J o u r n a l   o f   t h e   H o u s e


                             SIXTY-FIFTH DAY
                                    --------

                                          HALL OF THE HOUSE OF REPRESENTATIVES
                               TOPEKA, KAN., Saturday, May 3, 1997, 10:00 a.m.

  The House met pursuant to adjournment with Speaker Shallenburger in the
chair.
  The roll was called with 121 members present.
  Rep. Pottorff was excused on legislative business.
  Reps. Dillon, O'Neal and Welshimer were excused on excused absence by the
Speaker.
  Prayer by Chaplain Washington:
   Heavenly Father,
     Again, we set aside some time to call upon You.
     As we open this session, we also draw to a close. The time has gone by
   so swiftly. But Lord, I guess we shouldn't be surprised when times so
   quickly come and go. When struggles that seem to last forever, in
   retrospect, seem to have not lasted long at all, we shouldn't be
   surprised. It should not surprise us when children who take forever to
   grow up seem to have been with us only a few short years when they're
   gone.
     You said, in James 4:14, that the entire span of our lives would be like
   that. ``. . . a vapor, that appeareth for a little while, and then
   vanisheth away.''
     Father, many will speak well of us and our efforts during this session.
   But when the session of life itself has come and gone . . . when we stand,
   not as a House, but individually before Your throne, we want to hear you
   say ``well done.''
     Bless us as we now conclude.
     I come to You in the Name of Jesus, the Christ. Amen and Amen.

PRESENTATION OF PETITIONS

  The following petitions were presented and filed:
  HP 20111, by Rep. Hutchins, a petition opposing subcontracting foster
care services under the privatization of foster care, signed by Emma Schirmer
and 25 other citizens of Holton and Nemaha county.
  HP 2012, by Rep. Hutchins, a petition opposing subcontracting foster
care services under the privatization of foster care, signed by Keisha Allen
and 47 other citizens of Atchison.
  HP 2013, by Rep. Flower, a petition opposing any measure which could
lead to an increase in gambling or the sale of alcohol as they are addictive
and cause many social problems, signed by John Bower and seven others from
McLouth and Perry.
  HP 2014, by Rep. Boston, a petition supporting HB 2533, signed
by Jack Patton and 41 others.
  HP 2015, by Rep, Boston, a petition requesting a caution light and a
reduced speed limit to 45 miles per hour at the intersection of ``Old Main
Street and Highway 50 West,'' Newton, signed by Ms. Donna Old and 601 others
from Newton.

REFERENCE OF BILLS AND CONCURRENT RESOLUTIONS

  The following bills and resolutions were referred to committees as
indicated:
  Appropriations: HCR 5026.

                                  May 3, 1997                               931


COMMUNICATIONS FROM STATE OFFICERS

  From Kathy Kirk, Director of Dispute Resolution, Office of Judicial
Administration, in accordance with the provisions of K.S.A. 5-501 et
seq., Annual Report for 1997 of the Director of Dispute Resolution.
  The complete report is kept on file and open for inspection in the office
of the Chief Clerk.

MESSAGE FROM THE SENATE

  Announcing passage of HB 2509, as amended.
  The Senate adopts conference committee report on SB 87.
  The Senate adopts conference committee report on SB 116.
  The Senate adopts conference committee report on HB 2055.
  Speaker Shallenburger announced that in accordance with House Rule 2107,
the Senate amendments to HB 2509 do materially change its subject and
HB 2509 therefor is not subject to Motions to Concur and Nonconcur.
  HB 2509 was thereupon introduced and read by title.
  Speaker Shallenburger thereupon referred HB 2509 to Committee of the
Whole.

INTRODUCTION OF ORIGINAL MOTIONS

  On motion of Rep. Wilk to suspend the rules in order to consider HB
2509 under Motions to Concur and Nonconcur, Speaker Shallenburger stated
that his ruling that the Senate amendments do materially change its subject
is not challengeable. He stated further that the motion to suspend the rules
was in order, but to place the bill under Motions to Concur and Nonconcur was
not in order.  Rep. Wilk then withdrew his motion.

INTRODUCTION OF ORIGINAL MOTIONS

  On motion of Rep. Jennison, pursuant to subsection (k) of Joint Rule 4 of
the Joint Rules of the Senate and House of Representatives, the rules were
suspended for the purpose of considering HB 2278, 2055; S. Sub. for HB
2082; SB 53, 184, 214.

MOTIONS TO CONCUR AND NONCONCUR

  On motion of Rep. Mayans, the House nonconcurred in Senate amendments to
HB 2278 and asked for a conference.
  Speaker Shallenburger thereupon appointed Reps. Mayans, Morrison and Henry
as con ferees on the part of the House.

CONFERENCE COMMITTEE REPORT

  Mr. President and Mr. Speaker: Your committee on conference on House amend
ments to SB 53, submits the following report:
  The Senate accedes to all House amendments to the bill, and your committee
on con ference further agrees to amend the bill, as printed with House
Committee amendments, as follows:
  On page 2, by striking all in lines 30 through 32 and inserting the
following:
  ``Sec. 2.  K.S.A. 1996 Supp. 79-201a, as amended by section 36 of 1997
House Bill No. 2105, is hereby amended to read as follows: 79-201a. The
following described property, to the extent herein specified, shall be exempt
from all property or ad valorem taxes levied under the laws of the state of
Kansas:
  First. All property belonging exclusively to the United States,
except property which congress has expressly declared to be subject to state
and local taxation.
  Second. All property used exclusively by the state or any
municipality or political subdi vision of the state. All property owned,
being acquired pursuant to a lease-purchase agree ment or operated by the
state or any municipality or political subdivision of the state, in cluding
property which is vacant or lying dormant, which is used or is to be used for
any governmental or proprietary function and for which bonds may be issued or
taxes levied to finance the same, shall be considered to be used exclusively
by the state, municipality or political subdivision for the purposes of this
section. The lease by a municipality or political subdivision of the state of
any real property owned or being acquired pursuant to a leasepurchase
agreement for the purpose of providing office space necessary for the
performance

932                           JOURNAL OF THE HOUSE

of medical services by a person licensed to practice medicine and surgery or
osteopathic medicine by the board of healing arts pursuant to K.S.A. 65-2801
et seq., and amendments thereto, dentistry services by a person licensed by
the Kansas dental board pursuant to K.S.A. 65-1401 et seq., and
amendments thereto, optometry services by a person licensed by the board of
examiners in optometry pursuant to K.S.A. 65-1501 et seq., and
amendments thereto, or K.S.A. 74-1501 et seq., and amendments thereto
or podiatry services by a person licensed by the board of healing arts
pursuant to K.S.A. 65-2001 et seq., and amendments thereto, shall be
construed to be a governmental function, and such property actually and
regularly used for such purpose shall be deemed to be used exclusively for
the purposes of this paragraph. The lease by a municipality or political
subdivision of the state of any real property, or portion thereof, owned or
being acquired pursuant to a lease-purchase agree ment to any entity for the
exclusive use by it for an exempt purpose, including the purpose of
displaying or exhibiting personal property by a museum or historical society,
if no portion of the lease payments include compensation for return on the
investment in such leased property shall be deemed to be used exclusively for
the purposes of this paragraph.  All property leased, other than property
being acquired pursuant to a lease-purchase agreement, to the state or any
municipality or political subdivision of the state by any private entity
shall not be considered to be used exclusively by the state or any
municipality or political sub division of the state for the purposes of this
section except that the provisions of this sentence shall not apply to any
such property subject to lease on the effective date of this act until the
term of such lease expires but property taxes levied upon any such property
prior to tax year 1989, shall not be abated or refunded. Any property
constructed or purchased with the proceeds of industrial revenue bonds issued
prior to July 1, 1963, as authorized by K.S.A. 12-1740 to 12-1749, or
purchased with proceeds of improvement district bonds issued prior to July 1,
1963, as authorized by K.S.A. 19-2776, or with proceeds of bonds issued prior
to July 1, 1963, as authorized by K.S.A. 19-3815a and 19-3815b, or any
property improved, purchased, constructed, reconstructed or repaired with the
proceeds of revenue bonds is sued prior to July 1, 1963, as authorized by
K.S.A. 13-1238 to 13-1245, inclusive, or any property improved, reimproved,
reconstructed or repaired with the proceeds of revenue bonds issued after
July 1, 1963, under the authority of K.S.A. 13-1238 to 13-1245, inclusive,
which had previously been improved, reconstructed or repaired with the
proceeds of rev enue bonds issued under such act on or before July 1, 1963,
shall be exempt from taxation for so long as any of the revenue bonds issued
to finance such construction, reconstruction, improvement, repair or purchase
shall be outstanding and unpaid. Any property constructed or purchased with
the proceeds of any revenue bonds authorized by K.S.A. 13-1238 to 131245,
inclusive, 19-2776, 19-3815a and 19-3815b, and amendments thereto, issued on
or after July 1, 1963, shall be exempt from taxation only for a period of 10
calendar years after the calendar year in which the bonds were issued. Any
property, all or any portion of which is constructed or purchased with the
proceeds of revenue bonds authorized by K.S.A. 121740 to 12-1749, inclusive,
and amendments thereto, issued on or after July 1, 1963 and prior to July 1,
1981, shall be exempt from taxation only for a period of 10 calendar years
after the calendar year in which the bonds were issued. Except as hereinafter
provided, any property constructed or purchased wholly with the proceeds of
revenue bonds issued on or after July 1, 1981, under the authority of K.S.A.
12-1740 to 12-1749, inclusive, and amend ments thereto, shall be exempt from
taxation only for a period of 10 calendar years after the calendar year in
which the bonds were issued. Except as hereinafter provided, any property
constructed or purchased in part with the proceeds of revenue bonds issued on
or after July 1, 1981, under the authority of K.S.A. 12-1740 to 12-1749,
inclusive, and amend ments thereto, shall be exempt from taxation to the
extent of the value of that portion of the property financed by the revenue
bonds and only for a period of 10 calendar years after the calendar year in
which the bonds were issued. The exemption of that portion of the property
constructed or purchased with the proceeds of revenue bonds shall terminate
upon the failure to pay all taxes levied on that portion of the property
which is not exempt and the entire property shall be subject to sale in the
manner prescribed by K.S.A. 79-2301 et seq., and amendments thereto.
Property constructed or purchased in whole or in part with the proceeds of
revenue bonds issued on or after January 1, 1995, under the authority of
K.S.A. 12-1740 to 12-1749, inclusive, and amendments thereto, and used in any
retail en

                                  May 3, 1997                               933

terprise identified under the standard industrial classification codes, major
groups 52 through 59, inclusive, except facilities used exclusively to house
the headquarters or back office operations of such retail enterprises
identified thereunder, shall not be exempt from taxation. For the purposes of
the preceding provision ``standard industrial classification code'' means a
standard industrial classification code published in the Standard Industrial
Classification manual, 1987, as prepared by the statistical policy division
of the office of management and budget of the office of the president of the
United States. ``Headquarters or back office operations'' means a facility
from which the enterprise is provided direction, management, administrative
services, or distribution or warehousing functions in support of transactions
made by the enterprise. Property purchased, constructed, reconstructed,
equipped, maintained or repaired with the proceeds of industrial revenue
bonds issued under the authority of K.S.A. 12-1740 et seq., and
amendments thereto, which is located in a redevelopment project area
established under the authority of K.S.A. 12-1770 et seq. shall not be
exempt from taxation. Property purchased, acquired, constructed,
reconstructed, improved, equipped, furnished, repaired, enlarged or remodeled
with all or any part of the proceeds of revenue bonds issued under authority
of K.S.A. 12-1740 to 12-1749a, inclusive, and amendments thereto for any
poultry confinement facility on agricultural land which is owned, acquired,
obtained or leased by a corporation, as such terms are defined by K.S.A.
17-5903 and amendments thereto, shall not be exempt from such taxation.
Property pur chased, acquired, constructed, reconstructed, improved,
equipped, furnished, repaired, en larged or remodeled with all or any part of
the proceeds of revenue bonds issued under the authority of K.S.A. 12-1740 to
12-1749a, inclusive, and amendments thereto, for a rabbit confinement
facility on agricultural land which is owned, acquired, obtained or leased by
a corporation, as such terms are defined by K.S.A. 17-5903 and amendments
thereto, shall not be exempt from such taxation.
  Third. All works, machinery and fixtures used exclusively by any
rural water district or township water district for conveying or production
of potable water in such rural water district or township water district, and
all works, machinery and fixtures used exclusively by any entity which
performed the functions of a rural water district on and after January 1,
1990, and the works, machinery and equipment of which were exempted hereunder
on March 13, 1995.
  Fourth. All fire engines and other implements used for the
extinguishment of fires, with the buildings used exclusively for the
safekeeping thereof, and for the meeting of fire com panies, whether
belonging to any rural fire district, township fire district, town, city or
village, or to any fire company organized therein or therefor.
  Fifth. All property, real and personal, owned by county fair
associations organized and operating under the provisions of K.S.A. 2-125
et seq. and amendments thereto.
  Sixth. Property acquired and held by any municipality under the
municipal housing law (K.S.A. 17-2337 et seq.) and amendments thereto,
except that such exemption shall not apply to any portion of the project used
by a nondwelling facility for profit making enterprise.
  Seventh. All property of a municipality, acquired or held under and
for the purposes of the urban renewal law (K.S.A. 17-4742 et seq.) and
amendments thereto except that such tax exemption shall terminate when the
municipality sells, leases or otherwise disposes of such property in an urban
renewal area to a purchaser or lessee which is not a public body entitled to
tax exemption with respect to such property.
  Eighth. All property acquired and held by the Kansas armory board for
armory purposes under the provisions of K.S.A. 48-317, and amendments
thereto.
  Ninth. All property acquired and used by the Kansas turnpike
authority under the au thority of K.S.A. 68-2001 et seq., and
amendments thereto, K.S.A. 68-2030 et seq., and amendments thereto,
K.S.A. 68-2051 et seq., and amendments thereto, and K.S.A. 68-2070
et seq., and amendments thereto.
  Tenth. All property acquired and used for state park purposes by the
Kansas department of wildlife and parks.
  Eleventh. The state office building constructed under authority of
K.S.A. 75-3607 et seq., and amendments thereto, and the site upon which
such building is located.
  Twelfth. All buildings erected under the authority of K.S.A. 76-6a01
et seq., and amend ments thereto, and all other student union buildings
and student dormitories erected upon

934                           JOURNAL OF THE HOUSE

the campus of any institution mentioned in K.S.A. 76-6a01, and amendments
thereto, by any other nonprofit corporation.
  Thirteenth. All buildings, as the same is defined in subsection (c)
of K.S.A. 76-6a13, and amendments thereto, which are erected, constructed or
acquired under the authority of K.S.A. 76-6a13 et seq., and amendments
thereto, and building sites acquired therefor.
  Fourteenth. All that portion of the waterworks plant and system of
the city of Kansas City, Missouri, now or hereafter located within the
territory of the state of Kansas pursuant to the compact and agreement
adopted by chapter 304 of the 1921 Session Laws of the state of Kansas. See
K.S.A. 79-205 .
  Fifteenth. All property, real and personal, owned by a groundwater
management district organized and operating pursuant to K.S.A. 82a-1020, and
amendments thereto.
  Sixteenth. All property, real and personal, owned by the joint water
district organized and operating pursuant to K.S.A. 80-1616 et seq.,
and amendments thereto.
  Seventeenth. All property, including interests less than fee
ownership, acquired for the state of Kansas by the secretary of
transportation or a predecessor in interest which is used in the
administration, construction, maintenance or operation of the state system of
high ways, regardless of how or when acquired.
  Eighteenth. Any building used primarily as an industrial training
center for academic or vocational education programs designed for and
operated under contract with private in dustry, and located upon a site
owned, leased or being acquired by or for an area vocational school, an area
vocational-technical school, a technical college, or a community college, as
defined by K.S.A. 72-4412, and amendments thereto, and the site upon which
any such building is located.
  Except as otherwise specifically provided, the provisions of this section
shall apply to all taxable years commencing after December 31, 1996.
  Sec. 3.  K.S.A. 1996 Supp. 79-213, as amended by section 35 of 1997 House
Bill No. 2105, is hereby amended to read as follows: 79-213. (a) Any property
owner requesting an exemption from the payment of ad valorem property taxes
assessed, or to be assessed, against their property shall be required to file
an initial request for exemption, on forms approved by the board of tax
appeals and provided by the county appraiser.
  (b)  The initial exemption request shall identify the property for which
the exemption is requested and state, in detail, the legal and factual basis
for the exemption claimed.
  (c)  The request for exemption shall be filed with the county appraiser of
the county where such property is principally located.
  (d)  After a review of the exemption request, and after a preliminary
examination of the facts as alleged, the county appraiser shall recommend
that the exemption request either be granted or denied, and, if necessary,
that a hearing be held. If a denial is recommended, a statement of the
controlling facts and law relied upon shall be included on the form.
  (e)  The county appraiser, after making such written recommendation, shall
file the request for exemption and the recommendations of the county
appraiser with the board of tax appeals.
  (f)  Upon receipt of the request for exemption, the board shall docket the
same and notify the applicant and the county appraiser of such fact.
  (g)  After examination of the request for exemption, and the county
appraiser's recom mendation related thereto, the board may fix a time and
place for hearing, and shall notify the applicant and the county appraiser of
the time and place so fixed. In any case where a party to such request for
exemption requests a hearing thereon, the same shall be granted. Hearings
shall be conducted in accordance with the provisions of the Kansas
administrative procedure act. In all instances where the board sets a request
for exemption for hearing, the county shall be represented by its county
attorney or county counselor.
  (h)  In the event of a hearing, the same shall be originally set not later
than 90 days after the filing of the request for exemption with the board.
  (i)  During the pendency of a request for exemption, no person, firm,
unincorporated association, company or corporation charged with real estate
or personal property taxes pursuant to K.S.A. 79-2004 and 79-2004a, and
amendments thereto, on the tax books in the hands of the county treasurer
shall be required to pay the tax from the date the request is filed with the
county appraiser until the expiration of 30 days after the board issued its
order

                                  May 3, 1997                               935

thereon and the same becomes a final order. In the event that taxes have been
assessed against the subject property, no interest shall accrue on any unpaid
tax for the year or years in question nor shall the unpaid tax be considered
delinquent from the date the request is filed with the county appraiser until
the expiration of 30 days after the board issued its order thereon. In the
event the board determines an application for exemption is without merit and
filed in bad faith to delay the due date of the tax, the tax shall be
considered delinquent as of the date the tax would have been due pursuant to
K.S.A. 79-2004 and 79-2004a, and amendments thereto, and interest shall
accrue as prescribed therein.
  (j)  In the event the board grants the initial request for exemption, the
same shall be effective beginning with the date of first exempt use except
that, with respect to property the construction of which commenced not to
exceed 24 months prior to the date of first exempt use, the same shall be
effective beginning with the date of commencement of con struction.
  (k)  In conjunction with its authority to grant exemptions, the board shall
have the au thority to abate all unpaid taxes that have accrued from and
since the effective date of the exemption. In the event that taxes have been
paid during the period where the subject property has been determined to be
exempt, the board shall have the authority to order a refund of taxes for a
period not to exceed three years.
  (l)  The provisions of this section shall not apply to: (1) Farm machinery
and equipment exempted from ad valorem taxation by K.S.A. 79-201j, and
amendments thereto; (2) personal property exempted from ad valorem taxation
by K.S.A. 79-215, and amendments thereto;   (3) wearing apparel, household
goods and personal effects exempted from ad valorem tax ation by K.S.A.
79-201c, and amendments thereto; (4) livestock; (5) hay and silage exempted
from ad valorem taxation by K.S.A. 79-201d, and amendments thereto; (6)
merchants' and manufacturers' inventories exempted from ad valorem taxation
by K.S.A. 79-201m and amendments thereto; (7) grain exempted from ad valorem
taxation by K.S.A. 79-201n, and amendments thereto; (8) property exempted
from ad valorem taxation by K.S.A. 79-201a Seventeenth and amendments
thereto, including all property previously acquired by the secretary of
transportation or a predecessor in interest, which is used in the
administration, construction, maintenance or operation of the state system of
highways. The secretary of transportation shall at the time of acquisition of
property notify the county appraiser in the county in which the property is
located that the acquisition occurred and provide a legal description of the
property acquired; (9) property exempted from ad valorem taxation by K.S.A.
79-201a Ninth, and amendments thereto, including all property
previously acquired by the Kansas turnpike authority which is used in the
administration, construction, main tenance or operation of the Kansas
turnpike. The Kansas turnpike authority shall at the time of acquisition of
property notify the county appraiser in the county in which the property is
located that the acquisition occurred and provide a legal description of the
property ac quired; (10) aquaculture machinery and equipment exempted from ad
valorem taxation by K.S.A. 79-201j, and amendments thereto. As used in this
section, ``aquaculture'' has the same meaning ascribed thereto by K.S.A.
47-1901, and amendments thereto; (11) Christmas tree machinery and equipment
exempted from ad valorem taxation by K.S.A. 79-201j, and amendments thereto;
(12) property used exclusively by the state or any municipality or political
subdivision of the state for right-of-way purposes. The state agency or the
governing body of the municipality or political subdivision shall at the time
of acquisition of property for right-of-way purposes notify the county
appraiser in the county in which the property is located that the acquisition
occurred and provide a legal description of the property ac quired; (13)
machinery, equipment, materials and supplies exempted from ad valorem tax
ation by K.S.A. 1996 Supp. 79-201w, and amendments thereto; and (14)
vehicles owned by the state or by any political or taxing subdivision thereof
and used exclusively for govern mental purposes; and (15) property used
for residential purposes which is exempted pur suant to section 1 of 1997
Senate Bill No. 41 from the property tax levied pursuant to K.S.A. 1996 Supp.
72-6431, and amendments thereto.
  (m)  The provisions of this section shall apply to property exempt pursuant
to the pro visions of section 13 of article 11 of the Kansas constitution.
  (n)  The provisions of subsection (j) and (k) as amended by this act shall
be applicable to all taxable years commencing after December 31, 1995.

936                           JOURNAL OF THE HOUSE

  Sec. 4.  K.S.A. 1996 Supp. 79-1476, as amended by section 40 of 1997 House
Bill No. 2105, is hereby amended to read as follows: 79-1476. The director of
property valuation is hereby directed and empowered to administer and
supervise a statewide program of reap praisal of all real property located
within the state. Except as otherwise authorized by K.S.A. 19-428, and
amendments thereto, each county shall comprise a separate appraisal district
under such program, and the county appraiser shall have the duty of
reappraising all of the real property in the county pursuant to guidelines
and timetables prescribed by the director of property valuation and of
updating the same on an biennial annual basis. In the case of
multi-county appraisal districts, the district appraiser shall have the duty
of reappraising all of the real property in each of the counties comprising
the district pursuant to such guide lines and timetables and of updating the
same on an biennial annual basis. Commencing in 1994, every
parcel of real property shall be actually viewed and inspected by the county
or district appraiser once every four years. Any county or district appraiser
shall be deemed to be in compliance with the foregoing requirement in any
year if 25% or more of the parcels in such county or district are actually
viewed and inspected.
  Compilation of data for the initial preparation or updating of inventories
for each parcel of real property and entry thereof into the state computer
system as provided for in K.S.A. 79-1477, and amendments thereto, shall be
completed not later than January 1, 1989. When ever the director determines
that reappraisal of all real property within a county is complete,
notification thereof shall be given to the governor and to the state board of
tax appeals.
  Valuations shall be established for each parcel of real property at its
fair market value in money in accordance with the provisions of K.S.A.
79-503a, and amendments thereto.
  In addition thereto valuations shall be established for each parcel of land
devoted to agricultural use upon the basis of the agricultural income or
productivity attributable to the inherent capabilities of such land in its
current usage under a degree of management re flecting median production
levels in the manner hereinafter provided. A classification system for all
land devoted to agricultural use shall be adopted by the director of property
valuation using criteria established by the United States department of
agriculture soil conservation service. For all taxable years commencing after
December 31, 1989, all land devoted to agricultural use which is subject to
the federal conservation reserve program shall be clas sified as cultivated
dry land for the purpose of valuation for property tax purposes pursuant to
this section. Productivity of land devoted to agricultural use shall be
determined for all land classes within each county or homogeneous region
based on an average of the eight calendar years immediately preceding the
calendar year which immediately precedes the year of valuation, at a degree
of management reflecting median production levels. The director of property
valuation shall determine median production levels based on informa tion
available from state and federal crop and livestock reporting services, the
soil conser vation service, and any other sources of data that the director
considers appropriate.
  The share of net income from land in the various land classes within each
county or homogeneous region which is normally received by the landlord shall
be used as the basis for determining agricultural income for all land devoted
to agricultural use except pasture or rangeland. The net income normally
received by the landlord from such land shall be determined by deducting
expenses normally incurred by the landlord from the share of the gross income
normally received by the landlord. The net rental income normally received by
the landlord from pasture or rangeland within each county or homogeneous
region shall be used as the basis for determining agricultural income from
such land. The net rental income from pasture and rangeland which is normally
received by the landlord shall be determined by deducting expenses normally
incurred from the gross income normally re ceived by the landlord. Commodity
prices, crop yields and pasture and rangeland rental rates and expenses shall
be based on an average of the eight calendar years immediately preceding the
calendar year which immediately precedes the year of valuation. Net income
for every land class within each county or homogeneous region shall be
capitalized at a rate determined to be the sum of the contract rate of
interest on new federal land bank loans in Kansas on July 1 of each year
averaged over a five-year period which includes the five years immediately
preceding the calendar year which immediately precedes the year of valuation,
except that from and after December 31, 1997, the director of property
valuation shall phase in the second quarter federal reserve farm loan
interest rate with the rate determined above

                                  May 3, 1997                               937

until such time as the five-year average of the second quarter federal
reserve farm loan interest rate is used exclusively and without regard to the
contract rate of interest on new federal land bank loans in Kansas, plus a
percentage not less than .75% nor more than 2.75%, as determined by the
director of property valuation.
  Based on the foregoing procedures the director of property valuation shall
make an annual determination of the value of land within each of the various
classes of land devoted to agricultural use within each county or homogeneous
region and furnish the same to the several county appraisers who shall
classify such land according to its current usage and apply the value
applicable to such class of land according to the valuation schedules
prepared and adopted by the director of property valuation under the
provisions of this section.
  It is the intent of the legislature that appraisal judgment and appraisal
standards be fol lowed and incorporated throughout the process of data
collection and analysis and estab lishment of values pursuant to this
section.
  For the purpose of the foregoing provisions of this section the phrase
``land devoted to agricultural use'' shall mean and include land, regardless
of whether it is located in the unincorporated area of the county or within
the corporate limits of a city, which is devoted to the production of plants,
animals or horticultural products, including but not limited to: Forages;
grains and feed crops; dairy animals and dairy products; poultry and poultry
prod ucts; beef cattle, sheep, swine and horses; bees and apiary products;
trees and forest prod ucts; fruits, nuts and berries; vegetables; nursery,
floral, ornamental and greenhouse prod ucts. Land devoted to agricultural use
shall not include those lands which are used for recreational purposes, other
than that land established as a controlled shooting area pursuant to K.S.A.
32-943, and amendments thereto, which shall be deemed to be land devoted to
agricultural use, suburban residential acreages, rural home sites or farm
home sites and yard plots whose primary function is for residential or
recreational purposes even though such properties may produce or maintain
some of those plants or animals listed in the foregoing definition.
  The term ``expenses'' shall mean those expenses typically incurred in
producing the plants, animals and horticultural products described above
including management fees, production costs, maintenance and depreciation of
fences, irrigation wells, irrigation laterals and real estate taxes, but the
term shall not include those expenses incurred in providing temporary or
permanent buildings used in the production of such plants, animals and
horticultural products.
  The provisions of this act shall not be construed to conflict with any
other provisions of law relating to the appraisal of tangible property for
taxation purposes including the equal ization processes of the county and
state board of tax appeals.
  Sec. 5.  Notwithstanding any other provision of law to the contrary, for
tax year 1998, the amount of personal property tax imposed upon motor
vehicles having a gross vehicle weight of more than 12,000 pounds but less
than 20,001 pounds, shall be computed in accordance with the provisions of
K.S.A. 79-5101 et seq., and amendments thereto, but shall be required
to be paid at the time required by K.S.A. 79-2004a, and amendments thereto,
and the provisions of such section shall be applicable to the collection
thereof.
  Sec. 6.  K.S.A. 1996 Supp. 72-6431, as amended by section 6 of 1997 House
Bill No. 2031, is hereby amended to read as follows: 72-6431. (a) The board
of each district shall levy an ad valorem tax upon the taxable tangible
property of the district in the school years specified in subsection (b) for
the purpose of:
  (1)  Financing that portion of the district's general fund budget which is
not financed from any other source provided by law;
  (2)  paying a portion of the costs of operating and maintaining public
schools in partial fulfillment of the constitutional obligation of the
legislature to finance the educational in terests of the state; and
  (3)  with respect to any redevelopment district established prior to July
1, 1996 1997, pursuant to K.S.A. 12-1771, and amendments thereto,
paying a portion of the principal and interest on bonds issued by cities
under authority of K.S.A. 12-1774, and amendments thereto, for the financing
of redevelopment projects upon property located within the dis trict.

