as the real property upon
29  which the wireless communications tower, antenna or relay site is
30  located except that, in the event the real property upon which the
31  wireless communications tower, antenna or relay site is located is
32  exempt from property taxation, such real property shall continue
33  to be exempt from property taxation, except that portion of the
34  fair market value of such tax-exempt real property attributable to
35  the leasing of such tax-exempt real property, or the creation of any
36  other interest of less than fee simple in such tax-exempt real prop-
37  erty, for the purpose of the placement of a wireless communica-
38  tions tower, antenna or relay site upon such tax-exempt real prop-
39  erty, shall be taxable and shall be assessed to the owner of such
40  wireless communications tower, antenna or relay site as real prop-
41  erty at 25% of value. Such tax shall be a lien on the interest in the
42  real property of such owner of the wireless communications tower,
43  antenna or relay site and shall be collected in the same manner as
HB 2031--Am. by SCW
                                     

 1  the collection of other taxes on real property.
 2    [New Sec. 18.  Any real property, or portion thereof, which is
 3  otherwise exempt from property taxation pursuant to the provi-
 4  sions of K.S.A. 79-201, 79-201a, 79-201b, 79-201g and amendments
 5  thereto, and which is leased or otherwise used for the location of
 6  a wireless communications tower, antenna or relay site, shall be
 7  deemed to be used exclusively for the purposes of such sections.
 8    [New Sec. 19.  The provisions of sections 3 and 4 of this act
 9  shall be applicable to all taxable years commencing after Decem-
10  ber 31, 1995.]
11    [New Sec. 20.  (a) Any business firm which employs on a full-
12  time basis a person with a developmental disability or who is se-
13  riously and persistently mentally ill and who is engaged for a pe-
14  riod of eight months or more in the performance of duties in
15  connection with the operation of such firm, shall be allowed a
16  credit against the tax imposed by the Kansas income tax act, the
17  tax on net income of national banking associations, state banks,
18  trust companies or savings and loan associations imposed under
19  article 11 of chapter 79 of the Kansas Statutes Annotated, or the
20  tax on net income of insurance companies imposed under article
21  28 of chapter 40 of the Kansas Statutes Annotated. The amount of
22  the credit allowed shall be $500 for each such person employed,
23  except that no more than $50,000 may be claimed for credit in any
24  one taxable year.
25    [(b)  As used in this section:
26    [(1)  ``Business firm'' means any business entity authorized to
27  do business in the state of Kansas which is subject to the state
28  income tax imposed by the provisions of the Kansas income tax act,
29  any national banking association, state bank, trust company or sav-
30  ings and loan association paying an annual tax on its net income
31  pursuant to article 11 of chapter 79 of the Kansas Statutes Anno-
32  tated, or any insurance company paying an annual tax on its net
33  income pursuant to article 28 of chapter 40 of the Kansas Statutes
34  Annotated; and
35    [(2)  ``person with a developmental disability or who is seriously
36  and persistently mentally ill'' means any person who meets the
37  criteria established for mental retardation or developmental dis-
38  ability or serious and persistent mental illness by the division of
39  mental health and retardation services of the department of social
40  and rehabilitation services, and who is recommended for employ-
41  ment by a business firm, by a community mental health center or
42  facility for the mentally retarded established pursuant to K.S.A.
43  19-4001 et seq., or by any entity which any such center or facility
HB 2031--Am. by SCW
                                     

 1  has contracted with to provide mental health services or services
 2  for the mentally retarded, or both.
 3    [(c)  The provisions of this section shall be applicable to all tax-
 4  able years commencing after December 31, 1996.]
 5    [New Sec. 21.  (a) Whenever the appraised valuation of any sin-
 6  gle-family owner-occupied residential real property established
 7  for property taxation purposes exceeds by 75% or more the ap-
 8  praised valuation of such property for such purposes established
 9  for utilization for the next preceding taxable year, and if such in-
10  crease is not due to such property being improved, a portion of
11  the property tax attributable to such increase shall be refunded to
12  the taxpayer as provided by this section.
13    [(b)  Any person who qualifies for a refund pursuant to the pro-
14  visions of subsection (a) and has completed an appeal pursuant to
15  K.S.A. 79-1448, and amendments thereto, from the appraised val-
16  uation established for such residential real property may apply for
17  a refund of property tax to the division of taxation of the depart-
18  ment of revenue. For the taxable year for which such increase is
19  established, the amount of such refund shall be equal to 80% of
20  the property tax attributable to such increase; for the taxable year
21  next succeeding the taxable year for which such increase is estab-
22  lished, the amount of such refund shall be equal to 50% of the
23  property tax attributable to such increase; and for the second tax-
24  able year succeeding the taxable year for which such increase is
25  established, the amount of such refund shall be equal to 25% of
26  the property tax attributable to such increase.
27    [(c)  The secretary of revenue shall adopt rules and regulations
28  necessary to effectively implement the provisions of this section,
29  and shall devise forms necessary for the implementation of this
30  section.
31    [(d)  The provisions of this section shall be applicable to all tax-
32  able years commencing after December 31, 1996.]
33    [New Sec. 22.  (a) On and after January 1, 1998, a tax is hereby
34  imposed on the estate of every resident decedent, and every non-
35  resident decedent who died holding an interest in property with a
36  Kansas tax situs, whose estate is required by federal law to file a
37  return for federal state taxes. The amount of such tax shall be equal
38  to the amount of the maximum credit allowed by section 2011 of
39  the internal revenue code against the tax that would otherwise be
40  imposed on the transfer of the estate of the decedent by section
41  2001 of the internal revenue code.
42    [(b)  When the estate of a resident decedent shall consist of
43  property within and without the state, or in the case of the estate
HB 2031--Am. by SCW
                                     

