Session of 2000
Effective: Kansas Register

SENATE Substitute for HOUSE BILL No. 2624
An Act concerning public employment, public officers and employees; relating to retire-
      ment and pensions; the Kansas public employees retirement system; benefits; correction
      of errors by the system; vesting; taxation of death benefits; purchase of service credit;
      retirement options; fees; personnel disciplinary actions, policies and procedures; com-
      pensation and benefits; procedures, benefits and property dispositions related to persons
      laid off to closed institutions or transferred functions; amending K.S.A. 13-14a11, 14-
      10a11, 74-4914c, 74-4927k, 75-2929d, 75-2949, 75-4370, 75-4371, 75-4372, 75-4373,
      75-4374 and 75-4376 and K.S.A. 1999 Supp. 13-14a07, 14-10a07, 20-2610, 20-2610a,
      20-2625, 46-233, 74-4914, 74-4918, 74-4919p, 74-4919q, 74-4921, 74-4924, 74-4927, as
      amended by section 5 of 2000 House Bill No. 2034, 74-4958, 74-4958a, 74-4959, 74-
      4960, 74-4960a, 74-4964, 74-4964a and 74-4989 and repealing the existing sections; also
      repealing K.S.A. 1999 Supp. 74-4921a.

      Be it enacted by the Legislature of the State of Kansas:

      Section  1. On and after July 1, 2000, K.S.A. 1999 Supp. 13-14a07 is
hereby amended to read as follows: 13-14a07. (a) If any officer or member
of a police or fire department, while in the performance of such officer's
or member's duties, is killed or dies as a result of an injury received, or
dies of any disease contracted by reason of such officer's or member's
occupation as a policeman or fireman, or dies after having retired and
leaves a spouse, such spouse, shall receive a monthly pension in an
amount equal to 50% of the monthly salary of such deceased officer or
member, if such spouse was lawfully married to such policeman or fire-
man at the time of such policeman's or fireman's retirement. Commenc-
ing on the effective date of this act, any surviving spouse, who was re-
ceiving benefits pursuant to this section and who had such benefits
terminated by reason of such spouse's remarriage, shall be entitled to
once again receive benefits pursuant to this section, except that such
surviving spouse shall not be entitled to recover any benefits not received
after the termination of benefits by reason of such surviving spouse's
remarriage but before the effective date of this act. In the event there is
no surviving spouse, then any child or children of the deceased shall
receive, in equal shares a monthly amount equal to 50% of the monthly
salary received at the time of retirement, such sums to be paid until such
child or children attain the age of 18 years or until such child or children
attain the age of 23 years, if such child or children are full-time students
as provided in K.S.A. 74-49,117 and amendments thereto. Commencing
on the effective date of this act, any child who was receiving benefits
pursuant to this section and who had such benefits terminated by reason
of such child's marriage, shall be entitled to once again receive benefits
pursuant to this section subject to the limitations contained in this section,
except that such child shall not be entitled to recover any benefits not
received after the termination of benefits by reason of such child's mar-
riage but before the effective date of this act.

      (b) Pursuant to the provisions of section 36, and amendments thereto,
if any officer or member of such fire or police department, after having
become eligible for retirement as provided in K.S.A. 13-14a08 and
amendments thereto, is killed while not in the performance of such of-
ficer's or member's official duties, or dies, an amount equal to 50% of
such officer's or member's monthly salary shall be paid to such persons
for the periods of time provided in subsection (a) and shall be subject to
all the limitations provided in subsection (a).

      (c) Payments to the surviving spouse, child or children under the
provisions of subsection (a) or (b) shall begin no later than December 31
of the calendar year immediately following the calendar year in which the
member died.

 Sec.  2. On and after July 1, 2000, K.S.A. 13-14a11 is hereby amended
to read as follows: 13-14a11. Pursuant to the provisions of section 36, and
amendments thereto, whenever an active or retired fireman or policeman
shall die, the board of trustees shall appropriate from the pension fund a
sum of one hundred dollars $100 to be paid for funeral expenses for such
fireman or policeman.

 Sec.  3. On and after July 1, 2000, K.S.A. 1999 Supp. 14-10a07 is
hereby amended to read as follows: 14-10a07. (a) If any officer or member
of a police or fire department, while in the performance of such officer's
or member's duties, is killed or dies as a result of an injury received, or
dies of any disease contracted by reason of such officer's or member's
occupation as a policeman or fireman, or dies after having retired and
leaves a spouse, such spouse, shall receive a monthly pension in an
amount equal to 50% of the monthly salary of such deceased officer or
member, if such spouse was lawfully married to such policeman or fire-
man at the time of such policeman's or fireman's retirement. Commenc-
ing on the effective date of this act, any surviving spouse, who was re-
ceiving benefits pursuant to this section and who had such benefits
terminated by reason of such spouse's remarriage, shall be entitled to
once again receive benefits pursuant to this section, except that such
surviving spouse shall not be entitled to recover any benefits not received
after the termination of benefits by reason of such surviving spouse's
remarriage but before the effective date of this act. In the event there is
no surviving spouse, then any child or children of the deceased, shall
receive, in equal shares a monthly amount equal to 50% of the monthly
salary received at the time of death, such sums to be paid until such child
or children attain the age of 18 years or until such child or children attain
the age of 23 years, if such child or children are full-time students as
provided in K.S.A. 74-49,117 and amendments thereto. Commencing on
the effective date of this act, any child who was receiving benefits pur-
suant to this section and who had such benefits terminated by reason of
such child's marriage, shall be entitled to once again receive benefits
pursuant to this section subject to the limitations contained in this section,
except that such child shall not be entitled to recover any benefits not
received after the termination of benefits by reason of such child's mar-
riage but before the effective date of this act.

      (b) Pursuant to the provisions of section 36, and amendments thereto,
if any officer or member of such fire or police department, after having
become eligible for retirement as provided in K.S.A. 14-10a08 and
amendments thereto, is killed while not in the performance of such of-
ficer's or member's official duties, or dies, an amount equal to 50% of
such officer's or member's monthly salary shall be paid to such persons
for the periods of time provided in subsection (a) and shall be subject to
all the limitations provided in subsection (a).

      (c) Payments to the surviving spouse, child or children under the
provisions of subsection (a) or (b) must begin no later than December 31
of the calendar year immediately following the calendar year in which the
member died.

 Sec.  4. On and after July 1, 2000, K.S.A. 14-10a11 is hereby amended
to read as follows: 14-10a11. Subject to the provisions of section 36, and
amendments thereto, whenever an active or retired fireman or policeman
shall die, the board of trustees shall appropriate from the pension fund a
sum of one hundred dollars $100 to be paid for funeral expenses for such
fireman or policeman.

 Sec.  5. On and after July 1, 2000, K.S.A. 1999 Supp. 20-2610 is
hereby amended to read as follows: 20-2610. (a) (1) A judge who retires
under K.S.A. 20-2608, and amendments thereto, shall be entitled to re-
ceive an annual annuity payable in monthly amounts subject to subsection
(b), each such annual annuity of which shall be in an amount equal to the
total of 5% of the final average salary of the judge, determined as provided
in subsection (b), multiplied by the number of the judge's years of service
up to 10 years, and 3.5% of the final average salary of the judge, deter-
mined as provided in subsection (b), multiplied by the number of the
judge's years of service in excess of 10 years, but such annual annuity shall
not exceed 70% of the final average salary of such judge, determined as
provided in subsection (b). A judge who retires under K.S.A. 20-2608 and
amendments thereto, and who became a member of the system after June
30, 1987, shall be entitled to receive an annual annuity payable in monthly
amounts subject to subsection (b), each such annual amount of which
shall be in an amount equal to the total of 3.5% of the final average salary
of the judge, determined as provided in subsection (b), multiplied by the
number of the judge's years of service, but such annual annuity shall not
exceed 70% of the final average salary of the judge, determined as pro-
vided in subsection (b).

      (2) For purposes of this subsection, the date of membership for a
district magistrate judge who became a member of the system as provided
by K.S.A. 20-2620 and amendments thereto and who purchased service
as provided in subsection (c) of K.S.A. 20-2620 and K.S.A. 74-49,123, and
amendments thereto shall be the day such district magistrate judge be-
came a district magistrate judge and if such district magistrate judge's
membership date as determined in this subsection is earlier than July 1,
1987, such district magistrate judge shall be entitled to the 5% of final
average salary calculation for up to 10 years of service as provided in this
subsection. Any additional cost associated with the provisions of this sub-
section shall be paid by such district magistrate judge by means of a single
lump-sum payment or equal annual payments for not to exceed five years.
The lump-sum or annual payments shall be determined by the system's
actuary by using the member's final average salary at the time of appli-
cation, actuarial assumptions and tables currently in use by the system
and the member's attained age. No participating employer shall pay all
or any part of any cost associated with the provisions of this subsection.

      (b) For any judge who retires under K.S.A. 20-2608 or 20-2609, and
amendments thereto, on or after July 1, 1975, the annuity shall be based
on the final average salary of such judge as provided in this subsection.
The final average salary of a judge who becomes permanently physically
or mentally disabled and who is retired under K.S.A. 20-2608 or 20-2609,
and amendments thereto, shall be determined as if such judge had retired
on the date such judge became permanently physically or mentally disa-
bled. The final average salary of a former judge whose service is termi-
nated without retiring and who later retires under K.S.A. 20-2608, and
amendments thereto, shall be determined as if such former judge had
retired at the time such service was terminated.

      In the case of judges who retire on or after July 1, 1993, the final
average salary shall mean the average highest annual salary paid to the
judge for any three years of the last 10 years of service as a judge im-
mediately preceding retirement or termination of employment, or if serv-
ice as a judge is less than three years, then the final average salary shall
be the average annual salary paid to the judge during the full period of
service as a judge, or if service as a judge is less than one year, then the
final average salary shall be computed by multiplying the amount of
monthly salary such judge was receiving at the time of retirement by 12.

      (c) The provisions of law in effect on the retirement date of a judge
under the retirement system for judges shall govern the retirement ben-
efit payable to the judge, any joint annuitant and any beneficiary.

      (d) A judge who retires under K.S.A. 20-2608, and amendments
thereto, and who, after such retirement, again is appointed or elected as
a judge, shall have the judge's retirement annuity suspended as provided
in this subsection. Such judge shall become an active member and make
employee contributions to the system and receive service credit for any
service after the date of commencement of service in such position. Upon
again retiring, any credited service such member subsequently accrues
shall be added to all previous service and the retirement annuity shall be
recalculated in accordance with the provisions of this section.

 Sec.  6. On and after July 1, 2000, K.S.A. 1999 Supp. 20-2610a is
hereby amended to read as follows: 20-2610a. (a) A judge may elect to
have such judge's retirement annuity paid under one of the options pro-
vided in this section in lieu of having it paid in the form stated in K.S.A.
20-2610 and amendments thereto. Such election shall be made before
the date of actual retirement. A specific person shall be designated as
joint annuitant at the time of election of the joint and 1/2 to joint annuitant
survivor option, joint and survivor option and the joint and 3/4 to joint
annuitant survivor option. Under no circumstances may an option be
changed or canceled nor the named joint annuitant changed after the
date of actual retirement of the judge.

      (b) The amount of retirement annuity payable under an option shall
be based on the age of the judge and, if applicable, the age of the joint
annuitant, and shall be such amount as to be the actuarial equivalent of
the retirement annuity otherwise payable under K.S.A. 20-2610 and
amendments thereto as prescribed in subsection (c). Whenever the
amount of any benefit is to be determined on the basis of actuarial as-
sumptions, the assumptions shall be specified in a way that precludes
employer discretion. In no case shall the total amount of retirement an-
nuity payable under any option provided in this section be more than
100% of the retirement annuity which would have been otherwise payable
if no option had been elected under this section.

      (c) The following retirement options, which are subject to the pro-
visions of K.S.A. 1999 Supp. 74-49,123 and amendments thereto, are
available:

      (1) Joint and 1/2 to joint annuitant survivor. A reduced retirement
annuity payable to the judge during the judge's lifetime in a monthly
amount equal to the product of (A) the monthly payment of the retire-
ment annuity otherwise payable under K.S.A. 20-2610 and amendments
thereto and (B) the percentage equal to 91% minus .4% for each year by
which the age of the judge's joint annuitant is less than the judge's age,
computed to the nearest whole year, or plus .4% for each year by which
the age of the judge's joint annuitant is more than the judge's age, com-
puted to the nearest whole year, with 1/2 of that monthly amount contin-
ued to the judge's joint annuitant during such joint annuitant's remaining
lifetime, if any, after the death of the judge. In the event that the desig-
nated joint annuitant under this option predeceases the retired judge, the
amount of the retirement annuity otherwise payable to the judge under
this option shall be adjusted automatically to the retirement annuity which
the judge would have received if no option had been elected under this
section.

      (2) Joint and survivor. A reduced retirement annuity payable to the
judge during the judge's lifetime in a monthly amount equal to the prod-
uct of (A) the monthly payment of the retirement annuity otherwise pay-
able under K.S.A. 20-2610 and amendments thereto and (B) the per-
centage equal to 83% minus .6% for each year by which the age of the
judge's joint annuitant is less than the judge's age, computed to the near-
est whole year, or plus .6% for each year by which the age of the judge's
joint annuitant is more than the judge's age, computed to the nearest
whole year, with that monthly amount continued to the joint annuitant
during the joint annuitant's remaining lifetime, if any, after the death of
judge. In the event that the designated joint annuitant under this option
predeceases the retired judge, the amount of the retirement annuity oth-
erwise payable to the judge under this option shall be adjusted automat-
ically to the retirement annuity which the judge would have received if
no option had been elected under this section.

      (3) Joint and 3/4 to joint annuitant survivor. A reduced retirement
annuity payable to the judge during the judge's lifetime in a monthly
amount equal to the product of (A) the monthly payment of the retire-
ment annuity otherwise payable under K.S.A. 20-2610 and amendments
thereto and (B) the percentage equal to 87% minus .5% for each year by
which the age of the judge's joint annuitant is less than the judge's age,
computed to the nearest whole year, or plus .5% for each year by which
the age of the judge's joint annuitant is more than the judge's age, com-
puted to the nearest whole year, with 3/4 of that monthly amount contin-
ued to the judge's joint annuitant during such joint annuitant's remaining
lifetime, if any, after the death of the judge. In the event that the desig-
nated joint annuitant under this option predeceases the retired judge, the
amount of the retirement annuity otherwise payable to the judge under
this option shall be adjusted automatically to the retirement annuity which
the judge would have received if no option had been elected under this
section.

      (4) Life with 5 years certain. A reduced retirement annuity payable
to the judge during the judge's lifetime in a monthly amount equal to
98% of the monthly payment of the retirement annuity otherwise payable
under K.S.A. 20-2610 and amendments thereto and if the judge dies
within the five-year certain period, measured from the commencement
of retirement annuity payments, such monthly payments shall be contin-
ued to such judge's beneficiary during the balance of the five-year certain
period.

      (5) Life with 10 years certain. A reduced retirement annuity payable
to the judge during the judge's lifetime in a monthly amount equal to
95% of the monthly payment of the retirement annuity otherwise payable
under K.S.A. 20-2610 and amendments thereto and if the judge dies
within the ten-year certain period, measured from the commencement
of retirement annuity payments, such monthly payments shall be contin-
ued to such judge's beneficiary during the balance of the ten-year certain
period.

      (6) Life with 15 years certain. A reduced retirement annuity payable
to the judge during the judge's lifetime in a monthly amount equal to
88% of the monthly payment of the retirement annuity otherwise payable
under K.S.A. 20-2610 and amendments thereto and if the judge dies
within the fifteen-year certain period, measured from the commence-
ment of retirement annuity payments, such monthly payments shall be
continued to such judge's beneficiary during the balance of the fifteen-
year certain period.

      (7) Lump sum payment at retirement. (A) Pursuant to this option,
the judge must specify a lump sum amount to be paid to the judge upon
the judge's retirement. The lump sum amount will be based on the actu-
arial present value of the benefit as provided in K.S.A. 20-2610, and
amendments thereto. The lump sum amount designated by the judge must
be in 10% increments and shall not exceed 1/2 of the actuarial present
value of the benefit provided in K.S.A. 20-2610, and amendments thereto.

      (B) Pursuant to this option, the judge must elect to have the remaining
actuarial present value paid in a monthly amount under the provisions of
K.S.A. 20-2610, and amendments thereto, or subsections (c)(1) through
(c)(6) of this section.

      (C) The amount of any retirement benefit payable pursuant to this
subsection shall remain as provided in this subsection even in the event
that the designated joint annuitant pursuant to subsections (c)(1), (c)(2)
or (c)(3) predeceases the retirant.

      (D) The provisions of this subsection shall be effective on and after
July 1, 2001.

      (d) If a judge, who is eligible to retire, dies without having actually
retired, the judge's spouse, if the spouse is the sole beneficiary for the
judge's accumulated contributions, may elect to receive benefits as a joint
annuitant under one of the options provided in this section in lieu of
receiving the judge's accumulated contributions.

      (e) On and after July 1, 1993, if a judge with 15 or more years of
credited service dies before attaining retirement age, the judge's spouse,
if the spouse is the sole beneficiary for the judge's accumulated contri-
butions, may elect to receive benefits under one of the options provided
in this section in lieu of receiving the judge's accumulated contributions.
Payments under one of the options provided in this section to the judge's
spouse if so elected, shall commence on the date that the judge would
have first attained retirement age.

      (f) Benefits payable to a joint annuitant shall accrue from the first
day of the month following the death of a member or retirant and, in the
case of the joint and 1/2 to joint annuitant survivor option, the joint and
survivor option and the joint and 3/4 to joint annuitant survivor option,
shall end on the last day of the month in which the joint annuitant dies.

      (g) The provisions of the law in effect on the retirement date of a
judge under the retirement system for judges shall govern the retirement
annuity payable to the retired judge and any joint annuitant, except, for
retirement benefits payable after July 1, 1993, for judges who retired prior
to July 1, 1982, in the event that the designated joint annuitant under the
option provided in subsection (c)(1), (2) or (3), as applicable, predeceased
the judge, the amount of the retirement benefit otherwise payable to the
judge under the option provided in subsection (c)(1), (2) or (3), as appli-
cable, shall be adjusted automatically to the retirement benefit which the
judge would have received if no option had been elected under this sec-
tion.

      (h) Upon the death of a joint annuitant who is receiving a retirement
benefit under the provisions of this section, there shall be paid to such
joint annuitant's beneficiary an amount equal to the excess, if any, of the
accumulated contributions of the retired judge over the sum of all retire-
ment benefit payments made to such retired judge and such joint annu-
itant. Such joint annuitant shall designate a beneficiary by filing in the
office of the retirement system such designation at the time of death of
the retired judge. If there is no named beneficiary of such joint annuitant
living at the time of death of such joint annuitant, any amount provided
for by this section shall be paid to, in order of preference as follows:

      (1) The joint annuitant's surviving spouse;

      (2) the joint annuitant's dependent child or children;

      (3) the joint annuitant's dependent parent or parents;

      (4) the joint annuitant's nondependent child or children;

      (5) the joint annuitant's nondependent parent or parents; or

      (6) the estate of the deceased joint annuitant.

      (i) In any event, benefits shall be adjusted as necessary to satisfy the
incidental death benefits regulations under the federal internal revenue
code.

 Sec.  7. On and after July 1, 2000, K.S.A. 1999 Supp. 20-2625 is
hereby amended to read as follows: 20-2625. (1) Any member of the
retirement system for judges may purchase, subject to the provisions of
K.S.A. 1999 Supp. 74-49,123, and amendments thereto, participating
credit for periods of active service in the armed forces of the United States
or in the commissioned corps of the United States public health service
and for periods of service required to fulfill the requirements of section
651 of title 10, United States code, which does not exceed six years. Such
judge shall be entitled to purchase one quarter of participating service
credit for each year of service required to fulfill the requirements of
section 651 of title 10, United States code. Such purchase shall be effected
by the judge submitting proof of such service acceptable to the board and
electing in writing to have employee contributions as provided in K.S.A.
20-2603 and amendments thereto deducted from such judge's compen-
sation at an additional rate of contribution, in addition to the employee's
rate of contribution as provided in K.S.A. 20-2603 and amendments
thereto, based upon the judge's attained age at the time of purchase and
using actuarial assumptions and tables in use by the retirement system at
such time of purchase for such periods of service. Such additional rate of
contribution shall commence at the beginning of the quarter following
such election and shall remain in effect until all of the full quarters of
such service have been purchased.