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  (b)  The tax required under subsection (a) shall be levied at a rate of 27
mills in the 1997-98 school year and in the 1998-99 school year.
  (c)  The proceeds from the tax levied by a district under authority of this
section, except the proceeds of such tax levied for the purpose of paying a
portion of the principal and interest on bonds issued by cities under
authority of K.S.A. 12-1774, and amendments thereto, for the financing of
redevelopment projects upon property located within the dis trict, shall be
deposited in the general fund of the district.
  (d)  On June 1 of each year, the amount, if any, by which a district's
local effort exceeds the amount of the district's state financial aid, as
determined by the state board, shall be remitted to the state treasurer. Upon
receipt of any such remittance, the state treasurer shall deposit the same in
the state treasury to the credit of the state school district finance fund.
  (e)  No district shall proceed under K.S.A. 79-1964, 79-1964a or 79-1964b,
and amend ments to such sections.
  Sec. 7.  K.S.A. 79-5037 and K.S.A. 1996 Supp. 72-6431, as amended by
section 6 of 1997 House Bill No. 2031, 79-201a, as amended by section 36 of
1997 House Bill No. 2105, 79-201a, as amended by section 1 of 1997 Senate
Bill No. 22, 79-213, as amended by section 35 of 1997 House Bill No. 2105 and
79-1476, as amended by section 40 of 1997 House Bill No. 2105, are hereby
repealed.
  Sec. 8.  This act shall take effect and be in force from and after its
publication in the statute book.'';
  In the title, by striking all in lines 12 and 13 and inserting ``relating
to property taxation; amending K.S.A. 1996 Supp. 72-6431, as amended by
section 6 of 1997 House Bill No. 2031, 79-201a, as amended by section 36 of
1997 House Bill No. 2105, 79-213, as amended by section 35 of 1997 House Bill
No. 2105, and 79-1476, as amended by section 40 of 1997 House Bill No. 2105,
and repealing the existing sections; also repealing K.S.A. 79-5037 and K.S.A.
1996 Supp. 79-201a, as amended by section 1 of 1997 Senate Bill No. 22.'';
  And your committee on conference recommends the adoption of this report.
Phill Kline
Tony Powell
Bruce Larkin   Conferees on part of House Audrey Langworthy
David R. Corbin
Janis Lee   Conferees on part of Senate   On motion of Rep. Phill Kline, the
conference committee report on SB 53 was adopted.
  On roll call, the vote was: Yeas 120; Nays 1; Present but not voting 0;
Absent or not voting 4.
  Yeas: Adkins, Alldritt, Allen, Aurand, Ballard, Beggs, Benlon, Boston,
Bradley, Burroughs, Campbell, Carmody, Compton, Correll, Cox, Crow, Dahl,
Dean, Dreher, Edmonds, Emp son, Faber, Farmer, Feuerborn, Findley, Flaharty,
Flora, Flower, Franklin, Freeborn, Gar ner, Geringer, Gilbert, Gilmore,
Glasscock, Grant, Gregory, Haley, Hayzlett, Helgerson, Henderson, Henry,
Holmes, Horst, Howell, Huff, Humerickhouse, Hutchins, Jennison, Johnson,
Johnston, Kejr, Kirk, Klein, Phil Kline, Phill Kline, Krehbiel, Kuether,
Landwehr, Lane, Larkin, Lloyd, J. Long, P. Long, Mason, Mayans, Mays,
McClure, McCreary, Mc Kechnie, McKinney, Minor, Mollenkamp, Morrison, Myers,
Neufeld, Nichols, O'Connor, Osborne, Packer, Palmer, Pauls, E. Peterson, J.
Peterson, Phelps, Powell, Powers, Presta, Ray, Reardon, Reinhardt, Ruff,
Samuelson, Sawyer, Schwartz, Shallenburger, Sharp, Shore, Showalter, Shriver,
Shultz, Sloan, Spangler, Stone, Storm, Swenson, Tanner, Thimesch, Toelkes,
Tomlinson, Toplikar, Vickrey, Vining, Wagle, Weber, Weiland, Wells, Wempe,
Wilk, Wilson.
  Nays: Ballou.
  Present but not voting: None.
  Absent or not voting: Dillon, O'Neal, Pottorff, Welshimer.

                                  May 3, 1997                               939


CONFERENCE COMMITTEE REPORT

  Mr. President and Mr. Speaker: Your committee on conference on House amend
ments to SB 184, submits the following report:
  The Senate accedes to all House amendments to the bill, and your committee
on con ference further agrees to amend the bill, as printed with House on
Final Action amend ments, as follows:
  On page 2, by striking all in lines 3 through 43;
  By striking all on pages 3 through 12 and inserting the following:
  ``Sec. 2.  K.S.A. 1996 Supp. 12-1692 is hereby amended to read as follows:
12-1692. As used in this act, the following words and phrases shall have the
meanings respectively as cribed to them herein:
  (a)  ``Person'' means an individual, firm, partnership, corporation, joint
venture or other association of persons;
  (b)  ``Hotel, motel or tourist court'' means any structure or building
which contains rooms furnished for the purposes of providing lodging, which
may or may not also provide meals, entertainment or various other personal
services to transient guests, and which is kept, used, maintained, advertised
or held out to the public as a place where sleeping accommodations are sought
for pay or compensation by transient or permanent guests and having more than
two bedrooms furnished for the accommodation of such guests;
  (c)  ``Transient guest'' means a person who occupies a room in a hotel,
motel or tourist court for not more than 28 consecutive days;
  (d)  ``Business'' means any person engaged in the business of renting,
leasing or letting living quarters, sleeping accommodations, rooms or a part
thereof in connection with any motel, hotel or tourist court; and
  (e)  ``Convention and tourism promotion'' means: (1) Activities to attract
visitors into the community through marketing efforts, including advertising,
directed to at least one of the five basic convention and tourism market
segments consisting of group tours, pleasure trav elers, association meetings
and conventions, trade shows and corporate meetings and travel; and (2)
support of those activities and organizations which encourage increased
lodging facility occupancy.; and
  (f)  ``Accommodations broker'' means any business which maintains an
inventory of two or more rooms in one or more locations which are offered for
pay to a person or persons for not more than 28 consecutive days.
  Sec. 3.  K.S.A. 12-1693 is hereby amended to read as follows: 12-1693. (a)
In order to provide revenues to promote tourism and conventions, the
governing body of any county having a population of more than 300,000 or the
governing body of any city, all or any portion of which is located within
such county, is hereby authorized to levy a transient guest tax at not to
exceed the rate of 2% upon the gross receipts derived from or paid
directly or through an accommodations broker by transient guests for
sleeping accommodations in any hotel, motel or tourist court. The percentage
of such tax shall be determined by the gov erning body levying the same and
shall be specified in the resolution authorizing the same.
  (b)  Any transient guest tax levied pursuant to this section shall be based
on the gross rental receipts collected by any business or accommodations
broker.
  (c)  The taxes levied pursuant to this section shall be paid by the
consumer or user to the business and it shall be the duty of each and every
business to collect from the consumer or user the full amount of any such
tax, or an amount equal as nearly as possible or prac ticable to the average
equivalent thereto. Each business collecting any of the taxes levied
hereunder shall be responsible for paying over the same to the state
department of revenue in the manner prescribed by K.S.A. 12-1694, and
amendments thereto, and the state de partment of revenue shall administer and
enforce the collection of such taxes.
  (d)  A transient guest tax authorized by this section shall not be levied
until:
  (1)  The governing body of such county has either passed, or has received
from the governing body of any city within such county, a resolution calling
for an election for ap proval by the qualified electors of a transient guest
tax;
  (2)  the governing body of the county has notified all of the incorporated
cities, all or any portion of which are located within such county, of the
intent to call such election.

940                           JOURNAL OF THE HOUSE

Incorporated cities, all or any portion of which are located within such
county, shall have the option to decline participation in such election
within 30 days of the date of such notification. The governing body of the
county shall have the option to decline participation in such election within
the same 30 day period as provided to incorporated cities, in which case
individual cities may hold separate elections to submit the proposition to
the qualified electors of such city and such propositions, if approved, would
have force only in cities adopting the tax. If the governing body of the
county resolves to participate in such election, it shall submit such
proposition for approval by the qualified electors of the unincorporated
portions of such county and all incorporated cities within such county which
have not de clined participation in the election; and
  (3)  the governing body of the county or, if the county declines to hold
such election, the governing body of the city, has given notice of its
intention to submit any such proposition for approval by the qualified
electors in the manner required by K.S.A. 10-120, and amend ments thereto,
for giving notice of elections for the issuance of bonds. The notice shall
state the time of the election and the rate and effective date of the
proposed tax. If a majority of the votes cast and counted on any such
proposition are not in favor thereof, such proposition may be resubmitted
under the conditions and in the manner provided herein. If a majority of the
votes cast and counted on any such proposition are in favor thereof, the
governing body of the county or city shall provide by resolution for the levy
of such tax. Any repeal of such tax or any reduction or increase in the rate
thereof shall be accomplished in the manner provided herein for the adoption
and approval of such tax.
  (e)  The collection of any county transient guest tax authorized at a
primary or general election or a transient guest tax levied by a city
authorized at a city primary or general election shall commence on the first
day of the calendar quarter next following the 30th day after the date of the
election authorizing the levy of such tax. The collection of any transient
guest tax of a county or city approved at any other election shall commence
on the first day of the calendar quarter next following the 60th day after
the date of the election authorizing the levy of such tax.
  Sec. 4.  K.S.A. 1996 Supp. 12-1696 is hereby amended to read as follows:
12-1696. As used in this act, the following words and phrases shall have the
meanings respectively as cribed to them herein:
  (a)  ``Person'' means an individual, firm, partnership, corporation, joint
venture or other association of persons;
  (b)  ``Hotel, motel or tourist court'' means any structure or building
which contains rooms furnished for the purposes of providing lodging, which
may or may not also provide meals, entertainment or various other personal
services to transient guests, and which is kept, used, maintained, advertised
or held out to the public as a place where sleeping accommodations are sought
for pay or compensation by transient or permanent guests and having more than
two bedrooms furnished for the accommodation of such guests;
  (c)  ``Transient guest'' means a person who occupies a room in a hotel,
motel or tourist court for not more than 28 consecutive days;
  (d)  ``Business'' means any person engaged in the business of renting,
leasing or letting living quarters, sleeping accommodations, rooms or a part
thereof in connection with any motel, hotel or tourist court; and
  (e)  ``Convention and tourism promotion'' means: (1) Activities to attract
visitors into the community through marketing efforts, including advertising,
directed to at least one of the five basic convention and tourism market
segments consisting of group tours, pleasure trav elers, association meetings
and conventions, trade shows and corporate meetings and travel; and (2)
support of those activities and organizations which encourage increased
lodging facility occupancy.; and
  (f)  ``Accommodations broker'' means any business which maintains an
inventory of two or more rooms in one or more locations which are offered for
pay to a person or persons for not more than 28 consecutive days.
  Sec. 5.  K.S.A. 12-1697 is hereby amended to read as follows: 12-1697. (a)
In order to provide revenues to promote tourism and conventions, the
governing body of any county or the governing body of any city is hereby
authorized to levy a transient guest tax at not to exceed the rate of 2% upon
the gross receipts derived from or paid directly or through an

                                  May 3, 1997                               941

accommodations broker by transient guests for sleeping accommodations,
exclusive of charges for incidental services or facilities, in any hotel,
motel or tourist court. The per centage of such tax shall be determined by
the board of county commissioners or the city governing body and shall be
specified in the resolution or ordinance authorizing the same.
  (b)  Any transient guest tax levied pursuant to this section shall be based
on the gross rental receipts collected by any business or accommodations
broker.
  (c)  The taxes levied pursuant to this section shall be paid by the
consumer or user to the business and it shall be the duty of each and every
business to collect from the consumer or user the full amount of any such
tax, or an amount equal as nearly as possible or prac ticable to the average
equivalent thereto. Each business collecting any of the taxes levied
hereunder shall be responsible for paying over the same to the state
department of revenue in the manner prescribed by K.S.A. 12-1698, and
amendments thereto, and the state de partment of revenue shall administer and
enforce the collection of such taxes.
  (d)  A transient guest tax authorized by this section shall not be levied
until the governing body of such county or city has passed a resolution or
ordinance authorizing the same.
  (e)  The collection of any county or city transient guest tax authorized to
be levied pur suant to this section shall commence on the first day of the
calendar quarter next following the 30th day after the date of the receipt by
the department of revenue of the resolution or ordinance authorizing the levy
of such tax.
  Sec. 6.  K.S.A. 1996 Supp. 79-3603 is hereby amended to read as follows:
79-3603. For the privilege of engaging in the business of selling tangible
personal property at retail in this state or rendering or furnishing any of
the services taxable under this act, there is hereby levied and there shall
be collected and paid a tax at the rate of 4.9%:
  (a)  The gross receipts received from the sale of tangible personal
property at retail within this state;
  (b) (1)  the gross receipts from intrastate telephone or telegraph services
and (2) the gross receipts received from the sale of interstate telephone or
telegraph services, which (A) originate within this state and terminate
outside the state and are billed to a customer's telephone number or account
in this state; or (B) originate outside this state and terminate within this
state and are billed to a customer's telephone number or account in this
state except that the sale of interstate telephone or telegraph service does
not include: (A) Any interstate incoming or outgoing wide area telephone
service or wide area transmission type service which entitles the subscriber
to make or receive an unlimited number of commu nications to or from persons
having telephone service in a specified area which is outside the state in
which the station provided this service is located; (B) any interstate
private communications service to the persons contracting for the receipt of
that service that entitles the purchaser to exclusive or priority use of a
communications channel or group of channels between exchanges; (C) any
value-added nonvoice service in which computer processing applications are
used to act on the form, content, code or protocol of the information to be
transmitted; (D) any telecommunication service to a provider of
telecommunication services which will be used to render telecommunications
services, including carrier access services; or (E) any service or
transaction defined in this section among entities classified as members of
an affiliated group as provided by federal law (U.S.C. Section 1504);
  (c)  the gross receipts from the sale or furnishing of gas, water,
electricity and heat, which sale is not otherwise exempt from taxation under
the provisions of this act, and whether furnished by municipally or privately
owned utilities;
  (d)  the gross receipts from the sale of meals or drinks furnished at any
private club, drinking establishment, catered event, restaurant, eating
house, dining car, hotel, drugstore or other place where meals or drinks are
regularly sold to the public;
  (e)  the gross receipts from the sale of admissions to any place providing
amusement, entertainment or recreation services including admissions to
state, county, district and local fairs, but such tax shall not be levied and
collected upon the gross receipts received from sales of admissions to any
cultural and historical event which occurs triennially;
  (f)  the gross receipts from the operation of any coin-operated device
dispensing or providing tangible personal property, amusement or other
services except laundry services, whether automatic or manually operated;

942                           JOURNAL OF THE HOUSE

  (g)  the gross receipts from the service of renting of rooms by hotels, as
defined by K.S.A. 36-501 and amendments thereto, or by accommodation
brokers, as defined by K.S.A. 121692, and amendments thereto;
  (h)  the gross receipts from the service of renting or leasing of tangible
personal property except such tax shall not apply to the renting or leasing
of machinery, equipment or other personal property owned by a city and
purchased from the proceeds of industrial revenue bonds issued prior to July
1, 1973, in accordance with the provisions of K.S.A. 12-1740 through 12-1749,
and amendments thereto, and any city or lessee renting or leasing such
machinery, equipment or other personal property purchased with the proceeds
of such bonds who shall have paid a tax under the provisions of this section
upon sales made prior to July 1, 1973, shall be entitled to a refund from the
sales tax refund fund of all taxes paid thereon;
  (i)  the gross receipts from the rendering of dry cleaning, pressing,
dyeing and laundry services except laundry services rendered through a
coin-operated device whether automatic or manually operated;
  (j)  the gross receipts from the rendering of the services of washing and
washing and waxing of vehicles;
  (k)  the gross receipts from cable, community antennae and other subscriber
radio and television services;
  (l)  the gross receipts received from the sales of tangible personal
property to all con tractors, subcontractors or repairmen of materials and
supplies for use by them in erecting structures for others, or building on,
or otherwise improving, altering, or repairing real or personal property of
others;
  (m)  the gross receipts received from fees and charges by public and
private clubs, drink ing establishments, organizations and businesses for
participation in sports, games and other recreational activities, but such
tax shall not be levied and collected upon the gross receipts received from:
(1) Fees and charges by any political subdivision, or any youth recreation
organization exclusively providing services to persons 18 years of age or
younger which is exempt from federal income taxation pursuant to section
501(c)(3) of the federal internal revenue code of 1986, for participation in
sports, games and other recreational activities; and (2) entry fees and
charges for participation in a special event or tournament sanctioned by a
national sporting association to which spectators are charged an admission
which is taxable pursuant to subsection (e);
  (n)  the gross receipts received from dues charged by public and private
clubs, drinking establishments, organizations and businesses, payment of
which entitles a member to the use of facilities for recreation or
entertainment;
  (o)  the gross receipts received from the isolated or occasional sale of
motor vehicles or trailers but not including: (1) The transfer of motor
vehicles or trailers by a person to a corporation solely in exchange for
stock securities in such corporation; or (2) the transfer of motor vehicles
or trailers by one corporation to another when all of the assets of such
corporation are transferred to such other corporation; or (3) the sale of
motor vehicles or trailers which are subject to taxation pursuant to the
provisions of K.S.A. 79-5101 et seq., and amendments thereto, by an immediate
family member to another immediate family member. For the purposes of clause
(3), immediate family member means lineal ascendants or descendants, and
their spouses. In determining the base for computing the tax on such isolated
or occasional sale, the fair market value of any motor vehicle or trailer
traded in by the purchaser to the seller may be deducted from the selling
price;
  (p)  the gross receipts received for the service of installing or applying
tangible personal property which when installed or applied is not being held
for sale in the regular course of business, and whether or not such tangible
personal property when installed or applied remains tangible personal
property or becomes a part of real estate, except that no tax shall be
imposed upon the service of installing or applying tangible personal property
in connec tion with the original construction of a building or facility or
the construction, reconstruction, restoration, replacement or repair of a
bridge or highway.
  For the purposes of this subsection:
  (1)  ``Original construction'' shall mean the first or initial construction
of a new building or facility. The term ``original construction'' shall
include the addition of an entire room or

                                  May 3, 1997                               943

floor to any existing building or facility, the completion of any unfinished
portion of any existing building or facility and the restoration,
reconstruction or replacement of a building or facility damaged or destroyed
by fire, flood, tornado, lightning, explosion or earthquake, but such term
shall not include replacement, remodeling, restoration, renovation or recon
struction under any other circumstances;
  (2)  ``building'' shall mean only those enclosures within which individuals
customarily live or are employed, or which are customarily used to house
machinery, equipment or other property, and including the land improvements
immediately surrounding such building; and
  (3)  ``facility'' shall mean a mill, plant, refinery, oil or gas well,
water well, feedlot or any conveyance, transmission or distribution line of
any cooperative, nonprofit, membership corporation organized under or subject
to the provisions of K.S.A. 17-4601 et seq., and amendments thereto, or of
any municipal or quasi-municipal corporation, including the land improvements
immediately surrounding such facility;
  (q)  the gross receipts received for the service of repairing, servicing,
altering or main taining tangible personal property, except computer software
described in subsection (s), which when such services are rendered is not
being held for sale in the regular course of business, and whether or not any
tangible personal property is transferred in connection therewith. The tax
imposed by this subsection shall be applicable to the services of repairing,
servicing, altering or maintaining an item of tangible personal property
which has been and is fastened to, connected with or built into real
property;
  (r)  the gross receipts from fees or charges made under service or
maintenance agree ment contracts for services, charges for the providing of
which are taxable under the pro visions of subsection (p) or (q);
  (s)  the gross receipts received from the sale of computer software, and
the sale of the services of modifying, altering, updating or maintaining
computer software. As used in this subsection, ``computer software'' means
information and directions loaded into a computer which dictate different
functions to be performed by the computer. Computer software includes any
canned or prewritten program which is held or existing for general or
repeated sale, even if the program was originally developed for a single end
user as custom computer software. The sale of computer software or services
does not include: (1) The initial sale of any custom computer program which
is originally developed for the exclusive use of a single end user; or (2)
those services rendered in the modification of computer software when the
modification is developed exclusively for a single end user only to the
extent of the modi fication and only to the extent that the actual amount
charged for the modification is sep arately stated on invoices, statements
and other billing documents provided to the end user. The services of
modification, alteration, updating and maintenance of computer software shall
only include the modification, alteration, updating and maintenance of
computer soft ware taxable under this subsection whether or not the services
are actually provided; and
  (t)  the gross receipts received for telephone answering services,
including mobile phone services, beeper services and other similar services.
  Sec. 7.  K.S.A. 1996 Supp. 79-3606, as amended by section 32 of 1997 House
Bill No. 2105, is hereby amended to read as follows: 79-3606. The following
shall be exempt from the tax imposed by this act:
  (a)  All sales of motor-vehicle fuel or other articles upon which a sales
or excise tax has been paid, not subject to refund, under the laws of this
state except cigarettes as defined by K.S.A. 79-3301 and amendments thereto,
cereal malt beverages and malt products as defined by K.S.A. 79-3817 and
amendments thereto, including wort, liquid malt, malt syrup and malt extract,
which is not subject to taxation under the provisions of K.S.A. 79-41a02 and
amendments thereto, and motor vehicles as defined by K.S.A. 79-1017 and
amendments thereto;
  (b)  all sales of tangible personal property or service, including the
renting and leasing of tangible personal property, purchased directly by the
state of Kansas, a political subdi vision thereof, other than a school or
educational institution, or purchased by a public or private nonprofit
hospital or nonprofit blood, tissue or organ bank and used exclusively for
state, political subdivision, hospital or nonprofit blood, tissue or organ
bank purposes, except when: (1) Such state or hospital is engaged or proposes
to engage in any business specifically taxable under the provisions of this
act and such items of tangible personal property or

944                           JOURNAL OF THE HOUSE

service are used or proposed to be used in such business, or (2) such
political subdivision is engaged or proposes to engage in the business of
furnishing gas, water, electricity or heat to others and such items of
personal property or service are used or proposed to be used in such
business;
  (c)  all sales of tangible personal property or services, including the
renting and leasing of tangible personal property, purchased directly by a
public or private elementary or sec ondary school or public or private
nonprofit educational institution and used primarily by such school or
institution for nonsectarian programs and activities provided or sponsored by
such school or institution or in the erection, repair or enlargement of
buildings to be used for such purposes. The exemption herein provided shall
not apply to erection, con struction, repair, enlargement or equipment of
buildings used primarily for human habita tion;
  (d)  all sales of tangible personal property or services purchased by a
contractor for the purpose of constructing, equipping, reconstructing,
maintaining, repairing, enlarging, fur nishing or remodeling facilities for
any public or private nonprofit hospital, public or private elementary or
secondary school or a public or private nonprofit educational institution,
which would be exempt from taxation under the provisions of this act if
purchased directly by such hospital, school or educational institution; and
all sales of tangible personal property or services purchased by a contractor
for the purpose of constructing, equipping, recon structing, maintaining,
repairing, enlarging, furnishing or remodeling facilities for any po litical
subdivision of the state, the total cost of which is paid from funds of such
political subdivision and which would be exempt from taxation under the
provisions of this act if purchased directly by such political subdivision.
Nothing in this subsection or in the pro visions of K.S.A. 12-3418 and
amendments thereto, shall be deemed to exempt the purchase of any
construction machinery, equipment or tools used in the constructing,
equipping, reconstructing, maintaining, repairing, enlarging, furnishing or
remodeling facilities for any political subdivision of the state. As used in
this subsection, K.S.A. 12-3418 and 79-3640, and amendments thereto, ``funds
of a political subdivision'' shall mean general tax revenues, the proceeds of
any bonds and gifts or grants-in-aid. Gifts shall not mean funds used for the
purpose of constructing, equipping, reconstructing, repairing, enlarging,
furnishing or re modeling facilities which are to be leased to the donor.
When any political subdivision of the state, public or private nonprofit
hospital, public or private elementary or secondary school or public or
private nonprofit educational institution shall contract for the purpose of
constructing, equipping, reconstructing, maintaining, repairing, enlarging,
furnishing or remodeling facilities, it shall obtain from the state and
furnish to the contractor an exemption certificate for the project involved,
and the contractor may purchase materials for incor poration in such project.
The contractor shall furnish the number of such certificate to all suppliers
from whom such purchases are made, and such suppliers shall execute invoices
covering the same bearing the number of such certificate. Upon completion of
the project the contractor shall furnish to the political subdivision,
hospital, school or educational in stitution concerned a sworn statement, on
a form to be provided by the director of taxation, that all purchases so made
were entitled to exemption under this subsection. As an alter native to the
foregoing procedure, any such contracting entity may apply to the secretary
of revenue for agent status for the sole purpose of issuing and furnishing
project exemption certificates to contractors pursuant to rules and
regulations adopted by the secretary estab lishing conditions and standards
for the granting and maintaining of such status. All invoices shall be held
by the contractor for a period of five years and shall be subject to audit by
the director of taxation. If any materials purchased under such a certificate
are found not to have been incorporated in the building or other project or
not to have been returned for credit or the sales or compensating tax
otherwise imposed upon such materials which will not be so incorporated in
the building or other project reported and paid by such contractor to the
director of taxation not later than the 20th day of the month following the
close of the month in which it shall be determined that such materials will
not be used for the purpose for which such certificate was issued, the
political subdivision, hospital, school or educational institution concerned
shall be liable for tax on all materials purchased for the project, and upon
payment thereof it may recover the same from the contractor together with
reasonable attorney fees. Any contractor or any agent, employee or
subcontractor