 1  of a nonresident decedent who died holding an interest in property
 2  with a Kansas tax situs, the tax imposed under subsection (a) shall
 3  be the percentage thereof that the gross estate for federal estate
 4  tax purposes less the value of all property included therein having
 5  a tax situs which is not within the jurisdiction of the state of Kansas,
 6  bears to the total gross estate for federal estate tax purposes.
 7    [Sec. 23.  On and after January 1, 1998, K.S.A. 1996 Supp. 79-
 8  1541a is hereby amended to read as follows: 79-1541a. Whenever
 9  the amount of the tax imposed upon a generation-skipping transfer
10  by section 2601 of the internal revenue code is determined, a tax,
11  equal to the maximum amount of the credit allowed against such
12  tax by section 2604 of the internal revenue code, is hereby imposed
13  upon the taxable estate of the decedent as of the date of such de-
14  termination. The tax imposed under the provisions of this act shall be
15  chargeable against the interests of each beneficiary in proportion to the
16  share received by each beneficiary under such transfer.
17    [Sec. 24.  On and after January 1, 1998, K.S.A. 1996 Supp. 79-
18  1541b is hereby amended to read as follows: 79-1541b. When the
19  property transferred subject to the tax imposed by K.S.A. 1996
20  Supp. 79-1541a shall consist of both property within and property
21  without the state, the tax imposed shall be the percentage that the
22  Kansas assets of the generation-skipping trust or generation-skip-
23  ping trust equivalent bears to the total assets of the generation-
24  skipping trust or generation-skipping trust equivalent.
25    [Sec. 25.  On and after January 1, 1998, K.S.A. 1996 Supp. 79-
26  1542 is hereby amended to read as follows: 79-1542. As used in
27  this act unless the context otherwise requires:
28    [(a)  Any term used in this act shall have the same meaning as
29  when used in a comparable context in the internal revenue code.
30  Any reference in this act to the ``internal revenue code'' shall mean
31  the provisions of the United States internal revenue code of 1986,
32  as such code exists on December 31, 1992 1996. Any reference in
33  this act to a specific provision of the internal revenue code shall
34  be to such provision as it exists on December 31, 1992 1996.
35    [(b)  ``Deemed executor'' includes any person in actual or con-
36  structive possession of any property of the decedent.
37    [(c)  ``Director'' means the director of taxation.
38    [(d)  ``Distributee'' means a beneficiary, legatee, devisee, heir, next of
39  kin, grantee, donee, vendee, joint tenant or any other successor in inter-
40  est, whether outright or in trust.
41    [(e)  ``Distributive share'' or ``distributive shares'' means the share or
42  shares of the distributive estate passing to a distributee or distributees.
43    [(f) (d)  ``Domicile'' refers to that place where a person resides,
HB 2031--Am. by SCW
                                     

 1  has an intention to remain and to which they intend to return fol-
 2  lowing any absence.
 3    [(g) (e)  ``Estate'' and ``property'' shall mean the real, personal
 4  and mixed property or interest therein of the testator, intestate,
 5  grantor, bargainor, vendor or donor which shall pass or be trans-
 6  ferred to legatees, devisees, heirs, next of kin, grantees, donees,
 7  vendees, or successors and shall include all personal property
 8  within or without the state.
 9    [(h) (f)  ``Executor'' and ``administrator'' mean the duly ap-
10  pointed, qualified and acting executor or administrator of the de-
11  cedent in this state.
12    [(i) (g)  ``Nonresident decedent'' means a decedent who was not
13  a resident decedent at the time of death.
14    [(j) (h)  ``Personal representative'' means the executor, admin-
15  istrator or deemed executor of the decedent.
16    [(k) (i)  ``Resident decedent'' means a decedent who was domi-
17  ciled in this state at the time of death.
18    [(l) (j)  ``Secretary'' means the secretary of revenue, or the se-
19  cretary's designee.
20    [(m) (k)  ``Tax'' includes tax, penalty and interest, unless the con-
21  text of a particular section otherwise requires.
22    [(n) (l)  ``Transfer'' shall include the passing of property or any
23  interest therein in possession or enjoyment, present or future, by
24  inheritance, descent, devise, succession, bequest, grant, deed, bar-
25  gain, sale, gift or appointment in the manner herein prescribed.
26    [Sec. 26.  On and after January 1, 1998, K.S.A. 1996 Supp. 79-
27  1564 is hereby amended to read as follows: 79-1564. (a) Except as
28  hereinafter provided, the executor or administrator of the estate of every
29  decedent whose death gives rise to a tax liability under the provisions of
30  this act, within nine months following the death of the decedent, shall
31  make and The personal representative of every estate subject to the tax
32  imposed by section 1 who is required by federal law to file a return for
33  federal estate taxes shall file in the office of the director a return on
34  forms prepared and furnished by the secretary together with a copy
35  of the federal estate tax return on or before the date the federal estate tax
36  return is required to be filed.
37    [(b)  In those estates in which no executor or administrator has been
38  appointed, the deemed executor shall make and file such return. In the
39  event there is more than one deemed executor, all deemed executors
40  shall be jointly responsible for completing and filing one return reporting
41  all of the assets of the estate except as hereinafter provided.
42    [(c)  If, after exercising due diligence, the personal representative
43  making and filing such return is unable to make a complete return as to
HB 2031--Am. by SCW
                                     

