[As Amended by House Committee of the Whole]
         
As Amended by House Committee
          
Session of 1999
         
HOUSE BILL No. 2099
         
By Committee on Taxation
         
1-25
         
11             AN  ACT relating to sales taxation; exempting purchases of certain pri-
12             mary care clinics and health centers; amending K.S.A. 1998 Supp. 79-
13             3606 and repealing the existing section.
14      
15       Be it enacted by the Legislature of the State of Kansas:
16             Section  1. K.S.A. 1998 Supp. 79-3606 is hereby amended to read as
17       follows: 79-3606. The following shall be exempt from the tax imposed by
18       this act:
19             (a) All sales of motor-vehicle fuel or other articles upon which a sales
20       or excise tax has been paid, not subject to refund, under the laws of this
21       state except cigarettes as defined by K.S.A. 79-3301 and amendments
22       thereto, cereal malt beverages and malt products as defined by K.S.A. 79-
23       3817 and amendments thereto, including wort, liquid malt, malt syrup
24       and malt extract, which is not subject to taxation under the provisions of
25       K.S.A. 79-41a02 and amendments thereto, motor vehicles taxed pursuant
26       to K.S.A. 79-5117, and amendments thereto, tires taxed pursuant to
27       K.S.A. 1998 Supp. 65-3424d, and amendments thereto, and drycleaning
28       and laundry services taxed pursuant to K.S.A. 1998 Supp. 65-34,150, and
29       amendments thereto;
30             (b) all sales of tangible personal property or service, including the
31       renting and leasing of tangible personal property, purchased directly by
32       the state of Kansas, a political subdivision thereof, other than a school or
33       educational institution, or purchased by a public or private nonprofit hos-
34       pital or public hospital authority or nonprofit blood, tissue or organ bank
35       and used exclusively for state, political subdivision, hospital or public hos-
36       pital authority or nonprofit blood, tissue or organ bank purposes, except
37       when: (1) Such state, hospital or public hospital authority is engaged or
38       proposes to engage in any business specifically taxable under the provi-
39       sions of this act and such items of tangible personal property or service
40       are used or proposed to be used in such business, or (2) such political
41       subdivision is engaged or proposes to engage in the business of furnishing
42       gas, water, electricity or heat to others and such items of personal prop-

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  1       erty or service are used or proposed to be used in such business;
  2             (c) all sales of tangible personal property or services, including the
  3       renting and leasing of tangible personal property, purchased directly by
  4       a public or private elementary or secondary school or public or private
  5       nonprofit educational institution and used primarily by such school or
  6       institution for nonsectarian programs and activities provided or sponsored
  7       by such school or institution or in the erection, repair or enlargement of
  8       buildings to be used for such purposes. The exemption herein provided
  9       shall not apply to erection, construction, repair, enlargement or equip-
10       ment of buildings used primarily for human habitation;
11             (d) all sales of tangible personal property or services purchased by a
12       contractor for the purpose of constructing, equipping, reconstructing,
13       maintaining, repairing, enlarging, furnishing or remodeling facilities for
14       any public or private nonprofit hospital or public hospital authority, public
15       or private elementary or secondary school or a public or private nonprofit
16       educational institution, which would be exempt from taxation under the
17       provisions of this act if purchased directly by such hospital or public hos-
18       pital authority, school or educational institution; and all sales of tangible
19       personal property or services purchased by a contractor for the purpose
20       of constructing, equipping, reconstructing, maintaining, repairing, en-
21       larging, furnishing or remodeling facilities for any political subdivision of
22       the state, the total cost of which is paid from funds of such political
23       subdivision and which would be exempt from taxation under the provi-
24       sions of this act if purchased directly by such political subdivision. Nothing
25       in this subsection or in the provisions of K.S.A. 12-3418 and amendments
26       thereto, shall be deemed to exempt the purchase of any construction
27       machinery, equipment or tools used in the constructing, equipping, re-
28       constructing, maintaining, repairing, enlarging, furnishing or remodeling
29       facilities for any political subdivision of the state. As used in this subsec-
30       tion, K.S.A. 12-3418 and 79-3640, and amendments thereto, "funds of a
31       political subdivision" shall mean general tax revenues, the proceeds of
32       any bonds and gifts or grants-in-aid. Gifts shall not mean funds used for
33       the purpose of constructing, equipping, reconstructing, repairing, enlarg-
34       ing, furnishing or remodeling facilities which are to be leased to the do-
35       nor. When any political subdivision of the state, public or private non-
36       profit hospital or public hospital authority, public or private elementary
37       or secondary school or public or private nonprofit educational institution
38       shall contract for the purpose of constructing, equipping, reconstructing,
39       maintaining, repairing, enlarging, furnishing or remodeling facilities, it
40       shall obtain from the state and furnish to the contractor an exemption
41       certificate for the project involved, and the contractor may purchase ma-
42       terials for incorporation in such project. The contractor shall furnish the
43       number of such certificate to all suppliers from whom such purchases are