                                  May 3, 1997                               945

thereof, who shall use or otherwise dispose of any materials purchased under
such a certif icate for any purpose other than that for which such a
certificate is issued without the payment of the sales or compensating tax
otherwise imposed upon such materials, shall be guilty of a misdemeanor and,
upon conviction therefor, shall be subject to the penalties provided for in
subsection (g) of K.S.A. 79-3615, and amendments thereto;
  (e)  all sales of tangible personal property or services purchased by a
contractor for the erection, repair or enlargement of buildings or other
projects for the government of the United States, its agencies or
instrumentalities, which would be exempt from taxation if purchased directly
by the government of the United States, its agencies or instrumentalities.
When the government of the United States, its agencies or instrumentalities
shall contract for the erection, repair, or enlargement of any building or
other project, it shall obtain from the state and furnish to the contractor
an exemption certificate for the project involved, and the contractor may
purchase materials for incorporation in such project. The contractor shall
furnish the number of such certificates to all suppliers from whom such
purchases are made, and such suppliers shall execute invoices covering the
same bearing the number of such certificate. Upon completion of the project
the contractor shall furnish to the govern ment of the United States, its
agencies or instrumentalities concerned a sworn statement, on a form to be
provided by the director of taxation, that all purchases so made were
entitled to exemption under this subsection. As an alternative to the
foregoing procedure, any such contracting entity may apply to the secretary
of revenue for agent status for the sole purpose of issuing and furnishing
project exemption certificates to contractors pursuant to rules and
regulations adopted by the secretary establishing conditions and standards
for the granting and maintaining of such status. All invoices shall be held
by the contractor for a period of five years and shall be subject to audit by
the director of taxation. Any contractor or any agent, employee or
subcontractor thereof, who shall use or otherwise dispose of any ma terials
purchased under such a certificate for any purpose other than that for which
such a certificate is issued without the payment of the sales or compensating
tax otherwise imposed upon such materials, shall be guilty of a misdemeanor
and, upon conviction therefor, shall be subject to the penalties provided for
in subsection (g) of K.S.A. 79-3615 and amendments thereto;
  (f)  tangible personal property purchased by a railroad or public utility
for consumption or movement directly and immediately in interstate commerce;
  (g)  sales of aircraft including remanufactured and modified aircraft,
sales of aircraft repair, modification and replacement parts and sales of
services employed in the remanu facture, modification and repair of aircraft
sold to persons using such aircraft and aircraft repair, modification and
replacement parts as certified or licensed carriers of persons or property in
interstate or foreign commerce under authority of the laws of the United
States or any foreign government or sold to any foreign government or agency
or instrumentality of such foreign government and all sales of aircraft,
aircraft parts, replacement parts and services employed in the remanufacture,
modification and repair of aircraft for use outside of the United States;
  (h)  all rentals of nonsectarian textbooks by public or private elementary
or secondary schools;
  (i)  the lease or rental of all films, records, tapes, or any type of sound
or picture tran scriptions used by motion picture exhibitors;
  (j)  meals served without charge or food used in the preparation of such
meals to em ployees of any restaurant, eating house, dining car, hotel,
drugstore or other place where meals or drinks are regularly sold to the
public if such employees' duties are related to the furnishing or sale of
such meals or drinks;
  (k)  any motor vehicle, semitrailer or pole trailer, as such terms are
defined by K.S.A. 8-126 and amendments thereto, or aircraft sold and
delivered in this state to a bona fide resident of another state, which motor
vehicle, semitrailer, pole trailer or aircraft is not to be registered or
based in this state and which vehicle, semitrailer, pole trailer or aircraft
will not remain in this state more than 10 days;
  (l)  all isolated or occasional sales of tangible personal property,
services, substances or things, except isolated or occasional sale of motor
vehicles specifically taxed under the pro visions of subsection (o) of K.S.A.
79-3603 and amendments thereto;

946                           JOURNAL OF THE HOUSE

  (m)  all sales of tangible personal property which become an ingredient or
component part of tangible personal property or services produced,
manufactured or compounded for ultimate sale at retail within or without the
state of Kansas; and any such producer, manu facturer or compounder may
obtain from the director of taxation and furnish to the supplier an exemption
certificate number for tangible personal property for use as an ingredient or
component part of the property or services produced, manufactured or
compounded;
  (n)  all sales of tangible personal property which is consumed in the
production, man ufacture, processing, mining, drilling, refining or
compounding of tangible personal prop erty, the treating of by-products or
wastes derived from any such production process, the providing of services or
the irrigation of crops for ultimate sale at retail within or without the
state of Kansas; and any purchaser of such property may obtain from the
director of taxation and furnish to the supplier an exemption certificate
number for tangible personal property for consumption in such production,
manufacture, processing, mining, drilling, refining, compounding, treating,
irrigation and in providing such services;
  (o)  all sales of animals, fowl and aquatic plants and animals, the primary
purpose of which is use in agriculture or aquaculture, as defined in K.S.A.
47-1901, and amendments thereto, the production of food for human
consumption, the production of animal, dairy, poultry or aquatic plant and
animal products, fiber or fur, or the production of offspring for use for any
such purpose or purposes;
  (p)  all sales of drugs, as defined by K.S.A. 65-1626 and amendments
thereto, dispensed pursuant to a prescription order, as defined by K.S.A.
65-1626 and amendments thereto, by a licensed practitioner;
  (q)  all sales of insulin dispensed by a person licensed by the state board
of pharmacy to a person for treatment of diabetes at the direction of a
person licensed to practice medicine by the board of healing arts;
  (r)  all sales of prosthetic and orthopedic appliances prescribed in
writing by a person licensed to practice the healing arts, dentistry or
optometry. For the purposes of this sub section, the term prosthetic and
orthopedic appliances means any apparatus, instrument, device, or equipment
used to replace or substitute for any missing part of the body; used to
alleviate the malfunction of any part of the body; or used to assist any
disabled person in leading a normal life by facilitating such person's
mobility; such term shall include acces sories attached or to be
attached to motor vehicles, but such term shall not include motor vehicles or
personal property which when installed becomes a fixture to real property;
  (s)  all sales of tangible personal property or services purchased directly
by a groundwater management district organized or operating under the
authority of K.S.A. 82a-1020 et seq. and amendments thereto, which
property or services are used in the operation or mainte nance of the
district;
  (t)  all sales of farm machinery and equipment or aquaculture machinery and
equipment, repair and replacement parts therefor and services performed in
the repair and maintenance of such machinery and equipment. For the purposes
of this subsection the term ``farm machinery and equipment or aquaculture
machinery and equipment'' shall include machin ery and equipment used in the
operation of Christmas tree farming but shall not include any passenger
vehicle, truck, truck tractor, trailer, semitrailer or pole trailer, other
than a farm trailer, as such terms are defined by K.S.A. 8-126 and amendments
thereto. Each purchaser of farm machinery and equipment or aquaculture
machinery and equipment exempted herein must certify in writing on the copy
of the invoice or sales ticket to be retained by the seller that the farm
machinery and equipment or aquaculture machinery and equipment purchased will
be used only in farming, ranching or aquaculture production. Farming or
ranching shall include the operation of a feedlot and farm and ranch work for
hire and the operation of a nursery;
  (u)  all leases or rentals of tangible personal property used as a dwelling
if such tangible personal property is leased or rented for a period of more
than 28 consecutive days;
  (v)  all sales of food products to any contractor for use in preparing
meals for delivery to homebound elderly persons over 60 years of age and to
homebound disabled persons or to be served at a group-sitting at a location
outside of the home to otherwise homebound elderly persons over 60 years of
age and to otherwise homebound disabled persons, as all or part of any food
service project funded in whole or in part by government or as part of

                                  May 3, 1997                               947

a private nonprofit food service project available to all such elderly or
disabled persons residing within an area of service designated by the private
nonprofit organization, and all sales of food products for use in preparing
meals for consumption by indigent or homeless individuals whether or not such
meals are consumed at a place designated for such purpose;
  (w)  all sales of natural gas, electricity, heat and water delivered
through mains, lines or pipes: (1) To residential premises for noncommercial
use by the occupant of such premises;   (2) for agricultural use and also,
for such use, all sales of propane gas; (3) for use in the severing of oil;
and (4) to any property which is exempt from property taxation pursuant to
K.S.A. 79-201b Second through Sixth.  As used in this paragraph,
``severing'' shall have the meaning ascribed thereto by subsection (k) of
K.S.A. 79-4216, and amendments thereto;
  (x)  all sales of propane gas, LP-gas, coal, wood and other fuel sources
for the production of heat or lighting for noncommercial use of an occupant
of residential premises;
  (y)  all sales of materials and services used in the repairing, servicing,
altering, maintain ing, manufacturing, remanufacturing, or modification of
railroad rolling stock for use in interstate or foreign commerce under
authority of the laws of the United States;
  (z)  all sales of tangible personal property and services purchased
directly by a port authority or by a contractor therefor as provided by the
provisions of K.S.A. 12-3418 and amendments thereto;
  (aa)  all sales of materials and services applied to equipment which is
transported into the state from without the state for repair, service,
alteration, maintenance, remanufacture or modification and which is
subsequently transported outside the state for use in the trans mission of
liquids or natural gas by means of pipeline in interstate or foreign commerce
under authority of the laws of the United States;
  (bb)  all sales of used mobile homes or manufactured homes. As used in this
subsection:   (1) ``Mobile homes'' and ``manufactured homes'' shall have the
meanings ascribed thereto by K.S.A. 58-4202 and amendments thereto; and (2)
``sales of used mobile homes or man ufactured homes'' means sales other than
the original retail sale thereof;
  (cc)  all sales of tangible personal property or services purchased for the
purpose of and in conjunction with constructing, reconstructing, enlarging or
remodeling a business or retail business which meets the requirements
established in K.S.A. 74-50,115 and amendments thereto, and the sale and
installation of machinery and equipment purchased for installation at any
such business or retail business. When a person shall contract for the
construction, reconstruction, enlargement or remodeling of any such business
or retail business, such person shall obtain from the state and furnish to
the contractor an exemption certificate for the project involved, and the
contractor may purchase materials, machinery and equipment for incorporation
in such project. The contractor shall furnish the number of such certificates
to all suppliers from whom such purchases are made, and such suppliers shall
execute invoices covering the same bearing the number of such certificate.
Upon completion of the project the contractor shall furnish to the owner of
the business or retail business a sworn statement, on a form to be provided
by the director of taxation, that all purchases so made were entitled to
exemption under this subsection. All invoices shall be held by the contractor
for a period of five years and shall be subject to audit by the director of
taxation. Any contractor or any agent, employee or subcontractor thereof, who
shall use or otherwise dispose of any materials, machinery or equipment
purchased under such a certificate for any purpose other than that for which
such a certificate is issued without the payment of the sales or compensating
tax otherwise imposed thereon, shall be guilty of a misdemeanor and, upon
conviction therefor, shall be subject to the penalties provided for in
subsection   (g) of K.S.A. 79-3615 and amendments thereto. As used in this
subsection, ``business'' and ``retail business'' have the meanings
respectively ascribed thereto by K.S.A. 74-50,114 and amendments thereto;
  (dd)  all sales of tangible personal property purchased with food stamps
issued by the United States department of agriculture;
  (ee)  all sales of lottery tickets and shares made as part of a lottery
operated by the state of Kansas;
  (ff)  on and after July 1, 1988, all sales of new mobile homes or
manufactured homes to the extent of 40% of the gross receipts, determined
without regard to any trade-in allowance, received from such sale. As used in
this subsection, ``mobile homes'' and ``manufactured

948                           JOURNAL OF THE HOUSE

homes'' shall have the meanings ascribed thereto by K.S.A. 58-4202 and
amendments thereto;
  (gg)  all sales of tangible personal property purchased in accordance with
vouchers issued pursuant to the federal special supplemental food program for
women, infants and children;
  (hh)  all sales of medical supplies and equipment purchased directly by a
nonprofit skilled nursing home or nonprofit intermediate nursing care home,
as defined by K.S.A. 39-923, and amendments thereto, for the purpose of
providing medical services to residents thereof. This exemption shall not
apply to tangible personal property customarily used for human habitation
purposes;
  (ii)  all sales of tangible personal property purchased directly by a
nonprofit organization for nonsectarian comprehensive multidiscipline youth
development programs and activities provided or sponsored by such
organization. This exemption shall not apply to tangible personal property
customarily used for human habitation purposes;
  (jj)  all sales of tangible personal property or services, including the
renting and leasing of tangible personal property, purchased directly on
behalf of a community-based mental retardation facility or mental health
center organized pursuant to K.S.A. 19-4001 et seq., and amendments
thereto, and licensed in accordance with the provisions of K.S.A. 75-3307b
and amendments thereto. This exemption shall not apply to tangible personal
property customarily used for human habitation purposes;
  (kk)  on and after January 1, 1989, all sales of machinery and equipment
used directly and primarily for the purposes of manufacturing, assembling,
processing, finishing, storing, warehousing or distributing articles of
tangible personal property in this state intended for resale by a
manufacturing or processing plant or facility or a storage, warehousing or
dis tribution facility:
  (1)  For purposes of this subsection, machinery and equipment shall be
deemed to be used directly and primarily in the manufacture, assemblage,
processing, finishing, storing, warehousing or distributing of tangible
personal property where such machinery and equip ment is used during a
manufacturing, assembling, processing or finishing, storing, ware housing or
distributing operation:
  (A) To effect a direct and immediate physical change upon the tangible
personal property;
  (B)  to guide or measure a direct and immediate physical change upon such
property where such function is an integral and essential part of tuning,
verifying or aligning the component parts of such property;
  (C)  to test or measure such property where such function is an integral
part of the production flow or function;
  (D)  to transport, convey or handle such property during the manufacturing,
processing, storing, warehousing or distribution operation at the plant or
facility; or
  (E)  to place such property in the container, package or wrapping in which
such property is normally sold or transported.
  (2)  For purposes of this subsection ``machinery and equipment used
directly and pri marily'' shall include, but not be limited to:
  (A)  Mechanical machines or major components thereof contributing to a
manufacturing, assembling or finishing process;
  (B)  molds and dies that determine the physical characteristics of the
finished product or its packaging material;
  (C)  testing equipment to determine the quality of the finished product;
  (D)  computers and related peripheral equipment that directly control or
measure the manufacturing process or which are utilized for engineering of
the finished product; and
  (E)  computers and related peripheral equipment utilized for research and
development and product design.
  (3)  ``Machinery and equipment used directly and primarily'' shall not
include:
  (A)  Hand tools;
  (B)  machinery, equipment and tools used in maintaining and repairing any
type of ma chinery and equipment;
  (C)  transportation equipment not used in the manufacturing, assembling,
processing, furnishing, storing, warehousing or distributing process at the
plant or facility;

                                  May 3, 1997                               949

  (D)  office machines and equipment including computers and related
peripheral equip ment not directly and primarily used in controlling or
measuring the manufacturing process;
  (E)  furniture and buildings; and
  (F)  machinery and equipment used in administrative, accounting, sales or
other such activities of the business;
  (ll)  all sales of educational materials purchased for distribution to the
public at no charge by a nonprofit corporation organized for the purpose of
encouraging, fostering and con ducting programs for the improvement of public
health;
  (mm)  all sales of seeds and tree seedlings; fertilizers, insecticides,
herbicides, germi cides, pesticides and fungicides; and services, purchased
and used for the purpose of pro ducing plants in order to prevent soil
erosion on land devoted to agricultural use;
  (nn)  except as otherwise provided in this act, all sales of services
rendered by an ad vertising agency or licensed broadcast station or any
member, agent or employee thereof;
  (oo)  all sales of tangible personal property purchased by a community
action group or agency for the exclusive purpose of repairing or weatherizing
housing occupied by low income individuals;
  (pp)  all sales of drill bits and explosives actually utilized in the
exploration and produc tion of oil or gas;
  (qq)  all sales of tangible personal property and services purchased by a
nonprofit mu seum or historical society or any combination thereof, including
a nonprofit organization which is organized for the purpose of stimulating
public interest in the exploration of space by providing educational
information, exhibits and experiences, which is exempt from fed eral income
taxation pursuant to section 501(c)(3) of the federal internal revenue code
of 1986;
  (rr)  all sales of tangible personal property which will admit the
purchaser thereof to any annual event sponsored by a nonprofit organization
which is exempt from federal income taxation pursuant to section 501(c)(3) of
the federal internal revenue code of 1986;
  (ss)  all sales of tangible personal property and services purchased by a
public broad casting station licensed by the federal communications
commission as a noncommercial educational television or radio station;
and
  (tt)  all sales of tangible personal property and services purchased by or
on behalf of a not-for-profit corporation which is exempt from federal income
taxation pursuant to section 501(c)(3) of the federal internal revenue code
of 1986, for the sole purpose of constructing a Kansas Korean War
memorial;
  (uu)  all sales of tangible personal personal property and services
purchased by or on behalf of any rural volunteer fire-fighting organization
for use exclusively in the performance of its duties and functions;
  (vv)  all sales of tangible personal property purchased by any of the
following organi zations which are exempt from federal income taxation
pursuant to section 501 (c)(3) of the federal internal revenue code of 1986,
for the following purposes, and all sales of any such property by or on
behalf of any such organization for any such purpose:
  (1)  The American Heart Association, Kansas Affiliate, Inc. for the
purposes of providing education, training, certification in emergency cardiac
care, research and other related serv ices to reduce disability and death
from cardiovascular diseases and stroke;
  (2)  the Kansas Alliance for the Mentally Ill, Inc. for the purpose of
advocacy for persons with mental illness and to education, research and
support for their families;
  (3)  the Kansas Mental Illness Awareness Council for the purposes of
advocacy for per sons who are mentally ill and to education, research and
support for them and their families;
  (4)  the American Diabetes Association Kansas Affiliate, Inc. for the
purpose of elimi nating diabetes through medical research, public education
focusing on disease prevention and education, patient education including
information on coping with diabetes, and pro fessional education and
training;
  (5)  the American Lung Association of Kansas, Inc. for the purpose of
eliminating all lung diseases through medical research, public education
including information on coping with lung diseases, professional education
and training related to lung disease and other related services to reduce the
incidence of disability and death due to lung disease;

950                           JOURNAL OF THE HOUSE

  (6)  the Kansas chapters of the Alzheimer's Disease and Related Disorders
Association, Inc. for the purpose of providing assistance and support to
persons in Kansas with Alzhei mer's disease, and their families and
caregivers; and
  (ww)  all sales of tangible personal property purchased by the Habitat for
Humanities for the exclusive use of being incorporated within a housing
project constructed by such organization.
  Sec. 8.  K.S.A. 12-1693 and 12-1697 and K.S.A. 1996 Supp. 12-188, 12-1692,
12-1696, 79-3603 and 79-3606, as amended by section 32 of 1997 House Bill No.
2105, are hereby repealed.
  Sec. 9.  This act shall take effect and be in force from and after its
publication in the statute book.'';
  In the title, in line 12, by striking all after the semicolon; by striking
all in lines 13 through 15 and inserting ``amending K.S.A. 12-1693 and
12-1697 and K.S.A. 1996 Supp. 12-188, 121692, 12-1696, 79-3603 and 79-3606,
as amended by section 32 of 1997 House Bill No. 2105, and repealing the
existing sections.'';
  And your committee on conference recommends the adoption of this report.
Phill Kline
Tony Powell
Bruce Larkin   Conferees on part of House Audrey Langworthy
David R. Corbin
Janis Lee   Conferees on part of Senate   On motion of Rep. Phill Kline, the
conference committee report on SB 184 was adopted.
  On roll call, the vote was: Yeas 110; Nays 11; Present but not voting 0;
Absent or not voting 4.
  Yeas: Allen, Aurand, Ballard, Ballou, Benlon, Boston, Bradley, Burroughs,
Campbell, Carmody, Compton, Correll, Cox, Crow, Dahl, Dean, Dreher, Edmonds,
Empson, Faber, Farmer, Feuerborn, Findley, Flaharty, Flora, Flower, Franklin,
Freeborn, Garner, Gerin ger, Gilbert, Gilmore, Glasscock, Grant, Haley,
Hayzlett, Helgerson, Henderson, Henry, Holmes, Horst, Huff, Hutchins,
Jennison, Johnson, Johnston, Kejr, Kirk, Klein, Phil Kline, Phill Kline,
Krehbiel, Kuether, Landwehr, Lane, Larkin, Lloyd, J. Long, P. Long, Mason,
Mayans, Mays, McClure, McCreary, McKechnie, McKinney, Minor, Mollenkamp,
Morri son, Myers, Nichols, O'Connor, Osborne, Packer, Palmer, Pauls, E.
Peterson, J. Peterson, Phelps, Powell, Powers, Presta, Reardon, Ruff,
Samuelson, Sawyer, Schwartz, Shallenbur ger, Sharp, Shore, Showalter,
Shriver, Shultz, Sloan, Stone, Storm, Swenson, Tanner, Thi mesch, Toelkes,
Tomlinson, Toplikar, Vickrey, Vining, Wagle, Weber, Weiland, Wells, Wempe,
Wilk.
  Nays: Adkins, Alldritt, Beggs, Gregory, Howell, Humerickhouse, Neufeld,
Ray, Rein hardt, Spangler, Wilson.
  Present but not voting: None.
  Absent or not voting: Dillon, O'Neal, Pottorff, Welshimer.

CONFERENCE COMMITTEE REPORT

  Mr. President and Mr. Speaker: Your committee on conference on House amend
ments to SB 214, submits the following report:
  The Senate accedes to all House amendments to the bill, and your committee
on con ference further agrees to amend the bill, as printed with House
Committee of the Whole amendments as follows:
  On page 4, in line 11, by striking ``the effective date of this act'' and
inserting ``July 1, 1995''; in line 13, by striking ``or a misdemeanor crime
of domestic violence''; in line 15, after ``(d)'' by inserting the following:
``has not been convicted, does not have an expunged conviction, has not been
placed on diversion by any state or the federal government for a misdemeanor
crime of domestic violence or its equivalent under the uniform code of
military

                                  May 3, 1997                               951

justice, when such misdemeanor crime of domestic violence was committed on or
after the effective date of this act;
  (e)'';
  Also on page 4, in line 18, by striking ``(e)'' and inserting ``(f)''; in
line 19, by striking ``(f)'' and inserting ``(g)''; in line 20, by striking
``(g)'' and inserting ``(h)''; in line 23, by striking ``(h)'' and inserting
``(i)'';
  On page 5, in line 16, by striking ``the effective date of this act'' and
inserting ``July 1, 1995''; also in line 16, by striking ``or a''; in line
17, by striking ``misdemeanor crime of domestic violence''; in line 19, after
``justice'' by inserting ``or convicted of or diverted for a misdemeanor
crime of domestic violence under the laws of this state, another state or the
United States or of its equivalent under the uniform code of military
justice, when such misdemeanor crime of domestic violence was committed on or
after the effective date of this act'';
  On page 7, after line 14, by inserting the following:
  ``Sec. 8.  K.S.A. 32-808 is hereby amended to read as follows: 32-808. (a)
The secretary shall organize a wildlife and parks conservation service
and employ conservation officers and other employees, regardless of
title, to exercise law enforcement authority as provided in subsection (b),
if such officers and other employees successfully complete the required
course of instruction for law enforcement officers approved by the Kansas law
enforcement training center pursuant to K.S.A. 74-5607a and amendments
thereto, and employees ap pointed on a provisional or probationary basis for
a period of not more than one year, except that such provisional or
probationary employee shall meet at least the criteria on appoint ment
specified in K.S.A. 74-5605 and amendments thereto, and shall not be issued a
firearm until such employee has been instructed and trained in the use
thereof by the department. An employee appointed on a provisional or
probationary basis, who does not receive the certificate required under
subsection (a) of K.S.A. 74-5607a and amendments thereto, within one year
following the date of the person's original appointment shall not have
authority to enforce the laws of the state as provided in subsection (b).
The secretary may appoint per manent conservation officers and
employees of the department, including appointment in the capacity as
deputy conservation officers, and may appoint Kansas law enforcement
officers temporarily assigned by their employer to the department
pursuant to K.S.A. 745610 and amendments thereto, to assist the wildlife
and parks conservation service in a manner determined by the secretary.
All deputy conservation officer appointments shall be on a voluntary basis
and shall expire on December 31 following the date of any such ap pointment.
  (b)  Conservation officers, deputy conservation officers and other
employees who have completed the course of instruction as provided in
subsection (a), provisional or probationary employees who have met the
requirements of subsection (a) and any other Kansas law en forcement
officers authorized to enforce the laws of the state of Kansas shall have the
power and authority to:
  (1) Enforce all the wildlife and parks laws and statutory
provisions of chapter 32 of the Kansas Statutes Annotated or any rules and
regulations promulgated thereunder, or any other laws of the state
anywhere within the state, including but not limited to chapter 8 of
the Kansas Statutes Annotated, and amendments thereto, and the rules and
regulations of the secretary., except that nothing in this act shall
grant conservation officers, deputy con servation officers and other
employees authority that supersedes that of the local law en forcement
authority having jurisdiction over the matter. The secretary shall establish
a policy under which the department's officers and other employees primarily
direct such officers' and employees' efforts toward the protection,
conservation and management of natural re sources of this state and the
provision of safe and orderly lands controlled by the department. Such
officers shall also have the powers of arrest set forth in K.S.A. 22-2401,
and amend ments thereto, and are empowered to make arrests, pursuant to
K.S.A. 22-2307, and amend ments thereto, as required by any policy adopted by
the secretary. A conservation officer acting under authority of this
subsection shall be considered an employee of the department and shall be
subject to its direction, benefits and legal protection.
  (2)  Serve anywhere within the state warrants and subpoenas
issued for the examination, investigation or trial of all offenses against
the wildlife and parks laws and rules and regu

952                           JOURNAL OF THE HOUSE

lations of the secretary and of violations of department controlled lands and
waters, of any law and of any rule and regulation of the state of Kansas
violations of all laws of the state as provided in subsection (b).
  (3)  Carry firearms or weapons, concealed or otherwise, in the performance
of their duties but only if the officer or employee has completed the
required course of instruction for law enforcement officers at the
Kansas law enforcement training center, unless otherwise qualified
pursuant to K.S.A. 74-5608a and amendments thereto or as to a provisional
or probationary employee who has met the requirements of subsection (a).
  Sec. 9.  K.S.A. 32-1048 is hereby amended to read as follows: 32-1048.
Conservation officers and deputy conservation officers in the wildlife and
parks conservation service Any officer or other employee of the
department who meets the criteria specified in subsection   (a) of K.S.A.
32-808 and amendments thereto and any other Kansas law enforcement
officer authorized to enforce the laws of this state shall have the power to
arrest pursuant to the authority granted in subsection (b) of K.S.A.
32-808 and amendments thereto, at any place in the state of Kansas, any
person or persons found violating any of the wildlife and parks laws of
this state, or the rules and regulations adopted thereunder, without
warrants, and with warrants where not found violating such laws of the
state, and rules and regulations promulgated pursuant to chapter 32 of
the Kansas Statutes Annotated, and amendments thereto, and to bring such
persons forthwith immediately before the nearest proper judge of
the district court of the county within which such violation took place for
trial.'';
  And by renumbering sections accordingly;
  On page 13, in line 18, after ``19-801b'' by inserting ``, 32-808,
32-1048''; in line 21, by striking ``statute book'' and inserting ``Kansas
register'';
  On page 1, in the title, in line 13, after the semicolon, by inserting
``conservation officers;''; in line 14, after ``19-801b'' by inserting ``,
32-808, 32-1048''
  And your committee on conference recommends the adoption of this report.
Tim Carmody
Terry Presta
Thomas M. Klein   Conferees on part of House Tim Emert
Keith Schraad
Greta Goodwin   Conferees on part of Senate   On motion of Rep. Carmody, the
conference committee report on SB 214 was adopted.
  On roll call, the vote was: Yeas 121; Nays 0; Present but not voting 0;
Absent or not voting 4.
  Yeas: Adkins, Alldritt, Allen, Aurand, Ballard, Ballou, Beggs, Benlon,
Boston, Bradley, Burroughs, Campbell, Carmody, Compton, Correll, Cox, Crow,
Dahl, Dean, Dreher, Ed monds, Empson, Faber, Farmer, Feuerborn, Findley,
Flaharty, Flora, Flower, Franklin, Freeborn, Garner, Geringer, Gilbert,
Gilmore, Glasscock, Grant, Gregory, Haley, Hayzlett, Helgerson, Henderson,
Henry, Holmes, Horst, Howell, Huff, Humerickhouse, Hutchins, Jennison,
Johnson, Johnston, Kejr, Kirk, Klein, Phil Kline, Phill Kline, Krehbiel,
Kuether, Landwehr, Lane, Larkin, Lloyd, J. Long, P. Long, Mason, Mayans,
Mays, McClure, Mc Creary, McKechnie, McKinney, Minor, Mollenkamp, Morrison,
Myers, Neufeld, Nichols, O'Connor, Osborne, Packer, Palmer, Pauls, E.
Peterson, J. Peterson, Phelps, Powell, Pow ers, Presta, Ray, Reardon,
Reinhardt, Ruff, Samuelson, Sawyer, Schwartz, Shallenburger, Sharp, Shore,
Showalter, Shriver, Shultz, Sloan, Spangler, Stone, Storm, Swenson, Tanner,
Thimesch, Toelkes, Tomlinson, Toplikar, Vickrey, Vining, Wagle, Weber,
Weiland, Wells, Wempe, Wilk, Wilson.
  Nays: None.
  Present but not voting: None.
  Absent or not voting: Dillon, O'Neal, Pottorff, Welshimer.