 1  any part of the gross estate of the decedent, such personal representative
 2  shall make and file a return reporting all information as to the estate
 3  assets, including a description thereof and the name of any person holding
 4  a legal or beneficial interest in the assets to the best of such personal
 5  representative's knowledge.
 6    [(d) (b)  The taxes imposed under the provisions of this act shall
 7  be paid at the expiration of nine months after the death of the decedent.
 8  Such taxes shall be payable from the assets of the estate or proceeds
 9  therefrom, in order, so far as practicable, that each distributive share of
10  the estate shall bear a just and equitable proportion of such taxes unless
11  otherwise directed by the will of the decedent or trust agreement by the
12  personal representative to the director not later than the date of the filing
13  of the return.
14    [(1)  The executor or administrator of the estate of every decedent
15  who is required to file a return shall pay to the director all taxes imposed
16  under this act. In the event the tax imposed against the shares of the
17  decedent's estate exceeds the value of the assets or the proceeds there-
18  from which were in the custody or control of the executor or administra-
19  tor, the executor or administrator shall pay the tax imposed to the extent
20  of the value of the amount or the proceeds therefrom within such exe-
21  cutor's or administrator's custody or control and the balance of the taxes
22  may be stayed upon application to and approval by the director. Such
23  application shall be made at the time the return is filed upon forms pre-
24  scribed by the secretary. Upon approval of such application payment of
25  the taxes shall be stayed for a period not to exceed one year and the
26  executor or administrator shall have a right to proceed against the indi-
27  vidual distributee or distributees receiving such taxable shares and may
28  perfect a lien therefor under the provisions of K.S.A. 79-1569, and
29  amendments thereto.
30    [(2)  Except as hereinafter provided, the deemed executor or deemed
31  executors of the estate of every decedent who are required to file a return
32  shall pay to the director all of the taxes imposed by this act. To the extent
33  that all deemed executors do not join in the filing of the return, the
34  deemed executors who jointly file shall pay only that portion of the taxes
35  representing the aggregate tax liability imposed upon the distributive
36  shares of those so filing.
37    [(3)  Where an asset not within the custody or control of a personal
38  representative gives rise to a tax liability and such personal representative
39  is required to pay such tax or has voluntarily paid such tax from the assets
40  within such personal representative's custody or control, the personal rep-
41  resentative shall have a right to proceed against the individual distributee
42  receiving such share and may perfect a lien therefor under the provisions
43  of K.S.A. 79-1569, and amendments thereto. For the purpose of this
HB 2031--Am. by SCW
                                     

 1  paragraph: (1) With respect to the tax liability caused without consider-
 2  ation of K.S.A. 79-1539 or 79-1540, and amendments thereto, the per-
 3  sonal representative shall be entitled to recover from the distributee the
 4  amount by which the total tax liability of the decedent's estate resulting
 5  from such assets outside the control of the personal representative and
 6  received by the distributee exceeds the total tax liability which would have
 7  been payable if the value of such property had not been included in the
 8  decedent's gross estate; and (2) with respect to any additional tax liability
 9  resulting from the application of K.S.A. 79-1539 or 79-1540, and amend-
10  ments thereto, the personal representative shall be entitled to recover
11  from the distributee that portion of the total tax liability caused by such
12  application equal to the ratio that the value of such assets outside the
13  control of the personal representative received by the distributee bears
14  to the total value of such assets outside the control of the personal rep-
15  resentative.
16    [(4)  Whenever the personal representative is required to pay the taxes
17  imposed upon an asset not within the personal representative's custody
18  or control and pays the taxes imposed thereon from assets or proceeds
19  therefrom of the estate within the personal representative's custody or
20  control and thereafter fails to collect the taxes attributable to the distrib-
21  utive shares of the decedent's estate which were not within the personal
22  representative's custody or control, the personal representative shall be
23  entitled to a refund of the taxes attributable to such shares which were
24  paid from assets or proceeds therefrom within the personal representa-
25  tive's custody or control upon application to the director. The application
26  for refund shall be filed on forms prescribed by the secretary within the
27  time allowed for refunds pursuant to K.S.A. 79-1574, and amendments
28  thereto. Upon being satisfied that the personal representative has exer-
29  cised due diligence in attempting to recover the taxes attributable to the
30  distributive shares of the decedent's estate which were not within such
31  personal representative's custody or control, the director shall refund the
32  same.
33    [(5)  The director shall issue a receipt acknowledging payment of such
34  taxes whenever the taxes as shown to be due on the return or any addi-
35  tional taxes assessed by the director have been paid by a personal rep-
36  resentative and (A) such executor or administrator has requested a cash
37  receipt in order to be subrogated to the state's right to proceed in col-
38  lecting the tax against a distributee; or (B) such executor or administrator
39  has received a stay of payment from the director. Such a receipt shall be
40  issued only under circumstances described in clauses (A) or (B) of this
41  subsection and shall not constitute evidence that a final determination of
42  taxes pursuant to K.S.A. 79-1571, and amendments thereto, has been
43  made.
HB 2031--Am. by SCW
                                     

