J o u r n a l   o f   t h e   S e n a t e


                                FORTY-SECOND DAY
                                    --------


                                                SENATE CHAMBER, TOPEKA,
     KANSAS
                                           Thursday, March 13, 1997--2:30 p.m.

  The Senate was called to order by President Dick Bond.
  The roll was called with forty senators present.
  President Bond introduced as guest chaplain, Pastor Randy Visconti, Assembly
of God Church, Paola, who delivered the invocation:
     Precious Lord Jesus
     We anxiously look forward to the day when you will come and set up your
   kingdom in perfect justice and righteousness. Until that great and
   glorious day we ask that you will be with those who rule our land. Give
   them wisdom, guidance and understanding.
     Heavenly Father put your blessing upon them as they go about their
   important tasks. Bless the families of these men and women who have chosen
   to serve the public.
     Lord as we approach this time of the year we celebrate Easter. We
   remember you chose to allow yourself to be crucified by wicked
   authorities. You did this because it was your good plan to bring eternal
   life to those who believe.
     Sovereign Lord thank you for your goodness and love. Shed your mercy on
   us all. In Jesus name we pray.
     Amen

GUESTS

  The President introduced Harland Priddle, President, Mid-America
International Trade Services who brought special guests of the Senate the
Consulate General of the People's Republic of China in Chicago, and staff.

INTRODUCTION OF BILLS AND CONCURRENT RESOLUTIONS

The following bill was introduced and read by title:
SB 382An act concerning retirement and pensions; relating to plan
compliance with federal law; amending K.S.A. 12-5007, 13-14a02, 13-14a05,
13-14a06, 13-14a13, 14-10a02, 14-10a05, 14-10a06, 14-10a13, 20-2603, 20-2606,
20-2610a, 20-2618, 20-2620, 20-2621, 725501, 72-5512, 72-5518, 72-5520,
74-4911c, 74-4911e, 74-4912, 74-4919, 74-4919b, 744919f, 74-4919i, 74-4919l,
74-4927a, 74-4927b, 74-4927h, 74-4928, 74-4933, 74-4935, 74-4936, 74-4942,
74-4953, 74-4954b, 74-4962, 74-4977 and 74-4985 and K.S.A. 1996 Supp.
12-5002, 12-5005, 13-14a07, 13-14a10, 14-10a07, 20-2601, 74-4902, 74-4909,
74-4911, 744911f, 74-4913, 74-4916, 74-4917a, 74-4918, 74-4919a, 74-4919c,
74-4919d, 74-4919g, 744919h, 74-4919j, 74-4919m, 74-4919n, 74-4919o, 74-4922,
74-4923, 74-4927, 74-4932, 744935c, 74-4936a, 74-4952, 74-4956, 74-4958,
74-4958a, 74-4959, 74-4960, 74-4960a, 74-4963, 74-4963a, 74-4964, 74-4964a,
74-4965 and 74-4965a and repealing the existing sections; also repealing
K.S.A. 20-2619, 72-5531, 74-4911g, 74-4973, 74-4978b and 74-4981 and K.S.A.
1996 Supp. 74-4911b, by Committee on Ways and Means.

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REFERENCE OF BILLS AND CONCURRENT RESOLUTIONS

  The following bill was referred to Committee as indicated:
  Assessment and Taxation: HB 2107.

REFERRAL OF APPOINTMENTS

  The following appointments made by the Governor and submitted to the senate
for con firmation, were referred to Committees as indicated:
Public Employee Relations Board, Gregory M. Windholz, reappointed to
fill a four-year term    ending March 15, 2001.
                                   (Commerce)
State Board of Indigents' Defense Services, Devon F. Knoll, to fill a
three-year term ending    January 15, 2000.
                                  (Judiciary)

MESSAGE FROM THE HOUSE

  Announcing passage of HB 2298, 2389; SB 135.
  Also, passage of SB 147, as amended.
  The House accedes to the request of the Senate for a conference on SB
17 and has appointed Representatives Hayzlett, Howell and Dillon as
conferees on the part of the House.