      (2) Any member of the retirement system who has not retired may
purchase, subject to the provisions of K.S.A. 1999 Supp. 74-49,123, and
amendments thereto, participating service credit for military service as
described in this section by electing to effect such purchase by means of
a single lump-sum payment in lieu of employee contributions as provided
in this section. The lump-sum payment shall be an amount determined
by the actuary using the judge's then current annual rate of compensation,
the actuarial assumptions and tables currently in use by the retirement
system and the judge's attained age. No participating employer shall pay
all or any part of the cost of any additional participating service credit to
be purchased by means of a lump-sum payment by a judge under this
section.

 Sec.  8. K.S.A. 1999 Supp. 46-233 is hereby amended to read as fol-
lows: 46-233. (a) (1) No state officer or employee shall in the capacity as
such officer or employee be substantially involved in the preparation of
or participate in the making of a contract with any person or business by
which such officer or employee is employed or in whose business such
officer or employee or any member of such officer's or employee's im-
mediate family has a substantial interest and no such person or business
shall enter into any contract where any state officer or employee, acting
in such capacity, is a signatory to, has been substantially involved in the
preparation of or is a participant in the making of such contract and is
employed by such person or business or such officer or employee or any
member of such officer's or employee's immediate family has a substantial
interest in such person or business.

      (2) Except as otherwise provided in this subsection, whenever any
individual has participated as a state officer or employee in the making
of any contract with any person or business, such individual shall not
accept employment with such person or business as an employee, inde-
pendent contractor or subcontractor until two years after performance of
the contract is completed or until two years after the individual terminates
employment as a state officer or employee, whichever is sooner. This
prohibition on accepting employment shall not apply in any case in which:
(A) A state officer or employee who participated in making a contract
while employed by an institution that is subsequently closed or abolished
or otherwise ceases operations or that has budget reductions imposed
that are associated with such closure and who is laid off from employment
with such institution for the reason of such closure, abolition or cessation
of operations or such imposition of budget reductions; or (B) a state of-
ficer or employee who participated in making a contract while employed
by an institution that is scheduled to be closed or abolished or to cease
operations, who is scheduled to be laid off from employment with such
institution for the reason of the scheduled closure, abolition or cessation
of operations, and who voluntarily terminates such employment after re-
ceiving such state officer or employee's notice of the scheduled layoff;
(C) a state officer or employee who participated in making a contract
while employed by the department of corrections at the Topeka correc-
tional facility and who is laid off from such employment due to the transfer
of the reception and diagnostic center from the Topeka correctional fa-
cility to the El Dorado correctional facility; (D) a state officer or employee
who participated in making a contract while employed by the department
of corrections at the Topeka correctional facility and who voluntarily ter-
minates from such employment after receiving such state officer or em-
ployee's notice of scheduled layoff due to the transfer of the reception and
diagnostic center from the Topeka correctional facility to the El Dorado
correctional facility; (E) a state officer or employee who participated in
making a contract while employed by the department of social and re-
habilitation services within the division of services for the blind or at
Kansas industries for the blind at facilities located on the Topeka state
hospital property, as defined by K.S.A. 1999 Supp. 75-37,123 and amend-
ments thereto, and who is laid off from such employment due to the clo-
sure, abolition or other cessation of operations of the Kansas industries
for the blind as a state program at such location; or (F) a state officer or
employee who participated in making a contract while employed by the
department of social and rehabilitation services within the division of
services for the blind or at Kansas industries for the blind at facilities
located on the Topeka state hospital property, as defined by K.S.A. 1999
Supp. 75-37,123 and amendments thereto, and who voluntarily termi-
nates from such employment after receiving such state officer's or em-
ployee's notice of scheduled layoff due to the closure, abolition or other
cessation of operations of the Kansas industries for the blind as a state
program at such location. As used in this subsection (a)(2), "laid off" and
"layoff" mean, in the case of a state officer or employee in the classified
service under the Kansas civil service act, being laid off under K.S.A. 75-
2948, and amendments thereto, and, in the case of a state officer or
employee in the unclassified service under the Kansas civil service act,
being terminated from employment with the state agency by the appoint-
ing authority, except that "laid off" and "layoff" shall not include any
separation from employment pursuant to a budget reduction or expend-
iture authority reduction and a reduction of F.T.E. positions under K.S.A.
75-6801, and amendments thereto; and "institution" means Topeka state
hospital or Winfield state hospital and training center.

      (b) No individual shall, while a legislator or within one year after the
expiration of a term as legislator, be interested pecuniarily, either directly
or indirectly, in any contract with the state, which contract is funded in
whole or in part by any appropriation or is authorized by any law passed
during such term, except that the prohibition of this subsection (b) shall
not apply to any contract interest in relation to which a disclosure state-
ment is filed as provided by K.S.A. 46-239, and amendments thereto.

      (c) No individual, while a legislator or within one year after the ex-
piration of a term as a legislator, shall represent any person in a court
proceeding attacking any legislative action taken or enactment made dur-
ing any term such individual served as a legislator as being unconstitu-
tional because of error in the legislative process with respect to such
action or enactment unless such legislator voted no upon the enactment
of the measure and declared on the record, during such term, that such
legislation was unconstitutional. The prohibition of this subsection (c)
shall not apply to a current or former legislator charged with a violation
of such legislative action or enactment.

      (d) Subsections (a) and (b) shall not apply to the following:

      (1) Contracts let after competitive bidding has been advertised for by
published notice; and

      (2) Contracts for property or services for which the price or rate is
fixed by law.

      (e) When used in this section:

      (1) "Substantial interest" shall have the same meaning ascribed
thereto by K.S.A. 46-229, and amendments thereto, and any such interest
held within the preceding 12 months of the act or event of participating
in the preparation of making a contract.

      (2) "Substantially involved in the preparation or participate in the
making of a contract" means having approved or disapproved a contract
or having provided significant factual or specific information or advice or
recommendations in relation to the negotiated terms of the contract.

 Sec.  9. On and after July 1, 2000, K.S.A. 1999 Supp. 74-4914 is
hereby amended to read as follows: 74-4914. (1) The normal retirement
date for a member of the system shall be the first day of the month
coinciding with or following termination of employment with any partic-
ipating employer not followed by employment with any participating em-
ployer within 30 days and the attainment of age 65 or, commencing July
1, 1993, age 62 with the completion of 10 years of credited service or the
first day of the month coinciding with or following the date that the total
of the number of years of credited service and the number of years of
attained age of the member is equal to or more than 85. In no event shall
a normal retirement date for a member be before six months after the
entry date of the participating employer by whom such member is em-
ployed. A member may retire on the normal retirement date or on the
first day of any month thereafter upon the filing with the office of the
retirement system of an application in such form and manner as the board
shall prescribe. Nothing herein shall prevent any person, member or re-
tirant from being employed, appointed or elected as an employee, ap-
pointee, officer or member of the legislature. Elected officers may retire
from the system on any date on or after the attainment of the normal
retirement date, but no retirement benefits payable under this act shall
be paid until the member has terminated such member's office.

      (2) No retirant shall make contributions to the system or receive serv-
ice credit for any service after the date of retirement.

      (3) Any member who is an employee of an affiliating employer pur-
suant to K.S.A. 74-4954b and amendments thereto and has not withdrawn
such member's accumulated contributions from the Kansas police and
firemen's retirement system may retire before such member's normal
retirement date on the first day of any month coinciding with or following
the attainment of age 55.

      (4) Any member may retire before such member's normal retirement
date on the first day of any month coinciding with or following termination
of employment with any participating employer not followed by employ-
ment with any participating employer within 30 days and the attainment
of age 55 with the completion of 10 years of credited service, but in no
event before six months after the entry date, upon the filing with the
office of the retirement system of an application for retirement in such
form and manner as the board shall prescribe.

      (5) If a retirant who retired on or after July 1, 1988, is employed or
appointed in or to any position or office for which compensation for serv-
ice is paid in an amount equal to $15,000 or more in any one such calendar
year, by any participating employer for which such retirant was employed
or appointed during the final two years of such retirant's participation,
such retirant shall not receive any retirement benefit for any month for
which such retirant serves in such position or office. The participating
employer shall report to the system within 30 days of when the compen-
sation paid to the retirant is equal to or exceeds any limitation provided
by this section. Any retirant employed by a participating employer shall
not make contributions nor receive additional credit under such system
for such service except as provided by this section. Upon request of the
executive secretary of the system, the secretary of revenue shall provide
such information as may be needed by the executive secretary to carry
out the provisions of this act. The provisions of this subsection shall not
apply to retirants employed as substitute teachers or officers, employees,
or appointees or members of the legislature or any other elected officials.
The provisions of this subsection shall not apply to members of the leg-
islature prior to January 8, 2000. The provisions of this subsection shall
not apply to any other elected officials prior to the term of office of such
elected official which commences on or after July 1, 2000. The provisions
of this subsection shall apply to any other elected official on and after the
term of office of such other elected official which commences on or after
July 1, 2000. Except as otherwise provided, commencing January 8, 2001,
the provisions of this subsection shall apply to members of the legislature.
For determination of the amount of compensation paid pursuant to this
subsection, for members of the legislature, compensation shall include any
amount paid as provided pursuant to subsections (a), (b), (c) and (d) of
K.S.A. 46-137a, and amendments thereto, or pursuant to K.S.A. 46-137b,
and amendments thereto. Notwithstanding any provision of law to the
contrary, when a member of the legislature is paid an amount of com-
pensation of $15,000 or more in any one calendar year, the member may
continue to receive any amount provided in subsections (b) and (d) of
K.S.A. 46-137a, and amendments thereto, and still be entitled to receive
such member's retirement benefit.

      (6) For purposes of this section, any employee of a local governmental
unit which has its own pension plan who becomes an employee of a
participating employer as a result of a merger or consolidation of services
provided by local governmental units, which occurred on January 1, 1994,
may count service with such local governmental unit in determining
whether such employee has met the years of credited service require-
ments contained in this section.

 Sec.  10. On and after July 1, 2000, K.S.A. 74-4914c is hereby
amended to read as follows: 74-4914c. (1) Notwithstanding the provisions
of K.S.A. 74-4914, 74-4915 and subsection (23) of K.S.A. 74-4902, and
amendments thereto, the normal retirement date for all security officers,
as defined by paragraph (a) or (b) of subsection (1) of K.S.A. 74-4914a
and amendments thereto, with at least three consecutive years of service
as such security officer immediately preceding the date of retirement,
shall be the first day of the month coinciding with or following the at-
tainment of age 55 and, and commencing July 1, 2000, the first day of
the month coinciding with or following the date that the total of the num-
ber of years of credited service and the number of years of attained age
of the security officer is equal to or more than 85. Any such security officer
may retire before such normal retirement date on the first day of any
month coinciding with or following the attainment of age 50 or comple-
tion of 10 years of credited service, whichever occurs later.

      (2)  (a) Except as otherwise provided in paragraph (b) of this subsec-
tion (2), any security officer, as defined by paragraph (a) or (b) of sub-
section (1) of K.S.A. 74-4914a and amendments thereto, who retires be-
fore the normal retirement date shall receive an annual retirement benefit
equal to the annual retirement benefit payable had such security officer
retired on the normal retirement date but based upon such security of-
ficer's final average salary and years of participating and prior service
credited to the date of actual retirement reduced by an amount equal to
the product of (i) such annual retirement benefit payable had such se-
curity officer retired on the normal retirement date, multiplied by (ii) the
product of .6% multiplied by the number of months difference, to the
nearest whole month, between such security officer's attained age at the
time of retirement and age 55.

      (b) Any security officer, as defined by paragraph (a) or (b) of subsec-
tion (1) of K.S.A. 74-4914a and amendments thereto, who retires on or
after July 1, 1982, and prior to July 1, 1987, before the normal retirement
date shall receive an annual retirement benefit equal to the annual re-
tirement benefit payable had such security officer retired on the normal
retirement date but based upon such security officer's final average salary
and years of participating and prior service credited to the date of actual
retirement reduced by an amount equal to the product of (i) such annual
retirement benefit payable had such security officer retired on the normal
retirement date, multiplied by (ii) the product of .3% multiplied by the
number of months difference, to the nearest whole month, between such
security officer's attained age at the time of retirement and age 55.

      (c) Any security officer, as defined by paragraph (a) or (b) of subsec-
tion (1) of K.S.A. 74-4914a and amendments thereto, who retires on or
after July 1, 1990, before the normal retirement date shall receive an
annual retirement benefit equal to the annual retirement benefit payable
had such security officer retired on the normal retirement date but based
upon such security officer's final average salary and years of participating
and prior service credited to the date of actual retirement reduced by an
amount equal to the product of (i) such annual retirement benefit payable
had such security officer retired on the normal retirement date, multi-
plied by (ii) the product of .2% multiplied by the number of months
difference, to the nearest whole month, between such security officer's
attained age at the time of retirement and age 55.

      (3) Notwithstanding the provisions of K.S.A. 74-4914, 74-4915 and
subsection (23) of K.S.A. 74-4902, the normal retirement date for all
security officers, as defined by paragraph (c), (d), (e) or (f) of subsection
(1) of K.S.A. 74-4914a and amendments thereto, with at least three con-
secutive years of service as such security officer immediately preceding
the date of retirement, shall be the first day of the month coinciding with
or following the attainment of age 60 and, and commencing July 1, 2000,
the first day of the month coinciding with or following the date that the
total of the number of years of credited service and the number of years
of attained age of the security officer is equal to or more than 85. Any
such security officer may retire before such normal retirement date on
the first day of any month coinciding with or following the attainment of
age 55 or completion of 10 years of credited service, whichever occurs
later.

      (4) (a) Except as otherwise provided in paragraph (b) of this subsec-
tion (4), any security officer, as defined by paragraph (c), (d), (e) or (f) of
subsection (1) of K.S.A. 74-4914a and amendments thereto, who retires
before the normal retirement date shall receive an annual retirement
benefit equal to the annual retirement benefit payable had such security
officer retired on the normal retirement date but based upon such se-
curity officer's final average salary and years of participating and prior
service credited to the date of actual retirement reduced by an amount
equal to the product of (i) such annual retirement benefit payable had
such security officer retired on the normal retirement date, multiplied by
(ii) the product of .6% multiplied by the number of months difference,
to the nearest whole month, between such security officer's attained age
at the time of retirement and age 60.

      (b) Any security officer, as defined by paragraph (c), (d), (e) or (f) of
subsection (1) of K.S.A. 74-4914a and amendments thereto, who retires
on or after July 1, 1982, and prior to July 1, 1987, before the normal
retirement date shall receive an annual retirement benefit equal to the
annual retirement benefit payable had such security officer retired on the
normal retirement date but based upon such security officer's final av-
erage salary and years of participating and prior service credited to the
date of actual retirement reduced by an amount equal to the product of
(i) such annual retirement benefit payable had such security officer re-
tired on the normal retirement date, multiplied by (ii) the product of .3%
multiplied by the number of months difference, to the nearest whole
month, between such security officer's attained age at the time of retire-
ment and age 60.

      (c) Any security officer, as defined by paragraph (c), (d), (e) or (f) of
subsection (1) of K.S.A. 74-4914a and amendments thereto, who retires
on or after July 1, 1990, before the normal retirement date shall receive
an annual retirement benefit equal to the annual retirement benefit pay-
able had such security officer retired on the normal retirement date but
based upon such security officer's final average salary and years of par-
ticipating and prior service credited to the date of actual retirement re-
duced by an amount equal to the product of (i) such annual retirement
benefit payable had such security officer retired on the normal retirement
date, multiplied by (ii) the product of .2% multiplied by the number of
months difference, to the nearest whole month, between such security
officer's attained age at the time of retirement and age 60.

 Sec.  11. On and after July 1, 2000, K.S.A. 1999 Supp. 74-4918 is
hereby amended to read as follows: 74-4918. (1) A member may elect to
have such member's retirement benefit paid under one of the options
provided in this section in lieu of having it paid in the form stated in
K.S.A. 74-4915 and amendments thereto. Such election must be made
before the date of actual retirement. A specific person must be designated
as joint annuitant at the time of election of the joint and 1/2 to joint an-
nuitant survivor option, the joint and survivor option and the joint and 3/4
to joint annuitant survivor option. Under no circumstances may an option
be changed or canceled nor the named joint annuitant changed after the
date of actual retirement of the member.

      (2) The amount of retirement benefit payable under an option shall
be based on the age of the member and, if applicable, the age of the joint
annuitant, and shall be such amount as to be the actuarial equivalent of
the retirement benefit otherwise payable under K.S.A. 74-4915 and
amendments thereto, as prescribed in subsection (3). In no case shall the
total amount of retirement benefit paid under any option provided in this
section be more than 100% of the retirement benefit which would have
been otherwise payable if no option had been elected under this section.

      (3) The following retirement options, which are subject to the pro-
visions of K.S.A. 1999 Supp. 74-49,123 and amendments thereto, are
available:

      (A) Joint and 1/2 to joint annuitant survivor. A reduced retirement
benefit is payable to the retirant during the retirant's lifetime in a monthly
amount equal to the product of (A) (i) the monthly payment of the re-
tirement benefit otherwise payable under K.S.A. 74-4915 and amend-
ments thereto and (B) (ii) the percentage equal to 91% minus .4% for
each year by which the age of the retirant's joint annuitant is less than
the retirant's age, computed to the nearest whole year, or plus .4% for
each year by which the age of the retirant's joint annuitant is more than
the retirant's age, computed to the nearest whole year, with 1/2 of that
monthly amount continued to the retirant's joint annuitant during such
joint annuitant's remaining lifetime, if any, after the death of the retirant.
In the event that the designated joint annuitant under this option pre-
deceases the retirant, the amount of the retirement benefit otherwise
payable to the retirant under this option shall be adjusted automatically
to the retirement benefit which the retirant would have received if no
option had been elected under this section.

      (B) Joint and survivor. A reduced retirement benefit is payable to
the retirant during the retirant's lifetime in a monthly amount equal to
the product of (A) (i) the monthly payment of the retirement benefit
otherwise payable under K.S.A. 74-4915 and amendments thereto and
(B) (ii) the percentage equal to 83% minus .6% for each year by which
the age of the retirant's joint annuitant is less than the retirant's age,
computed to the nearest whole year, or plus .6% for each year by which
the age of the retirant's joint annuitant is more than the retirant's age,
computed to the nearest whole year, with that amount continued to the
joint annuitant during the joint annuitant's remaining lifetime, if any, after
the death of the retirant. In the event that the designated joint annuitant
under this option predeceases the retirant, the amount of the retirement
benefit otherwise payable to the retirant under this option shall be ad-
justed automatically to the retirement benefit which the retirant would
have received if no option had been elected under this section.

      (C) Joint and 3/4 to joint annuitant survivor. A reduced retirement
benefit is payable to the retirant during the retirant's lifetime in a monthly
amount equal to the product of (A) (i) the monthly payment of the re-
tirement benefit otherwise payable under K.S.A. 74-4915 and amend-
ments thereto and (B) (ii) the percentage equal to 87% minus .5% for
each year by which the age of the retirant's joint annuitant is less than
the retirant's age, computed to the nearest whole year, or plus .5% for
each year by which the age of the retirant's joint annuitant is more than
the retirant's age, computed to the nearest whole year, with 3/4 of that
monthly amount continued to the retirant's joint annuitant during such
joint annuitant's remaining lifetime, if any, after the death of the retirant.
In the event that the designated joint annuitant under this option pre-
deceases the retirant, the amount of the retirement benefit otherwise
payable to the retirant under this option shall be adjusted automatically
to the retirement benefit which the retirant would have received if no
option had been elected under this section.

      (D) Life with 5 years certain. A reduced retirement benefit is payable
to the retirant during the retirant's lifetime in a monthly amount equal
to 98% of the monthly payment of the retirement benefit otherwise pay-
able under K.S.A. 74-4915 and amendments thereto and if the retirant
dies within the five-year certain period, measured from the commence-
ment of retirement benefit payments, such payments shall be continued
to the retirant's beneficiary during the balance of the five-year certain
period.

      (E) Life with 10 years certain. A reduced retirement benefit is pay-
able to the retirant during the retirant's lifetime in a monthly amount
equal to 95% of the monthly payment of the retirement benefit otherwise
payable under K.S.A. 74-4915 and amendments thereto and if the retirant
dies within the ten-year certain period, measured from the commence-
ment of retirement benefit payments, such payments shall be continued
to the retirant's beneficiary during the balance of the ten-year certain
period.