 1    [(e) (c)  If the taxes contemplated by this act are not paid when
 2  due, interest at the rate prescribed by K.S.A. 79-2968(b), and
 3  amendments thereto, shall be charged and collected commencing
 4  at the time the same become payable. When the filing of the return
 5  is delayed beyond nine months after the death of the decedent and the
 6  director finds that such delay was due to the inability of the personal
 7  representative to determine the distributive shares of an estate or the
 8  proper recipients thereof, or to litigation, interest shall commence at the
 9  time the return is filed.
10    [(f)  At the election of the personal representative, the taxes imposed
11  by this act may be determined by the director. Such election shall be
12  made by filing a return disclosing all information necessary for the de-
13  termination of the taxes imposed by this act. Upon receipt of all necessary
14  information, the director shall determine the taxes due and owing and
15  shall notify the personal representative of the tax liability by registered or
16  certified mail. Notwithstanding any election made pursuant to this sec-
17  tion, the taxes shall be due and payable at the same time and in the same
18  manner as if the taxes had been determined by the personal represen-
19  tative. If the election pursuant to this subsection is made before the ex-
20  piration of the nine-month period after the death of the decedent, interest
21  shall be charged and collected commencing 10 days after notice of the
22  tax liability has been received by the personal representative, or at the
23  expiration of the nine-month period after the decedent's death, whichever
24  is later. If the election pursuant to this subsection is not timely made and
25  the director shall find that the delay was not due to the circumstances set
26  forth in subsection (e), interest shall be charged and collected commenc-
27  ing at the expiration of the nine-month period after the decedent's death.
28    [Sec. 27.  On and after January 1, 1998, K.S.A. 1996 Supp. 79-
29  1569 is hereby amended to read as follows: 79-1569. (a) Subject to
30  the provisions of subsection (b), Property of which a decedent died
31  seized or possessed, subject to the taxes imposed by this act, in
32  whatever form of investment it may happen to be shall be charged
33  with a lien for all taxes, penalty and interest thereon which are or
34  may become due on such property; but the lien shall not affect any
35  property after it has been sold or disposed of for value by the
36  executors or administrators in accordance with law, and no consent
37  to transfer issued by the director shall be required to release such lien,
38  but in all such cases a lien shall attach to the proceeds realized
39  from any such sale or other disposition for all taxes and interest
40  thereon which are or may be due on such property. That portion
41  of the decedent's property which is used for the payment of
42  charges against the estate and expenses of its administration, al-
43  lowed by any court having jurisdiction thereof, shall be divested
HB 2031--Am. by SCW
                                     

 1  of such lien. The lien on any property subject to the inheritance tax
 2  act by virtue of the provisions of this subsection shall be divested
 3  after 10 years from the date of the decedent's death.
 4    [(b)  If the taxes imposed under this act are not paid when due, the
 5  spouse, transferee, surviving tenant, person in possession of the property
 6  by reason of the exercise, nonexercise, or release of a power of appoint-
 7  ment, or beneficiary, who receives, or has on the date of the decedent's
 8  death, property included in the gross estate under K.S.A. 79-1548 through
 9  79-1553 and 79-1555 through 79-1557, and amendments thereto, to the
10  extent of the value of such property at the time of the decedent's death
11  shall be personally liable for such tax. Any part of such property trans-
12  ferred by, or transferred by a transferee of, such spouse, transferee, trus-
13  tee, surviving tenant, person in possession, or beneficiary to a purchaser
14  or holder of a security interest shall be divested of the lien provided for
15  in subsection (a) and a similar lien shall then attach to all the property of
16  such spouse, transferee, trustee, surviving tenant, person in possession,
17  beneficiary or transferee of any such person, except any part transferred
18  to a purchaser or a holder of a security interest.
19    [(c)  Upon issuance of a receipt for taxes paid pursuant to subsection
20    (d)(5) of K.S.A. 79-1564 and amendments thereto to a personal repre-
21  sentative who has paid the taxes imposed by this act or an approved
22  application for stay filed pursuant to subsection (d)(1) of K.S.A. 79-1564
23  and amendments thereto, the personal representative shall be subrogated
24  to the right to proceed against any real or personal property in which a
25  distributee has an interest which the state might have had. The issuance
26  of a receipt for taxes paid by the director after payment of the taxes or
27  approved application for stay shall be deemed an assignment by the state
28  to the personal representative of the right to proceed against the real and
29  personal property in which a distributee has an interest and shall be con-
30  clusive evidence thereof. A right to proceed shall arise and a lien shall be
31  perfected to aid the personal representative in the right to proceed against
32  property of a distributee only if the personal representative files a notice
33  of lien with the register of deeds. The lien shall be effective only against
34  property of a distributee located in the county where the notice of lien is
35  filed. Such notice of lien may be filed in any county wherein any real or
36  personal property in which the distributee has an interest is located. The
37  notice of lien shall be made on forms prescribed by the secretary. Upon
38  satisfaction of the lien, a release shall be issued by such personal repre-
39  sentative on forms prescribed by the secretary.
40    [(d)  If the personal representative has requested and received a re-
41  fund of taxes paid pursuant to subsection (d)(4) of K.S.A. 79-1564, and
42  amendments thereto, or whenever the personal representative fails to
43  collect the tax pursuant to subsection (d)(4) of K.S.A. 79-1564, and
HB 2031--Am. by SCW
                                     