INTRODUCTION OF HOUSE BILLS AND CONCURRENT RESOLUTIONS

  HB 2298, 2389 were thereupon introduced and read by title.

FINAL ACTION ON CONSENT CALENDAR

  HB 2023, 2044, 2065, 2182, 2216 having appeared on the Consent
Calendar for the required two full legislative days without objection from
any member, were considered on final action.
  HB 2023, An act repealing K.S.A. 80-504; concerning townships;
relating to township clerks, was considered on final action.
  On roll call, the vote was: Yeas 40, nays 0, present and passing 0; absent
or not voting 0.
  Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin,
Donovan, Downey, Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger,
Harrington, Hensley, Huel skamp, Jones, Jordan, Karr, Kerr, Langworthy,
Lawrence, Lee, Morris, Oleen, Petty, Prae ger, Pugh, Ranson, Salisbury,
Salmans, Schraad, Steffes, Steineger, Tyson, Umbarger, Vi dricksen.
  The bill passed.
  HB 2044, An act concerning health maintenance organizations;
regarding financial pro jections submitted in connection with applications
for certificates of authority; amending K.S.A. 1996 Supp. 40-3203 and
repealing the existing section, was considered on final action.
  On roll call, the vote was: Yeas 40, nays 0, present and passing 0; absent
or not voting 0.
  Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin,
Donovan, Downey, Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger,
Harrington, Hensley, Huel skamp, Jones, Jordan, Karr, Kerr, Langworthy,
Lawrence, Lee, Morris, Oleen, Petty, Prae ger, Pugh, Ranson, Salisbury,
Salmans, Schraad, Steffes, Steineger, Tyson, Umbarger, Vi dricksen.
  The bill passed.
  HB 2065, An act concerning election campaign finance; relating to
reports filed by treas urers; amending K.S.A. 25-4148 and repealing the
existing section, was considered on final action.
  On roll call, the vote was: Yeas 40, nays 0, present and passing 0; absent
or not voting 0.
  Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin,
Donovan, Downey, Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger,
Harrington, Hensley, Huel skamp, Jones, Jordan, Karr, Kerr, Langworthy,
Lawrence, Lee, Morris, Oleen, Petty, Prae ger, Pugh, Ranson, Salisbury,
Salmans, Schraad, Steffes, Steineger, Tyson, Umbarger, Vi dricksen.
  The bill passed.

                                 March 13, 1997                             277

  HB 2182, An act repealing K.S.A. 65-4801, 65-4802, 65-4803, 65-4804,
65-4805, 654806, 65-4807, 65-4808, 65-4809, 65-4811, 65-4815, 65-4816,
65-4817, 65-4818, 65-4819, 65-4820, 65-4821 and 65-4822; relating to the
certificate of need program for health facil ities, was considered on final
action.
  On roll call, the vote was: Yeas 40, nays 0, present and passing 0; absent
or not voting 0.
  Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin,
Donovan, Downey, Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger,
Harrington, Hensley, Huel skamp, Jones, Jordan, Karr, Kerr, Langworthy,
Lawrence, Lee, Morris, Oleen, Petty, Prae ger, Pugh, Ranson, Salisbury,
Salmans, Schraad, Steffes, Steineger, Tyson, Umbarger, Vi dricksen.
  The bill passed.
  HB 2216, An act concerning townships; relating to compensation of
township officers; amending K.S.A. 1996 Supp. 80-207 and repealing the
existing section, was considered on final action.
  On roll call, the vote was: Yeas 40, nays 0, present and passing 0; absent
or not voting 0.
  Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin,
Donovan, Downey, Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger,
Harrington, Hensley, Huel skamp, Jones, Jordan, Karr, Kerr, Langworthy,
Lawrence, Lee, Morris, Oleen, Petty, Prae ger, Pugh, Ranson, Salisbury,
Salmans, Schraad, Steffes, Steineger, Tyson, Umbarger, Vi dricksen.
  The bill passed.