      (F) Life with 15 years certain. A reduced retirement benefit is pay-
able to the retirant during the retirant's lifetime in a monthly amount
equal to 88% of the monthly payment of the retirement benefit otherwise
payable under K.S.A. 74-4915 and amendments thereto and if the retirant
dies within the fifteen-year certain period, measured from the com-
mencement of retirement benefit payments, such payments shall be con-
tinued to the retirant's beneficiary during the balance of the fifteen-year
certain period.

      (G) Lump sum payment at retirement. (i) Pursuant to this option, the
member must specify a lump sum amount to be paid to the member upon
the member's retirement. The lump sum amount will be based on the
actuarial present value of the benefit as provided in K.S.A. 74-4915, and
amendments thereto. The lump sum amount designated by the member
must be in 10% increments and shall not exceed 1/2 of the actuarial present
value of the benefit provided in K.S.A. 74-4915, and amendments thereto.

      (ii) Pursuant to this option, the member must elect to have the re-
maining actuarial present value paid in a monthly amount under the
provisions of K.S.A. 74-4915, and amendments thereto, or subsections
(3)(A) through (3)(F) of this section.

      (iii) The amount of any retirement benefit payable pursuant to this
subsection shall remain as provided in this subsection even in the event
that the designated joint annuitant pursuant to subsection (3)(A), (3)(B)
or (3)(C) predeceases the retirant.

      (iv) The provisions of this subsection shall be effective on and after
July 1, 2001.

      (4) If a member, who is eligible to retire in accordance with the pro-
visions of K.S.A. 74-4914 and amendments thereto, dies without having
actually retired, the member's spouse, if the spouse is the sole beneficiary
for the member's accumulated contributions, may elect to receive ben-
efits under one of the options provided in this section in lieu of receiving
the member's accumulated contributions.

      (5) The benefits of subsection (4) shall be available in the case of
death within the first six months after the entry date of the member's
participating employer.

      (6) On and after January 1, 1991, if a member with 15 or more years
of credited service dies before attaining retirement age, the member's
spouse, if the spouse is the sole beneficiary for the member's accumulated
contributions, may elect to receive benefits under one of the options
provided in this section in lieu of receiving the member's accumulated
contributions. Payments under one of the options provided in this section
to the member's spouse if so elected, shall commence on the date that
the member would have attained retirement age.

      (7) Benefits payable to a joint annuitant shall accrue from the first
day of the month following the death of a member or retirant and, in the
case of the joint and 1/2 to joint annuitant survivor option, the joint and
survivor option and the joint and 3/4 to joint annuitant survivor option,
shall end on the last day of the month in which the joint annuitant dies.

      (8) The provisions of the law in effect on the retirement date of a
member under the system shall govern the retirement benefit payable to
the retirant and any joint annuitant, except, for retirement benefits pay-
able after July 1, 1993, for retirants who retired prior to July 1, 1982, in
the event that the designated joint annuitant under the option provided
in subsection (3)(A), (B) or (C), as applicable, predeceased the retirant,
the amount of the retirement benefit otherwise payable to the retirant
under the option provided in subsection (3)(A), (B) or (C), as applicable,
shall be adjusted automatically to the retirement benefit which the retir-
ant would have received if no option had been elected under this section.

      (9) Upon the death of a joint annuitant who is receiving a retirement
benefit under the provisions of this section, there shall be paid to such
joint annuitant's beneficiary an amount equal to the excess, if any, of the
accumulated contributions of the retirant over the sum of all retirement
benefit payments made to such retirant and such joint annuitant. Such
joint annuitant shall designate a beneficiary by filing in the office of the
retirement system such designation at the time of death of the retirant.
If there is no named beneficiary of such joint annuitant living at the time
of death of such joint annuitant, any amount provided for by this section
shall be paid to, in order of preference as follows:

      (A) The joint annuitant's surviving spouse;

      (B) the joint annuitant's dependent child or children;

      (C) the joint annuitant's dependent parent or parents;

      (D) the joint annuitant's nondependent child or children;

      (E) the joint annuitant's nondependent parent or parents; or

      (F) the estate of the deceased joint annuitant.

 Sec.  12. On and after July 1, 2000, K.S.A. 1999 Supp. 74-4919p is
hereby amended to read as follows: 74-4919p. Any member may pur-
chase, subject to the provisions of K.S.A. 74-49,123, and amendments
thereto, service for periods of service in the United States peace corps
which commenced on or after January 1, 1962. At the election of the
member, the benefit for each such period of service shall be equal to
either 1% or 1.75% of the final average salary of any such member. For
any member who elected to purchase service credit as provided in this
section prior to the effective date of this act at the 1% rate, such member
may elect to purchase such service credit at an additional amount of .75%
of final average salary of such member in a lump-sum amount as other-
wise provided in this subsection. Such member may purchase such service
by making application therefor prior to date of retirement at an additional
rate of contribution in addition to the employee's rate of contribution as
provided in K.S.A. 74-4919 and amendments thereto, based upon the
member's attained age at the time of purchase and using actuarial as-
sumptions and tables in use by the retirement system at the time of such
purchase. Such additional rate of contribution shall commence at the
beginning of the quarter following such election and shall remain in effect
until all quarters of such service have been purchased. Any such member
may purchase, subject to the provisions of K.S.A. 74-49,123, and amend-
ments thereto, service as described in this section by electing to effect
such purchase by means of a single lump-sum payment in lieu of em-
ployee contributions as provided in this section in an amount equal to the
then present value of the benefits being purchased as determined by the
actuary using the member's attained age, annual compensation at the time
of purchase and the actuarial assumptions and tables then in use by this
system. The lump-sum payment shall be made immediately upon being
notified of the amount due. No participating employer shall pay the cost,
or any part thereof, of any service authorized to be purchased by a mem-
ber under this section. The provisions of this section shall be effective on
and after July 1, 1996.

 Sec.  13. On and after July 1, 2000, K.S.A. 1999 Supp. 74-4919q is
hereby amended to read as follows: 74-4919q. Any employee of a partic-
ipating employer who is a member of the Kansas public employees re-
tirement system, who was previously employed as an employee of the
memorial union corporation which is affiliated with Emporia state uni-
versity, may elect to purchase, subject to the provisions of K.S.A. 74-
49,123, and amendments thereto, service for such employment. At the
election of the member, the benefit for each such year of employment
shall be equal to either 1% or 1.75% of the final average salary of any
such member. For any member who elected to purchase service credit
as provided in this section prior to the effective date of this act at the 1%
rate, such member may elect to purchase such service credit at an addi-
tional amount of .75% of final average salary of such member in a lump-
sum amount as otherwise provided in this subsection. Such member may
purchase, subject to the provisions of K.S.A. 74-49,123, and amendments
thereto, such service by making application therefor prior to date of re-
tirement at an additional rate of contribution in addition to the employee's
rate of contribution as provided in K.S.A. 74-4919 and amendments
thereto, based upon the member's attained age at the time of purchase
and using actuarial assumptions and tables in use by the retirement sys-
tem at the time of such purchase. Such additional rate of contribution
shall commence at the beginning of the quarter following such election
and shall remain in effect until all quarters of such service have been
purchased. Any such member may purchase, subject to the provisions of
K.S.A. 74-49,123, and amendments thereto, service as described in this
section by electing to effect such purchase by means of a single lump-
sum payment in lieu of employee contributions as provided in this section
in an amount equal to the then present value of the benefits being pur-
chased as determined by the actuary using the member's attained age,
annual compensation at the time of purchase and the actuarial assump-
tions and tables then in use by this system. The lump-sum payment shall
be made immediately upon being notified of the amount due. No partic-
ipating employer shall pay the cost, or any part thereof, of any service
authorized to be purchased by a member under this section. The provi-
sions of this section shall be effective on and after July 1, 1996.

 Sec.  14. On and after July 1, 2000, K.S.A. 1999 Supp. 74-4921 is
hereby amended to read as follows: 74-4921. (1) There is hereby created
in the state treasury the Kansas public employees retirement fund. All
employee and employer contributions shall be deposited in the state
treasury to be credited to the Kansas public employees retirement fund.
The fund is a trust fund and shall be used solely for the exclusive purpose
of providing benefits to members and member beneficiaries and defray-
ing reasonable expenses of administering the fund. Investment income of
the fund shall be added or credited to the fund as provided by law. All
benefits payable under the system, refund of contributions and overpay-
ments, purchases or investments under the law and expenses in connec-
tion with the system unless otherwise provided by law shall be paid from
the fund. The director of accounts and reports is authorized to draw
warrants on the state treasurer and against such fund upon the filing in
the director's office of proper vouchers executed by the chairperson or
the executive secretary of the board. As an alternative, payments from
the fund may be made by credits to the accounts of recipients of payments
in banks, savings and loan associations and credit unions. A payment shall
be so made only upon the written authorization and direction of the re-
cipient of payment and upon receipt of such authorization such payments
shall be made in accordance therewith. Orders for payment of such claims
may be contained on (a) a letter, memorandum, telegram, computer prin-
tout or similar writing, or (b) any form of communication, other than
voice, which is registered upon magnetic tape, disc or any other medium
designed to capture and contain in durable form conventional signals used
for the electronic communication of messages.

      (2) The board shall have the responsibility for the management of
the fund and shall discharge the board's duties with respect to the fund
solely in the interests of the members and beneficiaries of the system for
the exclusive purpose of providing benefits to members and such mem-
ber's beneficiaries and defraying reasonable expenses of administering
the fund and shall invest and reinvest moneys in the fund and acquire,
retain, manage, including the exercise of any voting rights and disposal of
investments of the fund within the limitations and according to the pow-
ers, duties and purposes as prescribed by this section.

      (3) Moneys in the fund shall be invested and reinvested to achieve
the investment objective which is preservation of the fund to provide
benefits to members and member beneficiaries, as provided by law and
accordingly providing that the moneys are as productive as possible, sub-
ject to the standards set forth in this act. No moneys in the fund shall be
invested or reinvested if the sole or primary investment objective is for
economic development or social purposes or objectives.

      (4) In investing and reinvesting moneys in the fund and in acquiring,
retaining, managing and disposing of investments of the fund, the board
shall exercise the judgment, care, skill, prudence and diligence under the
circumstances then prevailing, which persons of prudence, discretion and
intelligence acting in a like capacity and familiar with such matters would
use in the conduct of an enterprise of like character and with like aims
by diversifying the investments of the fund so as to minimize the risk of
large losses, unless under the circumstances it is clearly prudent not to
do so, and not in regard to speculation but in regard to the permanent
disposition of similar funds, considering the probable income as well as
the probable safety of their capital.

      (5) Notwithstanding subsection (4): (a) Total investments in common
stock may be made in the amount of up to 60% of the total book value
of the fund;

      (b) the board may invest or reinvest moneys of the fund in alternative
investments if the following conditions are satisfied:

      (i) The total of such alternative investments does not exceed more
than 5% of the total investment assets of the fund. If the total of such
alternative investments exceeds more than 5% of the total investment
assets of the fund on the effective date of this act, the board shall not
invest or reinvest any moneys of the fund in alternative investments until
the total of such alternative investments is less the 5% of the total in-
vestment assets of the fund subject to the 5% limitation contained in this
subsection. Nothing in this subsection requires the board to liquidate or
sell the system's holdings in any alternative investment held by the system
on the effective date of this act, unless such liquidation or sale would be
in the best interest of the members and beneficiaries of the system and
be prudent under the standards contained in this section. The 5% limi-
tation contained in this section shall not have been violated if the total of
such alternative investments exceeds 5% of the total investment assets of
the fund as a result of market forces acting to increase the value of such
alternative investments relative to the rest of the system's investments;
however, the board shall not invest or reinvest any moneys of the fund
in alternative investments until the total of such alternative investments
is less than 5% of the total investment assets of the fund subject to the
5% limitation contained in this subsection;

      (ii) if in addition to the system, there are at least two other sophisti-
cated investors, as defined by section 301 of the securities and exchange
act of 1933;

      (iii) the system's share in any individual alternative investment is lim-
ited to an investment representing not more than 20% of any such indi-
vidual alternative investment;

      (iv) the system has received a favorable and appropriate recommen-
dation from a qualified, independent expert in investment management
or analysis in that particular type of alternative investment;

      (v) the alternative investment is consistent with the system's invest-
ment policies and objectives as provided in subsection (6);

      (vi) the individual alternative investment does not exceed more than
2.5% of the total alternative investments made under this subsection. If
the alternative investment is made pursuant to participation by the system
in a multi-investor pool, the 2.5% limitation contained in this subsection
is applied to the underlying individual assets of such pool and not to
investment in the pool itself. The total of such alternative investments
made pursuant to participation by the system in any one individual multi-
investor pool shall not exceed more than 20% of the total of alternative
investments made by the system pursuant to this subsection. Nothing in
this subsection requires the board to liquidate or sell the system's holdings
in any alternative investments made pursuant to participation by the sys-
tem in any one individual multi-investor pool held by the system on the
effective date of this act, unless such liquidation or sale would be in the
best interest of the members and beneficiaries of the system and be pru-
dent under the standards contained in this section. The 20% limitation
contained in this subsection shall not have been violated if the total of
such investment in any one individual multi-investor pool exceeds 20%
of the total alternative investments of the fund as a result of market forces
acting to increase the value of such a multi-investor pool relative to the
rest of the system's alternative investments; however, the board shall not
invest or reinvest any moneys of the fund in any such individual multi-
investor pool until the value of such individual multi-investor pool is less
than 20% of the total alternative investments of the fund;

      (vii) the board has received and considered the investment manager's
due diligence findings submitted to the board as required by subsection
(6)(c); and

      (viii) prior to the time the alternative investment is made, the system
has in place procedures and systems to ensure that the investment is
properly monitored and investment performance is accurately measured.

      For purposes of this act, "alternative investment" means nontraditional
investments outside the established nationally recognized public stock
exchanges and government securities market. Alternative investments
shall include, but not be limited to, private placements, venture capital,
partnerships, limited partnerships and leveraged buyout partnerships;

      (c) except as otherwise provided, the board may invest or reinvest
moneys of the fund in real estate investments if the following conditions
are satisfied:

      (i) If, in addition to the system, there are at least two other sophis-
ticated investors, as defined by section 301 of the securities and exchange
act of 1933;

      (ii) the system's share in any individual real estate investment is lim-
ited to an investment representing not more than 20% of any such indi-
vidual real estate investment;

      (iii) The system has received a favorable and appropriate recommen-
dation from a qualified, independent expert in investment management
or analysis in that particular type of real estate investment;

      (iv) (ii) the real estate investment is consistent with the system's in-
vestment policies and objectives as provided in subsection (6); and

      (v) the total of such real estate investments made pursuant to partic-
ipation by the system in any one individual multi-investor pool shall not
exceed more than 20% of the total of real estate investments made by
the system pursuant to this subsection. Nothing in this subsection re-
quires the board to liquidate or sell the system's holdings in any real estate
investments made pursuant to participation by the system in any one
individual multi-investor pool held by the system on the effective date of
this act, unless such liquidation or sale would be in the best interest of
the members and beneficiaries of the system and be prudent under the
standards contained in this section. The 20% limitation contained in this
subsection shall not have been violated if the total of such investment in
any one individual multi-investor pool exceeds 20% of the total real estate
investments of the fund as a result of market forces acting to increase the
value of such a multi-investor pool relative to the rest of the system's real
estate investments; however, the board shall not invest or reinvest any
moneys of the fund in any such individual multi-investor pool until the
value of such individual multi-investor pool is less than 20% of the total
real estate investments of the fund;

      (vi) (iii) the board has received and considered the investment man-
ager's due diligence findings submitted to the board as required by sub-
section (6)(c)

      (vii) prior to the time the real estate investment is made, the system
has in place procedures and systems to ensure that the investment is
properly monitored and investment performance is accurately measured;
and

      (viii) the provisions of this subsection shall not apply to any real estate
investment held by the system on July 1, 1992; and

      (d) the board shall not invest or reinvest moneys of the fund in any
banking institution, savings and loan association or credit union which
positions the system as a shareholder or owner of such banking institution,
savings and loan association or credit union.

      (6) Subject to the objective set forth in subsection (3) and the stan-
dards set forth in subsections (4) and (5) the board shall formulate policies
and objectives for the investment and reinvestment of moneys in the fund
and the acquisition, retention, management and disposition of invest-
ments of the fund. Such policies and objectives shall include:

      (a) Specific asset allocation standards and objectives;

      (b) establishment of criteria for evaluating the risk versus the poten-
tial return on a particular investment;

      (c) a requirement that all investment managers submit such man-
ager's due diligence findings on each investment to the board or invest-
ment advisory committee for approval or rejection prior to making any
alternative investment;

      (d) a requirement that all investment managers shall immediately re-
port all instances of default on investments to the board and provide the
board with recommendations and options, including, but not limited to,
curing the default or withdrawal from the investment; and

      (e) establishment of criteria that would be used as a guideline for
determining when no additional add-on investments or reinvestments
would be made and when the investment would be liquidated.

      The board shall review such policies and objectives, make changes con-
sidered necessary or desirable and readopt such policies and objectives
on an annual basis.

      (7) The board may enter into contracts with one or more persons
whom the board determines to be qualified, whereby the persons under-
take to perform the functions specified in subsection (2) to the extent
provided in the contract. Performance of functions under contract so
entered into shall be paid pursuant to rates fixed by the board subject to
provisions of appropriation acts and shall be based on specific contractual
fee arrangements. The system shall not pay or reimburse any expenses of
persons contracted with pursuant to this subsection, except that after
approval of the board, the system may pay approved investment related
expenses subject to provisions of appropriation acts. The board shall re-
quire that a person contracted with to obtain commercial insurance which
provides for errors and omissions coverage for such person in an amount
to be specified by the board, provided that such coverage shall be at least
the greater of $500,000 or 1% of the funds entrusted to such person up
to a maximum of $10,000,000. The board shall require a person con-
tracted with to give a fidelity bond in a penal sum as may be fixed by law
or, if not so fixed, as may be fixed by the board, with corporate surety
authorized to do business in this state. Such persons contracted with the
board pursuant to this subsection and any persons contracted with such
persons to perform the functions specified in subsection (2) shall be
deemed to be agents of the board and the system in the performance of
contractual obligations.

      (8)  (a) In the acquisition or disposition of securities, the board may
rely on the written legal opinion of a reputable bond attorney or attorneys,
the written opinion of the attorney of the investment counselor or man-
agers, or the written opinion of the attorney general certifying the legality
of the securities.

      (b) The board shall employ or retain qualified investment counsel or
counselors or may negotiate with a trust company to assist and advise in
the judicious investment of funds as herein provided.

      (9)  (a) Except as provided in subsection (7) and this subsection, the
custody of money and securities of the fund shall remain in the custody
of the state treasurer, except that the board may arrange for the custody
of such money and securities as it considers advisable with one or more
member banks or trust companies of the federal reserve system or with
one or more banks in the state of Kansas, or both, to be held in safe-
keeping by the banks or trust companies for the collection of the principal
and interest or other income or of the proceeds of sale. The services
provided by the banks or trust companies shall be paid pursuant to rates
fixed by the board subject to provisions of appropriation acts.

      (b) The state treasurer and the board shall collect the principal and
interest or other income of investments or the proceeds of sale of secu-
rities in the custody of the state treasurer and pay same when so collected
into the fund.

      (c) The principal and interest or other income or the proceeds of sale
of securities as provided in clause (a) of this subsection (9) shall be re-
ported to the state treasurer and the board and credited to the fund.

      (10) The board shall with the advice of the director of accounts and
reports establish the requirements and procedure for reporting any and
all activity relating to investment functions provided for in this act in order
to prepare a record monthly of the investment income and changes made
during the preceding month. The record will reflect a detailed summary
of investment, reinvestment, purchase, sale and exchange transactions
and such other information as the board may consider advisable to reflect
a true accounting of the investment activity of the fund.

      (11) The board shall provide for an examination of the investment
program annually. The examination shall include an evaluation of current
investment policies and practices and of specific investments of the fund
in relation to the objective set forth in subsection (3), the standard set
forth in subsection (4) and other criteria as may be appropriate, and rec-
ommendations relating to the fund investment policies and practices and
to specific investments of the fund as are considered necessary or desir-
able. The board shall include in its annual report to the governor as pro-
vided in K.S.A. 74-4907, and amendments thereto, a report or a summary
thereof covering the investments of the fund.

      (12)  (a) An annual financial-compliance audit of the system, includ-
ing any performance audit subjects which are directed to be included in
such annual audit by the legislative post audit committee, performance
audits of the system as prescribed under the Kansas governmental op-
erations law, and such other audits as are directed by the legislative post
audit committee under the Kansas legislative post audit act shall be con-
ducted. The annual financial-compliance audit shall include, but not be
limited to, a review of alternative investments of the system with any
estimates of permanent impairments to the value of such alternative in-
vestments reported by the system pursuant to K.S.A. 74-4907, and
amendments thereto.