                                  May 3, 1997                               953


CONFERENCE COMMITTEE REPORT

  Mr. President and Mr. Speaker: Your committee on conference on House amend
ments to SB 36, submits the following report:
  The Senate accedes to all House amendments to the bill, and your committee
on con ference further agrees to amend the bill, as printed as House
Substitute for SB No. 36 with amendments by House Committee of the Whole, as
follows:
  On page 1, in line 31, by striking ``90%'' and inserting ``95%''; in line
34, by striking ``and in each school year thereafter''; also in line 34, by
striking ``80%'' and inserting ``90%''; in line 36, after ``year'', by
inserting ``, in the 2000-01 school year, a percentage that is equal to 85%
of the percentage specified in the resolution under which the district was
authorized to adopt a local option budget in the 1996-97 school year, in the
2001-02 school year and in each school year thereafter, a percentage that is
equal to 80% of the percentage specified in the resolution under which the
district was authorized to adopt a local option budget in the 1996-97 school
year'';
  On page 3, in line 40, by striking ``The'' and inserting ``(A) Subject to
the provisions of subpart (B), the''; following line 42, by inserting the
following:
  ``(B)  In lieu of utilizing the authority granted by subpart (A) for
adoption of a local option budget, the board of a district may pass a
resolution authorizing adoption of such a budget and publish such resolution
once in a newspaper having general circulation in the district. The
resolution shall be published in substantial compliance with the following
form:
Unified School District No. _________,
                                                  ____________ County, Kansas.
                                   RESOLUTION
 Resolved that:
  The board of education of the above-named school district shall be
authorized to adopt a local option budget in each school year for a period of
time not to exceed _________ years in an amount not to exceed _________% of
the amount of state financial aid determined for the current school year. The
local option budget authorized by this resolution may be adopted, unless a
petition in opposition to the same, signed by not less than 5% of the
qualified electors of the school district, is filed with the county election
officer of the home county of the school district within 30 days after
publication of this resolution. In the event a petition is filed, the county
election officer shall submit the question of whether adoption of the local
option budget shall be authorized to the electors of the school district at
an election called for the purpose or at the next general election, as is
specified by the board of education of the school district.
                                  CERTIFICATE
  This is to certify that the above resolution was duly adopted by the board
of education of Unified School District No. ____________, ____________
County, Kansas, on the ______  day of _________, 19______.
                                                ______________________________
                                              Clerk of the board of education.
  All of the blanks in the resolution shall be appropriately filled. The
blank preceding the word ``years'' shall be filled with a specific number,
and the blank preceding the percentage symbol shall be filled with a specific
number. No word shall be inserted in either of the blanks. The percentage
specified in the resolution shall not exceed the district prescribed
percentage. The resolution shall be published once in a newspaper having
general circulation in the school district. If no petition as specified above
is filed in accordance with the pro visions of the resolution, the board may
adopt a local option budget. If a petition is filed as provided in the
resolution, the board may notify the county election officer of the date of
an election to be held to submit the question of whether adoption of a local
option budget shall be authorized. If the board fails to notify the county
election officer within 30 days after a petition is filed, the resolution
shall be deemed abandoned and no like resolution shall be adopted by the
board within the nine months following publication of the resolution.

954                           JOURNAL OF THE HOUSE

If any district is authorized to adopt a local option budget under this
subpart, but the board of such district chooses, in any school year, not to
adopt such a budget or chooses, in any school year, to adopt such budget in
an amount less than the amount of the district pre scribed percentage of the
amount of state financial aid in any school year, such board of education may
so choose. If the board of any district refrains from adopting a local option
budget in any one or more school years or refrains from budgeting the total
amount au thorized for any one or more school years, the authority of such
district to adopt a local option budget shall not be extended by such
refrainment beyond the period specified in the resolution authorizing
adoption of such budget, nor shall the amount authorized to be budg eted in
any succeeding school year be increased by such refrainment. Whenever an
initial resolution has been adopted under this subpart, and such resolution
specified a lesser per centage than the district prescribed percentage, the
board of the district may adopt one or more subsequent resolutions under the
same procedure as provided for the initial resolution and subject to the same
conditions, and shall be authorized to increase the percentage as specified
in any such subsequent resolution for the remainder of the period of time
specified in the initial resolution. Any percentage specified in a subsequent
resolution or in subsequent resolutions shall be limited so that the sum of
the percentage authorized in the initial res olution and the percentage
authorized in the subsequent resolution or in subsequent reso lutions is not
in excess of the district prescribed percentage in any school year. The board
of any district that has been authorized to adopt a local option budget under
this subpart and levied a tax under authority of K.S.A. 72-6435, and
amendments thereto, may initiate, at any time after the final levy is
certified to the county clerk under any current authorization, procedures to
renew its authority to adopt a local option budget in the manner specified in
this subpart or may utilize the authority granted by subpart (A). As used in
this subpart, the term ``authorized to adopt a local option budget'' means
that a district has adopted a reso lution under this subpart, has published
the same, and either that the resolution was not protested or that it was
protested and an election was held by which the adoption of a local option
budget was approved.'';
  On page 4, in line 12, by striking ``a'' and inserting ``: (A) A''; in line
14, after ``district'', by inserting ``; or (B) the question of whether the
board shall be authorized to increase the local option budget has been
submitted to and approved by the qualified electors of the district at a
special election called for the purpose. Any such election shall be noticed,
called and held in the manner provided by K.S.A. 10-120, and amendments
thereto, for the no ticing, calling and holding of elections upon the
question of issuing bonds under the general bond law. The notice of such
election shall state the purpose for and time of the election, and the ballot
shall be designed with the question of whether the board of education of the
district shall be continuously and permanently authorized to increase the
local option budget of the district in each school year by a percentage which
together with the percentage of the amount of state financial aid budgeted
under subsection (a) does not exceed the state prescribed percentage in any
school year. If a majority of the qualified electors voting at the election
approve authorization of the board to increase the local option budget, the
board shall have such authority. If a majority of the qualified electors
voting at the election are opposed to authorization of the board to increase
the local option budget, the board shall not have such authority and no like
question shall be submitted to the qualified electors of the district within
the nine months following the election'';
  On page 7, in line 11, after ``means'', by inserting ``either that a
district has held a special election under provision (2)(B) by which
authority of the board to increase a local option budget was approved, or'';
in line 12, by striking ``this subsection'' and inserting ``provision  
(2)(A)'';
  On page 11, in line 21, by striking ``districts'' and inserting
``district's'';
  On page 12, in line 20, after ``and'', by inserting ``(1) for districts
other than the district created by K.S.A. 72-5333a, and amendments
thereto,''; in line 21, after ``district'', by in serting ``and (2) for the
district created by K.S.A. 72-5333a, and amendments thereto, an amount equal
to the federal impact aid of the district''; following line 33, by inserting
a new section as follows:

                                  May 3, 1997                               955

  ``Sec. 4.  K.S.A. 72-6417 is hereby amended to read as follows: 72-6417.
(a) The distri bution of general state aid under this act shall be made in
accordance with appropriation acts each year as provided in this section.
  (b) (1)  In the months of July through May of each school year, the state
board shall determine the amount of general state aid which will be required
by each district to maintain operations in each such month. In making such
determination, the state board shall take into consideration the district's
access to local effort sources and the obligations of the general fund which
must be satisfied during the month. The amount determined by the state board
under this provision is the amount of general state aid which will be
distributed to the district in the months of July through May;
  (2)  in the month of June of each school year, payment shall be made of the
full amount of the general state aid entitlement determined for the school
year, less the sum of the monthly payments made in the months of July through
May.
  (c)  Payments of general state aid shall be distributed to districts once
each month at a time to be determined by the state board. The state board
shall certify to the director of accounts and reports the amount due as
general state aid to each district in each of the months of July through
June. Such certification, and the amount of general state aid payable from
the state general fund, shall be approved by the director of the budget. The
director of accounts and reports shall draw warrants on the state treasurer
payable to the district treasurer of each district entitled to payment of
general state aid, pursuant to vouchers approved by the state board. Upon
receipt of such warrant, each district treasurer shall deposit the amount of
general state aid in the general fund, except that, an amount equal to the
amount of federal impact aid not included in the local effort of a district
may be disposed of as provided in subsection (a) of K.S.A. 72-6427, and
amendments thereto.
  (d)  The provisions of this section shall take effect and be in force
from and after July 1, 1992.'';
  By renumbering sections 4 and 5 as sections 5 and 6, respectively;
  Also on page 12, in line 34, after ``K.S.A.'', by inserting ``72-6417 and
K.S.A.'';
  In the title, in line 13, after ``K.S.A.'', by inserting ``72-6417 and
K.S.A.'';
  And your committee on conference recommends the adoption of this report.
Michael R. O'Neal
Eugene L. Shore
Bill Reardon   Conferees on part of House Audrey Langworthy
Tim Emert
Christine Downey   Conferees on part of Senate   On motion of Rep. Shore, the
conference committee report on H. Sub. for SB 36 was adopted.
  On roll call, the vote was: Yeas 64; Nays 57; Present but not voting 0;
Absent or not voting 4.
  Yeas: Adkins, Alldritt, Allen, Ballard, Beggs, Benlon, Boston, Campbell,
Carmody, Comp ton, Correll, Cox, Crow, Dean, Dreher, Empson, Feuerborn,
Findley, Flaharty, Flora, Ger inger, Gilmore, Grant, Gregory, Hayzlett,
Henry, Horst, Huff, Kirk, Phil Kline, Phill Kline, Krehbiel, Kuether, Lane,
Larkin, Lloyd, J. Long, McKinney, Minor, Myers, Nichols, Pauls, E. Peterson,
Phelps, Powers, Ray, Reardon, Reinhardt, Samuelson, Schwartz, Sharp, Shore,
Showalter, Shriver, Shultz, Sloan, Stone, Storm, Swenson, Thimesch, Toelkes,
Tomlinson, Wempe, Wilson.
  Nays: Aurand, Ballou, Bradley, Burroughs, Dahl, Edmonds, Faber, Farmer,
Flower, Franklin, Freeborn, Garner, Gilbert, Glasscock, Haley, Helgerson,
Henderson, Holmes, Howell, Humerickhouse, Hutchins, Jennison, Johnson,
Johnston, Kejr, Klein, Landwehr, P. Long, Mason, Mayans, Mays, McClure,
McCreary, McKechnie, Mollenkamp, Morrison, Neufeld, O'Connor, Osborne,
Packer, Palmer, J. Peterson, Powell, Presta, Ruff, Sawyer,

956                           JOURNAL OF THE HOUSE

Shallenburger, Spangler, Tanner, Toplikar, Vickrey, Vining, Wagle, Weber,
Weiland, Wells, Wilk.
  Present but not voting: None.
  Absent or not voting: Dillon, O'Neal, Pottorff, Welshimer.
                              EXPLANATION OF VOTE
  Mr. Speaker: I vote NO on SB 36. The disappointing reality of this
bill is that this issue shouldn't even be before us today. If the Legislature
had met its obligation to adequately fund education, school districts would
not need to rely on local option budgets. A 1.9% increase over the last five
years is not aid, it's neglect. The state and those members of this body who
choose to deprive education at every turn are to blame for the LOB problem,
not local school districts which are continuously asked to produce quality
students without the appropriate dollars.
  Until we properly fund our schools, we will continue to pit school children
against prop erty taxpayers. That is the sad reality of this bill.--Tom
Sawyer

CONFERENCE COMMITTEE REPORT

  Mr. President and Mr. Speaker: Your committee on conference on Senate amend
ments to HB 2082, submits the following report:
  The House accedes to all Senate amendments to the bill, and your committee
on con ference further agrees to amend the bill, as printed with Senate
Committee of the Whole amendments, as follows:
  On page 10, in line 19, by striking ``for'' and inserting ``by'';
  On page 12, in line 38, by striking ``2.0'';
  On page 13, in line 36, by striking ``on'' and inserting ``of'';
  On page 19, in line 41, after ``under'', by inserting ``subsections A, C, D
or F of '';
  On page 21, in line 35, by striking ``1999'' and inserting ``1998'';
  On page 22, in line 1, by striking ``30,000'' and inserting ``90,000 with
the resulting credit not to exceed $30,000. No credit under this section
shall be allowed unless the company has paid salaries for which a salary
credit is allowed under new section 7''; in line 6, after ``than'' by
inserting ``1% of premiums taxable under K.S.A. 40-252 and amendments thereto
for tax year 1998 or by more than''; in line 8, before the period, by
inserting ``for tax years 1999 and thereafter'';
  And your committee on conference recommends the adoption of this report.
Audrey Langworthy
Don Steffes
Janis K. Lee   Conferees on part of Senate Tom Bradley
Dennis Wilson
Nancy Kirk   Conferees on part of House   On motion of Rep. Bradley, the
conference committee report on S. Sub. for HB 2082 was adopted.
  On roll call, the vote was: Yeas 104; Nays 15; Present but not voting 2;
Absent or not voting 4.
  Yeas: Adkins, Alldritt, Allen, Aurand, Ballard, Ballou, Beggs, Benlon,
Boston, Bradley, Burroughs, Campbell, Carmody, Correll, Cox, Crow, Dahl,
Dean, Dreher, Edmonds, Emp son, Faber, Farmer, Feuerborn, Findley, Flaharty,
Flora, Flower, Franklin, Freeborn, Gar ner, Geringer, Gilbert, Gilmore,
Glasscock, Grant, Gregory, Haley, Hayzlett, Helgerson, Henderson, Henry,
Holmes, Horst, Huff, Hutchins, Johnson, Johnston, Kejr, Kirk, Klein, Phil
Kline, Krehbiel, Kuether, Lane, Larkin, Lloyd, J. Long, Mason, Mays, McClure,
McCreary, McKechnie, McKinney, Minor, Mollenkamp, Morrison, Myers, Nichols,
Os borne, Palmer, Pauls, E. Peterson, J. Peterson, Phelps, Powell, Powers,
Presta, Ray, Rear don, Reinhardt, Ruff, Samuelson, Sawyer, Sharp, Shore,
Showalter, Shriver, Shultz, Sloan,

                                  May 3, 1997                               957

Spangler, Stone, Storm, Tanner, Thimesch, Toelkes, Toplikar, Vining, Wagle,
Weiland, Wells, Wempe, Wilk, Wilson.
  Nays: Compton, Howell, Humerickhouse, Jennison, Phill Kline, P. Long,
Neufeld, O'Connor, Packer, Schwartz, Shallenburger, Swenson, Tomlinson,
Vickrey, Weber.
  Present but not voting: Landwehr, Mayans.
  Absent or not voting: Dillon, O'Neal, Pottorff, Welshimer.

CONFERENCE COMMITTEE REPORT

  Mr. President and Mr. Speaker: Your committee on conference on Senate amend
ments to HB 2055, submits the following report:
  The Senate recedes from all Senate amendments to the bill, and your
committee on conference further agrees to amend the bill, as printed with
House Committee amendments, as follows:
on page 2, following line 43, by inserting the following:
  ``Sec. 8.  Section 1 of 1997 House Bill No. 2057 is hereby amended to read
as follows:   Section 1.  (a) Any mortgage or deed of trust against real
property located in this state recorded on or after January 1, 1955, and
before January 1, 1965, or referred to or described in any instrument of
record within such period shall be void, unless, prior to July 1, 1998, the
owner and holder thereof files, in the office of the register of deeds of the
county in which the property is located, an affidavit stating:
  (1)  The name and address of the owner and holder thereof;
  (2)  the nature of the claim;
  (3)  the amount due on the claim;
  (4)  the date of the last payment on the claim; and
  (5)  a description of the property.
  (b)  Any mortgage or deed of trust against real property located in this
state recorded on or after January 1, 1965, or referred to or described in
any instrument of record after such date, shall be void by operation of law
if:
  (1)  More that than 32 years shall have elapsed between the
date of the initial recording of the mortgage; and
  (2)  prior to July 1 of the year next preceding the date 32 years after the
date of initial recording, unless an action is not commenced to
foreclose the mortgage or deed of trust, or unless the owner and holder
of the mortgage does not file in the office of the register of deeds of the
county in which the property is located, an affidavit stating:
  (A)  The name and address of the owner and holder thereof;
  (B)  the nature of the claim;
  (C)  the amount due on the claim;
  (D)  the date of the last payment on the claim; and
  (E)  a description of the property.
  (c)  This section shall not apply to or affect mortgages, deeds of trust or
liens against real property of railroad corporations recorded after January
1, 1890.
  (d)  Infancy, incompetency or nonresidency shall not affect the operation
of this act.
  Sec. 9.  Section 1 of 1997 House Bill No. 2057 is hereby repealed.'';
  And by renumbering section 8 as section 10;
  In the title, in line 10, following ``concerning'' by inserting ``real
property; relating to the release of a mortgage or deed of trust; relating
to''; also in line 10, following ``transfers'' by striking ``; relating to''
and inserting ``of''; also in line 10, before the period by inserting ``;
amending section 1 of 1997 House Bill No. 2057 and repealing the existing
section'';
  And your committee on conference recommends the adoption of this report.
Tim Emert
Greta Goodwin
Keith Schraad   Conferees on part of Senate Tim Carmody
Terry Presta
Jim D. Garner   Conferees on part of House

958                           JOURNAL OF THE HOUSE

  On motion of Rep. Carmody, the conference committee report on HB 2055
was adopted.
  On roll call, the vote was: Yeas 121; Nays 0; Present but not voting 0;
Absent or not voting 4.
  Yeas: Adkins, Alldritt, Allen, Aurand, Ballard, Ballou, Beggs, Benlon,
Boston, Bradley, Burroughs, Campbell, Carmody, Compton, Correll, Cox, Crow,
Dahl, Dean, Dreher, Ed monds, Empson, Faber, Farmer, Feuerborn, Findley,
Flaharty, Flora, Flower, Franklin, Freeborn, Garner, Geringer, Gilbert,
Gilmore, Glasscock, Grant, Gregory, Haley, Hayzlett, Helgerson, Henderson,
Henry, Holmes, Horst, Howell, Huff, Humerickhouse, Hutchins, Jennison,
Johnson, Johnston, Kejr, Kirk, Klein, Phil Kline, Phill Kline, Krehbiel,
Kuether, Landwehr, Lane, Larkin, Lloyd, J. Long, P. Long, Mason, Mayans,
Mays, McClure, Mc Creary, McKechnie, McKinney, Minor, Mollenkamp, Morrison,
Myers, Neufeld, Nichols, O'Connor, Osborne, Packer, Palmer, Pauls, E.
Peterson, J. Peterson, Phelps, Powell, Pow ers, Presta, Ray, Reardon,
Reinhardt, Ruff, Samuelson, Sawyer, Schwartz, Shallenburger, Sharp, Shore,
Showalter, Shriver, Shultz, Sloan, Spangler, Stone, Storm, Swenson, Tanner,
Thimesch, Toelkes, Tomlinson, Toplikar, Vickrey, Vining, Wagle, Weber,
Weiland, Wells, Wempe, Wilk, Wilson.
  Nays: None.
  Present but not voting: None.
  Absent or not voting: Dillon, O'Neal, Pottorff, Welshimer.

CHANGE OF CONFEREES

  Speaker Shallenburger announced the appointment of Rep. Sawyer as a member
of the conference committee on HB 2315 to replace Rep. Welshimer.
  On motion of Rep. Jennison, the House recessed until 4:00 p.m.
Afternoon Session   The House met pursuant to recess with Speaker
Shallenburger in the chair.

MESSAGE FROM THE SENATE

  The Senate concurs in House amendments to SB 40, and requests return
of the bill.
  The Senate adopts conference committee report on H. Sub. for SB 36.
  The Senate adopts conference committee report on SB 53.
  The Senate adopts conference committee report on SB 184.
  The Senate adopts conference committee report on SB 214.
  The Senate adopts conference committee report on HB 2022.
  The Senate accedes to the request of the House for a conference on HB
2278 and has appointed Senators Praeger, Salmans and Steineger as
conferees on the part of the Senate.
  The President announced the appointment of Senator Steineger as a member of
the conference committee on SB 146 to replace Senator Gooch.

INTRODUCTION OF ORIGINAL MOTIONS

  On motion of Rep. Jennison, pursuant to subsection (k) of Joint Rule 4 of
the Joint Rules of the Senate and House of Representatives, the rules were
suspended for the purpose of considering HB 2022; SB 204; HB 2509.

CONFERENCE COMMITTEE REPORT

  Mr. President and Mr. Speaker: Your committee on conference on House amend
ments to SB 204, submits the following report:
  The Senate accedes to all House amendments to the bill, and your committee
on con ference further agrees to amend the bill, as printed with House
Committee of the Whole amendments, as follows:
  On page 2, in line 2, after the period, by inserting a sentence as follows:
 ``An accident and sickness insurer may exclude a late enrollee, except
during an open enrollment period.''; in line 30, by striking ``benefits'' and
inserting ``expenses'';
  On page 22, following line 31, by inserting a subsection, as follows:

                                  May 3, 1997                               959

  ``(c)  A carrier may exclude a late enrollee except during an open
enrollment period.'';
  Also on page 22, in line 32, by striking ``(c)'' and inserting ``(d)''; in
line 36, by striking ``(d)'' and inserting ``(e)''; in line 40, by striking
``(e)'' and inserting ``(f)'';
  On page 23, in line 6, by striking ``(f)'' and inserting ``(g)''; in line
11, by striking ``(g)'' and inserting ``(h)''; also in line 11, by striking
``(h)'' and inserting ``(f)'';
  On page 35, in line 24, before ``K.S.A.'' by inserting ``On and after
January 1, 1998,'';
  On page 36, following line 9, by inserting a subsection as follows:
  ``(g)  ``Dependent'' means a resident spouse or resident unmarried child
under the age of 19 years, a child who is a student under the age of 23 years
and who is financially dependent upon the parent, or a child of any age who
is disabled and dependent upon the parent.'';
  Also on page 36, in line 10, by striking ``(g)'' and inserting ``(h)''; in
line 24, by striking ``(h)'' and inserting ``(i)''; in line 28, by striking
``(i)'' and inserting ``(j)''; in line 34, by striking ``(j)'' and inserting
``(k)'';
  On page 37, in line 5, by striking ``(k)'' and inserting ``(l)''; in line
8, by striking ``(l)'' and inserting ``(m)''; in line 14, by striking ``(m)''
and inserting ``(n)''; in line 18, by striking ``(n)'' and inserting ``(o)'';
in line 21, by striking ``(o)'' and inserting ``(p)''; in line 23, by
striking ``(p)'' and inserting ``(q)''; in line 25, by striking ``(q)'' and
inserting ``(r)''; in line 27, by striking ``(r)'' and inserting ``(s)'';
following line 30, by inserting two sections as follows:
  ``Sec. 8.  On and after July 1, 1997, K.S.A. 1996 Supp. 40-2119 is hereby
amended to read as follows: 40-2119. (a) There is hereby created a nonprofit
legal entity to be known as the Kansas health insurance association. All
insurers and insurance arrangements provid ing health care benefits in this
state shall be members of the association. The association shall operate
under a plan of operation established and approved under subsection (b) of
this section and shall exercise its powers through a board of directors
established under this section.
  (b) (1)  The board of directors of the association shall be selected by
members of the association subject to the approval of the commissioner. To
select the initial board of di rectors, and to initially organize the
association, the commissioner shall give notice to all members in this state
of the time and place of the organizational meeting. In determining voting
rights at the organizational meeting, each member shall be entitled to one
vote in person or by proxy. If the board of directors is not selected within
60 days after the organ izational meeting, the commissioner shall appoint the
initial board. In approving or selecting members of the board, the
commissioner shall consider, among other things, whether all members are
fairly represented. Members of the board may be reimbursed from the moneys of
the plan for expenses incurred by them as members of the board of directors
but shall not otherwise be compensated by the plan for their services.
  (2)  The board shall submit to the commissioner a plan of operation for the
association and any amendments thereto necessary or suitable to assure the
fair, reasonable and equi table administration of the plan. The plan of
operation shall become effective upon approval in writing by the commissioner
consistent with the date on which the coverage under this act must be made
available. The commissioner shall, after notice and hearing, approve the plan
of operation if it is determined to be suitable to assure the fair,
reasonable and equitable administration of the plan and provides for the
sharing of association losses on an equitable proportionate basis among the
members of the association. If the board fails to submit a suitable plan of
operation within 180 days after its appointment, or at any time thereafter
fails to submit suitable amendments to the plan of operation, the
commissioner shall, after notice and hearing, adopt and promulgate such
reasonable rules and regulations as are necessary or advisable to effectuate
the provisions of this section. Such rules and regulations shall continue in
force until modified by the commissioner or superseded by a plan of operation
submitted by the board and approved by the commissioner. The plan of
operation shall, in addition to requirements enumerated elsewhere in this
act:
  (A)  Establish procedures for the handling and accounting of assets and
moneys of the plan;
  (B)  select an administering carrier in accordance with K.S.A. 40-2120, and
amendments thereto;

960                           JOURNAL OF THE HOUSE

  (C)  establish procedures for the collection of assessments from all
members to provide for claims paid under the plan and for administrative
expenses incurred or estimated to be incurred during the period for which the
assessment is made. The level of payments shall be established by the board
pursuant to K.S.A. 40-2121, and amendments thereto. Assess ments shall be due
and payable within 30 days of receipt of the assessment notice;
  (D)  establish appropriate cost control measures, including but not limited
to, pread mission review, case management, utilization review and exclusions
and limitations with respect to treatment and services under the plan; and
  (E)  develop and implement a program to publicize the existence of the
plan, the eligi bility requirements and procedures for enrollment and to
maintain public awareness of the plan.
  (F)  Establish benefit levels, lifetime maximum benefits, and other
coverage and eligibility parameters, and establish such other requirements
and procedures as are necessary to assure the availability of a benefit
program or programs conforming with the requirements of a qualified high risk
pool as set forth in section 111 of Public Law 104-191 and amendments
thereto.
  (c)  The association shall have the general powers and authority enumerated
by this subsection in accordance with the plan of operation approved by the
commissioner under subsection (b). The association shall have the general
powers and authority granted under the laws of this state to insurers
licensed to transact the kind of health service or insurance included under
K.S.A. 40-2123, and amendments thereto, and in addition thereto, the spe
cific authority and duty to:
  (1)  Enter into contracts as are necessary or proper to carry out the
provisions and purposes of this act, including the authority, with the
approval of the commissioner, to enter into contracts with similar plans of
other states for the joint performance of common ad ministrative functions,
or with persons or other organizations for the performance of ad ministrative
functions;
  (2)  sue or be sued, including taking any legal actions necessary or proper
for recovery of any assessments for, on behalf of, or against participating
members;
  (3)  take such legal action as necessary to avoid the payment of improper
claims against the association or the coverage provided by or through the
plan;
  (4)  establish appropriate rates, rate schedules, rate adjustments, expense
allowances, agents' referral fees, claim reserve formulas and any other
actuarial function appropriate to the operation of the plan. During the first
two years of operation of the plan, rates shall be established in an amount
that is estimated by the board to cover all claims that may be made against
the plan and the expenses of operating the plan. In following years, rates
for coverage shall be reasonable in terms of the benefits provided, the risk
experience and expenses of providing the coverage, except that such rates
shall not exceed 150% of the average premium rate charged for similar
coverage in the private market. Rates and rate schedules may be adjusted for
appropriate risk factors such as age, sex and geographic location in claims
costs and shall take into consideration appropriate risk factors in
accordance with established actuarial and underwriting practices, however
particular health conditions or illnesses shall not constitute appropriate
risk factors;
  (5)  assess members of the association in accordance with the provisions of
K.S.A. 402121, and amendments thereto;
  (6)  design the policy policies of insurance to be offered by
the plan which may cover only shall cover at least the expenses
enumerated in subsection (b) of K.S.A. 40-2123, and amendments thereto, but
with such limitations and optional benefit levels as the plan pre scribes;
  (7)  issue policies of insurance in accordance with the requirements of
this act; and
  (8)  appoint from among members appropriate legal, actuarial and other
committees as necessary to provide technical assistance in the operation of
the plan, policy and other contract design, and any other function within the
authority of the association.
  Sec. 9.  On and after July 1, 1997, K.S.A. 1996 Supp. 40-2121 is hereby
amended to read as follows: 40-2121. (a) Following the close of each fiscal
year, the administering carrier shall determine the net premiums, the plan
expenses of administration and the incurred losses for the year. Any net loss
of the plan determined after taking into account amounts