 1  amendments thereto, or is not required to pay the tax imposed by this
 2  act or the taxes imposed by this act are not paid at the expiration of nine
 3  months after the death of the decedent,
 4    [(b)  If the personal representative fails to timely pay the tax imposed
 5  by section 1, the director shall enforce the director's lien by the
 6  issuance of a warrant under the director's hand and official seal,
 7  directed to the sheriff of any county of the state, commanding such
 8  sheriff to levy upon and sell the real and personal property of the
 9  distributee estate found within the sheriff's county for the payment
10  of the amount thereof, with the added interest and the cost of
11  executing the warrant, and to return such warrant to the director
12  and pay to the director the money collected by virtue thereof not
13  more than 60 days from the date of the warrant. The sheriff shall
14  within five days after the receipt of the warrant, file with the clerk
15  of the district court of the sheriff's county a copy thereof, and
16  thereupon the clerk shall enter in the appearance docket in ap-
17  propriate columns, the name of the distributee estate named in the
18  warrant, the amount of the tax or portion thereof and interest for
19  which the warrant is issued and the date such copy is filed. The
20  amount of such warrant so docketed shall thereupon become a lien
21  upon the title to, and interest in, the real property of the distributee
22  estate against whom it is issued in the same manner, as a judgment
23  duly docketed in the office of such clerk. The sheriff shall proceed
24  in the same manner and with like effect as prescribed by law with
25  respect to executions issued against property upon judgments of a
26  court of record, and shall be entitled to the same fees for the sher-
27  iff's services to be collected in the same manner.
28    [The court in which the warrant is docketed shall have jurisdic-
29  tion over all subsequent proceedings as fully as though a judgment
30  had been rendered in the court. In the discretion of the director,
31  a warrant of like terms, force and effect may be issued and directed
32  to any officer or employee of the director, and in the execution
33  thereof such officer or employee shall have all the powers con-
34  ferred by laws upon sheriffs, and the subsequent proceedings
35  thereunder shall be the same as provided where the warrant is
36  issued directly to the sheriff. The distributee estate shall have the
37  right to redeem the real estate within a period of 18 months from
38  the date of such sale. If a warrant be returned, unsatisfied in full,
39  the director shall have the same remedies to enforce the claim for
40  taxes as if the state of Kansas had recovered judgment against the
41  distributee for the amount of the tax. No law exempting any goods
42  and chattels, land and tenements from forced sale under execution
43  shall apply to a levy and sale under any such warrants or upon any
HB 2031--Am. by SCW
                                     

 1  execution issued upon any judgment rendered in any action for
 2  inheritance taxes. The director shall have the right at any time
 3  after the warrant has been returned unsatisfied or satisfied only
 4  in part, to issue alias warrants until the full amount of the tax is
 5  collected.
 6    [Sec. 28.  On and after January 1, 1998, K.S.A. 1996 Supp. 79-
 7  1570 is hereby amended to read as follows: 79-1570. No final ac-
 8  count of a personal representative shall be allowed by the district
 9  court unless such account shows, and the judge of such court finds,
10  that all taxes imposed by the provisions of this act upon any prop-
11  erty or interest therein belonging to the estate to be settled by
12  such account and already payable have been paid, and that all taxes
13  which may become due on such estate have been paid or settled
14  as hereinbefore provided, or that the payment thereof to the state is
15  secured by bond.
16    [Sec. 29.  On and after January 1, 1998, K.S.A. 1996 Supp. 79-
17  1571 is hereby amended to read as follows: 79-1571. (a) As soon as
18  practicable after the return is filed and the taxes paid, the director
19  shall issue a closing letter. Such closing letter shall be issued upon
20  the director being satisfied that there has been a final determi-
21  nation of all taxes due and that all such taxes have been paid. The
22  director shall issue such closing letter to the personal represen-
23  tative, and when the estate is involved in probate proceedings be-
24  fore a district court, a copy of such closing letter shall be forwarded
25  to the judge of such court for recording in full in the journal of
26  such court.
27    [(b)  In the event that all deemed executors do not join in the filing
28  of a return, or in the event the personal representative is unable to make
29  a complete return as to any part of the gross estate of the decedent, upon
30  the director being satisfied that a final determination of the taxes due on
31  that portion of the estate reported has been made and all taxes due
32  thereon have been paid, the director shall issue a closing letter as to that
33  portion of the gross estate which has actually been reported.
34    [(c)  The closing letter shall be applicable only to assets reported in
35  the return filed with the director. To the extent the gross assets of the
36  decedent were reported, the issuance of a closing letter shall be conclu-
37  sive evidence that all taxes have been determined and paid and shall
38  release any lien which attached to the decedent's property and that of
39  any deemed executor or distributee unless such lien has been subrogated,
40  assigned and perfected pursuant to K.S.A. 79-1569, and amendments
41  thereto. The closing letter may contain a legal description of the real
42  property so reported.
43    [(d)  Release of the lien imposed by K.S.A. 79-1569, and amend-
HB 2031--Am. by SCW
                                     

 1  ments thereto, may be provided by filing notice of release in the
 2  office of the register of deeds in any county where any such real
 3  property included in the gross estate is located or, when the estate
 4  is involved in proceedings before the district court, with the court.
 5  Any such notice of release shall be in such form as prescribed by
 6  the secretary and may include use of or reference to the closing
 7  letter issued by the director or may be included as part of that
 8  closing letter.
 9    [Sec. 30.  On and after January 1, 1998, K.S.A. 1996 Supp. 79-
10  1572 is hereby amended to read as follows: 79-1572. (a) Assets
11  belonging to the estate of a deceased nonresident, other than in-
12  tangible assets of a decedent who at the time of death resided in
13  the United States but outside this state, shall not be delivered or
14  transferred to a foreign personal representative of such decedent
15  without serving notice upon the director of taxation of the time
16  and place of such intended delivery or transfer at least seven days
17  before the time of such delivery or transfer. The director or the
18  director's representative may examine such assets prior to the time
19  of such delivery or transfer. Failure to serve such notice or to allow
20  such examination or the making of a delivery or transfer of such
21  assets against the objection of the director shall render the person,
22  association, or corporation making the delivery or transfer liable
23  for the payment of the tax and interest due upon such assets, in an
24  action brought by the department of revenue in the name of the
25  state.
26    [(b)  A foreign or Kansas person, corporation, partnership or
27  other association of persons may release or transfer intangible as-
28  sets of a nonresident decedent upon receipt of a sworn affidavit
29  from the personal representative of the decedent's estate, stating
30  that the decedent was not a resident of the state of Kansas at the
31  time of the decedent's death but that such decedent was a resident
32  of another state in the United States.
33    [Sec. 31.  On and after January 1, 1998, K.S.A. 1996 Supp. 79-
34  1574 is hereby amended to read as follows: 79-1574. (a) Except as
35  otherwise provided in this section, the amount of any tax imposed
36  by this act shall be assessed within three years after the return or
37  affidavit was filed, whether or not such return was filed on or after
38  the date prescribed, or the tax as shown to be due on such return
39  was paid, whichever is the later date, and no proceedings in court
40  for the collection of such taxes shall be begun after the expiration
41  of such period. Where the assessment of any inheritance tax im-
42  posed under this act has been made within the period of limitation
43  properly applicable thereto, such tax may be collected by distraint
HB 2031--Am. by SCW
                                     