FINAL ACTION ON BILLS AND CONCURRENT RESOLUTIONS

  SB 168, An act designating the square dance as the official state
folk dance of Kansas and the polka dance as a state ethnic dance, was
considered on final action.
  On roll call, the vote was: Yeas 28, nays 11, present and passing 1; absent
or not voting 0.
  Yeas: Barone, Biggs, Bleeker, Brownlee, Clark, Donovan, Downey, Feleciano,
Gilstrap, Gooch, Goodwin, Harrington, Hensley, Huelskamp, Jordan, Karr,
Lawrence, Lee, Morris, Oleen, Petty, Pugh, Schraad, Steffes, Steineger,
Tyson, Umbarger, Vidricksen.
  Nays: Bond, Corbin, Emert, Hardenburger, Jones, Kerr, Langworthy, Praeger,
Ranson, Salisbury, Salmans.
  Present and passing: Becker.
  The bill passed, as amended.
                              EXPLANATION OF VOTE
  Mr. President: I vote NO on SB 168. As a youngster, I spent many an
evening snuggled down in a coat closet waiting for my mother and dad to
finish dancing the ``two-step'' or the ``polka''. My teenage years drew me to
the dance floor to thrill to the ``jitterbug'' and its variations. Then my
kids succumbed to the ``dirty dog'' and the ``swim'' and now dream about
their olden days. Now, why should we dance to the request of the square
dancing crowd to symbolize their recreational hobby?--Janice Hardenburger
  Senator Bond requests the record to show he concurs with the ``Explanation
of Vote'' offered by Senator Hardenburger on SB 168.
  SB 292, An act concerning law enforcement powers of conservation
officers; retirement; amending K.S.A. 32-808 and 32-1048 and K.S.A. 1996
Supp. 74-4952 and repealing the existing sections, was considered on final
action.
  On roll call, the vote was: Yeas 31, nays 9, present and passing 0; absent
or not voting 0.
  Yeas: Biggs, Bond, Clark, Corbin, Donovan, Downey, Emert, Gilstrap,
Goodwin, Har denburger, Harrington, Hensley, Jones, Jordan, Karr, Kerr,
Langworthy, Lee, Morris, Oleen, Petty, Praeger, Pugh, Salisbury, Salmans,
Schraad, Steffes, Steineger, Tyson, Um barger, Vidricksen.
  Nays: Barone, Becker, Bleeker, Brownlee, Feleciano, Gooch, Huelskamp,
Lawrence, Ranson.
  The bill passed, as amended.
  Sub. 317, An act abolishing the Kansas state grain inspection
department; relating to the transfer of duties and powers thereof; amending
K.S.A. 34-101, 34-101c, 34-102, 34-111,