                                  May 3, 1997                               961

transferred pursuant to subsection (h) of K.S.A. 79-4804, and amendments
thereto, invest ment income and other appropriate gains and losses shall be
assessed by the board to all members of the association in proportion to
their respective shares of total health insurance premiums received in this
state during the calendar year coinciding with or ending during the fiscal
year of the association or any other equitable basis as may be provided in
the plan of operation. For health maintenance organization members and
insurance arrangements, the proportionate share of losses shall be determined
through application of an equitable formula based upon claims paid on the
value of services provided. In sharing losses, the board may abate or defer
in whole or in part the assessment of a member if, in the opinion of the
board, payment of the assessment would endanger the ability of the member to
fulfill its contractual obligations. Health insurance benefits paid by an
insurance arrangement that are less than an amount determined by the board to
justify the cost of collection shall not be considered for purposes of
determining assessments. Net gains, if any, shall be held at interest to
offset future losses or allocated to reduce future premiums.  In addition
to any annual assessment at the close of the fiscal year of the plan
authorized by this subsection, the board may provide for interim assessments
of the members of the association, subject to the approval of the
commissioner, as may be necessary to assure the financial capability of the
association in meeting the incurred or estimated claims expenses of the plan
and the operating and administrative expenses of the plan.
  (b)  In addition to any assessment authorized by subsection (a) of this
section, the board may assess the members of the association for any
initial costs associated with developing and implementing the plan to the
extent such costs exceed the funds transferred to the uninsurable health
insurance plan fund pursuant to K.S.A. 40-2125 and amendments thereto. Such
assessment shall be allocated among the members of the association in the
manner prescribed by subsection (a) of this section or any other equitable
formula estab lished by the board. Assessments under this subsection shall
not be subject to the credit against premium tax under subsection (c) of
this section.
  (c)  For all taxable years commencing after December 31, 1995, and
prior to January 1, 1998, 80% of any assessment made against a member of
the association pursuant to subsection (a) of this section may be claimed by
such member as a credit against such member's premium or privilege tax
liability imposed by K.S.A. 12-2624, 40-252 or 40-3213 and amendments
thereto, for the taxable year in which such assessment is paid. For the
tax year commencing after December 31, 1997, 70% of any assessment made
against a member of the association pursuant to subsection (a) of this
section may be claimed by such member as a credit against such member's
premium tax liability imposed by K.S.A. 12-2624, 40-252 or 40-3213 and
amendments thereto, for the taxable year in which such assessment is paid.
  For the tax year commencing after December 31, 1998, 65% of any assessment
made against a member of the association pursuant to subsection (a) of this
section may be claimed by such member as a credit against such member's
premium tax liability imposed by K.S.A. 12-2624, 40-252 or 40-3213 and
amendments thereto, for the taxable year in which such assessment is paid.
  For the tax year commencing after December 31, 1999, 60% of any assessment
made against a member of the association pursuant to subsection (a) of this
section may be claimed by such member as a credit against such member's
premium tax liability imposed by K.S.A. 12-2624, 40-252 or 40-3213 and
amendments thereto, for the taxable year in which such assessment is paid.
  The amendments made to the Kansas uninsurable health insurance plan act by
1997 Senate Bill No. 204 shall expire on January 1, 2001.'';
  Also on page 37, in line 31, by striking ``8.'' and inserting ``10.  On and
after January 1, 1998,'';
  By renumbering remaining sections accordingly;
  Also on page 37, in line 33, by striking ``of this section''; in line 35,
by striking ``and'' and inserting ``or'';
  On page 38, in line 2, by striking the colon; by striking all of lines 3,
4, 5, 6 and 7 and inserting ``is in excess of the plan rate;''; following
line 11, by inserting a subsection as follows:

962                           JOURNAL OF THE HOUSE

  ``(b)  Each resident dependent of a person who is eligible for plan
coverage shall also be eligible for plan coverage.'';
  Also on page 38, in line 12, by striking ``(b)'' and inserting ``(c)''; by
striking lines 36, 37 and 38; in line 39, by striking ``$5,000.'' and
inserting the following: ``On and after January 1, 1998, the plan shall offer
to current participants and new enrollees no fewer than four choices of
deductible and copayment options.'';
  On page 43, in line 21, by striking ``10'' and inserting ``14'';
  On page 44, by striking lines 17 to 43, inclusive;
  On page 45, by striking lines 1 to 43, inclusive;
  On page 46, by striking lines 1 to 43, inclusive;
  On page 47, by striking all in lines 1 to 9, inclusive, and inserting the
following sections:
  ``Sec. 15.  K.S.A. 1996 Supp. 40-2,105 is hereby amended to read as
follows: 40-2,105.   (a) On or after the effective date of this act, every
insurer which issues any individual or group policy of accident and sickness
insurance providing medical, surgical or hospital ex pense coverage for other
than specific diseases or accidents only and which provides for reimbursement
or indemnity for services rendered to a person covered by such policy in a
medical care facility, must provide for reimbursement or indemnity under such
individual policy or under such group policy, except as provided in
subsection (d), which shall be limited to not less than 30 days per year when
such person is confined for treatment of alcoholism, drug abuse or nervous or
mental conditions in a medical care facility licensed under the provisions of
K.S.A. 65-429 and amendments thereto, a treatment facility for alcoholics
licensed under the provisions of K.S.A. 65-4014 and amendments thereto, a
treat ment facility for drug abusers licensed under the provisions of K.S.A.
65-4605 and amend ments thereto, a community mental health center or clinic
licensed under the provisions of K.S.A. 75-3307b and amendments thereto or a
psychiatric hospital licensed under the pro visions of K.S.A. 75-3307b and
amendments thereto. Such individual policy or such group policy shall also
provide for reimbursement or indemnity, except as provided in subsection  
(d), of the costs of treatment of such person for alcoholism, drug abuse and
nervous or mental conditions, limited to not less than 100% of the first
$100, 80% of the next $100 and 50% of the next $1,640 in any year and limited
to not less than $7,500 in such person's lifetime, in the facilities
enumerated when confinement is not necessary for the treatment or by a
physician licensed or psychologist licensed to practice under the laws of the
state of Kansas.
  (b)  For the purposes of this section ``nervous or mental conditions''
means disorders specified in the diagnostic and statistical manual of mental
disorders, fourth edition, (DSMIV, 1994) of the American psychiatric
association but shall not include conditions not at tributable to a mental
disorder that are a focus of attention or treatment (DSM-IV, 1994).
  (c)  The provisions of this section shall be applicable to health
maintenance organizations organized under article 32 of chapter 40 of the
Kansas Statutes Annotated.
  (d)  There shall be no coverage under the provisions of this section for
any assessment against any person required by a diversion agreement or by
order of a court to attend an alcohol and drug safety action program
certified pursuant to K.S.A. 8-1008 and amendments thereto.
  (e)  The provisions of this section shall not apply to any medicare
supplement policy of insurance, as defined by the commissioner of insurance
by rule and regulation.
  (f)  The provisions of this section shall be applicable to the Kansas state
employees health care benefits program developed and provided by the Kansas
state employees health care commission.
  (g)  The outpatient coverage provisions of this section shall not apply
to a high deductible health plan as defined in Section 301 of P.L. 104-191
and any amendments thereto if such plan is purchased in connection with a
medical savings account pursuant to that act. After the amount of eligible
deductible expenses have been paid by the insured, the outpatient costs of
treatment of the insured for alcoholism, drug abuse and nervous or mental
conditions shall be paid on the same level they are provided for a medical
condition.
  New Sec. 16.  Sections 16 to 23 of this act shall be known and may be cited
as the patient protection act.

                                  May 3, 1997                               963

  New Sec. 17.  As used in this act:
  (a)  ``Emergency medical condition'' means the sudden and, at the time,
unexpected onset of a health condition that requires immediate medical
attention, where failure to provide medical attention would result in serious
impairment to bodily functions or serious dysfunction of a bodily organ or
part, or would place the person's health in serious jeopardy.
  (b)  ``Emergency services'' means ambulance services and health care items
and services furnished or required to evaluate and treat an emergency medical
condition, as directed or ordered by a physician.
  (c)  ``Health benefit plan'' means any hospital or medical expense policy,
health, hospital or medical service corporation contract, a plan provided by
a municipal group-funded pool, a policy or agreement entered into by a health
insurer or a health maintenance organization contract offered by an employer
or any certificate issued under any such policies, contracts or plans.
``Health benefit plan'' does not include policies or certificates covering
only acci dent, credit, dental, disability income, long-term care, hospital
indemnity, medicare supple ment, specified disease, vision care, coverage
issued as a supplement to liability insurance, insurance arising out of a
workers compensation or similar law, automobile medical-payment insurance, or
insurance under which benefits are payable with or without regard to fault
and which is statutorily required to be contained in any liability insurance
policy or equiv alent self-insurance.
  (d)  ``Health insurer'' means any insurance company, nonprofit medical and
hospital service corporation, municipal group-funded pool, fraternal benefit
society, health mainte nance organization, or any other entity which offers a
health benefit plan subject to the Kansas Statutes Annotated.
  (e)  ``Insured'' means a person who is covered by a health benefit plan.
  (f)  ``Participating provider'' means a provider who, under a contract with
the health insurer or with its contractor or subcontractor, has agreed to
provide one or more health care services to insureds with an expectation of
receiving payment, other than coinsurance, copayments or deductibles,
directly or indirectly from the health insurer.
  (g)  ``Provider'' means a physician, hospital or other person which is
licensed, accredited or certified to perform specified health care services.
  (h)  ``Provider network'' means those participating providers who have
entered into a contract or agreement with a health insurer to provide items
or health care services to individuals covered by a health benefit plan
offered by such health insurer.
  (i)  ``Physician'' means a person licensed by the state board of healing
arts to practice medicine and surgery.
  New Sec. 18.  (a) A health benefit plan shall not deny coverage for
emergency services if the symptoms presented by an insured and recorded by
the attending provider indicate that an emergency medical condition exists,
or for emergency services necessary to provide an insured with a medical
examination and stabilizing treatment, regardless of whether prior
authorization was obtained to provide those services.
  (b)  If a participating provider or other authorized representative of a
health insurer authorizes emergency services, the health insurer shall not
subsequently rescind or modify that authorization after the provider renders
the authorized care in good faith and pursuant to the authorization except
for:
  (1)  Payments made as a result of misrepresentation, fraud, omission or
clerical error; and
  (2)  copayment, coinsurance or deductible amounts that are the
responsibility of the insured.
  (c)  Once an insured is stabilized pursuant to subsection (a), a health
benefit plan may require as a condition of further coverage that a hospital
emergency facility shall promptly contact the health insurer for prior
authorization for continuing treatment, specialty con sultations, transfer
arrangements or other medically necessary and appropriate care for an
insured.
  (d)  Coverage of emergency services shall be subject to applicable
copayments, coinsur ance and deductibles.

964                           JOURNAL OF THE HOUSE

  (e)  For required post evaluation or post stabilization services
immediately following treatment of an emergency medical condition, a health
insurer shall provide access to an authorized representative 24 hours a day,
seven days a week.
  New Sec. 19.  No health insurer shall prohibit or restrict any
participating provider from discussing with or disclosing to any insured or
other individual any medically appropriate health care information that such
provider deems appropriate regarding the nature of treat ment options, the
risks or alternatives thereto, the process used or the decision made by such
insurer to approve or deny health care services, the availability of
alternate therapies, consultations, or tests, or from advocating on behalf of
the insured within the utilization review or grievance processes established
by the health insurer.
  New Sec. 20.  No health insurer shall offer or operate a compensation
arrangement between such health insurer or its agents and a participating
provider that may directly or indirectly serve as an inducement to reduce or
limit the delivery of medically necessary services with respect to an insured
in any health benefit plan offered by such health insurer. Compensation
arrangements which involve capitation payments or other risk sharing pro
visions shall not be considered inducements.
  New Sec. 21.  Every health insurer shall inform in writing current and
prospective in sureds that the following information shall be available upon
request:
  (a)  A complete description of the health care services, items and other
benefits to which the insured is entitled in the particular health benefit
plan which is covering or being offered to such person;
  (b)  a description of any limitations, exceptions or exclusions to coverage
in the health benefit plan, including prior authorization policies,
restricted drug formularies or other provisions which restrict access to
covered services or items by the insured;
  (c)  a listing of the health benefit plan's participating providers, their
business addresses and telephone numbers, the availability of those
providers, and any limitations on an insu red's choice of provider;
  (d)  notification in advance of any changes in the health benefit plan
which either reduces the coverage or benefits, or increases the cost, to such
person; and
  (e)  a description of the grievance and appeal procedures available under
the health benefit plan and an insured's rights regarding termination,
disenrollment, nonrenewal or cancelation of coverage.
  New Sec. 22.  (a) A health insurer providing a health benefit plan shall
maintain a pro vider network that is sufficient in numbers and types of
providers to assure that all covered services to an insured will be
accessible without unreasonable delay. Sufficiency of the provider network
shall be determined in accordance with the requirements of this section, and
may be established by reference to any reasonable criteria used by the health
insurer, including but not limited to: provider-insured ratios by specialty;
primary care providerinsured ratios; geographic accessibility; waiting times
for appointments with participating providers; hours of operation; and the
availability of technological and specialty services to serve the needs of
insureds requiring technologically advanced or specialty care.
  (b)  A health insurer shall have a plan by which an insured with a
life-threatening, chronic, degenerative or disabling condition or disease,
which requires specialized medical care over a prolonged period of time, may
receive a referral to a specialist with expertise in treating such disease or
condition who shall be responsible for and capable of providing and
coordinating the insured's specialty care.
  (c)  Nothing in this section shall require a health insurer to provide
benefits not otherwise covered by the terms of the health benefits plan.
  (d)  A provider network shall not be determined to be insufficient for
failure to contract with any provider unwilling to contract under the same
terms and conditions, including reimbursement levels, as such health insurer
offers to other similarly situated health care providers.
  New Sec. 23.  The commissioner of insurance may adopt rules and regulations
as nec essary to implement the provisions of the patient protection act.
  Sec. 24.  K.S.A. 40-2201 is hereby amended to read as follows: 40-2201.
(a) The term ``policy of accident and sickness insurance'' as used
herein includes any policy or contract

                                  May 3, 1997                               965

insuring against loss resulting from sickness or bodily injury or death by
accident, or both, issued by a stock, or mutual company or association or any
other insurer.
  (b)  The term ``policy of stop loss or excess loss insurance coverage''
means a policy, contract, endorsement, attachments, amendments or other
modifications that insure against losses of the policyholder issued by a
stock, or mutual company or association or any other insurer.
  New Sec. 25.  Sections 25 to 33, inclusive, and amendments thereto shall be
known and may be cited as the woman's-right-to-know act.
  Sec. 26.  K.S.A. 65-6701 is hereby amended to read as follows: 65-6701. As
used in this act:
  (a)  ``Abortion'' means the use of any means to intentionally terminate a
pregnancy except for the purpose of causing a live birth. Abortion does not
include: (1) The use of any drug or device that inhibits or prevents
ovulation, fertilization or the implantation of an embryo; or (2) disposition
of the product of in vitro fertilization prior to implantation.
  (b)  ``Counselor'' means a person who is: (1) Licensed to practice
medicine and surgery;   (2) licensed to practice psychology; (3) licensed to
practice professional or practical nursing;   (4) registered to practice
professional counseling; (5) licensed as a social worker; (6) the holder of a
master's or doctor's degree from an accredited graduate school of social
work;   (7) registered to practice marriage and family therapy; (8) a
registered physician's assistant; or (9) a currently ordained member of the
clergy or religious authority of any religious denomination or society.
Counselor does not include the physician who performs or induces the abortion
or a physician or other person who assists in performing or inducing the abor
tion.
  (c)  ``Department'' means the department of health and environment.
  (d)  ``Gestational age'' means the time that has elapsed since the first
day of the woman's last menstrual period.
  (e)  ``Medical emergency'' means that condition which, on the basis of the
physician's good faith clinical judgment, so complicates the medical
condition of a pregnant woman as to necessitate the immediate abortion of her
pregnancy to avert her death or for which a delay will create serious risk of
substantial and irreversible impairment of a major bodily function.
  (f)  ``Minor'' means a person less than 18 years of age.
  (d) (g)  ``Physician'' means a person licensed to practice
medicine and surgery in this state.
  (e) (h)  ``Pregnant'' or ``pregnancy'' means that female
reproductive condition of having a fetus in the mother's body.
  (i)  ``Qualified person'' means an agent of the physician who is a
psychologist, licensed social worker, registered professional counselor,
registered nurse or physician.
  (j)  ``Unemancipated minor'' means any minor who has never been: (1)
Married; or (2) freed, by court order or otherwise, from the care, custody
and control of the minor's parents.
  (f) (k)  ``Viable'' means that stage of gestation when, in the
best medical judgment of the attending physician, the fetus is capable of
sustained survival outside the uterus without the application of
extraordinary medical means.
  New Sec. 27.  No abortion shall be performed or induced without the
voluntary and informed consent of the woman upon whom the abortion is to be
performed or induced. Except in the case of a medical emergency, consent to
an abortion is voluntary and informed only if:
  (a)  At least 24 hours before the abortion the physician who is to perform
the abortion or the referring physician has informed the woman in writing of:
  (1)  The name of the physician who will perform the abortion;
  (2)  a description of the proposed abortion method;
  (3)  a description of risks related to the proposed abortion method,
including risks to the woman's reproductive health and alternatives to the
abortion that a reasonable patient would consider material to the decision of
whether or not to undergo the abortion;
  (4)  the probable gestational age of the fetus at the time the abortion is
to be performed and that Kansas law requires the following: ``No person shall
perform or induce an abortion when the fetus is viable unless such person is
a physician and has a documented referral

966                           JOURNAL OF THE HOUSE

from another physician not financially associated with the physician
performing or inducing the abortion and both physicians determine that: (1)
The abortion is necessary to preserve the life of the pregnant woman; or (2)
the fetus is affected by a severe or life-threatening deformity or
abnormality.'' If the child is born alive, the attending physician has the
legal obligation to take all reasonable steps necessary to maintain the life
and health of the child;
  (5)  the probable anatomical and physiological characteristics of the fetus
at the time the abortion is to be performed;
  (6)  the medical risks associated with carrying a fetus to term; and
  (7)  any need for anti-Rh immune globulin therapy, if she is Rh negative,
the likely consequences of refusing such therapy and the cost of the therapy.
  (b)  At least 24 hours before the abortion, the physician who is to perform
the abortion, the referring physician or a qualified person has informed the
woman in writing that:
  (1)  Medical assistance benefits may be available for prenatal care,
childbirth and neo natal care, and that more detailed information on the
availability of such assistance is con tained in the printed materials given
to her and described in section 28 and amendments thereto;
  (2)  the printed materials in section 28 and amendments thereto describe
the fetus and list agencies which offer alternatives to abortion with a
special section listing adoption serv ices;
  (3)  the father of the fetus is liable to assist in the support of her
child, even in instances where he has offered to pay for the abortion except
that in the case of rape this information may be omitted; and
  (4)  the woman is free to withhold or withdraw her consent to the abortion
at any time prior to invasion of the uterus without affecting her right to
future care or treatment and without the loss of any state or
federally-funded benefits to which she might otherwise be entitled.
  (c)  Prior to the abortion procedure, prior to physical preparation for the
abortion and prior to the administration of medication for the abortion, the
woman shall meet privately with the physician who is to perform the abortion
and such person's staff to ensure that she has an adequate opportunity to ask
questions of and obtain information from the physician concerning the
abortion.
  (d)  At least 24 hours before the abortion, the woman is given a copy of
the printed materials described in section 28 and amendments thereto. If the
woman asks questions concerning any of the information or materials, answers
shall be provided to her in her own language.
  (e)  The woman certifies in writing on a form provided by the department,
prior to the abortion, that the information required to be provided under
subsections (a), (b) and (d) has been provided and that she has met with the
physician who is to perform the abortion on an individual basis as provided
under subsection (c). All physicians who perform abortions shall report the
total number of certifications received monthly to the department. The
department shall make the number of certifications received available on an
annual basis.
  (f)  Prior to the performance of the abortion, the physician who is to
perform the abortion or the physician's agent receives a copy of the written
certification prescribed by subsection   (e) of this section.
  (g)  The woman is not required to pay any amount for the abortion procedure
until the 24-hour waiting period has expired.
  New Sec. 28.  (a) The department shall cause to be published and
distributed widely, within 30 days after the effective date of this act, and
shall update on an annual basis, the following easily comprehensible printed
materials:
  (1)  Geographically indexed materials designed to inform the woman of
public and pri vate agencies and services available to assist a woman through
pregnancy, upon childbirth and while her child is dependent, including but
not limited to, adoption agencies. The materials shall include a
comprehensive list of the agencies, a description of the services they offer
and the telephone numbers and addresses of the agencies; and inform the woman
about available medical assistance benefits for prenatal care, childbirth and
neonatal care and about the support obligations of the father of a child who
is born alive. The department shall ensure that the materials described in
this section are comprehensive and do not

                                  May 3, 1997                               967

directly or indirectly promote, exclude or discourage the use of any agency
or service de scribed in this section. The materials shall also contain a
toll-free 24-hour a day telephone number which may be called to obtain,
orally, such a list and description of agencies in the locality of the caller
and of the services they offer. The materials shall state that it is unlawful
for any individual to coerce a woman to undergo an abortion, that any
physician who per forms an abortion upon a woman without her informed consent
may be liable to her for damages. Kansas law permits adoptive parents to pay
costs of prenatal care, childbirth and neonatal care. The materials shall
include the following statement:
     ``Many public and private agencies exist to provide counseling and
   information on available services. You are strongly urged to seek their
   assistance to obtain guidance during your pregnancy. In addition, you are
   encouraged to seek information on abortion services, alternatives to
   abortion, including adoption, and resources availa ble to post-partum
   mothers. The law requires that your physician or the physician's agent
   provide the enclosed information.''
  (2)  Materials that inform the pregnant woman of the probable anatomical and
physio logical characteristics of the fetus at two-week gestational increments
from fertilization to full term, including pictures or drawings representing
the development of a fetus at twoweek gestational increments, and any relevant
information on the possibility of the fetus' survival. Any such pictures or
drawings shall contain the dimensions of the fetus and shall be realistic. The
materials shall be objective, nonjudgmental and designed to convey only
accurate scientific information about the fetus at the various gestational
ages. The material shall also contain objective information describing the
methods of abortion procedures com monly employed, the medical risks commonly
associated with each such procedure and the medical risks associated with
carrying a fetus to term.
  (3)  A certification form to be used by physicians or their agents under
subsection (e) of section 27 and amendments thereto, which will list all the
items of information which are to be given to women by physicians or their
agents under the woman's-right-to-know act.
  (b)  The materials required under this section shall be printed in a typeface
large enough to be clearly legible. The materials shall be made available in
both English and Spanish language versions.
  (c)  The materials required under this section shall be available at no cost
from the department upon request and in appropriate number to any person,
facility or hospital.
  New Sec. 29.  Where a medical emergency compels the performance of an
abortion, the physician shall inform the woman, before the abortion if
possible, of the medical indi cations supporting the physician's judgment that
an abortion is necessary to avert her death or to avert substantial and
irreversible impairment of a major bodily function.
  New Sec. 30.  Any physician who intentionally, knowingly or recklessly fails
to provide informed consent pursuant to the woman's-right-to-know act is guilty
of unprofessional conduct as defined in K.S.A. 65-2837 and amendments thereto.
  New Sec. 31.  Any physician who complies with the provisions of this act
shall not be held civilly liable to a patient for failure to obtain informed
consent to the abortion.
  New Sec. 32.  The provisions of this act are declared to be severable, and if
any provi sion, word, phrase or clause of the act or the application thereof to
any person shall be held invalid, such invalidity shall not affect the validity
of the remaining portions of the woman'sright-to-know act.
  New Sec. 33.  (a) Nothing in the woman's-right-to-know act shall be construed
as cre ating or recognizing a right to abortion.
  (b)  It is not the intention of the woman's-right-to-know act to make lawful
an abortion that is currently unlawful.
  Sec. 34.  K.S.A. 40-2118, 40-2201, 40-2228, 65-6701 and 65-6706 and K.S.A.
1996 Supp. 40-2,105, 40-2119, 40-2121, 40-2122, 40-2124, 40-2209, 40-2209d,
40-2209f and 40-3209 are hereby repealed.'';
  Renumber remaining sections accordingly;
  On page 1, in the title, by striking lines 14 to 24, inclusive, and inserting
the following:
``AN ACT relating to health care; relating to accident and health insurance;
group and individual policies of insurance; patient protection;
women's-right-to-know; amending

968                           JOURNAL OF THE HOUSE

K.S.A. 40-2118, 40-2201, 40-2228 and 65-6701 and K.S.A. 1996 Supp. 40-2,105,
402119, 40-2121, 40-2122, 40-2124, 40-2209, 40-2209d, 40-2209f and 40-3209 and
re pealing the existing sections; also repealing K.S.A. 65-6706.'';
  And your committee on conference recommends the adoption of this report.
Susan Wagle
Nancy A. Kirk
Dennis Wilson   Conferees on part of House Don Steffes
Sandy Praeger
Paul Feleciano, Jr.   Conferees on part of Senate   On motion of Rep. Bradley,
the conference committee report on SB 204 was adopted.
  On roll call, the vote was: Yeas 118; Nays 0; Present but not voting 1;
Absent or not voting 6.
  Yeas: Adkins, Alldritt, Allen, Aurand, Ballard, Ballou, Beggs, Benlon,
Boston, Bradley, Burroughs, Campbell, Carmody, Compton, Correll, Cox, Crow,
Dahl, Dean, Dreher, Ed monds, Empson, Faber, Farmer, Feuerborn, Findley,
Flaharty, Flora, Flower, Franklin, Freeborn, Garner, Geringer, Gilbert,
Gilmore, Glasscock, Grant, Gregory, Hayzlett, Hel gerson, Henderson, Henry,
Holmes, Horst, Howell, Huff, Humerickhouse, Hutchins, Jen nison, Johnson,
Johnston, Kejr, Kirk, Klein, Phil Kline, Phill Kline, Krehbiel, Kuether, Land
wehr, Lane, Larkin, J. Long, P. Long, Mason, Mayans, Mays, McClure, McCreary,
McKechnie, McKinney, Minor, Mollenkamp, Morrison, Myers, Neufeld, Nichols,
O'Con nor, Osborne, Packer, Palmer, Pauls, E. Peterson, J. Peterson, Phelps,
Powell, Powers, Presta, Ray, Reardon, Reinhardt, Ruff, Samuelson, Sawyer,
Schwartz, Shallenburger, Sharp, Shore, Showalter, Shriver, Shultz, Sloan,
Spangler, Stone, Storm, Tanner, Thimesch, To elkes, Tomlinson, Toplikar,
Vickrey, Vining, Wagle, Weber, Weiland, Wells, Wempe, Wilk, Wilson.
  Nays: None.
  Present but not voting: Lloyd.
  Absent or not voting: Dillon, Haley, O'Neal, Pottorff, Swenson, Welshimer.