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  1       made, and such suppliers shall execute invoices covering the same bearing
  2       the number of such certificate. Upon completion of the project the con-
  3       tractor shall furnish to the political subdivision, hospital or public hospital
  4       authority, school or educational institution concerned a sworn statement,
  5       on a form to be provided by the director of taxation, that all purchases so
  6       made were entitled to exemption under this subsection. As an alternative
  7       to the foregoing procedure, any such contracting entity may apply to the
  8       secretary of revenue for agent status for the sole purpose of issuing and
  9       furnishing project exemption certificates to contractors pursuant to rules
10       and regulations adopted by the secretary establishing conditions and stan-
11       dards for the granting and maintaining of such status. All invoices shall
12       be held by the contractor for a period of five years and shall be subject
13       to audit by the director of taxation. If any materials purchased under such
14       a certificate are found not to have been incorporated in the building or
15       other project or not to have been returned for credit or the sales or
16       compensating tax otherwise imposed upon such materials which will not
17       be so incorporated in the building or other project reported and paid by
18       such contractor to the director of taxation not later than the 20th day of
19       the month following the close of the month in which it shall be deter-
20       mined that such materials will not be used for the purpose for which such
21       certificate was issued, the political subdivision, hospital or public hospital
22       authority, school or educational institution concerned shall be liable for
23       tax on all materials purchased for the project, and upon payment thereof
24       it may recover the same from the contractor together with reasonable
25       attorney fees. Any contractor or any agent, employee or subcontractor
26       thereof, who shall use or otherwise dispose of any materials purchased
27       under such a certificate for any purpose other than that for which such a
28       certificate is issued without the payment of the sales or compensating tax
29       otherwise imposed upon such materials, shall be guilty of a misdemeanor
30       and, upon conviction therefor, shall be subject to the penalties provided
31       for in subsection (g) of K.S.A. 79-3615, and amendments thereto;
32             (e) all sales of tangible personal property or services purchased by a
33       contractor for the erection, repair or enlargement of buildings or other
34       projects for the government of the United States, its agencies or instru-
35       mentalities, which would be exempt from taxation if purchased directly
36       by the government of the United States, its agencies or instrumentalities.
37       When the government of the United States, its agencies or instrumen-
38       talities shall contract for the erection, repair, or enlargement of any build-
39       ing or other project, it shall obtain from the state and furnish to the
40       contractor an exemption certificate for the project involved, and the con-
41       tractor may purchase materials for incorporation in such project. The
42       contractor shall furnish the number of such certificates to all suppliers
43       from whom such purchases are made, and such suppliers shall execute

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  1       invoices covering the same bearing the number of such certificate. Upon
  2       completion of the project the contractor shall furnish to the government
  3       of the United States, its agencies or instrumentalities concerned a sworn
  4       statement, on a form to be provided by the director of taxation, that all
  5       purchases so made were entitled to exemption under this subsection. As
  6       an alternative to the foregoing procedure, any such contracting entity may
  7       apply to the secretary of revenue for agent status for the sole purpose of
  8       issuing and furnishing project exemption certificates to contractors pur-
  9       suant to rules and regulations adopted by the secretary establishing con-
10       ditions and standards for the granting and maintaining of such status. All
11       invoices shall be held by the contractor for a period of five years and shall
12       be subject to audit by the director of taxation. Any contractor or any agent,
13       employee or subcontractor thereof, who shall use or otherwise dispose of
14       any materials purchased under such a certificate for any purpose other
15       than that for which such a certificate is issued without the payment of
16       the sales or compensating tax otherwise imposed upon such materials,
17       shall be guilty of a misdemeanor and, upon conviction therefor, shall be
18       subject to the penalties provided for in subsection (g) of K.S.A. 79-3615
19       and amendments thereto;
20             (f) tangible personal property purchased by a railroad or public utility
21       for consumption or movement directly and immediately in interstate
22       commerce;
23             (g) sales of aircraft including remanufactured and modified aircraft,
24       sales of aircraft repair, modification and replacement parts and sales of
25       services employed in the remanufacture, modification and repair of air-
26       craft sold to persons using directly or through an authorized agent such
27       aircraft and aircraft repair, modification and replacement parts as certified
28       or licensed carriers of persons or property in interstate or foreign com-
29       merce under authority of the laws of the United States or any foreign
30       government or sold to any foreign government or agency or instrumen-
31       tality of such foreign government and all sales of aircraft, aircraft parts,
32       replacement parts and services employed in the remanufacture, modifi-
33       cation and repair of aircraft for use outside of the United States;
34             (h) all rentals of nonsectarian textbooks by public or private elemen-
35       tary or secondary schools;
36             (i) the lease or rental of all films, records, tapes, or any type of sound
37       or picture transcriptions used by motion picture exhibitors;
38             (j) meals served without charge or food used in the preparation of
39       such meals to employees of any restaurant, eating house, dining car, hotel,
40       drugstore or other place where meals or drinks are regularly sold to the
41       public if such employees' duties are related to the furnishing or sale of
42       such meals or drinks;
43             (k) any motor vehicle, semitrailer or pole trailer, as such terms are