      (b) In accordance with this subsection (12), the annual financial-com-
pliance audit may include one or more performance audit subjects as
directed by the legislative post audit committee. In considering perform-
ance audit subjects to be included in any financial-compliance audit con-
ducted pursuant to this subsection (12), the legislative post audit com-
mittee shall consider recommendations and requests for performance
audits, relating to the system or the management thereof, by the joint
committee on pensions, investments and benefits or by any other com-
mittee or individual member of the legislature. Commencing with the
financial-compliance audit for the fiscal year ending June 30, 1998, the
legislative post audit committee shall specify if one or more performance
audit subjects shall be included in the financial-compliance audit con-
ducted pursuant to this subsection (12), in addition to such other subjects
as may be directed to be included in the financial-compliance audit by
the legislative post audit committee. Except as otherwise determined by
the legislative post audit committee pursuant to this subsection (12), com-
mencing with the financial-compliance audit for the fiscal year ending
June 30, 1998, one or more performance audit subjects specified by the
legislative post audit committee shall be included at least once every two
fiscal years in a financial-compliance audit conducted pursuant to this
subsection (12). The legislative post audit committee may direct that one
or more performance audit subjects are to be included in a financial-
compliance audit conducted pursuant to this subsection (12) not more
than once during a specific period of three fiscal years, in lieu of once
every two fiscal years.

      (c) The auditor to conduct the financial-compliance audit required
pursuant to this subsection (12) shall be specified in accordance with
K.S.A. 46-1122, and amendments thereto. If the legislative post audit
committee specifies under such statute that a firm, as defined by K.S.A.
46-1112, and amendments thereto, is to perform all or part of the audit
work of such audit, such firm shall be selected and shall perform such
audit work as provided in K.S.A. 46-1123, and amendments thereto, and
K.S.A. 46-1125 through 46-1127, and amendments thereto. The audits
required pursuant to this subsection (12) shall be conducted in accord-
ance with generally accepted governmental auditing standards. The fi-
nancial-compliance audit required pursuant to this subsection (12) shall
be conducted as soon after the close of the fiscal year as practicable, but
shall be completed no later than six months after the close of the fiscal
year. The post auditor shall annually compute the reasonably anticipated
cost of providing the financial-compliance audit pursuant to this subsec-
tion (12), subject to review and approval by the contract audit committee
established by K.S.A. 46-1120, and amendments thereto. Upon such ap-
proval, the system shall reimburse the division of post audit for the
amount approved by the contract audit committee. The furnishing of the
financial-compliance audit pursuant to this subsection (12) shall be a
transaction between the legislative post auditor and the system and shall
be settled in accordance with the provisions of K.S.A. 75-5516, and
amendments thereto.

      (d) Any internal assessment or examination of alternative investments
of the system performed by any person or entity employed or retained
by the board which evaluates or monitors the performance of alternative
investments shall be reported to the legislative post auditor so that such
report may be reviewed in accordance with the annual financial-compli-
ance audits conducted pursuant to this subsection (12).

 Sec.  15. On and after July 1, 2000, K.S.A. 1999 Supp. 74-4924 is
hereby amended to read as follows: 74-4924. (1) Any person who shall
knowingly make any false statement, or who shall falsify or permit to be
falsified any record necessary for carrying out the intent of this act for
the purpose of committing fraud, shall be subject to the provisions of
K.S.A. 21-3904 and amendments thereto.

      (2) Should any error in any records or in any calculation of the Kansas
public employees retirement system result in any member or beneficiary
receiving more or less than he would have been entitled to receive had
the records or calculations been correct, the board shall correct such
error, and, as far as practicable, make future payments in such a manner
that the actuarial equivalent of the benefit to which such member or
beneficiary was entitled shall be paid and may recover any overpayments.
In the event a member has withdrawn, all or part of, such member's
accumulated contributions in a manner not in compliance with the pro-
visions of this act or the regulations of the system the amount of such
withdrawal, plus interest at a rate specified by the board, shall be de-
ducted from any amounts, including group insurance benefits, which shall
become due the member or such member's beneficiaries under the pro-
visions of this act.

      (3)  (a) Notwithstanding the provisions of subsection (2) and except
as provided in subsection (3)(d), the board is not required to collect any
benefit overpayment that is of more than 60 months' standing when dis-
covered, if any errors in the records or calculations of the system that
resulted in such overpayment are attributable solely to incorrect proce-
dures or calculations by the system and there is no evidence of fraud or
misconduct on the part of the member or other person receiving the ben-
efit.

      (b) The board shall make reasonable efforts to recover all benefit over-
payment of 60 months' standing or less, including the imposition of an
actuarially calculated reduction in an ongoing monthly benefit payment
or the deduction of the total overpaid amount from any refund of contri-
butions or group life insurance benefits that become due and payable to
the member or member's beneficiary.

      (c) No monthly benefit reduction imposed under this section for the
purpose of collecting an overpayment shall result in a monthly benefit
payment that is more than 10% lower than the monthly benefit payment
would have been without such collection-related reduction, except that
the monthly benefit payment in all cases must first be reduced to the
correct amount as provided by the terms of this section before the 10%
cap on collection-related reductions is imposed.

      (d) Notwithstanding the provisions of this section, on and after the
effective date of this act, the board shall not collect any benefit overpay-
ment, attributable to errors in the calculation of benefits by the system
that resulted in such overpayments to any person that first occurred after
and as a result of a statutory increase in benefits passed by the legislature
in 1993, and there is no evidence of fraud or other misconduct on the part
of the person receiving the benefit.

 Sec.  16. On and after July 1, 2000, K.S.A. 1999 Supp. 74-4927, as
amended by section 5 of 2000 House Bill No. 2034, is hereby amended
to read as follows: 74-4927. (1) The board may establish a plan of death
and long-term disability benefits to be paid to the members of the re-
tirement system as provided by this section. The long-term disability ben-
efit shall not be payable until the member has been prevented from car-
rying out each and every duty pertaining to the member's employment
as a result of sickness or injury for a period of 180 days and the annual
benefit shall not exceed an amount equal to 66 2/3% of the member's
annual rate of compensation on the date such disability commenced and
shall be payable in equal monthly installments. In the event that a mem-
ber's compensation is not fixed at an annual rate but on an hourly, weekly,
biweekly, monthly or any other basis than annual, the board shall pre-
scribe by rule and regulation a formula for establishing a reasonable rate
of annual compensation to be used in determining the amount of the
death or long-term disability benefit for such member. Such plan shall
provide that:

      (A) For deaths occurring prior to January 1, 1987, the right to receive
such death benefit shall cease upon the member's attainment of age 70
or date of retirement whichever first occurs. The right to receive such
long-term disability benefit shall cease (i) for a member who becomes
eligible for such benefit before attaining age 60, upon the date that such
member attains age 65 or the date of such member's retirement, which-
ever first occurs, (ii) for a member who becomes eligible for such benefit
at or after attaining age 60, the date that such member has received such
benefit for a period of five years, upon the date that such member attains
age 70, or upon the date of such member's retirement, whichever first
occurs, (iii) for all disabilities incurred on or after January 1, 1987, for a
member who becomes eligible for such benefit at or after attaining age
70, the date that such member has received such benefit for a period of
12 months or upon the date of such member's retirement, whichever first
occurs, and (iv) for all disabilities incurred on or after January 1, 1987,
for a member who becomes eligible for such benefit at or after attaining
age 75, the date that such member has received such benefit for a period
of six months or upon the date of such member's retirement, whichever
first occurs.

      (B) Long-term disability benefit payments shall be in lieu of any ac-
cidental total disability benefit that a member may be eligible to receive
under subsection (3) of K.S.A. 74-4916 and amendments thereto. The
member must make an initial application for social security disability ben-
efits and, if denied such benefits, the member must pursue and exhaust
all administrative remedies of the social security administration which
include, but are not limited to, reconsideration and hearings. Such plan
may provide that any amount which a member receives as a social security
benefit or a disability benefit or compensation from any source by reason
of any employment including, but not limited to, workers compensation
benefits may be deducted from the amount of long-term disability benefit
payments under such plan. During the period in which such member is
pursuing such administrative remedies prior to a final decision of the
social security administration, social security disability benefits may be
estimated and may be deducted from the amount of long-term disability
benefit payments under such plan. Such long-term disability payments
shall accrue from the later of the 181st day of total disability or the first
day upon which the member ceases to draw compensation from the em-
ployer. If the social security benefit, workers compensation benefit, other
income or wages or other disability benefit by reason of employment, or
any part thereof, is paid in a lump-sum, the amount of the reduction shall
be calculated on a monthly basis over the period of time for which the
lump-sum is given. In no case shall a member who is entitled to receive
long-term disability benefits receive less than $50 per month. As used in
this section, "workers compensation benefits" means the total award of
disability benefit payments under the workers compensation act notwith-
standing any payment of attorney fees from such benefits as provided in
the workers compensation act.

      (C) The plan may include other provisions relating to qualifications
for benefits; schedules and graduation of benefits; limitations of eligibility
for benefits by reason of termination of employment or membership;
conversion privileges; limitations of eligibility for benefits by reason of
leaves of absence, military service or other interruptions in service; lim-
itations on the condition of long-term disability benefit payment by reason
of improved health; requirements for medical examinations or reports; or
any other reasonable provisions as established by rule and regulation of
uniform application adopted by the board.

      (D) On and after April 30, 1981, the board may provide under the
plan for the continuation of long-term disability benefit payments to any
former member who forfeits the entitlement to continued service credit
under the retirement system or continued assistance in the purchase of
retirement annuities under K.S.A. 74-4925 and amendments thereto and
to continued long-term disability benefit payments and continued death
benefit coverage, by reason of the member's withdrawal of contributions
from the retirement system or the repurchase of retirement annuities
which were purchased with assistance received under K.S.A. 74-4925 and
amendments thereto. Such long-term disability benefit payments may be
continued until such individual dies, attains age 65 or is no longer disa-
bled, whichever occurs first.

      (E) Any visually impaired person who is in training at and employed
by a sheltered workshop for the blind operated by the secretary of social
and rehabilitation services and who would otherwise be eligible for the
long-term disability benefit as described in this section shall not be eli-
gible to receive such benefit due to visual impairment as such impairment
shall be determined to be a preexisting condition.

      (2)  (A) In the event that a member becomes eligible for a long-term
disability benefit under the plan authorized by this section such member
shall be given participating service credit for the entire period of such
disability. Such member's final average salary shall be computed in ac-
cordance with subsection (17) of K.S.A. 74-4902 and amendments thereto
except that the years of participating service used in such computation
shall be the years of salaried participating service.

      (B) In the event that a member eligible for a long-term disability
benefit under the plan authorized by this section shall be disabled for a
period of five years or more immediately preceding retirement, such
member's final average salary shall be adjusted upon retirement by the
actuarial salary assumption rates in existence during such period of dis-
ability. Effective July 1, 1993, such member's final average salary shall be
adjusted upon retirement by 5% for each year of disability after July 1,
1993, but before July 1, 1998. Effective July 1, 1998, such member's final
average salary shall be adjusted upon retirement by an amount equal to
the lesser of: (i) The percentage increase in the consumer price index for
all urban consumers as published by the bureau of labor statistics of the
United States department of labor minus 1%; or (ii) four percent per
annum, measured from the month the disability occurs the member's last
day on the payroll to the month that is two months prior to the month
of retirement, for each year of disability after July 1, 1998.

      (C) In the event that a member eligible for a long-term disability
benefit under the plan authorized by this section shall be disabled for a
period of five years or more immediately preceding death, such member's
current annual rate shall be adjusted by the actuarial salary assumption
rates in existence during such period of disability. Effective July 1, 1993,
such member's current annual rate shall be adjusted upon death by 5%
for each year of disability after July 1, 1993, but before July 1, 1998.
Effective July 1, 1998, such member's current annual rate shall be ad-
justed upon death by an amount equal to the lesser of: (i) The percentage
increase in the consumer price index for all urban consumers published
by the bureau of labor statistics of the United States department of labor
minus 1%; or (ii) four percent per annum, measured from the month the
disability occurs the member's last day on the payroll to the month that
is two months prior to the month of death, for each year of disability after
July 1, 1998.

      (3)  (A) To carry out the legislative intent to provide, within the funds
made available therefor, the broadest possible coverage for members who
are in active employment or involuntarily absent from such active em-
ployment, the plan of death and long-term disability benefits shall be
subject to adjustment from time to time by the board within the limita-
tions of this section. The plan may include terms and provisions which
are consistent with the terms and provisions of group life and long-term
disability policies usually issued to those employers who employ a large
number of employees. The board shall have the authority to establish and
adjust from time to time the procedures for financing and administering
the plan of death and long-term disability benefits authorized by this
section. Either the insured death benefit or the insured disability benefit
or both such benefits may be financed directly by the system or by one
or more insurance companies authorized and licensed to transact group
life and group accident and health insurance in this state.

      (B) The board may contract with one or more insurance companies,
which are authorized and licensed to transact group life and group acci-
dent and health insurance in Kansas, to underwrite or to administer or
to both underwrite and administer either the insured death benefit or the
long-term disability benefit or both such benefits. Each such contract with
an insurance company under this subsection shall be entered into on the
basis of competitive bids solicited and administered by the board. Such
competitive bids shall be based on specifications prepared by the board.

      (i) In the event the board purchases one or more policies of group
insurance from such company or companies to provide either the insured
death benefit or the long-term disability benefit or both such benefits,
the board shall have the authority to subsequently cancel one or more of
such policies and, notwithstanding any other provision of law, to release
each company which issued any such canceled policy from any liability
for future benefits under any such policy and to have the reserves estab-
lished by such company under any such canceled policy returned to the
system for deposit in the group insurance reserve of the fund.

      (ii) In addition, the board shall have the authority to cancel any policy
or policies of group life and long-term disability insurance in existence
on the effective date of this act and, notwithstanding any other provision
of law, to release each company which issued any such canceled policy
from any liability for future benefits under any such policy and to have
the reserves established by such company under any such canceled policy
returned to the system for deposit in the group insurance reserve of the
fund. Notwithstanding any other provision of law, no premium tax shall
be due or payable by any such company or companies on any such policy
or policies purchased by the board nor shall any brokerage fees or com-
missions be paid thereon.

      (4)  (A) There is hereby created in the state treasury the group in-
surance reserve fund. Investment income of the fund shall be added or
credited to the fund as provided by law. The cost of the plan of death
and long-term disability benefits shall be paid from the group insurance
reserve fund, which shall be administered by the board. Except as oth-
erwise provided by this subsection, each participating employer shall ap-
propriate and pay to the system in such manner as the board shall pre-
scribe in addition to the employee and employer retirement contributions
an amount equal to .6% of the amount of compensation on which the
members' contributions to the Kansas public employees retirement sys-
tem are based for deposit in the group insurance reserve fund. Notwith-
standing the provisions of this subsection, no participating employer shall
appropriate and pay to the system any amount provided for by this sub-
section for deposit in the group insurance reserve fund for the period
commencing on April 1, 2000, and ending on June 30, 2001.

      (B) The director of the budget and the governor shall include in the
budget and in the budget request for appropriations for personal services
a sum to pay the state's contribution to the group insurance reserve fund
as provided by this section and shall present the same to the legislature
for allowances and appropriation.

      (C) The provisions of subsection (4) of K.S.A. 74-4920 and amend-
ments thereto shall apply for the purpose of providing the funds to make
the contributions to be deposited to the group insurance reserve fund.

      (D) Any dividend or retrospective rate credit allowed by an insurance
company or companies shall be credited to the group insurance reserve
fund and the board may take such amounts into consideration in deter-
mining the amounts of the benefits under the plan authorized by this
section.

      (5) The death benefit provided under the plan of death and long-
term disability benefits authorized by this section shall be known and
referred to as insured death benefit. The long-term disability benefit pro-
vided under the plan of death and long-term disability benefits authorized
by this section shall be known and referred to as long-term disability
benefit.

      (6) The board is hereby authorized to establish an optional death
benefit plan. Except as provided in subsection (7), such optional death
benefit plan shall be made available to all employees who are covered or
may hereafter become covered by the plan of death and long-term disa-
bility benefits authorized by this section. The cost of the optional death
benefit plan shall be paid by the applicant either by means of a system
of payroll deductions or direct payment to the board. The board shall
have the authority and discretion to establish such terms, conditions, spec-
ifications and coverages as it may deem to be in the best interest of the
state of Kansas and its employees which should include term death ben-
efits for the person's period of active state employment regardless of age,
but in no case, on and after January 1, 1989, shall the maximum allowable
coverage be less than $200,000. The cost of the optional death benefit
plan shall not be established on such a basis as to unreasonably discrim-
inate against any particular age group. The board shall have full admin-
istrative responsibility, discretion and authority to establish and continue
such optional death benefit plan and the director of accounts and reports
of the department of administration shall when requested by the board
and from funds appropriated or available for such purpose establish a
system to make periodic deductions from state payrolls to cover the cost
of the optional death benefit plan coverage under the provisions of this
subsection (6) and shall remit all deductions together with appropriate
accounting reports to the system. There is hereby created in the state
treasury the optional death benefit plan reserve fund. Investment income
of the fund shall be added or credited to the fund as provided by law. All
funds received by the board, whether in the form of direct payments,
payroll deductions or otherwise, shall be accounted for separately from
all other funds of the retirement system and shall be paid into the optional
death benefit plan reserve fund, from which the board is authorized to
make the appropriate payments and to pay the ongoing costs of admin-
istration of such optional death benefit plan as may be incurred in carrying
out the provisions of this subsection (6).

      (7) Any employer other than the state of Kansas which is currently a
participating employer of the Kansas public employees retirement system
or is in the process of affiliating with the Kansas public employees retire-
ment system may also elect to affiliate for the purposes of subsection (6).
All such employers shall make application for affiliation with such system,
to be effective on January 1 next following application. Such optional
death benefit plan shall not be available for employees of employers spec-
ified under this subsection until after July 1, 1988.

 Sec.  17. On and after July 1, 2000, K.S.A. 74-4927k is hereby
amended to read as follows: 74-4927k. (a) For the purposes of providing
the "insured death benefit" and "long-term disability benefit" as pre-
scribed in K.S.A. 74-4927 and amendments thereto and of providing the
"accidental death benefit" as prescribed in subsection (2) of K.S.A. 74-
4916 and amendments thereto, to all state officers who have filed an
election as provided in subsection (a) or (b) of K.S.A. 74-4911f, on and
after the first day of the first payroll period of the fiscal year ending June
30, 1989 and amendments thereto, the term "member" as used in K.S.A.
74-4927 and amendments thereto and subsection (2) of K.S.A. 74-4916
and amendments thereto and as used in this section shall include the
aforementioned such state officers.

      (b) The state agency employing any member shall pay to the Kansas
public employees retirement system in such manner as the board of trus-
tees shall prescribe, beginning with the first day of the first payroll period
of the fiscal year ending June 30, 1989, and each payroll period thereafter,
an amount sufficient to pay the employer's contribution to the group
insurance reserve as provided in subsection (4) of K.S.A. 74-4927 and
amendments thereto.

      (c) The state agency employing any member shall maintain a file of
the beneficiaries named by the persons covered under this section in the
form and manner as prescribed by the board of trustees of the Kansas
public employees retirement system.

      (d) Coverage under the plan of death and long-term disability ben-
efits and accidental death benefits shall begin with the first day of the
first payroll period of the fiscal year ending June 30, 1989, for such mem-
ber. Notwithstanding any provision of law to the contrary, the provisions
of this section shall not apply to any person employed by the legislative
branch of the state of Kansas who elected to be covered by the provisions
of K.S.A. 74-4911f, and amendments thereto, as provided in subsection
(e) of K.S.A. 46-1302, and amendments thereto, or who is first employed
on or after July 1, 1996, by the legislative branch of the state of Kansas
as described in K.S.A. 46-1302, and amendments thereto.

 Sec.  18. On and after July 1, 2000, K.S.A. 1999 Supp. 74-4958 is
hereby amended to read as follows: 74-4958. (1) Any member who retires
on or after July 1, 1993, shall be entitled to receive an age and service
retirement benefit equal to 2.5% of such member's final average salary
multiplied by the number of years of credited service except that in no
case shall such retirement benefit exceed 80% of such member's final
average salary.