CONFERENCE COMMITTEE REPORT

  Mr. President and Mr. Speaker: Your committee on conference on Senate amend
ments to HB 2022, submits the following report:
  The House accedes to all Senate amendments to the bill, and your committee on
con ference further agrees to amend the bill, as printed with Senate Committee
of the Whole amendments, as follows:
  On page 19, by striking all after line 41;
  By striking all in pages 20 through 29;
  On page 30, by striking all before line 27;
  By renumbering the existing sections;
  Also on page 30, in line 27, by striking ``and 44-706''; also in line 27, by
striking ``are'' and inserting ``is'';
  In the title, in line 15, by striking ``and 44-706''; in line 16, by striking
``sections'' and inserting ``section'';
  And your committee on conference recommends the adoption of this report.
Alicia L. Salisbury
Pat Ranson
Jim Barone   Conferees on part of Senate Al Lane
Janice L. Pauls
Gerald G. Geringer   Conferees on part of House

                                  May 3, 1997                               969

  On motion of Rep. Lane, the conference committee report on HB 2022 was
adopted.
  On roll call, the vote was: Yeas 121; Nays 0; Present but not voting 0;
Absent or not voting 4.
  Yeas: Adkins, Alldritt, Allen, Aurand, Ballard, Ballou, Beggs, Benlon,
Boston, Bradley, Burroughs, Campbell, Carmody, Compton, Correll, Cox, Crow,
Dahl, Dean, Dreher, Ed monds, Empson, Faber, Farmer, Feuerborn, Findley,
Flaharty, Flora, Flower, Franklin, Freeborn, Garner, Geringer, Gilbert,
Gilmore, Glasscock, Grant, Gregory, Haley, Hayzlett, Helgerson, Henderson,
Henry, Holmes, Horst, Howell, Huff, Humerickhouse, Hutchins, Jennison, Johnson,
Johnston, Kejr, Kirk, Klein, Phil Kline, Phill Kline, Krehbiel, Kuether,
Landwehr, Lane, Larkin, Lloyd, J. Long, P. Long, Mason, Mayans, Mays, McClure,
Mc Creary, McKechnie, McKinney, Minor, Mollenkamp, Morrison, Myers, Neufeld,
Nichols, O'Connor, Osborne, Packer, Palmer, Pauls, E. Peterson, J. Peterson,
Phelps, Powell, Pow ers, Presta, Ray, Reardon, Reinhardt, Ruff, Samuelson,
Sawyer, Schwartz, Shallenburger, Sharp, Shore, Showalter, Shriver, Shultz,
Sloan, Spangler, Stone, Storm, Swenson, Tanner, Thimesch, Toelkes, Tomlinson,
Toplikar, Vickrey, Vining, Wagle, Weber, Weiland, Wells, Wempe, Wilk, Wilson.
  Nays: None.
  Present but not voting: None.
  Absent or not voting: Dillon, O'Neal, Pottorff, Welshimer.

INTRODUCTION OF ORIGINAL MOTIONS

  On emergency motion of Rep. Jennison, pursuant to House Rule 2311, HB 2509
was advanced to Final Action on Bills and Concurrent Resolutions, subject to
amendment, de bate and roll call.

FINAL ACTION ON BILLS AND CONCURRENT RESOLUTIONS

  On motion of Rep. Sawyer to move the previous question, roll call was
demanded.
  On roll call, the vote was: Yeas 56; Nays 64; Present but not voting 0;
Absent or not voting 5.
  Yeas: Adkins, Alldritt, Allen, Ballard, Beggs, Benlon, Correll, Cox, Crow,
Dreher, Emp son, Feuerborn, Findley, Flaharty, Flora, Garner, Gilbert,
Glasscock, Grant, Haley, Hel gerson, Henderson, Henry, Huff, Johnson, Johnston,
Kirk, Klein, Phil Kline, Krehbiel, Kuether, Lane, Larkin, McClure, McKechnie,
McKinney, Minor, Nichols, E. Peterson, Phelps, Ray, Reinhardt, Ruff, Samuelson,
Sawyer, Sharp, Showalter, Shriver, Sloan, Stone, Storm, Toelkes, Tomlinson,
Weiland, Wells, Wempe.
  Nays: Aurand, Ballou, Boston, Bradley, Burroughs, Campbell, Carmody, Compton,
Dahl, Dean, Edmonds, Faber, Farmer, Flower, Franklin, Freeborn, Geringer,
Gilmore, Gregory, Hayzlett, Holmes, Horst, Howell, Humerickhouse, Hutchins,
Jennison, Kejr, Phill Kline, Landwehr, Lloyd, J. Long, P. Long, Mason, Mayans,
Mays, McCreary, Mollenkamp, Mor rison, Myers, Neufeld, O'Connor, Osborne,
Packer, Palmer, Pauls, J. Peterson, Powell, Powers, Presta, Reardon, Schwartz,
Shallenburger, Shore, Shultz, Swenson, Tanner, Thi mesch, Toplikar, Vickrey,
Vining, Wagle, Weber, Wilk, Wilson.
  Present but not voting: None.
  Absent or not voting: Dillon, O'Neal, Pottorff, Spangler, Welshimer.
  The motion of Rep. Sawyer did not prevail.
  Also, on motion of Rep. Wilk to concur in Senate amendments to HB 2509,
Speaker Shallenburger asked for a ruling of the Rules Chair. The Rules Chair
stated that the motion to concur is not in order and not germane under the
order of business Emergency Final Action. Rep. Wilk challenged the ruling, the
question being ``Shall the Rules Chair be sustained?'' The Rules Chair was
sustained.
  Also, roll call was demanded on motion of Rep. Phill Kline and HB 2509
was amended on page 19, by striking all in lines 3 through 28 and inserting:
  ``Section. 1.  K.S.A. 65-6701 is hereby amended to read as follows: 65-6701.
As used in this act:
  (a)  ``Abortion'' means the use of any means to intentionally terminate a
pregnancy except for the purpose of causing a live birth. Abortion does not
include: (1) The use of any drug

970                           JOURNAL OF THE HOUSE

or device that inhibits or prevents ovulation, fertilization or the
implantation of an embryo; or (2) disposition of the product of in vitro
fertilization prior to implantation.
  (b)  ``Counselor'' means a person who is: (1) Licensed to practice medicine
and surgery;   (2) licensed to practice psychology; (3) licensed to practice
professional or practical nursing;   (4) registered to practice professional
counseling; (5) licensed as a social worker; (6) the holder of a master's or
doctor's degree from an accredited graduate school of social work;   (7)
registered to practice marriage and family therapy; (8) a registered
physician's assistant; or (9) a currently ordained member of the clergy or
religious authority of any religious denomination or society. Counselor does
not include the physician who performs or induces the abortion or a physician
or other person who assists in performing or inducing the abor tion.
  (c)  ``Minor'' means a person less than 18 years of age.
  (d)  ``Physician'' means a person licensed to practice medicine and surgery
in this state.
  (e)  ``Severe or life-threatening deformity or abnormality'' means a
condition in which, in the best medical judgment of the attending physician,
the fetus is incapable of sustained survival outside the uterus without the
application of extraordinary medical means.
  (e) (f)  ``Unemancipated minor'' means any minor who has never
been: (1) Married; or   (2) freed, by court order or otherwise, from the care,
custody and control of the minor's parents.
  (f) (g)  ``Viable'' means that stage of gestation when, in the
best medical judgment of the attending physician, the fetus is capable of
sustained survival outside the uterus without the application of extraordinary
medical means.
  Sec. 2.  K.S.A. 1996 Supp. 65-6703 is hereby amended to read as follows:
65-6703. (a) No person shall perform or induce an abortion when the fetus is
viable or when the gesta tional age of the fetus is 24 or more weeks
unless such person is a physician and has a documented referral from another
physician not financially associated with the physician performing or inducing
the abortion and both physicians determine that: (1) The the abor
tion is necessary to preserve: (1) Preserve the life of the
pregnant woman; or (2) the fetus is affected by a severe or
life-threatening deformity or abnormality; or (3) prevent the serious risk
of substantial and irreversible impairment of a major bodily function of the
pregnant woman.
  (b)  Violation of this section is a class A person misdemeanor.
  Whenever an abortion has been performed on a fetus which is viable or when
the gesta tional age of the fetus is 24 or more weeks, the remains of such
fetus shall be delivered to the office of the coroner of the district in which
such abortion was performed. A qualified pathologist as may be designated by
the coroner shall perform an autopsy on the remains to determine the
gestational age of the fetus and whether such abortion has been performed in
compliance with the provisions of law. A report of such autopsy shall be
transmitted to the secretary of health and environment. Such information and
report shall be subject to the confidentiality requirements prescribed by
K.S.A. 65-445, and amendments thereto, except for the purposes of
investigations of violations of K.S.A. 65-6701 et seq., and amendments
thereto.
  (b) (1)  No person shall perform or induce a partial birth abortion unless
such person is a physician and has a documented referral from another physician
not financially asso ciated with the physician performing or inducing the
abortion and both physicians determine that the abortion is necessary to
preserve the life of the pregnant woman.
  (2)  As used in this section, partial birth abortion means an abortion in
which the fetus is partially delivered vaginally and then intentionally killed
before completing the delivery.
  (c)  A woman upon whom an abortion is performed shall not be prosecuted under
this section for conspiracy to violate this section pursuant to K.S.A. 21-3302,
and amendments thereto.
  (d)  Nothing in this section shall be construed to create a right to an
abortion. Notwith standing any provision of this section, a person shall not
perform an abortion that is pro hibited by law.
  (e)  Upon a first conviction of a violation of this section, a person shall
be guilty of a class A person misdemeanor. Upon a second or subsequent
conviction of a violation of this section, a person shall be guilty of a
severity level 10, person felony.

                                  May 3, 1997                               971

  (f)  If any provision of this section is held to be invalid or
unconstitutional, it shall be presumed conclusively that the legislature would
have enacted the remainder of this section without such invalid or
unconstitutional provision.
  Sec. 3.  K.S.A. 65-6701 and K.S.A. 1996 Supp. 65-6703 are hereby
repealed.'';
  By renumbering accordingly;
  In the title, in line 24, following ``amending'' by inserting ``K.S.A.
65-6701 and''; in line 25, by striking ``section'' and inserting ``sections'';
  On roll call, the vote was: Yeas 73; Nays 47; Present but not voting 0;
Absent or not voting 5.
  Yeas: Aurand, Ballou, Boston, Bradley, Burroughs, Campbell, Carmody, Compton,
Dahl, Dean, Edmonds, Faber, Farmer, Flower, Franklin, Freeborn, Geringer,
Gilmore, Grant, Gregory, Hayzlett, Henry, Holmes, Horst, Howell, Humerickhouse,
Hutchins, Jennison, Kejr, Phill Kline, Landwehr, Larkin, Lloyd, J. Long, P.
Long, Mason, Mayans, Mays, Mc Clure, McCreary, McKinney, Mollenkamp, Morrison,
Myers, Neufeld, O'Connor, Osborne, Packer, Palmer, Pauls, J. Peterson, Phelps,
Powell, Powers, Presta, Reardon, Ruff, Schwartz, Shallenburger, Shore, Shultz,
Swenson, Tanner, Thimesch, Toplikar, Vickrey, Vining, Wa gle, Weber, Weiland,
Wempe, Wilk, Wilson.
  Nays: Adkins, Alldritt, Allen, Ballard, Beggs, Benlon, Correll, Cox, Crow,
Dreher, Emp son, Feuerborn, Findley, Flaharty, Flora, Garner, Gilbert,
Glasscock, Haley, Helgerson, Henderson, Huff, Johnson, Johnston, Kirk, Klein,
Phil Kline, Krehbiel, Kuether, Lane, McKechnie, Minor, Nichols, E. Peterson,
Ray, Reinhardt, Samuelson, Sawyer, Sharp, Show alter, Sloan, Spangler, Stone,
Storm, Toelkes, Tomlinson, Wells.
  Present but not voting: None.
  Absent or not voting: Dillon, O'Neal, Pottorff, Shriver, Welshimer.
  The motion of Rep. Phill Kline prevailed.
  HB 2509, An act concerning abortions; amending K.S.A. 65-6701 and
K.S.A. 1996 Supp. 65-6703 and repealing the existing sections, was considered
on final action.
  On roll call, the vote was: Yeas 80; Nays 41; Present but not voting 0;
Absent or not voting 4.
  Yeas: Aurand, Ballou, Boston, Bradley, Burroughs, Campbell, Carmody, Compton,
Cor rell, Crow, Dahl, Dean, Edmonds, Faber, Farmer, Feuerborn, Flower,
Franklin, Freeborn, Geringer, Gilmore, Grant, Gregory, Hayzlett, Henry, Holmes,
Horst, Howell, Huff, Hu merickhouse, Hutchins, Jennison, Johnson, Kejr, Phill
Kline, Landwehr, Larkin, Lloyd, J. Long, P. Long, Mason, Mayans, Mays, McClure,
McCreary, McKinney, Mollenkamp, Mor rison, Myers, Neufeld, O'Connor, Osborne,
Packer, Palmer, Pauls, J. Peterson, Phelps, Powell, Powers, Presta, Reardon,
Ruff, Schwartz, Shallenburger, Sharp, Shore, Shultz, Swenson, Tanner, Thimesch,
Tomlinson, Toplikar, Vickrey, Vining, Wagle, Weber, Weiland, Wempe, Wilk,
Wilson.
  Nays: Adkins, Alldritt, Allen, Ballard, Beggs, Benlon, Cox, Dreher, Empson,
Findley, Flaharty, Flora, Garner, Gilbert, Glasscock, Haley, Helgerson,
Henderson, Johnston, Kirk, Klein, Phil Kline, Krehbiel, Kuether, Lane,
McKechnie, Minor, Nichols, E. Peterson, Ray, Reinhardt, Samuelson, Sawyer,
Showalter, Shriver, Sloan, Spangler, Stone, Storm, Toelkes, Wells.
  Present but not voting: None.
  Absent or not voting: Dillon, O'Neal, Pottorff, Welshimer.
  The bill passed, as amended.

INTRODUCTION OF ORIGINAL MOTIONS

  On motion of Rep. Jennison, pursuant to subsection (k) of Joint Rule 4 of the
Joint Rules of the Senate and House of Representatives, the rules were
suspended for the purpose of considering SB 146, 132.

CONFERENCE COMMITTEE REPORT

  Mr. President and Mr. Speaker: Your committee on conference on House amend
ments to SB 146, submits the following report:

972                           JOURNAL OF THE HOUSE

  The House recedes from all of its amendments to the bill, and your committee
on con ference further agrees to amend the bill, as printed with Senate
Committee amendments, as follows:
  On page 1, in lines 20 and 31, by striking ``may'' and inserting ``shall'';
  And your committee on conference recommends the adoption of this report.
Joann Flower
John Ballou
Galen Weiland   Conferees on part of House Janice L. Hardenburger
Rich Becker
Chris Steineger   Conferees on part of Senate   On motion of Rep. Flower, the
conference committee report on SB 146 was adopted.
  On roll call, the vote was: Yeas 120; Nays 0; Present but not voting 1;
Absent or not voting 4.
  Yeas: Adkins, Alldritt, Allen, Aurand, Ballard, Ballou, Beggs, Benlon,
Boston, Bradley, Burroughs, Campbell, Carmody, Compton, Correll, Cox, Crow,
Dahl, Dean, Dreher, Ed monds, Empson, Faber, Farmer, Feuerborn, Findley,
Flaharty, Flora, Flower, Franklin, Freeborn, Garner, Geringer, Gilbert,
Gilmore, Glasscock, Grant, Gregory, Haley, Hayzlett, Helgerson, Henderson,
Henry, Holmes, Horst, Howell, Huff, Humerickhouse, Hutchins, Jennison, Johnson,
Johnston, Kejr, Kirk, Klein, Phil Kline, Phill Kline, Krehbiel, Kuether,
Landwehr, Lane, Larkin, Lloyd, J. Long, P. Long, Mason, Mayans, Mays, McClure,
Mc Creary, McKinney, Minor, Mollenkamp, Morrison, Myers, Neufeld, Nichols,
O'Connor, Osborne, Packer, Palmer, Pauls, E. Peterson, J. Peterson, Phelps,
Powell, Powers, Presta, Ray, Reardon, Reinhardt, Ruff, Samuelson, Sawyer,
Schwartz, Shallenburger, Sharp, Shore, Showalter, Shriver, Shultz, Sloan,
Spangler, Stone, Storm, Swenson, Tanner, Thimesch, Toelkes, Tomlinson,
Toplikar, Vickrey, Vining, Wagle, Weber, Weiland, Wells, Wempe, Wilk, Wilson.
  Nays: None.
  Present but not voting: McKechnie.
  Absent or not voting: Dillon, O'Neal, Pottorff, Welshimer.

CONFERENCE COMMITTEE REPORT

  Mr. President and Mr. Speaker: Your committee on conference on House amend
ments to SB 132, submits the following report:
  The Senate accedes to all House amendments to the bill, and your committee on
con ference further agrees to amend the bill, as printed with House Committee
amendments, as follows:
  On page 1, following line 14, by inserting the following:
  ``New Section 1.  (a) The director of investments shall accept requests from
banks in terested in obtaining investment accounts of state moneys. Such
requests may be submitted any business day and shall specify the dollar amount,
maturity or maturity range and interest rate. If the interest rate bid by the
bank is at or greater than the market rate determined by the director of
investments in accordance with subsection (b), the director of investments is
authorized to award the investment account to the bidding bank at the market
rate. Awards of investment accounts pursuant to this section shall be subject
to investment policies of the pooled money investment board. When multiple bids
are received and are in excess of the amount available for investment that day
for any maturity, awards shall be made available in ascending order from
smallest to largest dollar amount bid, subject to investment policies of the
board.
  (b)  The market rate shall be determined each business day by the director of
invest ments, in accordance with any procedures established by the pooled money
investment board. Subject to any policies of the board, the market rate shall
reflect the highest rate at which state moneys can be invested on the open
market in investments authorized by sub section (a) of K.S.A. 75-4209 and
amendments thereto for equivalent maturities.

                                  May 3, 1997                               973

  New Sec. 2.  As used in article 14 of chapter 9 of the Kansas Statutes
Annotated:
  (a)  ``Bank'' means any bank incorporated under the laws of this state, or
organized under the laws of the United States and which has a main office in
this state;
  (b)  ``savings and loan association'' means any savings and loan association
incorporated under the laws of this state, or organized under the laws of the
United States and which has a main office in this state;
  (c)  ``savings bank'' means any savings bank organized under the laws of the
United States and which has a main office in this state;
  (d)  ``centralized securities depository'' means a clearing agency registered
with the se curities and exchange commission which provides safekeeping and
book-entry settlement services to its participants;
  (e)  ``municipal corporation'' or ``quasi-municipal corporation'' includes
each investing governmental unit under K.S.A. 12-1675, and amendments thereto;
  (f)  ``main office'' means the place of business specified in the articles of
association, certificate of authority or similar document, where the business
of the institution is carried on and which is not a branch;
  (g)  ``branch'' means any office, agency or other place of business within
this state, other than the main office, at which deposits are received, checks
paid or money lent with approval of the appropriate regulatory authorities.
Branch does not include an automated teller ma chine, remote service unit or
similar device;
  (h)  ``securities,'' ``security entitlements,'' ``financial assets,''
``securities account,'' ``secu rity agreement,'' ``security interest,''
``perfection'' and ``control'' shall have the meanings given such terms under
the Kansas uniform commercial code.
  Sec. 3.  K.S.A. 9-1401 is hereby amended to read as follows: 9-1401. (a) The
governing body of any municipal corporation or quasi-municipal corporation
shall designate by official action recorded upon its minutes the state and
national banks, state and federally chartered savings and loan
associations and federally chartered savings banks with home offices
located in the state of Kansas which shall serve as depositories of its
funds and the officer and official having the custody of such funds shall not
deposit such funds other than at such designated banks, state or federally
chartered savings and loan associations and federally chartered
savings banks. The state and national banks, state and federally
chartered savings and loan associations and federally chartered
savings banks which have main or branch offices in the county or counties
in which all or part of such municipal corporation or quasi-municipal
corporation is located shall be designated as such official depositories if the
municipal or quasi-municipal corporation can obtain satisfactory security
therefor, and such official de positories have a home office located in the
state of Kansas. For purposes of this subsection, banks, savings and loan
associations or savings banks organized under the laws of the United States or
another state which do not have a main office in this state, may be designated
as depositories of such municipal corporation's or quasi-municipal
corporation's funds in ac cordance with this subsection, if such banks, savings
and loan associations and savings banks have branch offices in the county or
counties in which all or part of such municipal corpo ration or quasi-municipal
corporation is located, except that such banks, savings and loan associations
or savings banks shall not be eligible to receive deposits except in accordance
with subsection (c).
  (b)  Every officer or person depositing public funds shall deposit all such
public funds coming into such officer or person's possession in their name and
official title as such officer. If the governing body of the municipal
corporation or quasi-municipal corporation fails to designate an official
depository or depositories, the officer thereof having custody of its funds
shall deposit such funds with one or more state or national banks,
state or federally chartered savings and loan associations or
federally chartered savings banks which have main or branch offices
in the county or counties in which all or part of such municipal corporation or
quasi-municipal corporation is located if satisfactory security can be obtained
therefor and if not then elsewhere, but upon so doing shall serve notice in
writing on the governing body showing the names and locations of such banks,
state or federally chartered savings and loan associations and
federally chartered savings banks where such funds are deposited, and
upon so doing the officer having custody of such funds shall not be liable for
the loss

974                           JOURNAL OF THE HOUSE

of any portion thereof except for official misconduct or for the
misappropriation of such funds by such officer.
  (c)  As used in this section and K.S.A. 9-1402, 9-1403 and 9-1405, and
amendments thereto, ``municipal corporation or quasi-municipal corporation''
includes each investing governmental unit under K.S.A. 12-1675, and amendments
thereto If eligible banks, savings and loan associations or savings banks
under subsections (a) or (b) cannot or will not provide an acceptable bid,
which shall include services, for the depositing of public funds under this
section, then banks, savings and loan associations or savings banks organized
under the laws of the United States or another state which do not have a main
office in this state, may receive deposits of such municipal corporation or
quasi-municipal corporation, if such banks, savings and loan associations or
savings banks have been designated as official depositories under subsection
(a), have branch offices in the county or counties in which all or part of such
municipal corporation or quasi-municipal corporation is located and the
municipal corporation or quasi-municipal corporation can obtain satisfactory
security therefor.
  Sec. 4.  K.S.A. 1996 Supp. 9-1402 is hereby amended to read as follows:
9-1402. (a) Before any deposit of public moneys or funds shall be made by any
municipal corporation or quasi-municipal corporation of the state of Kansas
with any state or national bank, state or federally chartered
savings and loan association or federally chartered savings bank, such
municipal or quasi-municipal corporation shall obtain security for such deposit
in one of the following manners prescribed by this section.
  (b)  Such bank, state or federally chartered savings and loan
association or federally chartered savings bank may give to the municipal
corporation or quasi-municipal corporation a personal bond in double the amount
which may be on deposit at any given time.
  (c)  Such bank, state or federally chartered savings and loan
association or federally chartered savings bank may give a corporate
surety bond of some surety corporation au thorized to do business in this
state, which bond shall be in an amount equal to the public moneys or funds on
deposit at any given time less the amount of such public moneys or funds
which is insured by the federal deposit insurance corporation or its
successor and such bond shall be conditioned that such deposit shall be paid
promptly on the order of the municipal corporation or quasi-municipal
corporation making such deposits.
  (d)  Any state or national Such bank, state or federally
chartered savings and loan asso ciation or federally chartered savings
bank may deposit, maintain, pledge and, assign, and grant a
security interest in, or cause its agent, trustee, wholly-owned
subsidiary or an affiliate bank having identical ownership as
the bank receiving the deposit of public moneys or funds to deposit,
maintain, pledge and, assign, and grant a security interest
in, for the benefit of the governing body of the municipal corporation or
quasi-municipal corporation in the manner provided in this act, securities,
security entitlements, financial assets and securities accounts owned by
it the depository institution directly or indirectly through its
agent or trustee holding securities on its behalf, or owned by the
depository institutions wholly-owned subsidiary or by such affiliate
bank, the market value of which is equal to 100% of the total deposits at
any given time, and such securities, security entitlements, financial assets
and securities accounts, may be accepted or rejected by the governing body
of the municipal corporation or quasi-municipal corporation and shall consist
of the following and security entitlements thereto:
  (1)  Direct obligations of, or obligations that are insured as to principal
and interest by, the United States of America or any agency thereof and
obligations, including but not limited to letters of credit, and securities of
United States sponsored corporations which under federal law may be accepted as
security for public funds;
  (2)  bonds of any municipal corporation or quasi-municipal corporation of the
state of Kansas which have been refunded in advance of their maturity and are
fully secured as to payment of principal and interest thereon by deposit in
trust, under escrow agreement with a bank, of direct obligations of, or
obligations the principal of and the interest on which are unconditionally
guaranteed by, the United States of America;
  (3)  bonds of the state of Kansas;
  (4)  general obligation bonds of any municipal corporation or quasi-municipal
corpora tion of the state of Kansas;

                                  May 3, 1997                               975

  (5)  revenue bonds of any municipal corporation or quasi-municipal
corporation of the state of Kansas if approved by the state bank commissioner
in the case of banks and by the savings and loan commissioner in the case of
savings and loan associations or federally chartered savings banks;
  (6)  temporary notes of any municipal corporation or quasi-municipal
corporation of the state of Kansas which are general obligations of the
municipal or quasi-municipal corpora tion issuing the same;
  (7)  warrants of any municipal corporation or quasi-municipal corporation of
the state of Kansas the issuance of which is authorized by the state board of
tax appeals and which are payable from the proceeds of a mandatory tax levy;
  (8)  bonds of either a Kansas not-for-profit corporation or of a local
housing authority that are rated at least Aa by Moody's Investors Service or AA
by Standard & Poor's Corp.;
  (9)  bonds issued pursuant to K.S.A. 12-1740 et seq., and amendments
thereto, that are rated at least MIG-1 or Aa by Moody's Investors Service or AA
by Standard & Poor's Corp.;
  (10)  notes of a Kansas not-for-profit corporation that are issued to provide
only the interim funds for a mortgage loan that is insured by the federal
housing administration;
  (11)  bonds issued pursuant to K.S.A. 74-8901 through 74-8916, and amendments
thereto;
  (12)  bonds issued pursuant to K.S.A. 68-2319 through 68-2330, and amendments
thereto; or
  (13)  commercial paper that does not exceed 270 days to maturity and which
has received one of the two highest commercial paper credit ratings by a
nationally recognized investment rating firm; or
  (13) (14) (A)  negotiable promissory notes together with first
lien mortgages on one to four family residential real estate located in Kansas
securing payment of such notes when such notes or mortgages:
  (i)  Are underwritten by the federal national mortgage association, the
federal home loan mortgage corporation, the federal housing administration or
the veterans administration standards; or are valued pursuant to rules and
regulations which shall be adopted by both the state bank commissioner and the
savings and loan commissioner after having first being submitted to and
approved by both the state banking board under K.S.A. 9-1713, and amendments
thereto, and the savings and loan board. Such rules and regulations shall be
published in only one place in the Kansas administrative regulations as
directed by the state rules and regulations board;
  (ii)  have been in existence with the same borrower for at least two years
and with no history of any installment being unpaid for 30 days or more; and
  (iii)  are valued at not to exceed 50% of the lesser of the following three
values: Out standing mortgage balance; current appraised value of the real
estate; or discounted present value based upon current federal national
mortgage association or government national mortgage association interest rates
quoted for conventional, federal housing administration or veterans
administration mortgage loans.
  (B)  Securities under (A) shall be taken at their value for not more than 50%
of the security required under the provisions of this section.
  (C)  Securities under (A) shall be withdrawn immediately from the collateral
pool if any installment is unpaid for 30 days or more.
  (D)  A status report on all such loans shall be provided to the investing
governmental entity by the financial institution on a quarterly basis.
  (e)  No state or national such bank, state or federally
chartered savings and loan asso ciation or federally chartered savings
bank may deposit and maintain for the benefit of the governing body of a
municipal or quasi-municipal corporation of the state of Kansas, any securities
which consist of:
  (1)  Bonds secured by revenues of a utility which has been in operation for
less than three years; or
  (2)  bonds issued under K.S.A. 12-1740 et seq., and amendments thereto,
unless such bonds have been refunded in advance of their maturity as provided
in subsection (d) or such bonds are rated at least Aa by Moody's Investors
Service or AA by Standard & Poor's Corp.