 1  or by a proceeding in court, but only if begun within one year after
 2  the period of limitation as provided in this act. The foregoing pro-
 3  visions of this section shall not apply in those cases where the time for
 4  the payment of the tax has been extended pursuant to K.S.A. 79-1544 or
 5  79-1567, and amendments thereto. In those cases where the director has
 6  retained jurisdiction over the estate pursuant to K.S.A. 79-1544, and
 7  amendments thereto, assessment of taxes or proceedings to collect taxes
 8  must be made or commenced within three years after notice of the death
 9  of the life tenant. In those cases where a bond has been given guaran-
10  teeing the payment of the tax pursuant to K.S.A. 79-1567, and amend-
11  ments thereto, assessment of taxes or proceedings for collection of the
12  tax must be made or commenced within three years after the date of the
13  expiration of the last bond so given.
14    [(b)  For the purposes of this section, a return of tax required
15  under this act filed before the last day prescribed by law shall be
16  deemed to be filed on such last day and any tax shown to be due
17  on such return and paid before the last day prescribed by law shall
18  be deemed to be paid on such last day.
19    [(c)  In the case of a false or fraudulent return or affidavit with
20  intent to evade tax or in the case of failure to file a return, the tax
21  may be assessed, or a proceeding in court for collection of such
22  tax may be begun at any time. If the personal representative omits
23  from the gross estate items includable in such gross estate as exceed 25%
24  of the gross estate stated in the return or affidavit, the tax may be assessed
25  or a proceeding in court for collection of such tax may be begun at any
26  time within six years after the return or affidavit was filed. In determining
27  the items omitted from the gross estate, there shall not be taken into
28  account any item which is omitted from the gross estate if such item is
29  disclosed in the return or affidavit, or in a statement attached to the return
30  or affidavit, in a manner adequate to apprise the director of the nature
31  and amount of such item.
32    [(d)  No refund or credit shall be allowed by the director after
33  three years from the date the return was filed, or one year after
34  an assessment is made, whichever is the later date, unless before
35  the expiration of such period a claim therefor is filed by the per-
36  sonal representative.
37    [(e)  In case a personal representative has made claim for a re-
38  fund, such personal representative shall have the right to com-
39  mence a suit for the recovery of the same at the expiration of six
40  months after the filing of the claim for refund, if no action has
41  been taken by the director.
42    [(f)  Any personal representative of an estate of a decedent who
43  has been notified of any adjustment by the internal revenue serv-
HB 2031--Am. by SCW
                                     

 1  ice shall notify the director within 90 days of the date such adjust-
 2  ment is agreed to or becomes final between the estate and the
 3  internal revenue service. Such adjustments shall be reported by
 4  filing an amended return and a copy of the revenue agent's report
 5  detailing such adjustments, along with any other statements or
 6  documents as may be necessary to explain and support the adjust-
 7  ments.:
 8    [(1)  Notwithstanding the provisions of subsections (a) or (d),
 9  additional tax may be assessed and proceedings in court for col-
10  lection of such taxes may be commenced and any refund or credit
11  may be allowed by the director of taxation within 180 days follow-
12  ing receipt of any such report of adjustments by the Kansas de-
13  partment of revenue. No assessment shall be made nor shall any
14  refund or credit be allowed under the provisions of this paragraph
15  except to the extent the same is attributable to changes in the es-
16  tate due to adjustments indicated by such report.
17    [(2)  In the event of failure to comply with the provisions of this
18  subsection, the statute of limitations shall be tolled.
19    [Sec. 32.  On and after January 1, 1998, K.S.A. 1996 Supp. 79-
20  1575 is hereby amended to read as follows: 79-1575. As soon as
21  practicable after the return or affidavit is filed, the director shall
22  make an examination thereof and determine the correct amount
23  of the tax liability. If the tax found due is less than the amount
24  paid, the excess paid shall be refunded to the personal represen-
25  tative who paid the tax, except that no refund of an amount of $25 or
26  less shall be made. If the tax found due shall be greater than the
27  amount theretofore paid, or if a claim for a refund is denied, notice
28  shall be mailed to the person filing the return by registered or
29  certified mail. Within 30 days after the mailing of the notice any
30  personal representative aggrieved by any such determination of
31  the director may request a hearing of the director relating to the
32  tax liability by filing a written request with the director. The hear-
33  ing shall be conducted in accordance with the provisions of the
34  Kansas administrative procedure act. An order finding additional
35  tax shall be accompanied by a notice and demand for payment.
36  The tax shall be paid within 30 days thereafter, together with in-
37  terest on the additional tax from the date the tax was due unless
38  an appeal is taken in the manner provided by K.S.A. 74-2438, and
39  amendments thereto. No additional tax shall be assessed for less
40  than $25.
41    [Sec. 33.  On and after January 1, 1998, K.S.A. 1996 Supp. 79-
42  1576 is hereby amended to read as follows: 79-1576. Subject to the
43  right of any personal representative to apply for review as pro-
HB 2031--Am. by SCW
                                     