      (2) Any member who is appointed or employed prior to July 1, 1989,
who does not make an election pursuant to K.S.A. 74-4955a and amend-
ments thereto and who retires before such member's normal retirement
date shall receive an early retirement benefit equal to the annual retire-
ment benefit payable had the member retired on the normal retirement
date reduced by an amount equal to the product of (A) such annual re-
tirement benefit payable had the member retired on the normal retire-
ment date, multiplied by (B) the product of .4% multiplied by the number
of months difference, to the nearest whole month, between the member's
attained age at the time of retirement and age 55.

      (3) Pursuant to the provisions of section 36, and amendments thereto,
upon the death after retirement of a member who was covered, up to the
entry date of the member's employer, by a pension system under the
provisions of K.S.A. 12-5001 to 12-5007, inclusive, and amendments
thereto, or K.S.A. 13-14a01 to 13-14a14, inclusive, and amendments
thereto, or K.S.A. 14-10a01 to 14-10a15, inclusive, and amendments
thereto, and who had not elected to retire under one of the options pro-
vided under K.S.A. 74-4964 and amendments thereto, the member's
spouse, if such spouse was the member's lawfully wedded spouse for a
period of not less than one year at the time of the member's retirement
or if such spouse had been the member's lawfully wedded spouse for at
least three years after the time of the member's retirement, shall receive
a lump-sum benefit equal to 1/2 the member's final average salary at the
time of the member's retirement and shall receive an annual spouse's
benefit equal to 75% of the member's retirement benefit payable in
monthly installments, to accrue from the last day of the month following
the member's date of death and ending on the last day of the month in
which the spouse dies. Commencing on the effective date of this act, any
surviving spouse, who was receiving benefits pursuant to this section and
who had such benefits terminated by reason of such spouse's remarriage,
shall be entitled to once again receive benefits pursuant to this section,
except that such surviving spouse shall not be entitled to recover any
benefits not received after the termination of benefits by reason of such
surviving spouse's remarriage but before the effective date of this act. If
there is no surviving spouse, or if after the death of the spouse there
remain one or more children under the age of 18 years or one or more
children under the age of 23 years who is a full-time student as provided
in K.S.A. 74-49,117 and amendments thereto, the annual spouse's benefit
shall be payable, subject to the provisions of K.S.A. 1999 Supp. 74-49,123
and amendments thereto, in equal shares to such children and each child's
share shall end on the last day of the month in which such child attains
the age of 18 years or dies, whichever occurs earlier or in which such
child attains the age of 23 years if such child is a full-time student as
provided in K.S.A. 74-49,117 and amendments thereto. Commencing on
the effective date of this act, any child who was receiving benefits pur-
suant to this section and who had such benefits terminated by reason of
such child's marriage, shall be entitled to once again receive benefits
pursuant to this section subject to the limitations contained in this section,
except that such child shall not be entitled to recover any benefits not
received after the termination of benefits by reason of such child's mar-
riage but before the effective date of this act. All payments due under
this section to a minor shall be made to a legally appointed conservator
of such minor as provided in subsection (7) of K.S.A. 74-4902 and amend-
ments thereto. No person shall be entitled to receive more than one
benefit under the provisions of this subsection. Any person who otherwise
meets the qualifications to receive more than one benefit under this sub-
section shall elect the benefit such person shall receive.

      (4) Upon the death after retirement of a member who had not elected
to retire under one of the options provided under K.S.A. 74-4964 and
amendments thereto, such member's beneficiary shall receive an amount
equal to the excess, if any, of such member's accumulated contributions
over the sum of all retirement benefit payments made.

      (5) The provisions of law in effect on the retirement date of a member
under the system shall govern the retirement benefit payable to the re-
tirant, any joint annuitant and any beneficiary.

 Sec.  19. On and after July 1, 2000, K.S.A. 1999 Supp. 74-4958a is
hereby amended to read as follows: 74-4958a. (1) Any member who re-
tires on or after July 1, 1993, shall be entitled to receive an age and service
retirement benefit equal to 2.5% of such member's final average salary
multiplied by the number of years of credited service except that in no
case shall such retirement benefit exceed 80% of such member's final
average salary.

      (2) Any member who retires before such member's normal retire-
ment date shall receive an early retirement benefit equal to the annual
retirement benefit payable had the member retired on the normal retire-
ment date reduced by an amount equal to the product of (A) such annual
retirement benefit payable had the member retired on the normal retire-
ment date, multiplied by (B) the product of .4% multiplied by the number
of months difference, to the nearest whole month, between the member's
attained age at the time of retirement and age 55.

      (3) Pursuant to the provisions of section 36, and amendments thereto,
upon the death after retirement of a member who was covered, up to the
entry date of the member's employer, by a pension system under the
provisions of K.S.A. 12-5001 to 12-5007, inclusive, and amendments
thereto, or K.S.A. 13-14a01 to 13-14a14, inclusive, and amendments
thereto, or K.S.A. 14-10a01 to 14-10a15, inclusive, and amendments
thereto, and who had not elected to retire under one of the options pro-
vided under K.S.A. 74-4964 and amendments thereto, the member's
spouse, if such spouse was the member's lawfully wedded spouse for a
period of not less than one year at the time of the member's retirement
or if such spouse had been the member's lawfully wedded spouse for at
least three years after the time of the member's retirement, shall receive
a lump-sum benefit equal to 1/2 the member's final average salary at the
time of the member's retirement and shall receive an annual spouse's
benefit equal to 75% of the member's retirement benefit payable in
monthly installments, to accrue from the first day of the month following
the member's date of death and ending on the last day of the month in
which the spouse dies. Commencing on the effective date of this act, any
surviving spouse, who was receiving benefits pursuant to this section and
who had such benefits terminated by reason of such spouse's remarriage,
shall be entitled to once again receive benefits pursuant to this section,
except that such surviving spouse shall not be entitled to recover any
benefits not received after the termination of benefits by reason of such
surviving spouse's remarriage but before the effective date of this act. If
there is no surviving spouse, or if after the death of the spouse there
remain one or more children under the age of 18 years or one or more
children under the age of 23 years who is a full-time student as provided
in K.S.A. 74-49,117 and amendments thereto, the annual spouse's benefit
shall be payable, subject to the provisions of K.S.A. 1999 Supp. 74-49,123
and amendments thereto, in equal shares to such children and each child's
share shall end on the last day of the month in which such child attains
the age of 18 years or dies, whichever occurs earlier or in which such
child attains the age of 23 years, if such child is a full-time student as
provided in K.S.A. 74-49,117 and amendments thereto. Commencing on
the effective date of this act, any child who was receiving benefits pur-
suant to this section and who had such benefits terminated by reason of
such child's marriage, shall be entitled to once again receive benefits
pursuant to this section subject to the limitations contained in this section,
except that such child shall not be entitled to recover any benefits not
received after the termination of benefits by reason of such child's mar-
riage but before the effective date of this act. All payments due under
this section to a minor shall be made to a legally appointed conservator
of such minor as provided in subsection (7) of K.S.A. 74-4902 and amend-
ments thereto. No person shall be entitled to receive more than one
benefit under the provisions of this subsection. Any person who otherwise
meets the qualifications to receive more than one benefit under this sub-
section shall elect the benefit such person shall receive.

      (4) Upon the death after retirement of a member who had not elected
to retire under one of the options provided under K.S.A. 74-4964 and
amendments thereto, such member's beneficiary shall receive an amount
equal to the excess, if any, of such member's accumulated contributions
over the sum of all retirement benefit payments made.

      (5) The provisions of this section shall be effective on and after July
1, 1989 and shall apply only to members who were appointed or employed
prior to July 1, 1989, and who made an election pursuant to K.S.A. 74-
4955a and amendments thereto; and persons appointed or employed on
or after July 1, 1989.

      (6) The provisions of law in effect on the retirement date of a member
under the system shall govern the retirement benefit payable to the re-
tirant, any joint annuitant and any beneficiary.

 Sec.  20. On and after July 1, 2000, K.S.A. 1999 Supp. 74-4959 is
hereby amended to read as follows: 74-4959. (1) Upon the death from
service-connected causes as defined in this act, of an active contributing
member prior to retirement, the following benefits shall be payable if a
report of the event, in a form acceptable to the board, is filed in the office
of the executive secretary of the board within 200 days after the date of
the act of duty causing such death and an application for such benefits,
in such form and manner as prescribed by the board, is filed in the office
of the executive secretary of the board within two years of the date of
death, but the board may waive such time limits for a reasonable period
if in the judgment of the board the failure to meet these limits was due
to lack of knowledge or incapacity:

      (a) To the member's spouse, if lawfully wedded to the member at the
time of the member's death, an annual spouse's benefit equal to 50% of
the member's final average salary, which shall accrue from the first day
of the month coinciding with or following the member's death and shall
end on the first day of the month in which the spouse's death occurs.
Commencing on the effective date of this act, any surviving spouse, who
was receiving benefits pursuant to this section and who had such benefits
terminated by reason of such spouse's remarriage, shall be entitled to
once again receive benefits pursuant to this section, except that such
surviving spouse shall not be entitled to recover any benefits not received
after the termination of benefits by reason of such surviving spouse's
remarriage but before the effective date of this act.

      (b) Subject to the provisions of K.S.A. 1999 Supp. 74-49,123 and
amendments thereto, to the member's children under the age of 18 years
or under the age of 23 years, if such children are full-time students as
provided in K.S.A. 74-49,117 and amendments thereto an annual chil-
dren's benefit equal to 10% of the member's final average salary for each
such child, which shall accrue from the first day of the month coinciding
with or following the member's death and shall end on the last day of the
month in which such child attains the age of 18 years or dies, whichever
occurs earlier or in which such child attains the age of 23 years, if such
child is a full-time student as provided in K.S.A. 74-49,117 and amend-
ments thereto, except that if there is no eligible spouse, or if upon the
death of the spouse there remain one or more children under the age of
18 years or under the age of 23 years, if such children are full-time stu-
dents as provided in K.S.A. 74-49,117 and amendments thereto, the an-
nual spouse's benefit shall be paid in equal shares to such children and
each child's share shall end on the last day of the month in which such
child attains the age of 18 years or dies, whichever occurs earlier or in
which such child attains the age of 23 years, if such child is a full-time
student as provided in K.S.A. 74-49,117 and amendments thereto. Com-
mencing on the effective date of this act, any child who was receiving
benefits pursuant to this section and who had such benefits terminated
by reason of such child's marriage, shall be entitled to once again receive
benefits pursuant to this section subject to the limitations contained in
this section, except that such child shall not be entitled to recover any
benefits not received after the termination of benefits by reason of such
child's marriage but before the effective date of this act.

      (c) In no case shall benefits payable under the provisions of para-
graphs (a) and (b) of this subsection (1) exceed 75% of the member's
final average salary.

      (2) Pursuant to the provisions of section 36, and amendments thereto,
upon the death from causes not service-connected of an active contrib-
uting member prior to retirement, the member's spouse, if lawfully wed-
ded to the member at the time of the member's death, shall receive
immediately a lump-sum benefit equal to 100% of the member's final
average salary and shall be entitled to receive an annual death benefit
equal to the member's retirement benefit calculated as if the member
had retired on the member's normal retirement date, but based upon the
member's final average salary and years of credited service on the date
of death but not to exceed the amount of the annual spouse's benefit
provided in paragraph (a) of subsection (1). An application for such ben-
efits in such form and manner as prescribed by the board must be filed
in the office of the executive secretary of the board within two years of
the date of death, but the board may waive such time limit for a reason-
able period if in the judgment of the board the failure to meet this limit
was due to the lack of knowledge or incapacity. On and after July 1, 1993,
the annual spouse's benefit under this subsection (2) shall accrue from
the first day of the month coinciding with or following the member's
death and shall continue until the spouse's death. Commencing on the
effective date of this act, any surviving spouse, who was receiving benefits
pursuant to this section and who had such benefits terminated by reason
of such spouse's remarriage, shall be entitled to once again receive ben-
efits pursuant to this section, except that such surviving spouse shall not
be entitled to recover any benefits not received after the termination of
benefits by reason of such surviving spouse's remarriage but before the
effective date of this act. If there is no eligible spouse or if after the death
of the spouse there remain one or more children of the member under
the age of 18 years or one or more children of the member under the
age of 23 years, if such children are full-time students as provided in
K.S.A. 74-49,117 and amendments thereto, the spouse's benefit shall be
payable, subject to the provisions of K.S.A. 1999 Supp. 74-49,123 and
amendments thereto, in equal shares to such children and each child's
share shall end on the last day of the month in which such child attains
the age of 18 years or dies, whichever occurs earlier or in which such
child attains the age of 23 years, if such child is a full-time student as
provided in K.S.A. 74-49,117 and amendments thereto. Commencing on
the effective date of this act, any child who was receiving benefits pur-
suant to this section and who had such benefits terminated by reason of
such child's marriage, shall be entitled to once again receive benefits
pursuant to this section subject to the limitations contained in this section,
except that such child shall not be entitled to recover any benefits not
received after the termination of benefits by reason of such child's mar-
riage but before the effective date of this act.

      (3) Upon the death of a member prior to retirement, if no benefits
are payable under the provisions of subsection (1) or (2), the sum of the
following shall be paid to the member's beneficiary: (a) The member's
accumulated contributions shall be paid to the member's beneficiary; and
(b) a lump sum death benefit equal to 100% of the member's current
annual salary reduced by the sum of the member's accumulated contri-
butions paid as provided by this section.

      (4) All payments due under this section to a minor shall be made to
a legally appointed conservator of such minor as provided in subsection
(7) of K.S.A. 74-4902 and amendments thereto.

 Sec.  21. On and after July 1, 2000, K.S.A. 1999 Supp. 74-4960 is
hereby amended to read as follows: 74-4960. (1) If any active contributing
member becomes totally and permanently disabled due to service-con-
nected causes as defined in subsection (10) of K.S.A. 74-4952 and amend-
ments thereto, such member shall be retired and the following benefits
shall become payable and shall continue until the member's death or until
the member recovers from the disability if: A report of the event in a
form acceptable to the board is filed in the office of the executive sec-
retary of the board within 220 days after the date of the event or act of
duty causing such disability; and an application for such benefit, in such
form and manner as the board prescribes, is filed by the member or the
member's authorized representative in the office of the executive secre-
tary of the board within two years of the date of disability:

      (a) On and after July 1, 1993, the member shall receive a retirement
benefit equal to 50% of the member's final average salary or, if the mem-
ber has no dependents, as defined in subsection (1)(b), the retirement
benefit the member would have been entitled to as provided under K.S.A.
74-4958 and amendments thereto had the member retired, whichever is
greater. Such benefit shall accrue from the day upon which the member
ceases to draw compensation.

      (b) Each of the member's children under the age of 18 years or each
of the member's children under the age of 23 years who is a full-time
student as provided in K.S.A. 74-49,117 and amendments thereto shall
receive an annual benefit equal to 10% of the member's final average
salary. Such benefit shall accrue from the day upon which the member
ceases to draw compensation and shall end on the last day of the month
in which each such child or children shall attain the age of 18 years or
die, whichever occurs earlier or in which such children attain the age of
23 years, if such child is a full-time student as provided in K.S.A. 74-
49,117 and amendments thereto. Commencing on the effective date of
this act, any child who was receiving benefits pursuant to this section and
who had such benefits terminated by reason of such child's marriage,
shall be entitled to once again receive benefits pursuant to this section
subject to the limitations contained in this section, except that such child
shall not be entitled to recover any benefits not received after the ter-
mination of benefits by reason of such child's marriage but before the
effective date of this act.

      (c) In no case shall the total of the benefits payable under paragraphs
(a) and (b) of this subsection (1) be in excess of 75% of the member's
final average salary.

      (d) In the event a member who is retired under subsection (1) dies
within two years after the date of such retirement and no benefits are
payable under subsection (3) of K.S.A. 74-4958 and amendments thereto,
then benefits may be payable under subsection (1) of K.S.A. 74-4959 and
amendments thereto.

      (e) In the event a member who is retired under subsection (1) dies
more than two years after the date of such retirement, and the proximate
cause of such death is the service-connected cause from which the disa-
bility resulted and no benefits are payable under subsection (3) of K.S.A.
74-4958 and amendments thereto, then benefits may be payable under
subsection (1) of K.S.A. 74-4959 and amendments thereto. The provisions
of this paragraph (e) of this subsection (1) shall apply in all cases of such
members who die after June 30, 1978.

      (f) In the event a member who is retired under subsection (1) dies
after the date of such retirement, and no benefits are payable under
paragraphs (d) and (e) of subsection (1), nor under subsection (3) of
K.S.A. 74-4958 and amendments thereto, the following benefits shall be
payable:

      (i) To the member's spouse, if lawfully wedded to the member at the
time of the member's death, a lump-sum benefit equal to 50% of the
member's final average salary at the time of the member's retirement.

      (ii) To the member's spouse, if lawfully wedded to the member at
the time of the member's death, an annual benefit equal to 50% of the
member's retirement benefit payable in monthly installments, to accrue
from the first day of the month following the member's date of death and
ending on the last day of the month in which the spouse dies. Com-
mencing on the effective date of this act, any surviving spouse, who was
receiving benefits pursuant to this section and who had such benefits
terminated by reason of such spouse's remarriage, shall be entitled to
once again receive benefits pursuant to this section, except that such
surviving spouse shall not be entitled to recover any benefits not received
after the termination of benefits by reason of such surviving spouse's
remarriage but before the effective date of this act. If there is no surviving
spouse, or if after the death of the spouse there remain one or more
children under the age of 18 years or one or more children under the age
of 23 years who is a full-time student as provided in K.S.A. 74-49,117 and
amendments thereto, the annual spouse's benefit shall be payable, subject
to the provisions of K.S.A. 1999 Supp. 74-49,123 and amendments
thereto, in equal shares to such children and each child's share shall end
on the last day of the month in which such child attains the age of 18
years or dies, whichever occurs earlier or in which such child attains the
age of 23 years, if such child is a full-time student as provided in K.S.A.
74-49,117 and amendments thereto. Commencing on the effective date
of this act, any child who was receiving benefits pursuant to this section
and who had such benefits terminated by reason of such child's marriage,
shall be entitled to once again receive benefits pursuant to this section
subject to the limitations contained in this section, except that such child
shall not be entitled to recover any benefits not received after the ter-
mination of benefits by reason of such child's marriage but before the
effective date of this act.

      The provisions of paragraph (f) of subsection (1) shall apply in all cases
of such members who die after December 1, 1984.

      (2)  (a) If any active contributing member, prior to such member's
normal retirement, becomes totally and permanently disabled for a period
of 180 days from causes not service-connected, and not as the result of a
willfully negligent or intentional act of the member, such member shall
be retired and the following benefit shall become payable and shall con-
tinue until the member's death or until the member recovers from such
disability, whichever occurs first, if a report of the disability in a form
acceptable to the board is filed in the office of the executive secretary of
the board within 220 days after the date of the commencement of such
disability and if an application for such benefit in such form and manner
as the board shall prescribe is filed in the office of the executive secretary
of the board within two years of the date of disability:

      A retirement benefit equal to 2.5% of the member's final average salary
multiplied by the number of years of credited service or the retirement
benefit the member would have been entitled to as provided under K.S.A.
74-4958 and amendments thereto had the member retired, whichever is
greater, multiplied by the number of years of credited service except that
such retirement benefit shall be at least equal to 25% of the member's
final average salary but shall not exceed the amount of the retirement
benefit provided in paragraph (a) of subsection (1). Such benefit shall not
become payable until satisfactory evidence shall be presented to the board
that the member is and has been totally and permanently disabled for a
period of 180 days, but benefits shall accrue from the day upon which
the member ceases to draw compensation.

      (b) Pursuant to the provisions of section 36, and amendments there,
in the event a member who is retired under subsection (2) dies after the
date of such retirement, and no benefits are payable under subsection (3)
of K.S.A. 74-4958 and amendments thereto, the following benefits shall
be payable:

      (i) To the member's spouse, if lawfully wedded to the member at the
time of the member's death, a lump-sum benefit equal to 50% of the
member's final average salary at the time of the member's retirement.