976                           JOURNAL OF THE HOUSE

  (f)  Whenever a bond is authorized to be pledged as a security under this
section, such bond shall be accepted as a security if
  (1)  In the case of a certificated bond, it is assigned, delivered or pledged
to the holder of the deposit for security;
  (2)  in the case of an uncertificated bond, registration of a pledge of the
bond is author ized by the system and the pledge of the uncertificated bond is
registered; or
  (3)  in a form approved by the attorney general, which assures the
availability of the bond proceeds pledged as a security for public deposits.
  (g) (f)  Any expense incurred in connection with granting
approval of revenue bonds shall be paid by the applicant for approval.
  Sec. 5.  K.S.A. 9-1403 is hereby amended to read as follows: 9-1403. (a)
During the periods of peak deposits occurring at tax paying time and tax
distributing time and continuing for a period of not to exceed 60 continuous
days at any given time and not to exceed 120 days in any calendar year the
amount of security for the deposit of public moneys as required under K.S.A.
9-1402, and amendments thereto, may be reduced by not more than 1/2 in an
amount thereof.
  (b)  The provisions of this section shall apply only to the deposits of all
municipal cor porations and quasi-municipal corporations, but the custodian of
the funds of each of such municipal corporations or quasi-municipal
corporations together with an officer of the de pository state or
national bank, state or federally chartered savings and loan
association or federally chartered savings bank may enter into an
agreement which designates in writing the beginning of each such sixty-day
period, and a copy thereof, fully executed, shall be kept on file in the office
of the governing body of such municipal corporation or quasi-municipal
corporation and in the files of such bank, state or federally chartered
savings and loan association or federally chartered savings bank.
  Sec. 6.  K.S.A. 1996 Supp. 9-1405 is hereby amended to read as follows:
9-1405. (a) All bonds and securities given by any bank, state or federally
chartered savings and loan asso ciation or federally chartered savings
bank to secure public moneys of the United States or any board, commission or
agency thereof, shall be deposited as required by the United States government
or any of its designated agencies.
  (b)  All bonds and securities pledged to secure securities, security
entitlements and fi nancial assets securing the deposits of any municipal
corporation or quasi-municipal cor poration shall be deposited in a
securities account with a bank, trust company, or national bank
authorized to do business in Kansas having adequate modern facilities for the
safe keeping of securities, the federal reserve bank of Kansas City bank
incorporated under the laws of this state, or organized under the laws of the
United States or another state and which has a main or branch office in this
state, a trust company incorporated under the laws of this state or another
state, the federal home loan bank of Topeka or with the state treasurer,
pursuant to a written custodial agreement and a joint custody
receipt taken there for with one copy going to the municipal corporation or
quasi-municipal corporation making the public deposit and one copy going to the
bank, state or federally chartered savings and loan association or
federally chartered savings bank which has secured such public deposits.
The receipt shall identify the securities, security entitlements and
financial assets which are subject to a security interest to secure payment of
the deposits of the municipal corporation or quasi-municipal corporation.
This section shall not prohibit any custodial bank or trust company
receiving securities for safekeeping, security entitlements and
financial assets on deposit from issuing a joint custody receipt and
placing those depositing securities, security entitlements and
financial assets identified in the receipt in such bank's account with any
bank chartered in Kansas or any other state, any trust company chartered in
Kansas or any other state, any national bank, or any centralized securities
depository wherever located within the United States. No bonds or
securities pledged to secure, security entitlements and financial
assets securing public deposits shall be left for safekeeping
deposited in any bank, trust company, or national bank which is owned
directly or indirectly by any parent corporation of the depository bank, or
with any bank, trust company, or national bank, having common controlling
shareholders, having a common majority of the board of directors or having
common directors with the ability to control or influence directly or
indirectly the acts or policies of the bank, state or federally chartered
savings and loan association or

                                  May 3, 1997                               977

federally chartered savings bank securing such public deposits.  When
bonds and securities, security entitlements and financial assets
are deposited with the state treasurer as authorized by this subsection, the
state treasurer shall make a charge for such service which is equivalent to the
reasonable and customary charge made therefor. Securities, security
entitlements and financial assets securing the deposits of any municipal
corporation or quasi-municipal cor poration may be deposited with the federal
reserve bank of Kansas City to be there held in such manner, under regulations
and operating letters of the bank, as to secure payment of the deposits of the
municipal corporation or quasi-municipal corporation in the depository
institution.
  (c)  All such bonds and securities shall be deposited under a joint
custody receipt issued by a bank or trust company within the state of Kansas or
the federal reserve bank of Kansas City, the federal home loan bank of Topeka
or with the state treasurer. All bonds or securities held by any depository and
for which a joint custody receipt has been issued shall be retained by such
depository and not released except upon consent of both the municipal
corporation or quasi-municipal corporation making the deposit and the bank,
state or federally chartered savings and loan association or federally
chartered savings bank taking or securing such deposit. In every report
required to be published by any bank, state or federally chartered savings and
loan association or federally chartered savings bank it shall show in full all
of the assets pledged or deposited as security for public moneys. The
depository bank, savings and loan association or savings bank and any agent,
trustee, wholly-owned subsidiary or affiliate having identical ownership
granting a security interest shall enter into a written agreement with the
municipal corporation or quasi-municipal corporation granting the mu nicipal
corporation or quasi-municipal corporation a security interest in the
securities, se curity entitlements and financial assets qualified under K.S.A.
9-1402, and amendments thereto, to secure payment of deposits of public moneys
of the municipal corporation or quasi-municipal corporation. Such security
interests shall be perfected by the depository bank, savings and loan
association or savings bank and any agent, trustee, wholly-owned subsidiary or
affiliate having identical ownership granting a security interest causing
control of the securities, security entitlements and financial assets under the
Kansas uniform com mercial code to be given to the municipality or
quasi-municipality. The security agreement and the custodial agreement shall be
in writing, executed by all parties thereto, maintained as part of their
official records, and except for the municipal corporations or quasi-municipal
corporation, approved by their boards of directors or their loan committees,
which approvals shall be reflected in the minutes of the boards or
committees.
  (d)  A bank, state or federally chartered savings and loan association
or federally char tered savings bank which fails to pay according to its
terms any deposit of public moneys of any municipal or quasi-municipal
corporation shall immediately take such actions as are required to enable bonds
and securities pledged to secure such deposit to be sold to satisfy its
obligation to the municipal or quasi-municipal corporation.
  (e)  As used in this section:
    ``Centralized securities depository'' means a clearing agency registered
with the secu rities and exchange commission which provides safekeeping and
book-entry settlement serv ices to its participants.
  Sec. 7.  K.S.A. 9-1406 is hereby amended to read as follows: 9-1406. No
public officer nor the sureties upon such officer's bond shall be liable for
any loss sustained by the failure or default of any designated depository or
depositories after a deposit or deposits have been made in an officially
designated bank, state or federally chartered savings and loan associ
ation or federally chartered savings bank as provided in this act. This
exemption from liability shall apply even though other statutes shall require
the furnishing of a bond or other se curities by the designated depositories of
public moneys.
  Sec. 8.  K.S.A. 9-1407 is hereby amended to read as follows: 9-1407. That
portion of any deposit of public moneys or funds which is insured by the
federal deposit insurance corporation, or its successor, or the federal
savings and loan insurance corporation, or its successor, need not be
secured as provided in this act.
  Also on page 1, in line 15, by striking ``Section 1.'' and inserting ``Sec.
9.'';
  And by renumbering sections accordingly;
  On page 8, in line 13, by striking ``1'' and inserting ``9'';

978                           JOURNAL OF THE HOUSE

  On page 16, by striking all in lines 8 and 9 and inserting:
  ``New Sec. 13.  As used in K.S.A. 12-1675, 12-1676 and 12-1677 and K.S.A.
1996 Supp. 12-1677a and 12-1677b, and amendments thereto:
  (a)  ``Bank'' means any bank incorporated under the laws of this state, or
organized under the laws of the United States and which has a main office in
this state;
  (b)  ``savings and loan association'' means any savings and loan association
incorporated under the laws of this state, or organized under the laws of the
United States and which has a main office in this state;
  (c)  ``savings bank'' means any savings bank organized under the laws of the
United States and which has a main office in this state;
  (d)  ``municipality'' includes each investing governmental unit under K.S.A.
12-1675, and amendments thereto;
  (e)  ``main office'' means the place of business specified in the articles of
association, certificate of authority or similar document, where the business
of the institution is carried on and which is not a branch;
  (f)  ``branch'' means any office, agency or other place of business within
this state, other than the main office, at which deposits are received, checks
paid or money lent with approval of the appropriate regulatory authorities.
Branch does not include an automated teller ma chine, remote service unit or
similar device; and
  (g)  ``investment rate'' means a rate which is the equivalent yield for
United States gov ernment securities having a maturity date as published in the
Wall Street Journal, nearest the maturity date for equivalent maturities. The
0-90 day rate shall be computed on the average effective federal funds rate as
published by the federal reserve system for the pre vious week.
  Sec. 14.  K.S.A. 1996 Supp. 12-1675 is hereby amended to read as follows:
12-1675. (a) The governing body of any county, city, township, school district,
area vocational-technical school, community college, firemen's relief
association, community mental health center, community facility for the
mentally retarded or any other governmental entity, unit or sub division in the
state of Kansas having authority to receive, hold and expend public moneys or
funds may invest any moneys which are not immediately required for the purposes
for which the moneys were collected or received, and the investment of which is
not subject to or regulated by any other statute.
  (b)  Such moneys shall be invested only:
  (1)  In temporary notes or no-fund warrants issued by such investing
governmental unit;
  (2)  in time deposit, open accounts or, certificates of deposit
with maturities of not more than two years: (A) In commercial banks which
have offices located in such investing gov ernmental unit; or (B) if the office
of no commercial bank is located in such investing governmental unit, then in
commercial banks or time certificates of deposit with maturities of not
more than two years: (A) In banks, savings and loan associations and savings
banks, which have main or branch offices located in such investing governmental
unit; or (B) if no main or branch office of a bank, savings and loan
association or savings bank is located in such investing governmental unit,
then in banks, savings and loan associations and savings banks, which have
main or branch offices in the county or counties in which all or part of
such investing governmental unit is located;
  (3)  in time certificates of deposit with maturities of not more than two
years: (A) With state or federally chartered savings and loan associations or
federally chartered savings banks which have offices located in such investing
governmental unit; or (B) if the office of no state or federally chartered
savings and loan association or federally chartered savings bank is located in
such governmental unit, then with state or federally chartered savings and loan
associations or federally chartered savings banks which have offices in the
county or counties in which all or part of such investing governmental unit is
located;
  (4) (3)  in repurchase agreements with: (A) Commercial banks,
state or federally char tered savings and loan associations or federally
chartered savings banks Banks, savings and loan associations and savings
banks, which have main or branch offices located in such investing
governmental unit, for direct obligations of, or obligations that are insured
as to principal and interest by, the United States government or any agency
thereof; or (B) (i) if the office of no commercial bank, state or federally
chartered savings and loan association

                                  May 3, 1997                               979

or federally chartered savings bank no main or branch office of a bank,
savings and loan association or savings bank, is located in such investing
governmental unit; or (ii) if no commercial such bank, state or
federally chartered savings and loan association or federally
chartered savings bank has an having a main or branch office
located in such investing governmental unit is willing to enter into such an
agreement with the investing governmental unit at an interest rate equal to or
greater than the investment rate, as defined in subsection (l) of K.S.A.
75-4201, and amendments thereto (g) of section 13, then such
repurchase agreements may be entered into with commercial banks, state
or federally chartered savings and loan associations or federally
chartered savings banks which have main or branch offices in the
county or counties in which all or part of such investing governmental unit is
located; or (C) if no bank, state or federally chartered savings and loan
association or federally chartered savings bank which has its,
having a main or branch office in such county or counties is willing to
enter into such an agreement with the investing governmental unit at an
interest rate equal to or greater than the investment rate, as defined in
subsection (l) of K.S.A. 75-4201, and amendments thereto (g) of
section 13, then such repurchase agreements may be entered into with
commercial banks, state or federally chartered savings and loan
associations or federally chartered savings banks which have offices
in the state of Kansas;
  (5) (4)  in United States treasury bills or notes with maturities
as the governing body shall determine, but not exceeding two years. Such
investment transactions shall only be conducted with the following, which is
doing business within the state of Kansas, any state or national bank, state or
federally chartered savings and loan association, or federally char tered
savings bank banks, savings and loan associations and savings banks;
the federal re serve bank of Kansas City, Missouri; or with primary government
securities dealers which report to the market report division of the federal
reserve bank of New York, or any brokerdealer engaged in the business of
selling government securities which is registered in com pliance with the
requirements of section 15 or 15C of the securities exchange act of 1934 and
registered pursuant to K.S.A. 17-1254, and amendments thereto;
  (6) (5)  in the municipal investment pool fund established in
K.S.A. 1996 Supp. 12-1677a, and amendments thereto;
  (7) (6)  in the investments authorized and in accordance with the
conditions prescribed in K.S.A. 1996 Supp. 12-1677b, and amendments thereto; or
  (8) (7)  in multiple municipal client investment pools managed by
the trust departments of commercial banks which have main or branch
offices located in the county or counties where such investing governmental
unit is located or with trust companies incorporated under the laws of this
state which have contracted to provide trust services under the pro visions
of K.S.A. 9-2107, and amendments thereto, with commercial banks which
have main or branch offices located in the county or counties in which
such investing governmental unit is located. Public moneys invested under this
paragraph shall be secured in the same manner as provided for under K.S.A.
9-1402, and amendments thereto. Pooled investments of public moneys made by
trust departments under this paragraph shall be subject to the same terms,
conditions and limitations as are applicable to the municipal investment pool
established by K.S.A. 1996 Supp. 12-1677a, and amendments thereto.
  (c)  The investments authorized in paragraphs (4), (5), (6),
or (7) or (8) of subsection   (b) shall be utilized only if the
appropriate eligible commercial banks, which have offices located in the
investing governmental unit or in the county or counties in which all or a part
of such investing governmental unit is located if no such bank has an office
which is located within such governmental unit, or the appropriate eligible
state or federally chartered savings and loan associations or federally
chartered savings banks, which have offices located in the investing
governmental unit or in the county or counties in which all or a part of such
investing governmental unit is located if no such state or federally chartered
savings and loan association or federally chartered savings bank has an office
which is located within such governmental unit banks, savings and loan
associations and savings banks eligible for investments authorized in paragraph
(2) of subsection (b), cannot or will not make the investments authorized in
paragraph (2) or (3) of subsection (b) available to the investing
governmental unit at interest rates equal to or greater than the investment
rate, as defined in subsection (l) of K.S.A. 75-4201, and amendments thereto
(g) of section 13.

980                           JOURNAL OF THE HOUSE

  (d)  In selecting a depository pursuant to paragraph (2) or (3) of
subsection (b), if a commercial bank, state or federally chartered
savings and loan association or federally char tered savings bank
eligible for an investment deposit thereunder has an office located in
the investing governmental unit and such financial institution will make such
deposits available to the investing governmental unit at interest rates equal
to or greater than the investment rate, as defined in subsection (l) of
K.S.A. 75-4201, and amendments thereto (g) of section 13, and such
financial institution otherwise qualifies for such deposit, the investing
govern mental unit shall select one or more of such eligible financial
institutions for deposit of funds pursuant to this section. If no such
financial institution qualifies for such deposits, the investing governmental
unit shall select for such deposits one or more commercial eligible
banks, state or federally chartered savings and loan associations or
federally chartered savings banks which have offices in the county or
counties in which all or a part of such investing governmental unit is located
which will make such deposits available to the investing gov ernmental unit at
interest rates equal to or greater than the investment rate, as defined in
subsection (l) of K.S.A. 75-4201, and amendments thereto (g) of
section 13, and which otherwise qualify for such deposits.
  (e) (1)  All security purchases and repurchase agreements shall occur on a
delivery ver sus payment basis.
  (2)  All securities, including those acquired by repurchase agreements, shall
be perfected in the name of the investing governmental unit and shall be
delivered to the purchaser or a third-party custodian which may be the state
treasurer.
  Sec. 15.  K.S.A. 12-1676 is hereby amended to read as follows: 12-1676.
Except as oth erwise provided in K.S.A. 12-1678a, and amendments thereto, the
provisions of this act authorizing the investment of moneys shall not apply to
moneys collected or received by a county for apportionment, credit or
distribution to the state or any political subdivision thereof. Interest paid
by commercial eligible banks, savings and loan associations and
savings banks on time deposit, open accounts, time certificates of
deposit and certificates of deposit of investing governmental units and
by state or federally chartered savings and loan asso ciations or federally
chartered savings banks on time certificates of deposit of investing
governmental units shall be at rates agreed upon by the governmental units
and the eligible banks, state or federally chartered savings and
loan associations or federally chartered savings banks.
  Sec. 16.  K.S.A. 1996 Supp. 12-1677a is hereby amended to read as follows:
12-1677a.   (a) Moneys deposited by any municipality with the state treasurer
for investment authorized in paragraph (6) (5) of subsection (b) of
K.S.A. 12-1675, and amendments thereto, shall be deposited in the municipal
investment pool fund which is hereby created in the state treas ury. The state
treasurer shall provide the board a monthly record of the deposits and with
drawals of municipalities. Such record may include the amount of the deposit,
the date of the deposit and such other information as the pooled money
investment board may require.
  (b)  The director of investments may invest and reinvest moneys in the
municipal in vestment pool fund in accordance with investment policies
established by the pooled money investment board under K.S.A. 75-4232, and
amendments thereto, and in accordance with K.S.A. 1996 Supp. 75-4234 and K.S.A.
75-4209, and amendments thereto.
  (c)  The director of investments shall apportion earnings and losses among
the accounts of the depositors in the various investment options of the
municipal investment pool in accordance with policies approved and published by
the board. A statement for each mu nicipality participating unit account
showing deposits, withdrawals, earnings and losses dis tributions shall be
provided monthly to the municipality. The director of investments shall make
comprehensive reports monthly to those municipalities participating in the
municipal investment pool fund and to other interested parties requesting such
reports. Such reports shall include a summary of transactions for the month,
the current market value of the pooled money investment portfolio investments,
the weighted average maturity of the port folio, the original costs of the
investments in the portfolio, including any fees associated with such
investments and such other relevant information the director of investments may
wish to include in such report.
  (d)  The municipal investment pool reserve fund is abolished effective July
1, 1996, and any unencumbered balance remaining therein shall be applied to net
losses in the municipal

                                  May 3, 1997                               981

investment pool fund. The municipal investment pool fund fee fund is abolished
on July 1, 1997, and any unencumbered balance remaining therein shall be
transferred to the pooled money investment portfolio fee fund and such amounts
shall be applied to net losses, as of July 1, 1996, in the municipal investment
pool fund.
  (e)  The pooled money investment board may adopt rules and regulations
necessary for the administration and operation of the municipal investment pool
fund and may enter into agreements with any municipality as to methods of
deposits, withdrawals and investments.
  (f)  Deposits in the municipal investment pool fund: (1) May only be made for
the same maturity as the maturity which is offered under paragraphs (2) and
(3) paragraph (2) of subsection (b) of K.S.A. 12-1675 and amendments
thereto; and (2) upon the maturity of such deposits, such moneys shall be
offered for investment under paragraphs (2) or (3) paragraph (2) of
subsection (b) of K.S.A. 12-1675, and amendments thereto, and may be reinvested
in such fund only if the conditions contained in subsection (c) of K.S.A.
12-1675, and amendments thereto, have been satisfied.
  (g)  Moneys and investments in the municipal investment pool fund shall be
managed by the pooled money investment board in accordance with investment
policies provided for in K.S.A. 75-4209, and amendments thereto. A copy of such
published policies shall be distributed to all municipalities participating in
the municipal investment pool fund and to other interested persons requesting a
copy of such policies. The pooled money investment board shall not contract for
management of investments by a money manager.
  (h)  For the purpose of this section, ``municipality'' means those
entities specified in subsection (a) of K.S.A. 12-1675, and amendments thereto,
and K.S.A. 1996 Supp. 75-4263, and amendments thereto.
  Sec. 17.  K.S.A. 1996 Supp. 12-1677b is hereby amended to read as follows:
12-1677b.   (a) The governing body of any city or county which has a written
investment policy approved by the governing body of such city or county and
approved by the pooled money investment board may invest and reinvest pursuant
to the approved investment policy in the following investments, as authorized
under paragraph (7) (6) of subsection (b) of K.S.A. 12-1675, and
amendments thereto:
  (1)  Direct obligations of, or obligations that are insured as to principal
and interest by, the United States of America or any agency thereof and
obligations and securities of United States sponsored enterprises which under
federal law may be accepted as security for public funds, except that such
investments shall not be in mortgage-backed securities;
  (2)  interest-bearing time deposits in any of the following, which is
doing business within the state of Kansas, any state or national bank, state or
federally chartered savings and loan association, or federally chartered
savings bank banks, savings and loan associations and savings banks;
or
  (3)  repurchase agreements with a Kansas bank, savings and loan
association, a federally chartered savings bank banks, savings and loan
associations and savings banks, or with a primary government securities
dealer which reports to the market reports division of the federal reserve bank
of New York for direct obligations of, or obligations that are insured as to
principal and interest by, the United States government or any agency thereof
and obligations and securities of United States government sponsored
enterprises which under federal law may be accepted as security for public
funds.
  (b)  The investment policy of any city or county approved by the pooled money
invest ment board under this section shall be reviewed and approved at least
annually by such board or when such city or county makes changes in such
investment policy.
  (c)  City and county investment policies shall address liquidity,
diversification, safety of principal, yield, maturity and quality, and
capability of investment management staff.
  (d) (1)  All security purchases shall occur on a delivery versus payment
basis.
  (2)  All securities shall be perfected in the name of the city or county and
shall be delivered to the purchaser or a third party custodian which may be the
state treasurer.
  (3)  Investment transactions shall only be conducted with the following,
which is doing business within the state of Kansas, any state or national bank,
state or federally chartered savings and loan association, or federally
chartered savings bank banks, savings and loan associations and savings
banks; or with primary government securities dealers which report to the
market report division of the federal reserve bank of New York; or any
broker-dealer

982                           JOURNAL OF THE HOUSE

which is registered in compliance with the requirements of section 15C of the
securities exchange act of 1934 and registered pursuant to K.S.A. 17-1254, and
amendments thereto.
  (4)  The maximum maturity for investments under subsection (a) shall be four
years.
  (e)  Investments in securities under paragraph (1) of subsection (a) shall be
limited to securities which do not have any more interest rate risk than do
direct United States gov ernment obligations of similar maturities. For
purposes of this subsection, ``interest rate risk'' means market value changes
due to changes in current interest rates.
  (f)  A city or county which violates subsection (c) or (d) of K.S.A. 12-1675
and amend ments thereto or the rules and regulations of the pooled money
investment board shall forfeit its rights under this section for a two year
period and shall be reinstated only after a complete review of its investment
policy as provided for in subsection (b). Such forfeiture shall be determined
by the pooled money investment board after notice and opportunity to be heard
in accordance with the Kansas administrative procedure act.
  Sec. 18.  K.S.A. 1996 Supp. 12-1677d is hereby amended to read as follows:
12-1677d.   (a) As used in this act:
  (1)  ``Municipality'' means any city, county or other political or taxing
subdivision of the state.
  (2)  ``Foundation'' means any not for profit charitable or eleemosynary
corporation es tablished by a municipality which is exempt from taxation
pursuant to section 501(c)(3) of the internal revenue code and which has
been in existence at least 15 years. Any such foundation is hereby deemed to
be a public body.
  (b)  The board of directors of any foundation shall invest the funds held by
such foun dation which are not required immediately for the purposes of the
foundation in the manner provided by this section:
  (1)  Any funds in an amount equal to 110% of the average annual expenses of
the foun dation for the next preceding five years may be invested in the manner
provided by K.S.A. 12-1675, and amendments thereto. If funds in the amount
required by this paragraph are available from the municipality which
established the foundation, the foundation may invest all of its funds in the
manner provided in paragraph (2).
  (2)  Any funds exceeding the amount described in paragraph (1) may be
invested in such investments that may be lawful for fiduciaries in this state
and also may be invested in such investments as would be lawful for a private
corporation or other foundation having purposes similar to the foundation. No
moneys derived pursuant to any tax may be invested under this paragraph.
  (c)  Nothing in this act shall effect the status of the foundation as a
municipal entity.
  (d)  The provisions of this section shall apply to foundations whether
created before or after the effective date of this act. Any investment of funds
by a foundation prior to July 1, 1997, which would have complied with the
provisions of this section, as amended by this act, are hereby validated.
  Sec. 19.  K.S.A. 17-5002 is hereby amended to read as follows: 17-5002. (a)
Adminis trators, executors, conservators, trustees, insurance companies and
other financial institu tions, charitable, educational, eleemosynary
corporations and organizations are authorized, in addition to investments now
authorized by law, to invest funds which they are authorized by law to invest,
in shares or savings deposits of federally insured savings and loan associa
tions or federally chartered savings banks with home main or branch
offices, as defined in section 13, in the state of Kansas and in credit
unions which are, in whole or in part, insured with an insurer or guarantee
corporation as required under K.S.A. 17-2246, and amend ments thereto, and such
investment shall be deemed and held to be legal investments for such funds.
  (b)  The governing body of any municipal corporation or quasi-municipal
corporation, county, township, school district, area vocational-technical
school, community college, fi remen's relief association, community mental
health center, community facility for the men tally retarded or any other
governmental entity, unit or division in the state of Kansas having authority
to receive, hold and expend public moneys or funds may invest the same in
state or federally chartered savings and loan associations or federally
chartered savings banks with home offices in the state of Kansas subject to
and as provided by K.S.A. 9-1401, 9-1402, 91405, 9-1407, 12-1675 and 12-1676
and amendments to such sections thereto.