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  1       defined by K.S.A. 8-126 and amendments thereto, or aircraft sold and
  2       delivered in this state to a bona fide resident of another state, which motor
  3       vehicle, semitrailer, pole trailer or aircraft is not to be registered or based
  4       in this state and which vehicle, semitrailer, pole trailer or aircraft will not
  5       remain in this state more than 10 days;
  6             (l) all isolated or occasional sales of tangible personal property, serv-
  7       ices, substances or things, except isolated or occasional sale of motor
  8       vehicles specifically taxed under the provisions of subsection (o) of K.S.A.
  9       79-3603 and amendments thereto;
10             (m) all sales of tangible personal property which become an ingre-
11       dient or component part of tangible personal property or services pro-
12       duced, manufactured or compounded for ultimate sale at retail within or
13       without the state of Kansas; and any such producer, manufacturer or
14       compounder may obtain from the director of taxation and furnish to the
15       supplier an exemption certificate number for tangible personal property
16       for use as an ingredient or component part of the property or services
17       produced, manufactured or compounded;
18             (n) all sales of tangible personal property which is consumed in the
19       production, manufacture, processing, mining, drilling, refining or com-
20       pounding of tangible personal property, the treating of by-products or
21       wastes derived from any such production process, the providing of serv-
22       ices or the irrigation of crops for ultimate sale at retail within or without
23       the state of Kansas; and any purchaser of such property may obtain from
24       the director of taxation and furnish to the supplier an exemption certifi-
25       cate number for tangible personal property for consumption in such pro-
26       duction, manufacture, processing, mining, drilling, refining, compound-
27       ing, treating, irrigation and in providing such services;
28             (o) all sales of animals, fowl and aquatic plants and animals, the pri-
29       mary purpose of which is use in agriculture or aquaculture, as defined in
30       K.S.A. 47-1901, and amendments thereto, the production of food for
31       human consumption, the production of animal, dairy, poultry or aquatic
32       plant and animal products, fiber or fur, or the production of offspring for
33       use for any such purpose or purposes;
34             (p) all sales of drugs, as defined by K.S.A. 65-1626 and amendments
35       thereto, dispensed pursuant to a prescription order, as defined by K.S.A.
36       65-1626 and amendments thereto, by a licensed practitioner;
37             (q) all sales of insulin dispensed by a person licensed by the state
38       board of pharmacy to a person for treatment of diabetes at the direction
39       of a person licensed to practice medicine by the board of healing arts;
40             (r) all sales of prosthetic and orthopedic appliances prescribed in
41       writing by a person licensed to practice the healing arts, dentistry or
42       optometry[, all sales of repair and replacement parts therefor and
43       all sales of services performed in the installation, maintenance or