      (ii) To the member's spouse, if lawfully wedded to the member at
the time of the member's death, an annual benefit equal to 50% of the
member's retirement benefit payable in monthly installments, to accrue
from the first day of the month following the member's date of death and
ending on the last day of the month in which the spouse dies. Com-
mencing on the effective date of this act, any surviving spouse, who was
receiving benefits pursuant to this section and who had such benefits
terminated by reason of such spouse's remarriage, shall be entitled to
once again receive benefits pursuant to this section, except that such
surviving spouse shall not be entitled to recover any benefits not received
after the termination of benefits by reason of such surviving spouse's
remarriage but before the effective date of this act. If there is no surviving
spouse, or if after the death of the spouse there remain one or more
children under the age of 18 years or one or more children under the age
of 23 years who are full-time students as provided in K.S.A. 74-49,117
and amendments thereto, the annual spouse's benefit shall be payable,
subject to the provisions of K.S.A. 1999 Supp. 74-49,123 and amendments
thereto, in equal shares to such children and each child's share shall end
on the last day of the month in which such child attains the age of 18
years or dies, whichever occurs earlier or in which such child attains the
age of 23 years, if such child is a full-time student as provided in K.S.A.
74-49,117 and amendments thereto. Commencing on the effective date
of this act, any child who was receiving benefits pursuant to this section
and who had such benefits terminated by reason of such child's marriage,
shall be entitled to once again receive benefits pursuant to this section
subject to the limitations contained in this section, except that such child
shall not be entitled to recover any benefits not received after the ter-
mination of benefits by reason of such child's marriage but before the
effective date of this act.

      The provisions of paragraph (b) of subsection (2) shall apply in all cases
of such members who die after July 1, 1989.

      (3) Any member who was employed for compensation by an em-
ployer other than the member's participating employer and whose disa-
bility was incurred in the course of such other employment shall not be
eligible for any of the benefits provided in subsection (2).

      (4) If a member becomes totally and permanently disabled and no
benefits are payable under subsection (1) or (2), the sum of the member's
accumulated contributions shall be paid to the member.

      (5) Any member receiving benefits under this section shall submit to
medical examination, not more frequent than annually, by one or more
physicians or any other practitioners of the healing arts holding a valid
license issued by Kansas state board of healing arts, as the board of trus-
tees may direct. If upon such medical examination, the examiner's report
to the board states that the retirant is physically able and capable of re-
suming employment with the same or a different participating employer,
the disability benefits shall terminate. A retirant who has been receiving
benefits under the provisions of this section and who returns to employ-
ment, as defined in subsection (4) of K.S.A. 74-4952 and amendments
thereto, of a participating employer shall immediately commence accru-
ing service credit which shall be added to that which has been accrued
by virtue of previous service.

      (6) Any retirant who has been receiving benefits under the provisions
of this section for a period of five years shall be deemed finally retired
and shall not be subject to further medical examinations, except that if
the board of trustees shall have reasonable grounds to question whether
the retirant remains totally and permanently disabled, a further medical
examination or examinations may be required.

      (7) Refusal or neglect to submit to examination as provided in sub-
section (5) shall be sufficient cause for suspending or discontinuing ben-
efit payments under this section and if such refusal or neglect shall con-
tinue for a period of one year, the member's rights in and to all benefits
under this system may be revoked by the board.

      (8) Any retirement benefits payable under the provisions of this sec-
tion shall be in lieu of normal retirement benefits as provided in subsec-
tions (1) and (2) of K.S.A. 74-4958 and amendments thereto.

      (9) Each member shall report to such member's participating em-
ployer any event or act of duty causing disability within 200 days after
such event or act of duty. The member's participating employer shall file
in the office of the executive secretary of the board, in a form acceptable
to the board, a report of the event or act of duty causing disability within
220 days after the event or act of duty.

      (10) In any case of any event occurring prior to July 1, 1979, and after
June 30, 1998, for which a report of the event was made by the partici-
pating employer to the director of workers' compensation in accordance
with K.S.A. 44-557 and amendments thereto, such report to the director
of workers' compensation shall satisfy the requirement under subsection
(1) of this section to file a report of such event, in a form acceptable to
the board within 220 days. No such report to the director of workers'
compensation shall be deemed to satisfy such requirement with respect
to events occurring on or after July 1, 1979, and prior to July 1, 1998.

      (11) All payments due under this section to a minor shall be made to
a legally appointed conservator of such minor.

      (12) The provisions of this section shall apply only to members who
were appointed or employed prior to July 1, 1989, and who did not make
an election pursuant to K.S.A. 74-4955a and amendments thereto.

      (13) Any retirant who has been receiving benefits under the provi-
sions of this section and who returns to employment with the same or
different participating employer in the system shall be deemed no longer
retired.

 Sec.  22. On and after July 1, 2000, K.S.A. 1999 Supp. 74-4960a is
hereby amended to read as follows: 74-4960a. (1) If any active contrib-
uting member who is appointed or employed on or after July 1, 1989, or
who makes an election pursuant to K.S.A. 74-4955a and amendments
thereto to be covered by the provisions of this act becomes disabled as
defined in subsection (2), such member shall receive a monthly benefit
equal to 50% of the member's final average salary at the time such mem-
ber was disabled payable in monthly installments, accruing from the first
day upon which the member ceases to draw compensation, if a report of
the disability in such form and manner as the board shall prescribe is filed
in the office of the executive secretary of the board within 220 days after
the date of the commencement of such disability and if an application for
such benefit in such form and manner as the board shall prescribe is filed
in the office of the executive secretary of the board within two years of
the date of the commencement of such disability.

      (2) For the purposes of this section, "disabled" means total inability
to perform permanently the duties of the position of policeman or fire-
man.

      (3) Pursuant to the provisions of section 36, and amendments thereto,
in the event a member who is disabled and entitled to such benefits as
provided in subsection (1) dies after the date of such disability, and no
benefits are payable under subsection (3) of K.S.A. 74-4958 and amend-
ments thereto, the following benefits shall be payable:

      (i) To the member's spouse, if lawfully wedded to the member at the
time of the member's death, a lump-sum benefit equal to 50% of the
member's final average salary at the time such member was disabled.

      (ii) To the member's spouse, if lawfully wedded to the member at
the time of the member's death, an annual benefit equal to 50% of the
member's benefit payable in monthly installments, to accrue from the
first day of the month following the member's date of death and ending
on the last day of the month in which the spouse dies. Commencing on
the effective date of this act, any surviving spouse, who was receiving
benefits pursuant to this section and who had such benefits terminated
by reason of such spouse's remarriage, shall be entitled to once again
receive benefits pursuant to this section, except that such surviving spouse
shall not be entitled to recover any benefits not received after the ter-
mination of benefits by reason of such surviving spouse's remarriage but
before the effective date of this act. If there is no surviving spouse, or if
after the death of the spouse there remain one or more children under
the age of 18 years or one or more children under the age of 23 years
who is a full-time student as provided in K.S.A. 74-49,117 and amend-
ments thereto, the annual spouse's benefit shall be payable, subject to
the provisions of K.S.A. 1999 Supp. 74-49,123 and amendments thereto,
in equal shares to such children and each child's share shall end on the
last day of the month in which such child attains the age of 18 years or
dies, whichever occurs earlier or in which such child attains the age of 23
years, if such child is a full-time student as provided in K.S.A. 74-49,117
and amendments thereto. Commencing on the effective date of this act,
any child who was receiving benefits pursuant to this section and who
had such benefits terminated by reason of such child's marriage, shall be
entitled to once again receive benefits pursuant to this section subject to
the limitations contained in this section, except that such child shall not
be entitled to recover any benefits not received after the termination of
benefits by reason of such child's marriage but before the effective date
of this act.

      (4) Any member who was employed for compensation by an em-
ployer other than the member's participating employer and whose disa-
bility was incurred in the course of such other employment shall not be
eligible for any of the benefits provided in subsection (1) or (3).

      (5) If a member becomes totally and permanently disabled and no
benefits are payable under subsection (1), the sum of the member's ac-
cumulated contributions shall be paid to the member.

      (6) Any member receiving benefits under this section shall submit to
medical examination, not more frequent than annually, by one or more
physicians or any other practitioners of the healing arts holding a valid
license issued by the state board of healing arts to practice a branch of
the healing arts, as the board of trustees may direct. If upon such medical
examination, the examiner's report to the board states that the member
is physically able and capable of resuming employment with the same or
a different participating employer, the disability benefits shall terminate.
A member who has been receiving benefits under the provisions of this
section and who returns to employment, as defined in subsection (4) of
K.S.A. 74-4952 and amendments thereto, of a participating employer shall
immediately commence accruing service credit which shall be added to
that which has been accrued by virtue of previous service.

      (7) Any member who has been receiving benefits under the provi-
sions of this section for a period of five years shall be deemed permanent
and shall not be subject to further medical examinations, except that if
the board of trustees shall have reasonable grounds to question whether
the member remains totally and permanently disabled, a further medical
examination or examinations may be required.

      (8) Refusal or neglect to submit to examination as provided in sub-
section (6) shall be sufficient cause for suspending or discontinuing ben-
efit payments under this section and if such refusal or neglect shall con-
tinue for a period of one year, the member's rights in and to all benefits
under this system may be revoked by the board.

      (9) In the event that a member becomes disabled and is eligible for
benefits provided in this section, such member shall be given participating
service credit for the entire period of such disability.

      (10) Any member who is receiving benefits pursuant to this section
shall file annually a statement of earnings for the previous year in such
form and manner as the board shall prescribe. Any disability benefit paid
to a member entitled to such benefit pursuant to this section shall be
reduced by the board in an amount equal to a $1 reduction in such benefit
for every $2 of earnings of such member which were earned during the
previous year while such member was disabled. Such reduction shall ap-
ply only to a member's earnings which exceed $10,000.

      (11) Any benefits provided pursuant to this section and any partici-
pating service credit given pursuant to subsection (9) shall terminate upon
the earliest date such member is eligible for retirement upon attainment
of the normal retirement date as provided in K.S.A. 74-4964a and amend-
ments thereto.

      (12) Any member who has received benefits under the provisions of
this section for a period of five years or more immediately preceding
retirement shall have such member's final average salary adjusted upon
retirement by the actuarial salary assumption rates in existence during
such period. Effective July 1, 1993, each member's current annual rate
shall be adjusted upon retirement by 5% for each year of disability after
July 1, 1993, but before July 1, 1998. Effective July 1, 1998, such mem-
ber's current annual rate shall be adjusted upon retirement by an amount
equal to the lesser of: (1) The percentage increase in the consumer price
index for all urban consumers as published by the bureau of labor statistics
of the United States department of labor minus one percent; or (2) four
percent per annum, measured from the month the disability occurs the
member's last day on the payroll to the month that is two months prior
to the month of retirement, for each year of disability after July 1, 1998.

      (13) All payments due under this section to a minor shall be made to
a legally appointed conservator of such minor.

      (14) The provisions of this section shall be effective on and after July
1, 1989 and shall apply only to members who were appointed or employed
prior to July 1, 1989, and who made an election pursuant to K.S.A. 74-
4955a and amendments thereto; and persons appointed or employed on
or after July 1, 1989.

      (15) Any retirant who has been receiving benefits under the provi-
sions of this section and who returns to employment with the same or
different participating employer in the system shall be deemed no longer
retired.

 Sec.  23. On and after July 1, 2000, K.S.A. 1999 Supp. 74-4964 is
hereby amended to read as follows: 74-4964. (1) A member may elect to
have such member's retirement benefit paid under one of the options
provided in this section in lieu of having it paid in the form stated in
subsections (1) and (2) of K.S.A. 74-4958 and amendments thereto. Such
election must be made before the date of actual retirement. Only a spe-
cific individual person may be designated as a joint annuitant at the time
of election of the joint and 1/2 to joint annuitant survivor option, the joint
and survivor option and the joint and 3/4 to joint annuitant survivor option.
Under no circumstances may an option be changed or canceled nor the
named joint annuitant changed after the date of actual retirement of the
member.

      (2) The amount of a retirement benefit payable under an option shall
be based on the age of the member and, if applicable, the age of the joint
annuitant, and shall be such amount as to be the actuarial equivalent of
the retirement benefit otherwise payable under subsections (1) or (2) of
K.S.A. 74-4958 and amendments thereto as prescribed under subsection
(5). In no case shall the total amount of retirement benefit paid under
any option provided in this section be more than 100% of the retirement
benefit which would have been otherwise payable if no option had been
elected under this section.

      (3) If a member who was, up to the entry date of such member's
employer, covered by a pension system under the provisions of K.S.A.
13-14a01 to 13-14a14, inclusive or 14-10a01 through 14-10a15, inclusive,
and amendments thereto so elects one of the options under this section,
payment of such option shall be in lieu of any payments provided in
subsection (3) of K.S.A. 74-4958 and amendments thereto.

      (4) Such election of an option shall become null and void upon the
death of a member prior to such member's retirement, except that if a
member, who is eligible to retire in accordance with the provisions of
subsections (1) and (2) of K.S.A. 74-4958 and amendments thereto, dies
without having actually retired the member's spouse, if the spouse is
beneficiary for the member's accumulated contributions, and no benefits
are payable under subsections (1) and (2) of K.S.A. 74-4959 and amend-
ments thereto, may elect to receive benefits under one of the options
provided in this section, in lieu of receiving the member's accumulated
contributions.

      (5) The following retirement options which are subject to the provi-
sions of K.S.A. 1999 Supp. 74-49,123 and amendments thereto, are avail-
able:

      (A) Joint and 1/2 to joint annuitant survivor. A reduced retirement
benefit is payable to the retirant during the retirant's lifetime in a monthly
amount equal to the product of (A) the monthly payment of the retire-
ment annuity otherwise payable under K.S.A. 74-4958 and amendments
thereto and (B) the percentage equal to 94.5% minus .2% for each year
by which the age of the retirant's joint annuitant is less than the retirant's
age, computed to the nearest whole year, or plus .2% for each year by
which the age of the retirant's joint annuitant is more than the retirant's
age, computed to the nearest whole year, with 1/2 of that monthly amount
continued to the retirant's joint annuitant during such joint annuitant's
remaining lifetime, if any, after the death of the retirant. In the event that
the designated joint annuitant under this option predeceases the retirant,
the amount of the retirement benefit otherwise payable to the retirant
under this option shall be adjusted automatically to the retirement benefit
which the retirant would have received if no option had been elected
under this section.

      (B) Joint and survivor. A reduced retirement benefit is payable to
the retirant during the retirant's lifetime in a monthly amount equal to
the product of (A) the monthly payment of the retirement annuity oth-
erwise payable under K.S.A. 74-4958 and amendments thereto and (B)
the percentage equal to 88% minus .4% for each year by which the age
of the retirant's joint annuitant is less than the retirant's age, computed
to the nearest whole year, or plus .4% for each year by which the age of
the retirant's joint annuitant is more than the retirant's age, computed to
the nearest whole year, with that monthly amount continued to the joint
annuitant during the joint annuitant's remaining lifetime, if any, after the
death of retirant. In the event that the designated joint annuitant under
this option predeceases the retirant, the amount of the retirement benefit
otherwise payable to the retirant under this option shall be adjusted au-
tomatically to the retirement benefit which the retirant would have re-
ceived if no option had been elected under this section.

      (C) Joint and 3/4 to joint annuitant survivor. A reduced retirement
benefit is payable to the retirant during the retirant's lifetime in a monthly
amount equal to the product of (A) the monthly payment of the retire-
ment annuity otherwise payable under K.S.A. 74-4958 and amendments
thereto and (B) the percentage equal to 91% minus .3% for each year by
which the age of the retirant's joint annuitant is less than the retirant's
age, computed to the nearest whole year, or plus .3% for each year by
which the age of the retirant's joint annuitant is more than the retirant's
age, computed to the nearest whole year, with 3/4 of that monthly amount
continued to the retirant's joint annuitant during such joint annuitant's
remaining lifetime, if any, after the death of the retirant. In the event that
the designated joint annuitant under this option predeceases the retirant,
the amount of the retirement benefit otherwise payable to the retirant
under this option shall be adjusted automatically to the retirement benefit
which the retirant would have received if no option had been elected
under this section.

      (D) Life with 5 years certain. A reduced retirement benefit is payable
to the retirant during the retirant's lifetime in a monthly amount equal
to 99% of the monthly payment of the retirement benefit otherwise pay-
able under K.S.A. 74-4958 and amendments thereto, and if the retirant
dies within the five-year certain period, measured from the commence-
ment of retirement benefit payments, such payments will be continued
to the retirant's beneficiary during the balance of the five-year certain
period.

      (E) Life with 10 years certain. A reduced retirement benefit is pay-
able to the retirant during the retirant's lifetime in a monthly amount
equal to 98% of the monthly payment of the retirement benefit otherwise
payable under K.S.A. 74-4958 and amendments thereto, and if the retir-
ant dies within the ten-year certain period, measured from the com-
mencement of retirement benefit payments, such payments will be con-
tinued to the retirant's beneficiary during the balance of the ten-year
certain period.

      (F) Life with 15 years certain. A reduced retirement benefit is pay-
able to the retirant during the retirant's lifetime in a monthly amount
equal to 92% of the monthly payment of the retirement benefit otherwise
payable under K.S.A. 74-4958 and amendments thereto, and if the retir-
ant dies within the fifteen-year certain period, measured from the com-
mencement of retirement benefit payments, such payments will be con-
tinued to the retirant's beneficiary during the balance of the fifteen-year
certain period.

      (G) Lump sum payment at retirement. (i) Pursuant to this option,
the member must specify a lump sum amount to be paid to the member
upon the member's retirement. The lump sum amount will be based on
the actuarial present value of the benefit as provided in K.S.A. 74-4958,
and amendments thereto. The lump sum amount designated by the
member must be in 10% increments and shall not exceed 1/2 of the ac-
tuarial present value of the benefit provided in K.S.A. 74-4958, and
amendments thereto.

      (ii) Pursuant to this option, the member must elect to have the re-
maining actuarial present value paid in a monthly amount under the
provisions of K.S.A. 74-4958, and amendments thereto, or subsections
(5)(A) through (5)(F) of this section.

      (iii) The amount of any retirement benefit payable pursuant to this
subsection shall remain as provided in this subsection even in the event
that the designated joint annuitant pursuant to subsections (5)(A), (5)(B)
or (5)(C) predeceases the retirant.

      (iv) The provisions of this subsection shall be effective on and after
July 1, 2001.

      (6) On and after July 1, 1996, if a member with 20 or more years of
credited service dies before attaining retirement age, the member's
spouse, if the spouse is the sole beneficiary for the member's accumulated
contributions, may elect to receive benefits under one of the options
provided in this section in lieu of receiving the member's accumulated
contributions or in lieu of receiving benefits as provided in K.S.A. 74-
4959 and amendments thereto. Payments under one of the options pro-
vided in this section to the member's spouse if so elected, shall commence
on the date that the member would have attained retirement age.

      (7) Benefits payable to a joint annuitant shall accrue from the first
day of the month following the death of a member or retirant and, in the
case of the joint and 1/2 to joint annuitant survivor option, the joint and
survivor option and the joint and 3/4 to joint annuitant survivor option,
shall end on the last day of the month in which the joint annuitant dies.

      (8) The provisions of the law in effect on the retirement date of a
member under the system shall govern the retirement benefit payable to
the retirant and any joint annuitant, except, for retirement benefits pay-
able after July 1, 1993, for retirants who retired prior to July 1, 1982, in
the event that the designated joint annuitant under the option provided
in subsection (5)(A), (B) or (C), as applicable, predeceased the retirant,
the amount of the retirement benefit otherwise payable to the retirant
under the option provided in subsection (5)(A), (B) or (C), as applicable,
shall be adjusted automatically to the retirement benefit which the retir-
ant would have received if no option had been elected under this section.

      (9) Upon the death of a joint annuitant who is receiving a retirement
benefit under the provisions of this section, there shall be paid to such
joint annuitant's beneficiary an amount equal to the excess, if any, of the
accumulated contributions of the retirant over the sum of all retirement
benefit payments made to such retirant and such joint annuitant. Such
joint annuitant shall designate a beneficiary by filing in the office of the
retirement system such designation at the time of death of the retirant.
If there is no named beneficiary of such joint annuitant living at the time
of death of such joint annuitant, any amount provided for by this section
shall be paid to, in order of preference as follows:

      (A) The joint annuitant's surviving spouse;

      (B) the joint annuitant's dependent child or children;

      (C) the joint annuitant's dependent parent or parents;

      (D) the joint annuitant's nondependent child or children;

      (E) the joint annuitant's nondependent parent or parents; or

      (F) the estate of the deceased joint annuitant.

      (10) The provisions of this section shall apply only to members who
were appointed or employed prior to July 1, 1989, and who did not make
an election pursuant to K.S.A. 74-4955a and amendments thereto.