                                  May 3, 1997                               983

  Sec. 20.  K.S.A. 68-2060 is hereby amended to read as follows: 68-2060. All
moneys received pursuant to the authority of this act, whether as proceeds from
the sale of bonds or as revenues or otherwise, shall be deemed to be trust
funds to be held and applied solely as provided in this act. Any officer with
whom, or any bank or trust company with which, such moneys shall be deposited
shall act as trustee of such moneys and shall hold and apply the same for the
purposes hereof, subject to such regulations as this act and the resolution
authorizing the bonds or the trust agreement securing such bonds may provide.
Trust funds received pursuant to this act may be invested as determined by the
authority with banks authorized to do business in Kansas at rates of interest
not less than the investment rate, as defined in subsection (1) of K.S.A.
75-4201, and amendments thereto (g) of section 13 or in direct
obligations of the United States or in obligations that are fully guaranteed as
to principal and interest by the United States.
  Sec. 21.  K.S.A. 1996 Supp. 75-4201 is hereby amended to read as follows:
75-4201. As used in this act, unless the context otherwise requires:
  (a)  ``Treasurer'' means state treasurer.
  (b)  ``Controller'' means director of accounts and reports.
  (c)  ``Board'' means the pooled money investment board.
  (d)  ``Bank'' means a state bank incorporated under the laws of
Kansas or a national bank having such bank's home office within the state of
Kansas of this state, or organized under the laws of the United States or
another state and which has a main or branch office in this state.
  (e)  ``State moneys'' means all moneys in the treasury of the state or coming
lawfully into the possession of the treasurer.
  (f)  ``State bank account'' means state moneys or fee agency account moneys
deposited in accordance with the provisions of this act.
  (g)  ``Operating account'' means a state bank account which is payable or
withdrawable, in whole or in part, on demand.
  (h)  ``Investment account'' means a state bank account which is not payable
on demand.
  (i)  ``Market rate'' means the average of the average equivalent yields,
with equivalent maturities, of: (1) United States government securities; and
(2) debt obligations of the fol lowing United States government agencies,
federal home loan banks, federal national mort gage association and federal
farm credit bank.
  (j)  ``Investment rate'' means a rate which is the equivalent yield for
United States gov ernment securities having a maturity date as published in the
Wall Street Journal, nearest the maturity date for equivalent maturities.  The
0-90 day rate shall be computed on the average effective federal funds rate as
published by the federal reserve system for the pre vious week.
  (k) (i)  ``Fee agency account'' means a state bank account of any
state agency consisting of fees, tuition or charges authorized by law prior to
remittance to the state treasurer.
  (l) (j)  ``Disbursement'' means a payment of any kind whatsoever
made from the state treasury or from any operating account, except transfer of
moneys between or among op erating accounts and investment accounts or either
or both of them.
  (m) (k)  ``Securities'' means, for the purposes of this
section and K.S.A. 75-4218, and amendments thereto, securities, security
entitlements, financial assets and securities account consisting of any one
or more of the following, and security entitlements thereto, which may be
accepted or rejected by the pooled money investment board:
  (1)  Direct obligations of, or obligations that are insured as to principal
and interest by, the United States government or any agency thereof and
obligations, letters of credit and securities of United States sponsored
enterprises which under federal law may be accepted as security for public
funds.
  (2)  Kansas municipal bonds which are general obligations of the municipality
issuing the same.
  (3)  Revenue bonds of any agency or arm of the state of Kansas.
  (4)  Revenue bonds of any municipality, as defined by K.S.A. 10-101, and
amendments thereto, within the state of Kansas or bonds issued by a public
building commission as authorized by K.S.A. 12-1761, and amendments thereto, if
approved by the state bank commissioner, except (A) bonds issued under the
provisions of K.S.A. 12-1740 et seq., and

984                           JOURNAL OF THE HOUSE

amendments thereto, unless such bonds are rated at least MIG-1 or Aa by Moody's
Investors Service or AA by Standard & Poor's Corp. and (B) bonds secured by
revenues of a utility which has been in operation for less than three years.
Any expense incurred in connection with granting approval of revenue bonds
shall be paid by the applicant for approval.
  (5)  Temporary notes of any municipal corporation or quasi-municipal
corporation within the state of Kansas which are general obligations of the
municipal corporation or quasimunicipal corporation issuing the same.
  (6)  Warrants of any municipal corporation or quasi-municipal corporation
within the state of Kansas the issuance of which is authorized by the state
board of tax appeals and which are payable from the proceeds of a mandatory tax
levy.
  (7)  Bonds of any municipal or quasi-municipal corporation of the state of
Kansas which have been refunded in advance of their maturity and are fully
secured as to payment of principal and interest thereon by deposit in trust,
under escrow agreement with a bank, of direct obligations of, or obligations
the principal of and the interest on which are uncondi tionally guaranteed by,
the United States of America. A copy of such escrow agreement shall be
furnished to the treasurer.
  (8)  Securities listed in paragraph (13) (14) of subsection (d)
of K.S.A. 9-1402 and amend ments thereto within limitations of K.S.A. 9-1402
and amendments thereto.
  (9)  A corporate surety bond guaranteeing deposits in a bank, savings or
savings and loan association in excess of federal deposit insurance corporation
insurance, underwritten by an insurance company authorized to do business in
the state of Kansas.
  (10)  Commercial paper that does not exceed 270 days to maturity and which
has re ceived one of the two highest commercial paper credit ratings by a
nationally recognized investment rating firm.
  (11)  All of such securities shall be current as to interest according to the
terms thereof.
  (12)  Whenever a bond is authorized to be pledged as a security under this
section, such bond shall be accepted as a security if: (i) In the case of a
certificated bond, it is assigned, delivered or pledged to the holder of the
deposit for security; (ii) in the case of an uncer tificated bond, registration
of a pledge of the bond is authorized by the system and the pledge of the
uncertificated bond is registered; or (iii) in a form approved by the attorney
general, which assures the availability of the bond proceeds pledged as a
security for public deposits.
  (n) (l)  ``Savings bank'' means a federally chartered
savings bank organized under the laws of the United States or another
state insured by the federal deposit insurance corpo ration or its
successor and doing business within the state of Kansas having a
main or branch office in the county in which a state agency making collection
of any fees, tuition, or charges is located.
  (o) (m)  ``Savings and loan association'' means a state or
federally chartered savings and loan association incorporated under the
laws of this state or organized under the laws of the United States or another
state, insured by the federal deposit insurance corporation or its
successor and doing business within the state of Kansas having a
main or branch office in the county in which a state agency making collection
of any fees, tuition or charges is located.
  (p) (n)  ``Custodial bank'' means a bank designated to keep
safely holding on deposit collateral pledged as which is
security for state bank accounts.
  (q) (o)  ``Centralized securities depository'' means a clearing
agency registered with the securities and exchange commission which provides
safekeeping and book-entry settlement services to its participants.
  (r) (p)  ``Depository bank'' means a bank, savings bank or
savings and loan association authorized and eligible to receive state moneys.
  (q)  ``main office'' means the place of business specified in the articles
of association, certificate of authority or similar document, where the
business of the institution is carried on and which is not a branch;
  (r)  ``branch'' means any office, agency or other place of business within
this state, other than the main office, at which deposits are received, checks
paid or money lent with approval of the appropriate regulatory authorities.
Branch does not include an automated teller ma chine, remote service unit or
similar device;

                                  May 3, 1997                               985

  (s)  ``securities,'' ``security entitlements,'' ``financial assets,''
``securities account,'' ``security agreement,'' ``security interest,''
``perfection'' and ``control'' shall have the meanings given such terms under
the Kansas uniform commercial code.
  Sec. 22.  K.S.A. 1996 Supp. 75-4208 is hereby amended to read as follows:
75-4208. The board shall follow the procedure prescribed in rules and
regulations adopted under the provisions of K.S.A. 1996 Supp. 75-4232, in
designating banks to receive deposit of state moneys in operating accounts and
investment accounts. The board shall determine which banks shall receive state
operating and investment accounts and shall designate the types of accounts to
be awarded each such bank and the initial amount of each award. Such initial
awards which are operating accounts shall be made as provided in K.S.A.
75-4205, and amendments thereto. Such initial awards which are investment
accounts shall be appor tioned awarded as is provided in K.S.A.
75-4209, and amendments thereto. Upon making the awards provided for above, the
board shall notify each bank of its award, and that the same is subject to
approval of securities to be pledged as prescribed in this act.
  Sec. 23.  K.S.A. 1996 Supp. 75-4209 is hereby amended to read as follows:
75-4209. (a) After the director of investments determines the liquidity
needs for the state, and determines the varying maturities of the investment
accounts to be offered and the amount of state moneys to be invested in each of
the maturities offered, in accordance with rules and regulations adopted
pursuant to K.S.A. 1996 Supp. 75-4232, and amendments thereto, the director of
investments shall make available state moneys eligible for investment accounts
in the following manner:
  (1) (A)  The director of investments shall offer to qualified banks, on a
competitive bid basis, state moneys for deposit in investment accounts at
maturities of not more than four years and such bids shall be at a rate of at
least the market rate, as defined in subsection   (k) of K.S.A. 75-4201, and
amendments thereto.
  (B)  As part of the offering under subparagraph (A) the director of
investments shall offer to qualified banks, on a twelve-month average, 50% of
the amount of state moneys available for investment or $350,000,000, whichever
amount is greater, at maturities of not more than four years and at the
investment rate as defined in subsection (l) of K.S.A. 754201, and amendments
thereto. Such accounts shall be apportioned by the director of in vestments
among the banks which propose to receive such accounts and which qualify
therefor on the basis of the ratio of each bank's combined capital, undivided
profits and surplus to the total capital, undivided profits and surplus of all
such banks.
  (C)  Qualified banks shall be determined in accordance with requirements
established by rules and regulations adopted pursuant to K.S.A. 1996 Supp.
75-4232, and amendments thereto.
  (2)  The director of investments may invest and reinvest state moneys
eligible for in vestment which are not invested in accordance with paragraph
(1) section 1, in the following investments:
  (A) (1)  Direct obligations of, or obligations that are insured
as to principal and interest by, the United States of America or any agency
thereof and obligations and securities of the United States sponsored
enterprises which under federal law may be accepted as security for public
funds, on and after the effective date of this act moneys available for
investment under this subsection shall not be invested in mortgage-backed
securities of such enterprises and of the government national mortgage
association, except that any such mortgage-backed securities held prior to the
effective date of this act may be held to maturity;
  (B) (2)  repurchase agreements with a Kansas bank or a
primary government securities dealer which reports to the market reports
division of the federal reserve bank of New York for direct obligations of, or
obligations that are insured as to principal and interest by, the United States
government or any agency thereof and obligations and securities of United
States government sponsored enterprises which under federal law may be accepted
as se curity for public funds;
  (C)  investments in SKILL act projects and bonds pursuant to K.S.A. 1996
Supp. 748920, and amendments thereto, and investments in any state agency bonds
or bond project;
  (D)  until July 1, 1996, in the municipal investment pool fund, created under
K.S.A. 1996 Supp. 12-1677a, and amendments thereto, in accordance with the
policies adopted by the board on January 30, 1995. Any investment of such state
moneys in such fund prior to

986                           JOURNAL OF THE HOUSE

the effective date of this act are hereby authorized, confirmed and validated.
On July 1, 1996, all state moneys invested in the municipal investment pool
fund under this paragraph shall be removed from such fund; or
  (E) (3)  commercial paper that does not exceed 270 days to
maturity and which has received one of the two highest commercial paper credit
ratings by a nationally recognized investment rating firm.
  (b)  At any time moneys are available for deposits or investments for a
period of time which is insufficient to permit deposit in investment accounts
or to provide for the liquidity needs for the state, the director of
investments may invest such moneys in repurchase agreements as authorized in
subparagraph (B) of paragraph (2) of subsection (a) When moneys are
available for deposit or investments, the director of investments may invest in
SKILL act projects and bonds pursuant to K.S.A. 1996 Supp. 74-8920, and
amendments thereto, and in state agency bonds and bond projects.
  (c)  When moneys are available for deposits or investments, the director of
investments may invest in preferred stock of Kansas venture capital, inc.,
under terms and conditions prescribed by K.S.A. 74-8203, and amendments
thereto, but such investments shall not in the aggregate exceed a total amount
of $10,000,000.
  (d)  When moneys are available for deposits or investments, the director of
investments may invest in loans pursuant to legislative mandates, except that
not more than the lesser of 10% or $80,000,000 of the state moneys shall be
invested.
  (e)  Interest on investment accounts in banks is to be paid at maturity, but
not less than annually.
  (f)  Investments made by the director of investments under the provisions of
this section shall be made with judgment and care, under circumstances then
prevailing, which persons of prudence, discretion and intelligence exercise in
the management of their own affairs, not for speculation, but for investment,
considering the probable safety of their capital as well as the probable income
to be derived.
  (g)  Investments under subsection (a) or (b) of this section or under
section 1 shall be for a period not to exceed four years.
  (h)  Investments in securities under subparagraph (A) of paragraph (2)
paragraph (1) of subsection (a) shall be limited to securities which
do not have any more interest rate risk than do direct United States government
obligations of similar maturities. For purposes of this subsection, ``interest
rate risk'' means market value changes due to changes in current interest
rates.
  (i)  On and after July 1, 1996, The director of investments shall not
invest state moneys eligible for investment under paragraph (2) of
subsection (a), in the municipal investment pool fund, created under K.S.A.
1996 Supp. 12-1677a, and amendments thereto.
  (j)  The director of investments shall not invest moneys in the pooled money
investment portfolio in derivatives. As used in this subsection,
``derivatives'' means a financial contract whose value depends on the value of
an underlying asset or index of asset values.
  (k)  Moneys and investments in the pooled money investment portfolio shall be
invested and reinvested by the director of investments in accordance with
investment policies de veloped, approved, published and updated on an annual
basis by the board. Such investment policies shall include at a minimum
guidelines which identify credit standards, eligible in struments, allowable
maturity ranges, methods for valuing the portfolio, calculating earnings and
yields and limits on portfolio concentration for each type of investment. Any
changes in such investment policies shall be approved by the pooled money
investment board. Such investment policies may specify the contents of reports,
methods of crediting funds and accounts and other operating procedures.
  (l)  The board shall adopt rules and regulations to establish an overall
percentage limi tation on the investment of moneys in investments authorized
under subparagraph (E) of paragraph (2) paragraph (3) of subsection
(a), and within such authorized investment, the board shall establish a
percentage limitation on the investment in any single business entity.
  Sec. 24.  K.S.A. 1996 Supp. 75-4210 is hereby amended to read as follows:
75-4210. The director of investments shall calculate the investment rate, as
defined in subsection (l) of K.S.A. 75-4201 and amendments thereto (g)
of section 13, on Monday of each week and publish such rate that week in the
Kansas register. The director of investments shall also

                                  May 3, 1997                               987

calculate the market rate as defined in subsection (k) of K.S.A. 75-4201 and
amendments thereto on the day before the offering of moneys to Kansas banks.
  Sec. 25.  K.S.A. 1996 Supp. 75-4212a is hereby amended to read as follows:
75-4212a. Whenever the balance in operating accounts is insufficient to meet
the state's obligations or withdrawals from the municipal investment pool fund,
and there are state moneys in authorized investments, the director of
investments, with approval of the board, may:
  (a)  Borrow upon the security of any one or more investment accounts an
amount suf ficient to meet the state's or the municipal investment pool fund's
obligations. Any such loan shall be repaid in full within 60 days or prior to
July 1, whichever occurs first. Interest payment by the state for any loan
under this section shall be made only by way of setoff from interest
obligations to the state from the bank making such loan. The amount borrowed
under this section from any bank, shall never exceed an amount equal to the
amount of state moneys on deposit in such bank; or
  (b)  enter into reverse repurchase agreements utilizing securities purchased
by the board pursuant to subsection (a)(2)(A) of K.S.A. 75-4209,
and amendments thereto. Such reverse repurchase agreements may be entered into
with Kansas banks or primary government securities dealers which report
to the market reports division of the federal reserve bank of New York.
Expenses of reverse repurchase agreements shall be paid by deducting such
expenses against other interest income to the state.
  Sec. 26.  K.S.A. 1996 Supp. 75-4217 is hereby amended to read as follows:
75-4217. Awards of all state bank accounts, aggregating more than
$100,000, shall be made pursuant to a written security agreement
between the depository bank and the board, granting the state of Kansas a
security interest in securities pledged to secure payment of deposits in state
bank accounts. This agreement shall be approved by the board of directors of
the depository bank, as and reflected in the minutes of the board
of directors. From the time of execution, the security agreement
shall remain continuously an official record of the depository bank. Separate
security agreements shall be entered into for each class of account in
each depository bank.
  Sec. 27.  K.S.A. 1996 Supp. 75-4218 is hereby amended to read as follows:
75-4218. (a) All state bank accounts shall be secured by pledge of
securities as provided in this section.
  (b)  The bank, savings bank or savings and loan association receiving
or having a state bank account shall deposit or cause its affiliate bank to
deposit securities acceptable to the board and owned by it or by its affiliate
bank, in one of the following ways:
  (1)  Deposit with the treasurer.
  (2)  Deposit with a custodial bank having adequate modern facilities for the
safekeeping of securities which shall have had the prior approval of the board.
Any such custodial bank receiving securities for safekeeping shall be liable to
the state for any loss suffered by the state in the event such custodial bank
relinquishes the custody of any such securities contrary to the provisions of
this act or rules and regulations adopted thereunder. This section shall not
prohibit any custodial bank receiving securities for safekeeping from issuing a
joint custody receipt and placing those securities in such bank's account with
any bank chartered in Kansas or any other state, any trust company chartered in
Kansas or any other state, any national bank, or any centralized securities
depository wherever located within the United States. No bonds or securities
pledged to secure public deposits shall be left for safekeeping in any bank,
trust company, or national bank which is owned directly or indirectly by any
parent corporation of the depository bank, or with any bank, trust company, or
national bank, having common controlling shareholders, having a common majority
of the board of directors or having common directors with the ability to
control or influence directly or indirectly the acts or policies of the bank,
state or federally chartered savings and loan association or federally
chartered savings bank securing such public deposits.
  (3)  Deposit with the federal reserve bank of Kansas City, Missouri.
  (4)  Deposit with the federal home loan bank of Topeka, Kansas.
  (5)  Any combination of (1), (2), (3) and (4).
  (c)  The depository bank shall obtain a written agreement from its affiliate
bank that the affiliate bank grants a security interest to the state of Kansas
in securities owned by the affiliate bank which are pledged on behalf of the
depository bank to secure payment of deposits made with the depository bank
pursuant to this section. Such agreement shall be

988                           JOURNAL OF THE HOUSE

approved by the board of directors of the affiliate bank and reflected in its
minutes. From the time of execution of such agreement, the agreement shall
remain continuously an official record of the affiliate bank. Any such deposit
of securities, except with the treasurer, shall have a joint custody receipt
which shall constitute a perfected security interest taken therefor with one
copy going to the treasurer and one copy going to the bank, savings bank or
savings and loan association which deposits such securities. In lieu of the
initial deposit of securities provided for in this subsection (c), the
treasurer or the treasurer's duly authorized deputy, for a period of not to
exceed 10 calendar days, may accept the telephone assurance of a bank qualified
as provided in (2) or (3) of subsection (b), that the depository bank has
requested the issuance of a joint custody receipt with the state of Kansas,
specifying the securities pledged, for the purpose of compliance with this
section and that such joint custody receipt will be forthcoming.
  (d)  The depository bank, the board and the custodial bank shall enter into a
written agreement for the safekeeping of securities and the agreement shall be
maintained in the records of the depository bank.
  (e)  Securities deposited to comply with this section may be withdrawn on
application of the bank, savings bank or savings and loan association
depositing the securities, if such application is approved by the treasurer or
the treasurer's duly authorized deputy for the reason that such deposit of
securities is no longer needed to comply with this section or are required for
collection by virtue of their maturity or for exchange. Securities withdrawn
for collection by virtue of their maturity or for exchange shall be replaced
within 15 calendar days, but until replaced the state shall retain a first lien
on the withdrawn security or the proceeds therefrom.
  (f)  Operating accounts, investment accounts and fee agency accounts shall be
secured by pledge of securities, the market value of which is equal to 100% of
the amount of the deposits in the account plus accrued interest, less the
amount of deposits in the account protected by the federal deposit insurance
corporation. Any agency responsible for a fee agency account shall transfer
immediately all moneys not so secured to the state treasurer for deposit in the
state treasury deposit, maintain, pledge, assign, and grant a security in
terest in, or cause its agent, trustee, wholly-owned subsidiary, or affiliate
having identical ownership to deposit, maintain, pledge, assign, and grant a
security interest in, for the benefit of the state of Kansas, in the manner
provided in this act, securities owned by the depository bank directly or
indirectly through its agent or trustee holding securities on its behalf, or
owned by the depository bank's wholly-owned subsidiary or by such affiliate,
the market value of which is equal to 100% of the amount of the account plus
accrued interest, less that portion of the amount of the account plus accrued
interest which is insured by the federal deposit insurance corporation or its
successor.
  (b)  All securities securing state bank accounts shall be deposited in a
securities account with a bank having the prior approval of the board, the
federal home loan bank of Topeka or with the state treasurer pursuant to a
written custodial agreement, and a receipt taken therefor with one copy going
to the treasurer and one copy going to the bank, savings bank or savings and
loan association which has secured such state bank account. The receipt shall
identify the securities which are subject to a security interest to secure
payment of the state bank account. This section shall not prohibit any
custodial bank receiving securities on deposit from issuing a receipt and
depositing securities identified in the receipt in such bank's account with any
bank chartered in Kansas or any other state, any trust company chartered in
Kansas or any other state, any national bank, or any centralized securities
depository wherever located within the United States. No securities securing
state bank accounts shall be deposited in any bank, trust company or national
bank which is owned directly or in directly by any parent corporation of the
depository bank, or with any bank, trust company, or national bank having
common controlling shareholders, having a common majority of the board of
directors or having common directors with the ability to control or influence
directly or indirectly the acts or policies of the bank, savings and loan
association or savings bank securing such state bank account. Any custodial
bank which releases securities securing a state bank account without being
authorized to do so under the custodial agreement shall be liable to the state
for any loss to the state resulting therefrom.

                                  May 3, 1997                               989

  (c)  Securities securing state bank accounts may be deposited with the
federal reserve bank of Kansas City to be there held in such manner, under
regulations and operating letters of the federal reserve bank, as to secure
payment of the state bank account in the depository bank.
  (d)  The depository bank, and any agent, trustee, wholly-owned subsidiary or
affiliate having identical ownership granting a security interest shall enter
into a written agreement with the state of Kansas granting the state of Kansas
a security interest in the securities to secure payment of the state bank
account. Such security interest shall be perfected by the depository bank and
any agent, trustee, wholly-owned subsidiary or affiliate having identical
ownership granting a security interest causing control of the securities under
the Kansas uniform commercial code to be given to the state of Kansas. The
security agreement and the custodial agreement shall be in writing, executed by
all parties thereto, maintained as part of their official records, and, except
for the state of Kansas, approved by their boards of directors or their loan
committees, which approvals shall be reflected in the minutes of the boards or
committees.
  Sec. 28.  K.S.A. 1996 Supp. 75-4220 is hereby amended to read as follows:
75-4220. (a) Each depository or its affiliate bank pledging securities
for such depository bank and its agent, trustee, wholly-owned subsidiary
or affiliate having identical ownership granting a security interest
pursuant to K.S.A. 75-4218, and amendments thereto, shall be liable for payment
if: (1) (a) The depository bank fails to: (A) (1) Pay
any check, draft or warrant drawn by the treasurer and director of accounts and
reports; or (B) (2) account for any check, draft, warrant, order,
or certificate of deposit, or any money entrusted to such bank by the
treasurer; or (2) (b) a conservator or receiver is appointed for
the depository bank.
  Any loss incurred by the state by reason of failure by any depository bank to
safely keep and account for moneys and interest thereon shall be recovered by
the state from the depository bank and a sale of the securities pledged
securing payment of such moneys under this act. The attorney general
is authorized to prosecute in the name of the state any and all actions for
recovery of any loss incurred by the state under this act.
  In case of default by any depository bank having a state bank account of any
type, the securities pledged securing payment of such account under
this act, if not in the possession of the treasurer, shall be transferred to
the treasurer by the custodial bank to be sold by the treasurer and payment of
the proceeds of such sale shall be made to the state to the extent of the
state's interest, subject to the provisions of K.S.A. 75-4221, and amendments
thereto.
  Sec. 29.  K.S.A. 1996 Supp. 75-4263 is hereby amended to read as follows:
75-4263. (a) Except as provided in subsection (b), moneys of a state agency or
public instrumentality of this state which may be invested by the director of
investments in accordance with invest ment policies established by the pooled
money investment board under K.S.A. 75-4232, and amendments thereto, expressly
for such agency or instrumentality, or invested directly by the agency or
instrumentality, may be invested in the municipal investment pool fund es
tablished in K.S.A. 1996 Supp. 12-1677a and amendments thereto. Such agency or
instru mentality shall be treated as a municipality for purposes of
participation in such fund.
  (b)  On and after July 1, 1996, state moneys eligible for investment under
paragraph (2) of subsection (a) of K.S.A. 75-4209, and amendments
thereto, shall not be invested in the municipal investment pool fund.
  Sec. 30.  K.S.A. 9-1401, 9-1403, 9-1406, 9-1407, 12-1676, 17-5002 and 68-2060
and K.S.A. 1996 Supp. 9-1101, 9-1104, 9-1111, 9-1402, 9-1405, 12-1675,
12-1677a, 12-1677b, 12-1677d, 75-4201, 75-4208, 75-4209, 75-4210, 75-4212a,
75-4217, 75-4218, 75-4220 and 75-4263 are hereby repealed.'';
  Also on page 16, in line 10, by striking ``Sec. 6.'' and inserting ``Sec.
31.''; in line 11, by striking ``statute book'' and inserting ``Kansas
register'';
  On page 1, in the title, in line 10, by striking ``banks and banking'' and
inserting ``depository institutions''; in line 11, by striking ``K.S.A. 1996
Supp. 9-1101, 9-1104 and 9-1111'' and inserting ``K.S.A. 9-1401, 9-1403,
9-1406, 9-1407, 12-1676, 17-5002 and 68-2060 and K.S.A. 1996 Supp. 9-1101,
9-1104, 9-1111, 9-1402, 9-1405, 12-1675, 12-1677a, 12-1677b, 121677d, 75-4201,
75-4208, 75-4209, 75-4210, 75-4212a, 75-4217, 75-4218, 75-4220 and 754263''

990                           JOURNAL OF THE HOUSE

  And your committee on conference recommends the adoption of this report. Ray
L. Cox
Joe Humerickhouse
Vernon Correll   Conferees on part of House Don Steffes
Sandy Praeger
Paul Feleciano, Jr.   Conferees on part of Senate   On motion of Rep. Cox, the
conference committee report on SB 132 was adopted.
  On roll call, the vote was: Yeas 121; Nays 0; Present but not voting 0;
Absent or not voting 4.
  Yeas: Adkins, Alldritt, Allen, Aurand, Ballard, Ballou, Beggs, Benlon,
Boston, Bradley, Burroughs, Campbell, Carmody, Compton, Correll, Cox, Crow,
Dahl, Dean, Dreher, Ed monds, Empson, Faber, Farmer, Feuerborn, Findley,
Flaharty, Flora, Flower, Franklin, Freeborn, Garner, Geringer, Gilbert,
Gilmore, Glasscock, Grant, Gregory, Haley, Hayzlett, Helgerson, Henderson,
Henry, Holmes, Horst, Howell, Huff, Humerickhouse, Hutchins, Jennison, Johnson,
Johnston, Kejr, Kirk, Klein, Phil Kline, Phill Kline, Krehbiel, Kuether,
Landwehr, Lane, Larkin, Lloyd, J. Long, P. Long, Mason, Mayans, Mays, McClure,
Mc Creary, McKechnie, McKinney, Minor, Mollenkamp, Morrison, Myers, Neufeld,
Nichols, O'Connor, Osborne, Packer, Palmer, Pauls, E. Peterson, J. Peterson,
Phelps, Powell, Pow ers, Presta, Ray, Reardon, Reinhardt, Ruff, Samuelson,
Sawyer, Schwartz, Shallenburger, Sharp, Shore, Showalter, Shriver, Shultz,
Sloan, Spangler, Stone, Storm, Swenson, Tanner, Thimesch, Toelkes, Tomlinson,
Toplikar, Vickrey, Vining, Wagle, Weber, Weiland, Wells, Wempe, Wilk, Wilson.
  Nays: None.
  Present but not voting: None.
  Absent or not voting: Dillon, O'Neal, Pottorff, Welshimer.
  The House stood at ease until the sound of the gavel.
                                   _________
  Speaker Shallenburger called the House to order.

REPORT OF STANDING COMMITTEE

  Your Committee on Calendar and Printing recommends on requests for
resolutions and certificates that
  Request No. 154, by Representative P. Long, commending Marshall Hunter
for attain ing the rank of Eagle Scout;
  Request No. 155, by Representative P. Long, commending Grant Moody for
attaining the rank of Eagle Scout;
  Request No. 156, by Sedgwick County Legislators, honoring Charles Koch,
in honor of his induction into the Kansas Business Hall of Fame;
  Request No. 157, by Representative Freeborn, congratulating Beverly
Deann Mortimer, on selection to the Fulbright Memorial Fund Teacher's Program
and as a Presidential Awardee for excellence in Mathematics and Science
Teaching;
  Request No. 158, by Representative Henderson, congratulating B.J.
Robinson, Leland Robinson and Correy Harris, 1997 scholarship recipients of the
First Baptist Church of Quindaro;
  Request No. 159, by Representative Flower, congratulating Matthew D.
Conner for achieving the rank of Eagle Scout;
  Request No. 160, by Representative Flower, congratulating Jason Andrew
Coppedge for achieving the rank of Eagle Scout;
be approved and the Chief Clerk of the House be directed to order the printing
of said certificates and order drafting of said resolutions.
  On motion of Rep. Jennison, the committee report was adopted.

                                  May 3, 1997                               991


REPORT ON ENGROSSED BILLS

  Sub. HB 2059; HB 2350 reported correctly engrossed May 3, 1997.
  HB 2230, 2313 reported correctly re-engrossed May 3, 1997.

REPORT ON ENROLLED BILLS

  HB 2083, 2579, 2580, 2581, 2582 reported correctly enrolled, properly
signed and presented to the governor on May 3, 1997.

REPORT ON ENROLLED RESOLUTIONS

  HR 6015 reported correctly enrolled and properly signed on May 3, 1997.
  On motion of Rep. Jennison, the House adjourned until 2:00 p.m., Sunday, May
4, 1997.
                                            CHARLENE SWANSON, Journal Clerk.
JANET E. JONES, Chief Clerk.
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