278                          JOURNAL OF THE SENATE

34-223, 34-227b, 34-229, 34-230, 34-230a, 34-230b, 34-231, 34-233, 34-235,
34-236, 34238, 34-241a, 34-246, 34-249a, 34-251, 34-257a, 34-273, 34-295a,
34-295b, 34-298, 34-299, 34-2,104 and 34-2,110 and K.S.A. 1996 Supp. 34-101b,
34-125, 34-228, 74-4911f, 75-3170a and 77-415 and repealing the existing
sections; also repealing K.S.A. 34-101a, 34-101d, 34-102a, 34-104, 34-105,
34-106, 34-107, 34-110, 34-112a, 34-113, 34-121, 34-122, 34-123, 34-124,
34-127, 34-224, 34-227 34-227a, 34-2,100, 75-1701, 75-1702, 75-1703, 75-1704,
751706, 75-1709 and 75-1711 and K.S.A. 1996 Supp. 34-102b, 34-103a and
34-2,108, was considered on final action.
  On roll call, the vote was: Yeas 35, nays 5, present and passing 0; absent
or not voting 0.
  Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin,
Donovan, Downey, Emert, Feleciano, Goodwin, Hardenburger, Harrington,
Hensley, Huelskamp, Jordan, Kerr, Langworthy, Lawrence, Lee, Morris, Oleen,
Petty, Praeger, Ranson, Salisbury, Sal mans, Schraad, Steffes, Steineger,
Tyson, Umbarger, Vidricksen.
  Nays: Gilstrap, Gooch, Jones, Karr, Pugh.
  The substitute bill passed, as amended.
  SB 346, An act concerning workers compensation; amending K.S.A.
44-523, 44-534, 44536, 44-557a, 44-567 and 74-713 and K.S.A. 1996 Supp.
44-510, 44-534a, 44-551 and 44566a and repealing the existing sections, was
considered on final action.
  On roll call, the vote was: Yeas 33, nays 7, present and passing 0; absent
or not voting 0.
  Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin,
Donovan, Downey, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger,
Harrington, Hensley, Jones, Jordan, Karr, Langworthy, Lee, Morris, Oleen,
Petty, Praeger, Salisbury, Salmans, Schraad, Stei neger, Tyson, Umbarger,
Vidricksen.
  Nays: Emert, Huelskamp, Kerr, Lawrence, Pugh, Ranson, Steffes.
  The bill passed, as amended.
  HB 2015, An act concerning community colleges; relating to residence
of students for determination of state aid entitlements; amending K.S.A.
71-401 and K.S.A. 1996 Supp. 71406, 71-602, 71-603, 71-607 and 71-619 and
repealing the existing sections, was considered on final action.
  On roll call, the vote was: Yeas 40, nays 0, present and passing 0; absent
or not voting 0.
  Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin,
Donovan, Downey, Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger,
Harrington, Hensley, Huel skamp, Jones, Jordan, Karr, Kerr, Langworthy,
Lawrence, Lee, Morris, Oleen, Petty, Prae ger, Pugh, Ranson, Salisbury,
Salmans, Schraad, Steffes, Steineger, Tyson, Umbarger, Vi dricksen.
  The bill passed.
  HB 2110, An act concerning committees of the legislature; amending
K.S.A. 46-1604, 46-1701, 46-2101, 46-2102 and 68-2003 and K.S.A. 1996 Supp.
46-2201, 65-34,154, 754740, 75-5147 and 76-3,100 and repealing the existing 
sections, was considered on final action.
  On roll call, the vote was: Yeas 40, nays 0, present and passing 0; absent
or not voting 0.
  Yeas: Barone, Becker, Biggs, Bleeker, Bond, Brownlee, Clark, Corbin,
Donovan, Downey, Emert, Feleciano, Gilstrap, Gooch, Goodwin, Hardenburger,
Harrington, Hensley, Huel skamp, Jones, Jordan, Karr, Kerr, Langworthy,
Lawrence, Lee, Morris, Oleen, Petty, Prae ger, Pugh, Ranson, Salisbury,
Salmans, Schraad, Steffes, Steineger, Tyson, Umbarger, Vi dricksen.
  The bill passed, as amended.

REPORTS OF STANDING COMMITTEES

  Committee on Agriculture recommends HB 2245, as amended by
House Committee, be amended on page 6, in line 1, by striking ``: (1) Sell,''
and inserting ``sell,''; in line 4, by striking ``(A)'' and inserting
``(1)''; in line 5, by striking ``(B)'' and inserting ``(2)''; in line 6, by
striking ``(C)'' and inserting ``(3)'';
  In the title, in line 11, by striking ``cleaners'' and inserting
``conditioners''; and the bill be passed as amended.