 Sec.  24. On and after July 1, 2000, K.S.A. 1999 Supp. 74-4964a is
hereby amended to read as follows: 74-4964a. (1) A member may elect
to have such member's retirement benefit paid under one of the options
provided in this section in lieu of having it paid in the form stated in
subsections (1) and (2) of K.S.A. 74-4958 and amendments thereto. Such
election must be made before the date of actual retirement. Only a spe-
cific individual person may be designated as a joint annuitant at the time
of election of the joint and 1/2 to joint annuitant survivor option, the joint
and survivor option and the joint and 3/4 to joint annuitant survivor option.
Under no circumstances may an option be changed or canceled nor the
named joint annuitant changed after the date of actual retirement of the
member.

      (2) The amount of a retirement benefit payable under an option shall
be based on the age of the member and, if applicable, the age of the joint
annuitant, and shall be such amount as to be the actuarial equivalent of
the retirement benefit otherwise payable under subsections (1) or (2) of
K.S.A. 74-4958 and amendments thereto as prescribed under subsection
(5). In no case shall the total amount of retirement benefit paid under
any option provided in this section be more than 100% of the retirement
benefit which would have been otherwise payable if no option had been
elected under this section.

      (3) If a member who was, up to the entry date of such member's
employer, covered by a pension system under the provisions of K.S.A.
13-14a01 through 13-14a14, inclusive or 14-10a01 through 14-10a15, in-
clusive, and amendments thereto so elects one of the options under this
section, payment of such option shall be in lieu of any payments provided
in subsection (3) of K.S.A. 74-4958 and amendments thereto.

      (4) Such election of an option shall become null and void upon the
death of a member prior to such member's retirement, except that if a
member, who is eligible to retire in accordance with the provisions of
subsections (1) and (2) of K.S.A. 74-4958 and amendments thereto, dies
without having actually retired the member's spouse, if the spouse is
beneficiary for the member's accumulated contributions, and no benefits
are payable under subsections (1) and (2) of K.S.A. 74-4959 and amend-
ments thereto, may elect to receive benefits under one of the options
provided in this section, in lieu of receiving the member's accumulated
contributions.

      (5) The following retirement options which are subject to the provi-
sions of K.S.A. 1999 Supp. 74-49,123 and amendments thereto, are avail-
able:

      (A) Joint and 1/2 to joint annuitant survivor. A reduced retirement
benefit is payable to the retirant during the retirant's lifetime in a monthly
amount equal to the product of (A) the monthly payment of the retire-
ment annuity otherwise payable under K.S.A. 74-4958 and amendments
thereto and (B) the percentage equal to 94.5% minus .2% for each year
by which the age of the retirant's joint annuitant is less than the retirant's
age, computed to the nearest whole year, or plus .2% for each year by
which the age of the retirant's joint annuitant is more than the retirant's
age, computed to the nearest whole year, with 1/2 of that monthly amount
continued to the retirant's joint annuitant during such joint annuitant's
remaining lifetime, if any, after the death of the retirant. In the event that
the designated joint annuitant under this option predeceases the retirant,
the amount of the retirement benefit otherwise payable to the retirant
under this option shall be adjusted automatically to the retirement benefit
which the retirant would have received if no option had been elected
under this section.

      (B) Joint and survivor. A reduced retirement benefit is payable to
the retirant during the retirant's lifetime in a monthly amount equal to
the product of (A) the monthly payment of the retirement annuity oth-
erwise payable under K.S.A. 74-4958 and amendments thereto and (B)
the percentage equal to 88% minus .4% for each year by which the age
of the retirant's joint annuitant is less than the retirant's age, computed
to the nearest whole year, or plus .4% for each year by which the age of
the retirant's joint annuitant is more than the retirant's age, computed to
the nearest whole year, with that monthly amount continued to the joint
annuitant during the joint annuitant's remaining lifetime, if any, after the
death of retirant. In the event that the designated joint annuitant under
this option predeceases the retirant, the amount of the retirement benefit
otherwise payable to the retirant under this option shall be adjusted au-
tomatically to the retirement benefit which the retirant would have re-
ceived if no option had been elected under this section.

      (C) Joint and 3/4 to joint annuitant survivor. A reduced retirement
benefit is payable to the retirant during the retirant's lifetime in a monthly
amount equal to the product of (A) the monthly payment of the retire-
ment annuity otherwise payable under K.S.A. 74-4958 and amendments
thereto and (B) the percentage equal to 91% minus .3% for each year by
which the age of the retirant's joint annuitant is less than the retirant's
age, computed to the nearest whole year, or plus .3% for each year by
which the age of the retirant's joint annuitant is more than the retirant's
age, computed to the nearest whole year, with 3/4 of that monthly amount
continued to the retirant's joint annuitant during such joint annuitant's
remaining lifetime, if any, after the death of the retirant. In the event that
the designated joint annuitant under this option predeceases the retirant,
the amount of the retirement benefit otherwise payable to the retirant
under this option shall be adjusted automatically to the retirement benefit
which the retirant would have received if no option had been elected
under this section.

      (D) Life with 5 years certain. A reduced retirement benefit is payable
to the retirant during the retirant's lifetime in a monthly amount equal
to 99% of the monthly payment of the retirement benefit otherwise pay-
able under K.S.A. 74-4958 and amendments thereto, and if the retirant
dies within the five-year certain period, measured from the commence-
ment of retirement benefit payments, such payments will be continued
to the retirant's beneficiary during the balance of the five-year certain
period.

      (E) Life with 10 years certain. A reduced retirement benefit is pay-
able to the retirant during the retirant's lifetime in a monthly amount
equal to 98% of the monthly payment of the retirement benefit otherwise
payable under K.S.A. 74-4958 and amendments thereto, and if the retir-
ant dies within the ten-year certain period, measured from the com-
mencement of retirement benefit payments, such payments will be con-
tinued to the retirant's beneficiary during the balance of the ten-year
certain period.

      (F) Life with 15 years certain. A reduced retirement benefit is pay-
able to the retirant during the retirant's lifetime in a monthly amount
equal to 92% of the monthly payment of the retirement benefit otherwise
payable under K.S.A. 74-4958 and amendments thereto, and if the retir-
ant dies within the fifteen-year certain period, measured from the com-
mencement of retirement benefit payments, such payments will be con-
tinued to the retirant's beneficiary during the balance of the fifteen-year
certain period.

      (G) Lump sum payment at retirement. (i) Pursuant to this option, the
member must specify a lump sum amount to be paid to the member upon
the member's retirement. The lump sum amount will be based on the
actuarial present value of the benefit as provided in K.S.A. 74-4958a, and
amendments thereto. The lump sum amount designated by the member
must be in 10% increments and shall not exceed 1/2 of the actuarial present
value of the benefit provided in K.S.A. 74-4958a, and amendments
thereto.

      (ii) Pursuant to this option, the member must elect to have the re-
maining actuarial present value paid in a monthly amount under the
provisions of K.S.A. 74-4958a, and amendments thereto, or subsections
(5)(A) through (5)(F) of this section.

      (iii) The amount of any retirement benefit payable pursuant to this
subsection shall remain as provided in this subsection even in the event
that the designated joint annuitant pursuant to subsections (5)(A), (5)(B)
or (5)(C) predeceases the retirant.

      (iv) The provisions of this subsection shall be effective on and after
July 1, 2001.

      (6) On and after July 1, 1996, if a member with 20 or more years of
credited service dies before attaining retirement age, the member's
spouse, if the spouse is the sole beneficiary for the member's accumulated
contributions, may elect to receive benefits under one of the options
provided in this section in lieu of receiving the member's accumulated
contributions or in lieu of receiving benefits as provided in K.S.A. 74-
4959 and amendments thereto. Payments under one of the options pro-
vided in this section to the member's spouse if so elected, shall commence
on the date that the member would have attained retirement age.

      (7) Benefits payable to a joint annuitant shall accrue from the first
day of the month following the death of a member or retirant and, in the
case of the joint and 1/2 to joint annuitant survivor option, the joint and
survivor option and the joint and 3/4 to joint annuitant survivor option,
shall end on the last day of the month in which the joint annuitant dies.

      (8) The provisions of the law in effect on the retirement date of a
member under the system shall govern the retirement benefit payable to
the retirant and any joint annuitant, except, for retirement benefits pay-
able after July 1, 1993, for retirants who retired prior to July 1, 1982, in
the event that the designated joint annuitant under the option provided
in subsection (5)(A), (B) or (C), as applicable, predeceased the retirant,
the amount of the retirement benefit otherwise payable to the retirant
under the option provided in subsection (5)(A), (B) or (C), as applicable,
shall be adjusted automatically to the retirement benefit which the retir-
ant would have received if no option had been elected under this section.

      (9) Upon the death of a joint annuitant who is receiving a retirement
benefit under the provisions of this section, there shall be paid to such
joint annuitant's beneficiary an amount equal to the excess, if any, of the
accumulated contributions of the retirant over the sum of all retirement
benefit payments made to such retirant and such joint annuitant. Such
joint annuitant shall designate a beneficiary by filing in the office of the
retirement system such designation at the time of death of the retirant.
If there is no named beneficiary of such joint annuitant living at the time
of death of such joint annuitant, any amount provided for by this section
shall be paid to, in order of preference as follows:

      (A) The joint annuitant's surviving spouse;

      (B) the joint annuitant's dependent child or children;

      (C) the joint annuitant's dependent parent or parents;

      (D) the joint annuitant's nondependent child or children;

      (E) the joint annuitant's nondependent parent or parents; or

      (F) the estate of the deceased joint annuitant.

      (10) The provisions of this section shall be effective on and after July
1, 1989, and shall apply only to members who were appointed or em-
ployed prior to July 1, 1989, and who made an election pursuant to K.S.A.
74-4955a and amendments thereto; and persons appointed or employed
on or after July 1, 1989.

 Sec.  25. On and after July 1, 2000, K.S.A. 1999 Supp. 74-4989 is
hereby amended to read as follows: 74-4989. (1) (a) Except as provided
in (b), pursuant to the provisions of section 36, and amendments thereto,
upon the death of a retirant, the board of trustees of the Kansas public
employees retirement system shall pay a lump-sum death benefit to the
retirant's beneficiary which shall not exceed $4,000 for such retirant, less
any amount payable for funeral benefits under the applicable provisions
of any local police or fire pension plan, as defined by subsection (c) of
K.S.A. 12-5001 and amendments thereto.

      (b) Notwithstanding the provisions of K.S.A. 74-4923 and amend-
ments thereto, any amounts owed the system shall be deducted from such
lump-sum death benefit.

      (2) As used in this section, "retirant" means any person who is a
member or special member of the Kansas public employees retirement
system, the Kansas police and firemen's retirement system, the state
school retirement system or the retirement system for judges and who
has retired.

 Sec.  26. On and after July 1, 2000, K.S.A. 75-2929d is hereby
amended to read as follows: 75-2929d. (a) The state civil service board
shall hear appeals taken to it pursuant to: (1) K.S.A. 75-2940, 75-2949
and 75-3747, and amendments thereto, concerning demotion, dismissal
or suspension of a permanent employee in the classified service, or con-
cerning refusal to examine an applicant or to certify a person as eligible
for a job class, and (2) K.S.A. 75-2973, and amendments thereto, con-
cerning disciplinary action in violation of that statute.

      (b) When an appeal is taken to the board, the board shall establish a
time and a place for the hearing which shall be held within 45 days after
receipt of request for the appeal. The board shall notify the person bring-
ing the appeal and the appointing authority or other person whose action
is being reviewed of the time and the place of the hearing at least 14 days
prior to such hearing. Each party at the hearing shall have the right to be
represented by a person of the party's own choice. Hearings shall be
conducted in accordance with the provisions of the Kansas administrative
procedure act. For purposes of the administrative procedure act, the state
civil service board shall be deemed the agency head. The board may
affirm, modify or reverse an agency action and order any other action it
deems appropriate.

      (c) The board, or the director of personnel services when authorized
by majority vote of the board, may take deposition of depose witnesses.
Either party to a hearing may depose witnesses in accordance with the
Kansas administrative procedure act. If books and papers are required to
be produced in advance of a hearing date, the person or agency producing
the books and papers shall be entitled to receive reasonable compensation
to recover all costs of such production from the person or agency for
which they are produced. The board, any presiding officer or the director
may examine such public records as may be required in relation to any
matter which the board has authority to investigate.

      (d) Each person not in the classified or unclassified service who ap-
pears before the board or the director by order shall receive for such
person's attendance the fees and mileage provided for witnesses in civil
actions in the district court, which. Such fees and mileage shall be audited
and paid by the state upon presentation of proper vouchers. Each witness
subpoenaed at the request of parties other than the board or the director
shall be entitled to compensation from the state for attendance or travel
only if the board certifies that the testimony of such witness was relevant
and material to the matter investigated or, if such witness is not called to
testify, the board determines and certifies that such compensation should
be paid.

 Sec.  27. On and after July 1, 2000, K.S.A. 75-2949 is hereby
amended to read as follows: 75-2949. (a) An appointing authority may
dismiss or demote any permanent employee in the classified service when
the appointing authority considers that the good of the service will be
served thereby and. For disciplinary purposes, an appointing authority
may suspend without pay a permanent classified employee for a period
not to exceed 30 calendar days, but. No permanent employee in the clas-
sified service shall be dismissed, demoted or suspended for political, re-
ligious, racial or other nonmerit reasons.

      (b) Prior to dismissal, demotion or suspension of a permanent em-
ployee in the classified service, the appointing authority shall furnish the
employee by certified mail to the employee's last known address, return
receipt requested, or by personal delivery, a statement in writing specif-
ically setting forth the reasons and factual basis therefor. A copy of such
statement shall be furnished immediately to the director. This statement
shall contain notice of the proposed dismissal, demotion or suspension
and shall specify the proposed effective date thereof. Except as otherwise
provided in the Kansas civil service act, a proposed suspension, demotion
or dismissal shall become effective no less than three calendar days nor
more than 14 calendar days following the date the notice of such proposed
suspension, demotion or dismissal is personally delivered to the employee
or deposited with the post office as certified mail. If in the opinion of the
appointing authority conditions warrant, the appointing authority may re-
lieve the employee of duties or change the duties of the employee during
such period. If the employee is relieved from duty during such period,
the employee may be continued in pay status, or placed on leave of ab-
sence without pay by the appointing authority. In the statement proposing
suspension, demotion or dismissal, the appointing authority shall offer
the employee who is proposed to be suspended, demoted or dismissed
an opportunity to reply in writing, or appear in person, or both, before
the appointing authority or a designated representative of the appointing
authority, on the issue of the proposed suspension, demotion or dismissal
prior to the time such suspension, demotion or dismissal is specified by
the notice to become effective. The statement shall specify the date, time
and place by, or at which, the employee may reply in writing or appear,
or both. If the employee chooses to appear in person on the issue of the
proposed action, the employee may be represented by a person of the
employee's choice.

      (c) Upon request by the employee, or upon the initiative of the ap-
pointing authority, the appointing authority may extend the time for reply
or appearance, or both, if the circumstances warrant. Notice of any such
extension shall be furnished to the employee and to the director of per-
sonnel services. The proposed suspension, demotion or dismissal shall not
become effective until after the extended period has expired.

      (d) Following the employee's response to the opportunity to reply to
the proposed action, or upon expiration of the time for such reply, if no
reply is made, the appointing authority, or the designee of the appointing
authority, shall notify the employee of the final decision on the proposed
action. Such notice shall be in writing and shall be sent by certified mail
to the employee's last known address or personally delivered to the em-
ployee on or before the effective date of the proposed action. A copy of
the notice shall be furnished immediately to the director of personnel
services. This final notice of decision by the appointing authority or the
designee of the appointing authority, to suspend, demote or dismiss the
employee shall inform the employee of the employee's right to appeal
the decision to the state civil service board within 30 calendar days after
the effective date of the action.

      (e) At any time prior to the effective date of the proposed suspension,
demotion or dismissal or, if an appeal is taken to the state civil service
board, at any time prior to the final decision of the board, the appointing
authority, or the designee of the appointing authority, may withdraw or
modify the action proposed to be taken or taken against the employee.
Notice of any such withdrawal or modification shall be given in writing
to the employee by certified mail to the employee's last known address
or by personal delivery. A copy of the notice shall be furnished immedi-
ately to the director of personnel services.

      (f) Any permanent employee finally dismissed, demoted or sus-
pended, may request a hearing from the state civil service board to de-
termine the reasonableness of such action. Each such request for a hear-
ing shall be in writing and shall be submitted to the director of personnel
services filed in the office of the director of personnel services within 30
calendar days after the effective date of the dismissal, demotion or sus-
pension. Additional days shall not be added to the thirty-day period in
which an appeal may be filed if the notice of the effective date of the
dismissal, demotion or suspension is mailed to the employee. The board
shall grant the employee a hearing in accordance with the provisions of
the Kansas administrative procedure act within 45 calendar days after
receipt of such request. At the hearing the burden of proof shall be upon
the employee to establish that the appointing authority did not act rea-
sonably in taking such action.

      (g) No employee shall be disciplined or discriminated against in any
way because of the employee's proper use of the appeal procedure.

      (h) A permanent employee who is demoted pursuant to this section
need not meet the qualifications for the class of positions to which de-
moted if the appointing authority determines that the employee can rea-
sonably be expected to perform satisfactorily the duties of the position to
which the employee is demoted. A permanent employee who is demoted
pursuant to this section shall have permanent status in the class to which
demotion is made, effective on the date of the demotion.

      (i) In case of a situation in which the possibility of proposing dis-
missal, suspension or demotion of a permanent employee is indicated,
but where the appointing authority needs time to conduct an investigation
before proposing such action, or in a situation where immediate removal
of an employee from such employee's job is needed to avoid disruption
of work, or for the protection of persons or property, or for a similar
reason, the appointing authority may relieve the employee of duties or
change the duties of the employee for a limited period and keep the
employee in pay status. The secretary of administration shall provide by
rules and regulations, adopted pursuant to K.S.A. 75-3706, and amend-
ments thereto, procedures to be followed in such cases.

 Sec.  28. K.S.A. 75-4370 is hereby amended to read as follows: 75-
4370. (a) In establishing certified pools of eligible candidates under the
Kansas civil service act, a preference shall be given to each state officer
or employee (1) who (1)(A) is in the classified service under the Kansas
civil service act and is employed by an institution that is closed or abol-
ished or otherwise ceases operations or that is scheduled for such closure,
abolition or cessation of operations and has a budget reduction imposed
that is associated with such closure, abolition or cessation of operations,
and (2) who (B) is laid off from employment with such institution for the
reason of such closure, abolition or cessation of operations or such im-
position of a budget reduction, and (3) who (C) remains in such employ-
ment until the date the officer or employee is laid off or (2) (A) is in the
classified service under the Kansas civil service act and is laid off from
employment at the Topeka correctional facility due to the transfer of the
reception and diagnostic unit from the Topeka correctional facility to the
El Dorado correctional facility, and (B) remains in such employment until
the date the officer or employee is laid off.

      (b) To qualify for the preference established by this section, a person
described in subsection (a) also shall meet the requirements for the vacant
position. In addition to other applicable provisions of the Kansas civil
service act and rules and regulations and policies adopted thereunder,
the preference established by this section (1) shall place the person into
the reemployment pool, (2) shall provide an opportunity for an interview
for any vacant position in the same or higher pay grade than the position
from which the person was laid off and for which the person meets the
qualifications, and (3) shall grant a right of first refusal for any vacant
position. No state agency shall be required to interview more than seven
applicants for any one position. The right of first refusal shall allow the
person the right to accept the first position applied for by the person for
which the person meets the qualifications and for which the pay grade is
the same as or lower than the pay grade of the position from which the
person was laid off. The right of first refusal may be exercised only one
time and must be exercised within the 24 months following the date of
layoff.

      (c) The secretary of administration shall give a global notice of layoff
to all state officers and employees, who are employed by an institution
that is scheduled for closure, abolition or cessation of operations, up to
180 days prior to such closure, abolition or cessation of operations. The
global notice of layoff shall be effective for all such state officers and
employees, including any state officer or employee who is transferred to
or employed by such institution within 180 days of the date of such clo-
sure, abolition or cessation of operations, for all purposes of lay off pro-
cedures under K.S.A. 75-2948 and amendments thereto, except each such
officer or employee receiving the global notice of layoff shall also be given
an individual notice of layoff which specifies such officer or employee's
individual date of layoff.

      (d) Notice of layoff pursuant to K.S.A. 75-2948 and amendments
thereto, shall be given to state officers and employees whose proposed
layoff is caused by the transfer of the reception and diagnostic unit from
the Topeka correctional facility to the El Dorado correctional facility.

      (d) (e) The secretary of administration shall adopt rules and regula-
tions necessary to implement the provisions of this section.