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  1       repair thereof]. For the purposes of this subsection, the term prosthetic
  2       and orthopedic appliances means any apparatus, instrument, device, or
  3       equipment used to replace or substitute for any missing part of the body;
  4       used to alleviate the malfunction of any part of the body; or used to assist
  5       any disabled person in leading a normal life by facilitating such person's
  6       mobility; such term shall include accessories attached or to be attached
  7       to motor vehicles, but such term shall not include motor vehicles or per-
  8       sonal property which when installed becomes a fixture to real property;
  9             (s) all sales of tangible personal property or services purchased di-
10       rectly by a groundwater management district organized or operating un-
11       der the authority of K.S.A. 82a-1020 et seq. and amendments thereto,
12       which property or services are used in the operation or maintenance of
13       the district;
14             (t) all sales of farm machinery and equipment or aquaculture ma-
15       chinery and equipment, repair and replacement parts therefor and serv-
16       ices performed in the repair and maintenance of such machinery and
17       equipment. For the purposes of this subsection the term "farm machinery
18       and equipment or aquaculture machinery and equipment" shall include
19       machinery and equipment used in the operation of Christmas tree farm-
20       ing but shall not include any passenger vehicle, truck, truck tractor, trailer,
21       semitrailer or pole trailer, other than a farm trailer, as such terms are
22       defined by K.S.A. 8-126 and amendments thereto. Each purchaser of
23       farm machinery and equipment or aquaculture machinery and equipment
24       exempted herein must certify in writing on the copy of the invoice or
25       sales ticket to be retained by the seller that the farm machinery and
26       equipment or aquaculture machinery and equipment purchased will be
27       used only in farming, ranching or aquaculture production. Farming or
28       ranching shall include the operation of a feedlot and farm and ranch work
29       for hire and the operation of a nursery;
30             (u) all leases or rentals of tangible personal property used as a dwell-
31       ing if such tangible personal property is leased or rented for a period of
32       more than 28 consecutive days;
33             (v) all sales of food products to any contractor for use in preparing
34       meals for delivery to homebound elderly persons over 60 years of age and
35       to homebound disabled persons or to be served at a group-sitting at a
36       location outside of the home to otherwise homebound elderly persons
37       over 60 years of age and to otherwise homebound disabled persons, as
38       all or part of any food service project funded in whole or in part by
39       government or as part of a private nonprofit food service project available
40       to all such elderly or disabled persons residing within an area of service
41       designated by the private nonprofit organization, and all sales of food
42       products for use in preparing meals for consumption by indigent or home-
43       less individuals whether or not such meals are consumed at a place des-

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  1       ignated for such purpose;
  2             (w) all sales of natural gas, electricity, heat and water delivered
  3       through mains, lines or pipes: (1) To residential premises for noncom-
  4       mercial use by the occupant of such premises; (2) for agricultural use and
  5       also, for such use, all sales of propane gas; (3) for use in the severing of
  6       oil; and (4) to any property which is exempt from property taxation pur-
  7       suant to K.S.A. 79-201b Second through Sixth. As used in this paragraph,
  8       "severing" shall have the meaning ascribed thereto by subsection (k) of
  9       K.S.A. 79-4216, and amendments thereto;
10             (x) all sales of propane gas, LP-gas, coal, wood and other fuel sources
11       for the production of heat or lighting for noncommercial use of an oc-
12       cupant of residential premises;
13             (y) all sales of materials and services used in the repairing, servicing,
14       altering, maintaining, manufacturing, remanufacturing, or modification of
15       railroad rolling stock for use in interstate or foreign commerce under
16       authority of the laws of the United States;
17             (z) all sales of tangible personal property and services purchased di-
18       rectly by a port authority or by a contractor therefor as provided by the
19       provisions of K.S.A. 12-3418 and amendments thereto;
20             (aa) all sales of materials and services applied to equipment which is
21       transported into the state from without the state for repair, service, al-
22       teration, maintenance, remanufacture or modification and which is sub-
23       sequently transported outside the state for use in the transmission of
24       liquids or natural gas by means of pipeline in interstate or foreign com-
25       merce under authority of the laws of the United States;
26             (bb) all sales of used mobile homes or manufactured homes. As used
27       in this subsection: (1) "Mobile homes" and "manufactured homes" shall
28       have the meanings ascribed thereto by K.S.A. 58-4202 and amendments
29       thereto; and (2) "sales of used mobile homes or manufactured homes"
30       means sales other than the original retail sale thereof;
31             (cc) all sales of tangible personal property or services purchased for
32       the purpose of and in conjunction with constructing, reconstructing, en-
33       larging or remodeling a business or retail business which meets the
34       requirements established in K.S.A. 74-50,115 and amendments thereto,
35       and the sale and installation of machinery and equipment purchased for
36       installation at any such business or retail business. When a person shall
37       contract for the construction, reconstruction, enlargement or remodeling
38       of any such business or retail business, such person shall obtain from the
39       state and furnish to the contractor an exemption certificate for the project
40       involved, and the contractor may purchase materials, machinery and
41       equipment for incorporation in such project. The contractor shall furnish
42       the number of such certificates to all suppliers from whom such purchases
43       are made, and such suppliers shall execute invoices covering the same