                                 March 13, 1997                             279

  Committee on Assessment and Taxation recommends HB 2031, as
amended by House Committee of the Whole, be amended on page 8, in line 11, by
striking ``27'' and inserting ``29'';
  On page 10, in line 26, by striking ``70.36%'' and inserting ``72.403%'';
  On page 11, in line 13, after the comma by inserting ``the privilege tax on
net income of insurance companies imposed under article 28 of chapter 40 of
the Kansas Statutes Anno tated and the privilege tax as measured by net
income of financial institutions imposed pursuant to article 11 of chapter 79
of the Kansas Statutes Annotated,''; in line 15, after ``income'' by
inserting ``or privilege''; in line 18, by striking the first ``of'' and
inserting ``or''; also, in line 18, before the period by inserting ``and
machinery and equipment classified for such purposes in subclass (2) of class
2'';
  On page 12, in line 33, after ``23'' by inserting ``determined without
regard to subsection   (c) thereof''; by striking all in lines 36 through 39
and inserting:
  ``(b)  For all taxable years commencing after December 31, 1996, there
shall be allowed as a credit against the tax liability of a resident
individual imposed under the Kansas income tax act an amount equal to $3,000
for the taxable year in which occurs the lawful adoption of a child in the
custody of the secretary of social and rehabilitation services or a child
with special needs, whether or not such individual is reimbursed for all or
part of qualified adoption expenses or has received a public or private grant
therefor. As used in this sub section, terms and phrases shall have the
meanings ascribed thereto by the provisions of section 23 of the federal
internal revenue code. No credit shall be allowed under subsection   (a) for
any qualified adoption expenses incurred in the adoption of a child described
by this subsection.
  (c)  The credit allowed by subsections (a) and (b) shall not exceed the
amount of the tax imposed by K.S.A. 79-32,110, and amendments thereto,
reduced by the sum of any other credits allowable pursuant to law. If the
amount of such tax credit exceeds the taxpayer's income tax liability for
such taxable year, the amount thereof which exceeds such tax liability may be
carried over for deduction from the taxpayer's income tax liability in the
next suc ceeding taxable year or years until the total amount of the tax
credits has been deducted from tax liability, except that no such tax credit
shall be carried over for deduction after the fifth taxable year succeeding
the taxable year in which the credit was claimed.'';
  On page 15, in line 30, before the first ``or'' by inserting ``, repair'';
  On page 16, in line 13, after the comma by inserting ``and as otherwise
provided by subsection (p),''; in line 16, by striking ``The'' and inserting
``Except as otherwise provided by subsection (p), the'';
  On page 17, by striking all in lines 6 through 19; after line 19, by
inserting the following:
  ``Sec. 12.  On and after October 16, 1997, K.S.A. 79-3634 is hereby amended
to read as follows: 79-3634. The right to file a claim for a refund under
K.S.A. 79-3620 and 79-3632 to 79-3639 shall be personal to the
claimant and shall not survive his or her death, but such right et
seq. may be exercised on behalf of a claimant by his or her legal
guardian, conservator or attorney-in-fact. When a claimant dies after having
filed a timely claim the amount thereof shall be disbursed to another member
of the household as determined by the director of taxation. If the claimant
was the only member of his or her household, the claim may be paid to his or
her executor or administrator, but if neither is appointed and qualified, the
amount of the claim may be paid upon a claim duly made to any heir at law. In
the absence of any such claim within two (2) years of the filing of the
claim, the amount of the claim shall escheat to the state. When a person
who would otherwise be entitled to file a claim under the provisions of this
act dies prior to filing such claim, another member of such person's
household may file such claim in the name of such decedent, subject to the
deadline prescribed by K.S.A. 79-4505, and amendments thereto, and the
director shall pay the amount to which the decedent would have been entitled
to such person filing the claim. If the decedent was the only member of his
or her household, the decedent's executor or ad ministrator may file such
claim in the name of the decedent, and the claim shall be paid to said
executor or administrator. In the event that neither an executor or
administrator is appointed and qualified, such claim may be made by any heir
at law and the claim shall be payable to such heir at law. Any of the
foregoing provisions shall be applicable in any case where the decedent dies
in the calendar year preceding the year in which a claim may be