 1  vided for in this act, the director shall hear and determine all ques-
 2  tions relative to such tax. The attorney for the director, at the re-
 3  quest of the director, shall represent the state in any court
 4  proceedings brought to review any action of the director. If any
 5  district court shall find that any such tax remains due and that
 6  proper proceedings have not been taken before the director for
 7  abatement thereof, it shall order the personal representative to
 8  pay the same, with interest, and costs, and no question regarding
 9  the validity of such tax shall be heard in such court. If it appears
10  that there are no goods or assets of the estate in the personal re-
11  presentative's hands, the court may assess the amount of the tax
12  against the personal representative, as if for the personal repre-
13  sentative's own debt, and may enforce compliance with such order;
14  but the personal representatives shall be personally liable only for
15  such taxes as shall be payable while they continue in such offices
16  or have custody or control of decedent's property. In the cases
17  where the tax is due and payable by and collectible from the distributee,
18  all actions shall be prosecuted by the attorney for the director in the name
19  of the state, and such actions may be brought in the same courts as other
20  actions for money.
21    [Sec. 34.  On and after January 1, 1998, K.S.A. 1996 Supp. 79-
22  1579 is hereby amended to read as follows: 79-1579. A refund
23  clearing fund, designated inheritance estate tax abatement refund,
24  not to exceed $50,000 shall be set apart and maintained by the
25  director of taxation from inheritance estate tax collections and held
26  by the state treasurer for the prompt payment of all abatements
27  and refunds. If the director of taxation finds that a claim for refund
28  duly filed by a personal representative pursuant to K.S.A. 79-
29  1564(d)(4), 79-1574(d) or 79-1575, and amendments thereto, should be
30  allowed, or if a court upon a final judgment shall find that the
31  inheritance estate tax, penalty or interest paid by a personal repre-
32  sentative is in excess of the amount legally due, then the director
33  of taxation shall issue the director's vouchers to the director of
34  accounts and reports for the refund to the personal representative
35  of such tax, penalty or interest together with interest provided for
36  hereinafter. Upon receipt of such voucher properly executed and
37  endorsed, the director of accounts and reports shall issue the di-
38  rector's warrants to the state treasurer for the payment to the per-
39  sonal representative out of the inheritance estate tax abatement re-
40  fund fund. The director of taxation shall file a duplicate of such
41  voucher and also a statement which shall set forth the reasons why
42  such abatement or refund was allowed. Upon the allowance of an
43  abatement or refund of any tax or interest paid, interest shall be
HB 2031--Am. by SCW
                                     

 1  allowed and paid on the amount of such abatement or refund at
 2  the rate of 12% per annum from the date such tax, penalty or in-
 3  terest was paid to the date the refund or abatement of inheritance
 4  estate taxes is made. No refunds in an amount of less than $25 shall be
 5  made.
 6    [Sec. 35.  On and after January 1, 1998, K.S.A. 1996 Supp. 79-
 7  1580 is hereby amended to read as follows: 79-1580. (a) The di-
 8  rector of taxation shall fix and charge an amount pursuant to K.S.A.
 9  45-218 and 45-219, and amendments thereto for furnishing certi-
10  fied copies of returns or affidavits.
11    [(b)  All fees collected hereunder shall be remitted to the state
12  treasurer at least monthly. Upon receipt of each such remittance,
13  the state treasurer shall deposit the entire amount thereof in the
14  state treasury and the same shall be credited to the state general
15  fund.
16    [Sec. 36.  On and after January 1, 1998, K.S.A. 79-1587 is
17  hereby amended to read as follows: 79-1587. (a) All reports and
18  returns required under the provisions of the Kansas inheritance
19  estate tax act shall be preserved for three years and thereafter until
20  the director of taxation orders them to be destroyed.
21    [(b)  Except in accordance with proper judicial order, or as pro-
22  vided in subsection (c) of this section, subsection (g) of K.S.A. 17-
23  7511, and amendments thereto, or 46-1106, and amendments
24  thereto, it shall be unlawful for the director of taxation, or any
25  deputy, agent, clerk or other officer, employee or former em-
26  ployee of the department of revenue or any other state officer or
27  employee or former state officer or employee to divulge, or to
28  make known in any way, the value of any estate or any particulars
29  set forth or disclosed in any report, return, federal return or fed-
30  eral return information required under the provisions of the Kan-
31  sas inheritance estate tax act; and it shall be unlawful for the director
32  of taxation, any deputy, agent, clerk or other officer or employee
33  of the department of revenue engaged in the administration of the
34  Kansas inheritance estate tax act to engage in the business or pro-
35  fession of tax accounting or to accept employment, with or without
36  consideration, from any person, firm or corporation for the pur-
37  pose, directly or indirectly, of preparing tax returns or reports re-
38  quired by the laws of the state of Kansas, by any other state or by
39  the United States government, or to accept any employment for
40  the purpose of advising, preparing material or data, or the auditing
41  of books or records to be used in an effort to defeat or cancel any
42  tax or part thereof that has been assessed by the state of Kansas,
43  any other state or by the United States government.
HB 2031--Am. by SCW
                                     