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  1       bearing the number of such certificate. Upon completion of the project
  2       the contractor shall furnish to the owner of the business or retail business
  3       a sworn statement, on a form to be provided by the director of taxation,
  4       that all purchases so made were entitled to exemption under this subsec-
  5       tion. All invoices shall be held by the contractor for a period of five years
  6       and shall be subject to audit by the director of taxation. Any contractor
  7       or any agent, employee or subcontractor thereof, who shall use or oth-
  8       erwise dispose of any materials, machinery or equipment purchased un-
  9       der such a certificate for any purpose other than that for which such a
10       certificate is issued without the payment of the sales or compensating tax
11       otherwise imposed thereon, shall be guilty of a misdemeanor and, upon
12       conviction therefor, shall be subject to the penalties provided for in sub-
13       section (g) of K.S.A. 79-3615 and amendments thereto. As used in this
14       subsection, "business" and "retail business" have the meanings respec-
15       tively ascribed thereto by K.S.A. 74-50,114 and amendments thereto;
16             (dd) all sales of tangible personal property purchased with food
17       stamps issued by the United States department of agriculture;
18             (ee) all sales of lottery tickets and shares made as part of a lottery
19       operated by the state of Kansas;
20             (ff) on and after July 1, 1988, all sales of new mobile homes or man-
21       ufactured homes to the extent of 40% of the gross receipts, determined
22       without regard to any trade-in allowance, received from such sale. As used
23       in this subsection, "mobile homes" and "manufactured homes" shall have
24       the meanings ascribed thereto by K.S.A. 58-4202 and amendments
25       thereto;
26             (gg) all sales of tangible personal property purchased in accordance
27       with vouchers issued pursuant to the federal special supplemental food
28       program for women, infants and children;
29             (hh) all sales of medical supplies and equipment purchased directly
30       by a nonprofit skilled nursing home or nonprofit intermediate nursing
31       care home, as defined by K.S.A. 39-923, and amendments thereto, for
32       the purpose of providing medical services to residents thereof. This ex-
33       emption shall not apply to tangible personal property customarily used
34       for human habitation purposes;
35             (ii) all sales of tangible personal property purchased directly by a non-
36       profit organization for nonsectarian comprehensive multidiscipline youth
37       development programs and activities provided or sponsored by such or-
38       ganization, and all sales of tangible personal property by or on behalf of
39       any such organization. This exemption shall not apply to tangible personal
40       property customarily used for human habitation purposes;
41             (jj) all sales of tangible personal property or services, including the
42       renting and leasing of tangible personal property, purchased directly on
43       behalf of a community-based mental retardation facility or mental health

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  1       center organized pursuant to K.S.A. 19-4001 et seq., and amendments
  2       thereto, and licensed in accordance with the provisions of K.S.A. 75-
  3       3307b and amendments thereto. This exemption shall not apply to tan-
  4       gible personal property customarily used for human habitation purposes;
  5             (kk) on and after January 1, 1989, all sales of machinery and equip-
  6       ment used directly and primarily for the purposes of manufacturing, as-
  7       sembling, processing, finishing, storing, warehousing or distributing ar-
  8       ticles of tangible personal property in this state intended for resale by a
  9       manufacturing or processing plant or facility or a storage, warehousing or
10       distribution facility, and all sales of repair and replacement parts and
11       accessories purchased for such machinery and equipment:
12             (1) For purposes of this subsection, machinery and equipment shall
13       be deemed to be used directly and primarily in the manufacture, assem-
14       blage, processing, finishing, storing, warehousing or distributing of tan-
15       gible personal property where such machinery and equipment is used
16       during a manufacturing, assembling, processing or finishing, storing,
17       warehousing or distributing operation:
18             (A) To effect a direct and immediate physical change upon the tan-
19       gible personal property;
20             (B) to guide or measure a direct and immediate physical change upon
21       such property where such function is an integral and essential part of
22       tuning, verifying or aligning the component parts of such property;
23             (C) to test or measure such property where such function is an in-
24       tegral part of the production flow or function;
25             (D) to transport, convey or handle such property during the manu-
26       facturing, processing, storing, warehousing or distribution operation at
27       the plant or facility; or
28             (E) to place such property in the container, package or wrapping in
29       which such property is normally sold or transported.
30             (2)  For purposes of this subsection "machinery and equipment used
31       directly and primarily" shall include, but not be limited to:
32             (A) Mechanical machines or components thereof contributing to a
33       manufacturing, assembling or finishing process;
34             (B) molds and dies that determine the physical characteristics of the
35       finished product or its packaging material;
36             (C) testing equipment to determine the quality of the finished
37       product;
38             (D) computers and related peripheral equipment that directly control
39       or measure the manufacturing process or which are utilized for engi-
40       neering of the finished product; and
41             (E) computers and related peripheral equipment utilized for research
42       and development and product design.
43             (3) "Machinery and equipment used directly and primarily" shall not