      (e) (f) This section shall be part of and supplemental to the Kansas
civil service act.

 Sec.  29. K.S.A. 75-4371 is hereby amended to read as follows: 75-
4371. (a) Each state officer or employee (1) who (1)(A) is employed by
an institution that is closed or abolished or otherwise ceases operations
or that is scheduled for such closure, abolition or cessation of operations
and has a budget reduction imposed that is associated with such closure,
abolition or cessation of operations, and (2) who (B) is laid off from em-
ployment with such institution for the reason of such closure, abolition
or cessation of operations or such imposition of a budget reduction, and
(3) who (C) remains in such employment until the date the officer or
employee is laid off; or (2)(A) is in the classified service under the Kansas
civil service act and is laid off from employment at the Topeka correctional
facility due to the transfer of the reception and diagnostic unit from the
Topeka correctional facility to the El Dorado correctional facility, and (B)
remains in such employment until the date the officer or employee is laid
off, may receive compensation for 20% of all accumulated hours of sick
leave credited to such state officer or employee as of the date of being
laid off. Each state officer or employee, who is eligible for and who elects
to receive compensation for accumulated sick leave under this section,
shall file a written statement of election therefor which shall be in such
form as may be prescribed by the secretary of administration and which
shall include a specific waiver of any right to receive any payment for
accumulated sick leave under the provisions of K.S.A. 75-5517 and
amendments thereto. No state officer or employee, who receives com-
pensation for accumulated sick leave under this section, shall receive any
payment for accumulated sick leave under the provisions of K.S.A. 75-
5517 and amendments thereto. Payment for accumulated sick leave under
this section shall be made from the state leave payment reserve fund.

      (b) For the purposes of retirement employee contributions and re-
tirement benefits, each payment of compensation for accumulated sick
leave under this section shall be subject to the applicable provisions of
the statutes governing the Kansas public employees retirement system,
K.S.A. 74-4901 et seq., and amendments thereto.

      (c) The secretary of administration shall adopt rules and regulations
necessary to implement the provisions of this section.

 Sec.  30. K.S.A. 75-4372 is hereby amended to read as follows: 75-
4372. (a) Each state officer or employee (1) who (1)(A) is employed by
an institution that is closed or abolished or otherwise ceases operations
or that is scheduled for such closure, abolition or cessation of operations
and has a budget reduction imposed that is associated with such closure,
abolition or cessation of operations, and (2) who (B) is laid off from em-
ployment with such institution for the reason of such closure, abolition
or cessation of operations or such imposition of a budget reduction, and
(3) who (C) remains in such employment until the date the officer or
employee is laid off; or (2)(A) who is in the classified service under the
Kansas civil service act and is laid off from employment at the Topeka
correctional facility due to the transfer of the reception and diagnostic
unit from the Topeka correctional facility to the El Dorado correctional
facility, and (B) remains in such employment until the date the officer or
employee is laid off, shall continue to be qualified to participate in the
state health care benefits program as provided in this section.

      (b) In accordance with the following, each such state officer or em-
ployee may participate in the state health care benefits program after
being laid off for the following periods:

      (1) For the six-month period after the date of such person's layoff,
during which period that portion of the cost of participation of such per-
son which would have been paid by the state agency if such person was
still a state officer or employee shall be paid as provided in subsection
(c); and

      (2) for the eighteen-month period after such six-month period, dur-
ing which period the entire cost of participation of such person shall be
paid by such person.

      (c) There is hereby established the closure health insurance fund in
the state treasury which shall be administered by the secretary of admin-
istration. In accordance with the provisions of appropriation acts, the sec-
retary of administration shall cause to be deposited in the closure health
insurance fund an amount equal to the full cost for six months of the
employer contribution for full-time single member health care insurance
under the state health care benefits program for each such laid off state
officer and employee on the officer or employee's last day of service.
Expenditures shall be made from the closure health insurance fund for
the purpose of paying the employer's portion for full-time single member
health insurance under the state health care benefits program for each
such laid off state officer or employee until the expiration of six months
or until notified by the laid off officer or employee that such officer or
employee is otherwise covered by health care insurance. The secretary of
administration shall establish a system to account for the state health
insurance expenditures for each such laid off state officer or employee.
Upon notice that the person who had been laid off is otherwise covered
by health care insurance, the balance attributed to such person shall be
paid to the person who had been laid off. After such six-month period,
any participation by such person in the state health care benefits program
shall be paid by such person.

      (d) Except as otherwise provided by this section, the participation of
each such state officer or employee in the state health care benefits pro-
gram shall be in accordance with the provisions of K.S.A. 75-6501 through
75-6513 and amendments thereto and rules and regulations and policies
adopted by the Kansas state employees health care commission. Each
such state officer or employee may obtain family coverage under the state
health care benefits program administered by the Kansas state employees
health care commission generally in the same manner as other state of-
ficers and employees and shall pay the entire cost of such family coverage.

      New Sec.  31. The secretary of social and rehabilitation services is
hereby authorized and directed to develop and administer provisions for
health care benefits and related assistance which shall be provided to each
person who is a blind person who was employed prior to the effective
date of this act at Kansas industries for the blind at facilities on the Topeka
state hospital property, as defined by K.S.A. 1999 Supp. 75-37,123 and
amendments thereto, and who voluntarily terminates or retires or who is
laid off from such employment due to the closure, abolition or other
cessation of operations of the Kansas industries for the blind as a state
program at such location.

 Sec.  32. K.S.A. 75-4373 is hereby amended to read as follows: 75-
4373. (a) Each state officer or employee (1) who (1)(A) is employed by
an institution that is closed or abolished or otherwise ceases operations
or that is scheduled for such closure, abolition or cessation of operations
and has a budget reduction imposed that is associated with such closure,
abolition or cessation of operations, and (2) who (B) is laid off from em-
ployment with such institution for the reason of such closure, abolition
or cessation of operations or such imposition of a budget reduction, and
(3) who (C) remains in such employment until the date the officer or
employee is laid off; or (2)(A) is in the classified service under the Kansas
civil service act and who is laid off from employment at the Topeka cor-
rectional facility due to the transfer of the reception and diagnostic unit
from the Topeka correctional facility to the El Dorado correctional facil-
ity, and (B) remains in such employment until the date of officer or em-
ployee is laid off, shall be eligible for the extended death benefit plan
providing term life insurance under this section.

      (b) The extended death benefit plan providing term life insurance
under this section shall provide a death benefit equal to 150% of the
annual rate of compensation of the covered state officer or employee, as
of the date the covered state officer or employee is laid off, for each state
officer or employee described in subsection (a). The extended death ben-
efit plan providing term life insurance under this section shall provide
death benefit coverage for a period of 24 months after the date the cov-
ered state officer or employee is laid off.

      (c) The secretary of administration shall administer the provisions of
this section. The secretary of administration shall issue a request for pro-
posals from qualified vendors for term life insurance under this section
and is hereby authorized to enter into contracts for such term life insur-
ance pursuant to competitive bids. Contracts entered into for such insur-
ance shall not be subject to the provisions of K.S.A. 75-4101 and amend-
ments thereto.

      (d) There is hereby created in the state treasury the closure term life
insurance fund which shall be administered by the secretary of adminis-
tration. All expenditures of moneys credited to the closure term life in-
surance fund shall be for the provision of term life insurance under this
section in accordance with appropriation acts upon warrants of the direc-
tor of accounts and reports issued pursuant to vouchers approved by the
secretary of administration or the secretary's designee.

 Sec.  33. K.S.A. 75-4374 is hereby amended to read as follows: 75-
4374. (a) The head of any state agency, as defined by K.S.A. 75-3701, and
amendments thereto, who hires any state officer or employee who is laid
off or transferred in lieu of layoff between state agencies, may agree to
reimburse such officer or employee's in-state moving expenses in an ag-
gregate amount of not more than $2,000, as verified by receipts. No such
moving expenses shall be paid when such transfer results in the new
official duty station being less than 25 miles from the old station.

      (b) Moving expenses may include, but not be limited to, the cost of
packing and transporting household goods and personal effects, subsis-
tence expenses while en route from the old residence to the new resi-
dence, subsistence expenses while occupying temporary quarters in the
new location and the expenses of a premove trip to look for a new resi-
dence.

      (c) Any state agency, as defined by K.S.A. 75-3701 and amendments
thereto, which hires any state officer or employee, who is a blind person
employed at Kansas industries for the blind at facilities on the Topeka
state hospital property and who is laid off or transferred between state
agencies, in lieu of being laid off, shall purchase or otherwise provide all
adaptive equipment and other accommodations required by such state
officer or employer for such state officer or employee's position at such
state agency.

      (d) As used in this section, "state officer or employee" means a state
officer or employee (1) who (1)(A) is employed by an institution that is
closed or abolished or otherwise ceases operations or that is scheduled
for such closure, abolition or cessation of operations, and (2) who (B) is
laid off from employment with such institution for the reason of such
closure, abolition or cessation of operations, and (3) who (C) remains in
such employment with such institution until the date the officer or em-
ployee is laid off; or (2)(A) is in the classified service under the Kansas
civil service act and is laid off from employment at the Topeka correctional
facility due to the transfer of the reception and diagnostic unit from the
Topeka correctional facility to the El Dorado correctional facility, and (B)
remains in such employment until the date the officer or employee is laid
off.

 Sec.  34. K.S.A. 75-4376 is hereby amended to read as follows: 75-
4376. As used in K.S.A. 75-4370 through 75-4376 and amendments
thereto, except as otherwise specifically provided in such statutes:

      (a) "Institution" means Topeka state hospital or, Winfield state hos-
pital and training center and Kansas industries for the blind of the de-
partment of social and rehabilitation services; and

      (b) "laid off" means, (1) in the case of a state officer or employee in
the classified service under the Kansas civil service act, being laid off
under K.S.A. 75-2948 and amendments thereto and,; (2) in the case of a
state officer or employee in the unclassified service under the Kansas civil
service act, being terminated from employment with the state agency by
the appointing authority, except that "laid off" shall not include any sep-
aration from employment pursuant to a budget reduction or expenditure
authority reduction and a reduction of F.T.E. positions under K.S.A. 75-
6801 and amendments thereto; and (3) in the case of blind persons em-
ployed by Kansas industries for the blind, being terminated or otherwise
separated from employment at Kansas industries for the blind at the fa-
cilities located on the Topeka state hospital property because Kansas in-
dustries for the blind is closed, abolished or otherwise ceases operations
as a state program at such location; and

      (c) "Topeka state hospital property" has the meaning ascribed thereto
by K.S.A. 1999 Supp. 75-37,123 and amendments thereto.

      New Sec.  35. (a) Except as otherwise provided in subsection (b), any
member of the system who becomes eligible for another retirement plan
authorized under any law of this state or who becomes ineligible for the
Kansas public employees retirement plan due to a reduction of hours,
who: (1) Has not been granted a vested retirement benefit in the system
as provided in K.S.A. 74-4917, and amendments thereto; and (2) has
reached the early or normal retirement dates as provided in K.S.A. 74-
4914, and amendments thereto, shall be eligible to receive a retirement
benefit based on such member's years of service and have interest cred-
ited annually to such member's account from the time the member first
becomes eligible under this subsection and for so long as they remain
eligible under the provisions of this subsection notwithstanding the fact
that such member has not been granted a vested retirement benefit as
provided in K.S.A. 74-4917, and amendments thereto. Receipt of such
retirement benefit shall be as otherwise provided by law.

      (b) If the status of such member is no longer as described in subsec-
tion (a), the vesting requirements specified by K.S.A. 74-4917, and
amendments thereto shall be applicable to such member.

      (c) The provisions of this section shall be part of and supplemental
to the provisions of K.S.A. 74-4901 et seq., and amendments thereto.

      (d) The provisions of this section shall be effective on and after July
1, 2000.

      New Sec.  36.  The lump sum death benefits, survivor benefits and
funeral expenses that are provided to surviving spouses, minor children
and other beneficiaries as a result of a nonduty related death or retirant
death pursuant to K.S.A. 13-14a07, 13-14a11, 14-10a07, 14-10a11, 74-
4958, 74-4958a, 74-4959, 74-4960, 74-4960a and 74-4989, and amend-
ments thereto, are in the nature of life insurance; are provided by the
participating employers for the protection of members' spouses, survivors
or beneficiaries as provided in those sections; and are not subject to reg-
ulation of the state of Kansas department of insurance. The provisions of
this section shall be effective on and after July 1, 2000.

      New Sec.  37. Notwithstanding any provision of law to the contrary,
whenever the Kansas public employees retirement system board of trus-
tees is directed to invest and reinvest and manage any moneys or funds
pursuant to law, other than as provided pursuant to K.S.A. 74-4921, and
amendments thereto, or any other provision related to the Kansas public
employees retirement system and systems thereunder, the board may
charge a fee to cover the board's expenses, related to such investment
and management services. The provisions of this section shall be part of
and supplemental to the provisions of K.S.A. 74-4901 et seq., and amend-
ments thereto. The provisions of this section shall be effective on and
after July 1, 2000.

      New Sec.  38. (a) Notwithstanding any provision of law to the con-
trary, any member who is a member of the legislature who is also em-
ployed by another participating employer of the Kansas public employees
retirement system other than the legislature and is an eligible employee
as defined in K.S.A. 74-4902, and amendments thereto, may retire from
service from such other participating employer and may continue to serve
as a member of the legislature, except that, commencing January 8, 2001,
such member of the legislature shall not receive any retirement benefit
for any month for which such member of the legislature serves when
compensation as provided in subsection (e) is paid in an amount equal to
$15,000 or more in any one such calendar year. Such member's retire-
ment benefit shall be based on the final average salary of such member
for service prior to service as a member of the legislature.

      (b) No such member who is a member of the legislature who retires
as provided in subsection (a) and who continues to serve as a member of
the legislature shall accrue any additional service credit for such service
as a member of the legislature or be entitled to any benefit provided in
K.S.A. 74-4916 or 74-4927, and amendments thereto.

      (c) When such member who is a member of the legislature retires as
a member of the legislature, such member's final average salary shall be
recalculated to include legislative compensation, if such inclusion of such
compensation increases such member's final average salary, of the mem-
ber up to the time of retirement from the participating employer other
than the legislature as provided in subsection (a).

      (d) No such member who is a member of the legislature shall accrue
any additional retirement benefits for the period of time between the
date the member retired from the participating employer other than the
legislature and the date such member retires as a member of the legis-
lature.

      (e) The participating employer shall report to the system within 30
days of when the compensation paid to the retirant is equal to or exceeds
any limitation provided in subsection (a). Upon request of the executive
secretary of the system, the secretary of revenue shall provide such in-
formation as may be needed by the executive secretary to carry out the
provisions of this section. For determination of the amount of legislative
compensation, as provided in subsection (a) and this subsection, for mem-
bers of the legislature, compensation shall include any amount paid as
provided pursuant to subsections (a), (b), (c) and (d) of K.S.A. 46-137a,
and amendments thereto, or pursuant to K.S.A. 46-137b, and amend-
ments thereto. Notwithstanding any provision of law to the contrary,
when a member of the legislature is paid an amount of compensation of
$15,000 or more in any one calendar year, the member may continue to
receive any amount provided in subsections (b) and (d) of K.S.A. 46-137a,
and amendments thereto, and still be entitled to receive such member's
retirement benefit.

      (f) The provisions of this section are intended to further the public
policy of encouraging persons to serve in elective public office by per-
mitting a member of the system, who is a member through employment
with a participating employer in a nonelected position and who holds an
elected office as a member of the legislature and who is also a member
of the system for such elected office, to retire under the system from
such nonelected employment and to continue serving in such elected
public office.

      (g) The words and phrases used in this section have the meanings
respectively ascribed thereto by K.S.A. 74-4902, and amendments
thereto, unless a different meaning is plainly required by the context.

      (h) The provisions of this section shall be effective on and after July 1,
2000.

      New Sec.  39. (a) Notwithstanding any provision of law to the con-
trary, any member who is an elected local official of a municipality who
is also employed by another participating employer of the Kansas public
employees retirement system other than the municipality and is an eli-
gible employee as defined in K.S.A. 74-4902, and amendments thereto,
may retire from service from such other participating employer and may
continue to serve as an elected local official, except that such local official
shall not receive any retirement benefit for any month for which such
local official serves in such office when compensation is paid in an amount
equal to $15,000 or more in any one such calendar year. The participating
employer shall report to the system within 30 days of when the compen-
sation paid to the retirant is equal to or exceeds any limitation provided
in this subsection. Upon request of the executive secretary of the system,
the secretary of revenue shall provide such information as may be needed
by the executive secretary to carry out the provisions of this section.

      (b) No such member who is an elected local official who retires as
provided in subsection (a) and who continues to serve as an elected local
official shall accrue any additional service credit for such service as an
elected local official or be entitled to any benefit provided in K.S.A. 74-
4916 or 74-4927, and amendments thereto.

      (c) The provisions of this section are intended to further the public
policy of encouraging persons to serve in elective public office by per-
mitting a member of the system, who is a member through employment
with a participating employer in a nonelected position and who holds an
elected office as an elected local official of a municipality and who is also
a member of the system for such elected office, to retire under the system
from such nonelected employment and to continue serving in such
elected public office.

      (d) The words and phrases used in this section have the meanings
respectively ascribed thereto by K.S.A. 74-4902, and amendments
thereto, unless a different meaning is plainly required by the context.

      New Sec.  40. Any member may purchase service credit for periods
of service in the United States volunteers in service to America (VISTA)
which commenced on or after January 1, 1962. At the election of the
member, the benefit for each such period of service shall be equal to
either 1% or 1.75% of the final average salary of any such member. Such
member may purchase such service credit by making application therefor
prior to date of retirement at an additional rate of contribution in addition
to the employee's rate of contribution as provided in K.S.A. 74-4919 and
amendments thereto, based upon the member's attained age at the time
of purchase and using actuarial assumptions and tables in use by the
retirement system at the time of such purchase. Such additional rate of
contribution shall commence at the beginning of the quarter following
such election and shall remain in effect until all quarters of such service
have been purchased. Any such member may purchase service credit as
described in this section by electing to effect such purchase by means of
a single lump-sum payment in lieu of employee contributions as provided
in this section in an amount equal to the then present value of the benefits
being purchased as determined by the actuary using the member's at-
tained age, annual compensation at the time of purchase and the actuarial
assumptions and tables then in use by this system. The lump-sum pay-
ment shall be made immediately upon being notified of the amount due.
The provisions of this section shall be effective on and after July 1, 2000.

      New Sec.  41. Any member of the retirement system for judges may
purchase service credit for periods of service in the United States vol-
unteers in service to America (VISTA) which commenced on or after
January 1, 1962. At the election of the judge, the benefit for each such
period of service shall be equal to either 1% or 1.75% of the final average
salary of any such judge. Such judge may purchase such service credit by
making application therefor prior to date of retirement at an additional
rate of contribution in addition to the employee's rate of contribution as
provided in K.S.A. 20-2603 and amendments thereto, based upon the
judge's attained age at the time of purchase and using actuarial assump-
tions and tables in use by the retirement system at the time of such
purchase. Such additional rate of contribution shall commence at the
beginning of the quarter following such election and shall remain in effect
until all quarters of such service have been purchased. Any such judge
may purchase service credit as described in this section by electing to
effect such purchase by means of a single lump-sum payment in lieu of
employee contributions as provided in this section in an amount equal to
the then present value of the benefits being purchased as determined by
the actuary using the judge's attained age, annual compensation at the
time of purchase and the actuarial assumptions and tables then in use by
this system. The lump-sum payment shall be made immediately upon
being notified of the amount due. The provisions of this section shall be
effective on and after July 1, 2000.

 Sec.  42. K.S.A. 75-4370, 75-4371, 75-4372, 75-4373, 75-4374 and 75-
4376 and K.S.A. 1999 Supp. 46-233 are hereby repealed.

 Sec.  43. On and after July 1, 2000, K.S.A. 13-14a11, 14-10a11, 74-
4914c, 74-4927k, 75-2929d and 75-2949 and K.S.A. 1999 Supp. 13-14a07,
14-10a07, 20-2610, 20-2610a, 20-2625, 74-4914, 74-4918, 74-4919p, 74-
4919q, 74-4921, 74-4921a, 74-4924, 74-4927, as amended by section 5 of
2000 House Bill No. 2034, 74-4958, 74-4958a, 74-4959, 74-4960, 74-
4960a, 74-4964, 74-4964a and 74-4989 are hereby repealed.

 Sec.  44. This act shall take effect and be in force from and after its
publication in the Kansas register.