280                          JOURNAL OF THE SENATE

made under the provisions of this act, if such decedent was a resident of or
domiciled in this state during the entire part of such year that such
decedent was living. Where decedent's death occurs during the calendar year
preceding the year in which a claim may be made hereunder, the amount of the
claim that would have been allowable if the decedent had been a resident of
or domiciled in this state the entire calendar year of his or her death shall
be reduced in a proportionate amount equal to a fraction of the claim
otherwise allowable, the numerator of which fraction is the number of months
in such calendar year following the month of decedent's death and the
denominator of which is 12.
  Sec. 13.  On and after October 16, 1997, K.S.A. 79-3635 is hereby amended
to read as follows: 79-3635. (a) A claimant shall be entitled to a refund of
retailers' sales taxes paid upon food during the calendar year 1986
1997 and each year thereafter in the amount hereinafter provided.
For households having a household income of less than $5,000, a refund in the
amount of $40 $80 shall be allowed for the head of household and
a refund of $30 $60 shall be allowed for each additional member
of the household. For households having a household income of at least $5,000
but less than $10,000, a refund in the amount of $30 $60 shall be
allowed for the head of household and a refund of $25 $50 shall
be allowed for each additional member of the household. For households having
a household income of at least $10,000 but not more than $13,000
$15,000, a refund in the amount of $20 $40 shall be
allowed for the head of household and a refund of $15 $30 shall
be allowed for each additional member of the household. For households
having a household income of at least $15,000 but not more than $20,000, a
refund in the amount of $30 shall be allowed for the head of the household
and a refund of $20 shall be allowed for each additional member of the
household. For households having a household income of at least $20,000 but
not more than $25,000, a refund in the amount of $20 shall be allowed for the
head of household and a refund of $10 shall be allowed for each additional
member of the household. All such claims shall be paid from the sales tax
refund fund upon warrants of the director of accounts and reports pursuant to
vouchers approved by the director of taxation or by a person or persons
designated by the director, except that no warrant shall be drawn in an
amount less than $5.
  (b)  A head of household shall make application for refunds for all members
of the same household upon a common form provided for the making of joint
claims. All claims paid to members of the same household shall be paid as a
joint claim by means of a single warrant.
  (c)  No claim for a refund of taxes under the provisions of K.S.A.
79-3620 and 79-3632 to 79-3639 et seq. shall be paid or
allowed unless such claim is actually filed with and in the possession of the
department of revenue on or before October April 15 of the year
next succeeding the year in which said such taxes were paid. The
director of taxation may: (1) Extend the time for filing any claim under the
provisions of this act when good cause exists therefor; or (2) accept a claim
filed after the deadline for filing in the case of sickness, absence or
disability of the claimant if said claim has been filed within four (4)
years of said deadline.'';
  Also on page 17, in line 20, before ``K.S.A.'' by inserting ``On and after
October 16, 1997,'';
  On page 20, in line 21, before ``K.S.A.'' by inserting ``On and after
October 16, 1997,''; in line 28, before ``K.S.A.'' by inserting ``On and
after October 16, 1997,'';
  On page 21, by striking all in lines 12 through 43;
  By striking all on pages 22 through 38;
  On page 39, by striking all in lines 1 through 13; after line 13, by
inserting the following:
  ``Sec. 17.  On and after October 16, 1997, K.S.A. 79-3634, 79-3635,
79-4505, 79-4508 and 79-4520 and K.S.A. 1996 Supp. 79-4502 are hereby
repealed.
  Sec. 18.  K.S.A. 72-6414 and K.S.A. 1996 Supp. 72-6407, 72-6410, 72-6412,
72-6431, 72-6431a, 72-6442, 79-5105, 79-32,110 and 79-3603 are hereby
repealed.'';
  By renumbering sections accordingly;
  In the title, in line 18, by striking all after ``K.S.A.''; by striking all
in lines 19 through 32 and inserting ``72-6414, 79-3634, 79-3635, 79-4505 and
79-4508 and K.S.A. 1996 Supp. 726407, 72-6410, 72-6412, 72-6431, 72-6442,
79-32,110, 79-3603 and 79-4502; also repealing K.S.A. 79-4520 and K.S.A. 1996
Supp. 72-6431a.''; and the bill be passed as amended.
  Committee on Commerce recommends SB 280 be amended on page 2,
in line 15, after ``by'' by inserting ``or to be leased to''; and the bill be
passed as amended.