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  1       include:
  2             (A) Hand tools;
  3             (B) machinery, equipment and tools used in maintaining and repair-
  4       ing any type of machinery and equipment;
  5             (C) transportation equipment not used in the manufacturing, assem-
  6       bling, processing, furnishing, storing, warehousing or distributing process
  7       at the plant or facility;
  8             (D) office machines and equipment including computers and related
  9       peripheral equipment not directly and primarily used in controlling or
10       measuring the manufacturing process;
11             (E) furniture and buildings; and
12             (F) machinery and equipment used in administrative, accounting,
13       sales or other such activities of the business;
14             (4) for purposes of this subsection, "repair and replacement parts and
15       accessories" means all parts and accessories for exempt machinery and
16       equipment, including but not limited to dies, jigs, molds, and patterns
17       which are attached to exempt machinery or which are otherwise used in
18       production, short-lived replaceable parts that can be readily detached
19       from exempt machinery or equipment, such as belts, drill bits, grinding
20       wheels, cutting bars and saws, and other replacement parts for production
21       equipment, including refractory brick and other refractory items for kiln
22       equipment used in production operations;
23             (ll) all sales of educational materials purchased for distribution to the
24       public at no charge by a nonprofit corporation organized for the purpose
25       of encouraging, fostering and conducting programs for the improvement
26       of public health;
27             (mm) all sales of seeds and tree seedlings; fertilizers, insecticides,
28       herbicides, germicides, pesticides and fungicides; and services, purchased
29       and used for the purpose of producing plants in order to prevent soil
30       erosion on land devoted to agricultural use;
31             (nn) except as otherwise provided in this act, all sales of services ren-
32       dered by an advertising agency or licensed broadcast station or any mem-
33       ber, agent or employee thereof;
34             (oo) all sales of tangible personal property purchased by a community
35       action group or agency for the exclusive purpose of repairing or weath-
36       erizing housing occupied by low income individuals;
37             (pp) all sales of drill bits and explosives actually utilized in the explo-
38       ration and production of oil or gas;
39             (qq) all sales of tangible personal property and services purchased by
40       a nonprofit museum or historical society or any combination thereof, in-
41       cluding a nonprofit organization which is organized for the purpose of
42       stimulating public interest in the exploration of space by providing edu-
43       cational information, exhibits and experiences, which is exempt from fed-

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  1       eral income taxation pursuant to section 501(c)(3) of the federal internal
  2       revenue code of 1986;
  3             (rr) all sales of tangible personal property which will admit the pur-
  4       chaser thereof to any annual event sponsored by a nonprofit organization
  5       which is exempt from federal income taxation pursuant to section
  6       501(c)(3) of the federal internal revenue code of 1986;
  7             (ss) all sales of tangible personal property and services purchased by
  8       a public broadcasting station licensed by the federal communications
  9       commission as a noncommercial educational television or radio station;
10             (tt) all sales of tangible personal property and services purchased by
11       or on behalf of a not-for-profit corporation which is exempt from federal
12       income taxation pursuant to section 501(c)(3) of the federal internal rev-
13       enue code of 1986, for the sole purpose of constructing a Kansas Korean
14       War memorial;
15             (uu) all sales of tangible personal property and services purchased by
16       or on behalf of any rural volunteer fire-fighting organization for use ex-
17       clusively in the performance of its duties and functions;
18             (vv) all sales of tangible personal property purchased by any of the
19       following organizations which are exempt from federal income taxation
20       pursuant to section 501 (c)(3) of the federal internal revenue code of
21       1986, for the following purposes, and all sales of any such property by or
22       on behalf of any such organization for any such purpose:
23             (1) The American Heart Association, Kansas Affiliate, Inc. for the
24       purposes of providing education, training, certification in emergency car-
25       diac care, research and other related services to reduce disability and
26       death from cardiovascular diseases and stroke;
27             (2) the Kansas Alliance for the Mentally Ill, Inc. for the purpose of
28       advocacy for persons with mental illness and to education, research and
29       support for their families;
30             (3) the Kansas Mental Illness Awareness Council for the purposes of
31       advocacy for persons who are mentally ill and to education, research and
32       support for them and their families;
33             (4) the American Diabetes Association Kansas Affiliate, Inc. for the
34       purpose of eliminating diabetes through medical research, public edu-
35       cation focusing on disease prevention and education, patient education
36       including information on coping with diabetes, and professional education
37       and training;
38             (5) the American Lung Association of Kansas, Inc. for the purpose of
39       eliminating all lung diseases through medical research, public education
40       including information on coping with lung diseases, professional educa-
41       tion and training related to lung disease and other related services to
42       reduce the incidence of disability and death due to lung disease;
43             (6) the Kansas chapters of the Alzheimer's Disease and Related Dis-