 1    [(c)  Nothing herein shall be construed to prohibit the publi-
 2  cation of statistics, so classified as to prevent the identification of
 3  particular reports or returns and the items thereof, or the inspec-
 4  tion of returns by the attorney general or other legal representa-
 5  tives of the state. Nothing in this section shall prohibit the post
 6  auditor from access to all inheritance estate tax reports or returns
 7  in accordance with and subject to the provisions of subsection (g)
 8  of K.S.A. 46-1106, and amendments thereto. Nothing in this sec-
 9  tion shall be construed to prohibit the disclosure of the taxpayer's
10  name, social security number, last known address and total tax
11  liability, including penalty and interest, from inheritance estate tax
12  returns to a debt collection agency contracting with the secretary
13  of revenue pursuant to K.S.A. 75-5140 to 75-5143, inclusive, and
14  amendments thereto. Any person receiving any information under
15  the provisions of this subsection shall be subject to the confiden-
16  tiality provisions of subsection (b) of this section and to the penalty
17  provisions of subsection (d) of this section.
18    [(d)  Any violation of subsections (b) or (c) of this section shall be
19  a class B misdemeanor; and if the offender be an officer or em-
20  ployee of the state, such officer or employee shall be dismissed
21  from office.
22    [(e)  Notwithstanding the provisions of this section, the secre-
23  tary of revenue may permit the commissioner of internal revenue
24  of the United States, or the proper official of any state imposing
25  an inheritance or estate tax, or the authorized representative of
26  either, to inspect the inheritance estate tax returns made under the
27  provisions of the Kansas inheritance estate tax act and the secretary
28  of revenue may make available or furnish to the taxing officials of
29  any other state or the commissioner of internal revenue of the
30  United States or other taxing officials of the federal government,
31  or their authorized representatives, information contained in in-
32  heritance tax reports or returns or any audit thereof or the report
33  of any investigation made with respect thereto, filed pursuant to
34  the Kansas inheritance estate tax act, as the secretary may consider
35  proper, but such information shall not be used for any other pur-
36  pose than that of the administration of tax laws of such state, the
37  state of Kansas or of the United States.
38    [(f)  Notwithstanding the provisions of this section, the inheri-
39  tance estate tax return filed with respect to the estate of a decedent
40  shall, upon written request, be open to inspection by or disclosure
41  to: (1) The administrator, executor or trustee of such decedent's
42  estate,and (2) any heir at law, next of kin or beneficiary under the
43  will of such decedent or a donee or distributee of the decedent's
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 1  property, but only if the secretary of revenue finds that such heir
 2  at law, next of kin, beneficiary, donee or distributee has a material
 3  interest which will be affected by information contained therein.
 4    [New Sec. 37.  On and after January 1, 1998, this act and the
 5  provisions of article 15 of chapter 79 of the Kansas Statutes An-
 6  notated not repealed by this act shall be known and may be cited
 7  as the Kansas estate tax act.
 8    [New Sec. 38.  On and after January 1, 1998, the provisions of
 9  this act shall be applicable to the estates of all decedents dying
10  after December 31, 1996. The provisions of article 15 of chapter
11  79 of the Kansas Statutes Annotated in effect immediately before
12  the effective date of this act shall be applicable to the estates of all
13  decedents dying before January 1, 1997.
14    [Sec. 39.  K.S.A. 72-6414, 79-4505, 79-4508 and 79-4520 and
15  K.S.A. 1996 Supp. 72-6407, 72-6410, 72-6412, 72-6412a, 72-6431,
16  72-6431a, 72-6442, 72-6442a, 72-8191, 72-8192, 79-32,110, 79-
17  3603, 79-4502 and 79-5105 are hereby repealed.]
18    [Sec. 40.  On and after January 1, 1998, K.S.A. 79-1538, 79-
19  1548, 79-1554, 79-1557, 79-1566, 79-1584, 79-1584a, 79-1584b,
20  79-1584c, 79-1585, 79-1586 and 79-1587 and K.S.A. 1996 Supp.
21  79-1537, 79-1537b, 79-1537c, 79-1537e, 79-1537f, 79-1538a,
22  79-1539, 79-1540, 79-1541, 79-1541a, 79-1541b, 79-1542, 79-
23  1542a, 79-1543, 79-1545, 79-1547, 79-1549, 79-1550, 79-1551, 79-
24  1552, 79-1553, 79-1555, 79-1556, 79-1557a, 79-1559, 79-1560, 79-
25  1561, 79-1562, 79-1563, 79-1563a, 79-1564, 79-1565, 79-1567,
26  79-1567a, 79-1568, 79-1569, 79-1570, 79-1571, 79-1572, 79-1573,
27  79-1574, 79-1575, 79-1576, 79-1579 and 79-1580 are hereby re-
28  pealed.]
29    Sec. 3.  K.S.A. 1996 Supp. 72-6431 [and 72-6431a], 72-6431a[, 79-
30  412] and 79-5105 [and 72-6431a] are hereby repealed.
31    Sec. 17 21 [18].  On and after October 16, 1997, K.S.A. 79-3634,
32  79-3635, 79-4505, 79-4508 and 79-4520 and K.S.A. 1996 Supp. 79-
33  4502 are hereby repealed.
34    Sec. 18 22 [19].  On July 1, 1997, K.S.A. 72-6414 and K.S.A.
35  1996 Supp. 72-6407, 72-6410, 72-6412, 72-6412a, 72-6431, 72-
36  6431a, 72-6438, 72-6441, 72-6442, 72-6442a, [72-8191, 72-8192,]
37  79-5105, [and] 79-32,110 and 79-3603 shall be and are hereby re-
38  pealed.
39    Sec. 4 [41] 19 23 [20].  This act shall take effect and be in force
40  from and after its publication in the statute book Kansas register.