HB 2099--Am. by HCW

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  1       orders Association, Inc. for the purpose of providing assistance and sup-
  2       port to persons in Kansas with Alzheimer's disease, and their families and
  3       caregivers; and
  4             (ww) all sales of tangible personal property purchased by the Habitat
  5       for Humanity for the exclusive use of being incorporated within a housing
  6       project constructed by such organization.
  7             (xx) all sales of tangible personal property and services purchased by
  8       a nonprofit zoo which is exempt from federal income taxation pursuant
  9       to section 501 (c)(3) of the federal internal revenue code of 1986, or on
10       behalf of such zoo by an entity itself exempt from federal income taxation
11       pursuant to section 50 501 (c)(3) of the federal internal revenue code of
12       1986 contracted with to operate such zoo and all sales of tangible personal
13       property or services purchased by a contractor for the purpose of con-
14       structing, equipping, reconstructing, maintaining, repairing, enlarging,
15       furnishing or remodeling facilities for any nonprofit zoo which would be
16       exempt from taxation under the provisions of this section if purchased
17       directly by such nonprofit zoo or the entity operating such zoo. Nothing
18       in this subsection shall be deemed to exempt the purchase of any con-
19       struction machinery, equipment or tools used in the constructing, equip-
20       ping, reconstructing, maintaining, repairing, enlarging, furnishing or re-
21       modeling facilities for any nonprofit zoo. When any nonprofit zoo shall
22       contract for the purpose of constructing, equipping, reconstructing, main-
23       taining, repairing, enlarging, furnishing or remodeling facilities, it shall
24       obtain from the state and furnish to the contractor an exemption certifi-
25       cate for the project involved, and the contractor may purchase materials
26       for incorporation in such project. The contractor shall furnish the number
27       of such certificate to all suppliers from whom such purchases are made,
28       and such suppliers shall execute invoices covering the same bearing the
29       number of such certificate. Upon completion of the project the contractor
30       shall furnish to the nonprofit zoo concerned a sworn statement, on a form
31       to be provided by the director of taxation, that all purchases so made were
32       entitled to exemption under this subsection. All invoices shall be held by
33       the contractor for a period of five years and shall be subject to audit by
34       the director of taxation. If any materials purchased under such a certifi-
35       cate are found not to have been incorporated in the building or other
36       project or not to have been returned for credit or the sales or compen-
37       sating tax otherwise imposed upon such materials which will not be so
38       incorporated in the building or other project reported and paid by such
39       contractor to the director of taxation not later than the 20th day of the
40       month following the close of the month in which it shall be determined
41       that such materials will not be used for the purpose for which such cer-
42       tificate was issued, the nonprofit zoo concerned shall be liable for tax on
43       all materials purchased for the project, and upon payment thereof it may

HB 2099--Am. by HCW

13

  1       recover the same from the contractor together with reasonable attorney
  2       fees. Any contractor or any agent, employee or subcontractor thereof,
  3       who shall use or otherwise dispose of any materials purchased under such
  4       a certificate for any purpose other than that for which such a certificate
  5       is issued without the payment of the sales or compensating tax otherwise
  6       imposed upon such materials, shall be guilty of a misdemeanor and, upon
  7       conviction therefor, shall be subject to the penalties provided for in sub-
  8       section (g) of K.S.A. 79-3615, and amendments thereto;
  9             (yy) all sales of tangible personal property and services purchased by
10       a parent-teacher association or organization, and all sales of tangible per-
11       sonal property by or on behalf of such association or organization;
12             (zz) all sales of machinery and equipment purchased by over-the-air,
13       free access radio or television station which is used directly and primarily
14       for the purpose of producing a broadcast signal or is such that the failure
15       of the machinery or equipment to operate would cause broadcasting to
16       cease. For purposes of this subsection, machinery and equipment shall
17       include, but not be limited to, that required by rules and regulations of
18       the federal communications commission, and all sales of electricity which
19       are essential or necessary for the purpose of producing a broadcast signal
20       or is such that the failure of the electricity would cause broadcasting to
21       cease;
22             (aaa) all sales of tangible personal property and services purchased
23       by a religious organization which is exempt from federal income taxation
24       pursuant to section 501 (c)(3) of the federal internal revenue code, and
25       used exclusively for religious purposes; and
26             (bbb) all sales of food for human consumption by an organization
27       which is exempt from federal income taxation pursuant to section 501
28       (c)(3) of the federal internal revenue code of 1986, pursuant to a food
29       distribution program which offers such food at a price below cost in
30       exchange for the performance of community service by the purchaser
31       thereof.; and
32             (ccc) all sales of tangible personal property and services purchased
33       by a primary care clinic or health center the primary purpose of which
34       is to provide services to medically underserved individuals and families,
35       and which is exempt from federal income taxation pursuant to section 501
36       (c)(3) of the federal internal revenue code, and all sales of tangible
37       personal property or services purchased by a contractor for the
38       purpose of constructing, equipping, reconstructing, maintaining,
39       repairing, enlarging, furnishing or remodeling facilities for any
40       such clinic or center which would be exempt from taxation under
41       the provisions of this section if purchased directly by such clinic
42       or center. Nothing in this subsection shall be deemed to exempt
43       the purchase of any construction machinery, equipment or tools

HB 2099--Am. by HCW

14

  1       used in the constructing, equipping, reconstructing, maintaining,
  2       repairing, enlarging, furnishing or remodeling facilities for any
  3       such clinic or center. When any such clinic or center shall contract
  4       for the purpose of constructing, equipping, reconstructing, main-
  5       taining, repairing, enlarging, furnishing or remodeling facilities, it
  6       shall obtain from the state and furnish to the contractor an ex-
  7       emption certificate for the project involved, and the contractor
  8       may purchase materials for incorporation in such project. The con-
  9       tractor shall furnish the number of such certificate to all suppliers
10       from whom such purchases are made, and such suppliers shall ex-
11       ecute invoices covering the same bearing the number of such cer-
12       tificate. Upon completion of the project the contractor shall fur-
13       nish to such clinic or center concerned a sworn statement, on a
14       form to be provided by the director of taxation, that all purchases
15       so made were entitled to exemption under this subsection. All in-
16       voices shall be held by the contractor for a period of five years and
17       shall be subject to audit by the director of taxation. If any materials
18       purchased under such a certificate are found not to have been
19       incorporated in the building or other project or not to have been
20       returned for credit or the sales or compensating tax otherwise im-
21       posed upon such materials which will not be so incorporated in
22       the building or other project reported and paid by such contractor
23       to the director of taxation not later than the 20th day of the month
24       following the close of the month in which it shall be determined
25       that such materials will not be used for the purpose for which such
26       certificate was issued, such clinic or center concerned shall be li-
27       able for tax on all materials purchased for the project, and upon
28       payment thereof it may recover the same from the contractor to-
29       gether with reasonable attorney fees. Any contractor or any agent,
30       employee or subcontractor thereof, who shall use or otherwise dis-
31       pose of any materials purchased under such a certificate for any
32       purpose other than that for which such a certificate is issued with-
33       out the payment of the sales or compensating tax otherwise im-
34       posed upon such materials, shall be guilty of a misdemeanor and,
35       upon conviction therefor, shall be subject to the penalties provided
36       for in subsection (g) of K.S.A. 79-3615, and amendments thereto;
37       and
38             (ddd) [(1)] all sales of manual and powered wheelchairs, stairway
39       lifts, braille writers, electronic braille equipment, hearing aids, tel-
40       ephone communication devices, assistive listening devices and
41       other aids that enhance an individual's ability to hear, home res-
42       piratory equipment and accessories, hospital beds and accessories
43       and ambulatory aids and, if purchased by or on behalf of a person

HB 2099--Am. by HCW

15

  1       with one or more physical or mental disabilities to enable them to
  2       function more independently, all sales of scooters, reading ma-
  3       chines, electronic print enlargers and magnifiers, electronic alter-
  4       native and augmentative communication devices, [environmental
  5       control units] and items used solely to modify motor vehicles to
  6       permit the use of such motor vehicles by individuals with disabil-
  7       ities[; and (2) all sales of repair and replacement parts for property
  8       described in paragraph (1) and all sales of services performed in
  9       the installation, maintenance or repair of such property].  
10       Sec.  2. K.S.A. 1998 Supp. 79-3606 is hereby repealed.
11        Sec.  3. This act shall take effect and be in force from and after its
12       publication in the statute book.