                                 March 13, 1997                             281

  Committee on Energy and Natural Resources recommends HB 2361,
as amended by House Committee, be amended on page 4, in line 23, before the
period, by inserting ``practices'';
  On page 6, after line 38, by inserting:
  ``Sec. 7.  K.S.A. 1996 Supp. 79-32,117 is hereby amended to read as
follows: 79-32,117.   (a) The Kansas adjusted gross income of an individual
means such individual's federal ad justed gross income for the taxable year,
with the modifications specified in this section.
  (b)  There shall be added to federal adjusted gross income:
  (i)  Interest income less any related expenses directly incurred in the
purchase of state or political subdivision obligations, to the extent that
the same is not included in federal adjusted gross income, on obligations of
any state or political subdivision thereof, but to the extent that interest
income on obligations of this state or a political subdivision thereof issued
prior to January 1, 1988, is specifically exempt from income tax under the
laws of this state authorizing the issuance of such obligations, it shall be
excluded from computation of Kansas adjusted gross income whether or not
included in federal adjusted gross income. Interest income on obligations of
this state or a political subdivision thereof issued after December 31, 1987,
shall be excluded from computation of Kansas adjusted gross income whether or
not included in federal adjusted gross income.
  (ii)  Taxes on or measured by income or fees or payments in lieu of income
taxes imposed by this state or any other taxing jurisdiction to the extent
deductible in determining federal adjusted gross income and not credited
against federal income tax. This paragraph shall not apply to taxes imposed
under the provisions of K.S.A. 79-1107 or 79-1108, and amendments thereto,
for privilege tax year 1995, and all such years thereafter.
  (iii)  The federal net operating loss deduction.
  (iv)  Federal income tax refunds received by the taxpayer if the deduction
of the taxes being refunded resulted in a tax benefit for Kansas income tax
purposes during a prior taxable year. Such refunds shall be included in
income in the year actually received regard less of the method of accounting
used by the taxpayer. For purposes hereof, a tax benefit shall be deemed to
have resulted if the amount of the tax had been deducted in determining
income subject to a Kansas income tax for a prior year regardless of the rate
of taxation applied in such prior year to the Kansas taxable income, but only
that portion of the refund shall be included as bears the same proportion to
the total refund received as the federal taxes deducted in the year to which
such refund is attributable bears to the total federal income taxes paid for
such year. For purposes of the foregoing sentence, federal taxes shall be
considered to have been deducted only to the extent such deduction does not
reduce Kansas taxable income below zero.
  (v)  The amount of any depreciation deduction or business expense deduction
claimed on the taxpayer's federal income tax return for any capital
expenditure in making any build ing or facility accessible to the
handicapped, for which expenditure the taxpayer claimed the credit allowed by
K.S.A. 79-32,177, and amendments thereto.
  (vi)  Any amount of designated employee contributions picked up by an
employer pur suant to K.S.A. 12-5005, 20-2603, 74-4919 and 74-4965, and
amendments to such sections.
  (vii)  The amount of any charitable contribution made to the extent the
same is claimed as the basis for the credit allowed pursuant to K.S.A. 1996
Supp. 79-32,196, and amendments thereto.
  (viii)  The amount of any ad valorem taxes and assessments paid and the
amount of any costs incurred for habitat management or construction and
maintenance of improvements on real property, claimed for deduction in
determining federal adjusted gross income, to the extent the same is claimed
as the basis for any credit allowed pursuant to section 6 and amendments
thereto.
  (c)  There shall be subtracted from federal adjusted gross income:
  (i)  Interest or dividend income on obligations or securities of any
authority, commission or instrumentality of the United States and its
possessions less any related expenses directly incurred in the purchase of
such obligations or securities, to the extent included in federal adjusted
gross income but exempt from state income taxes under the laws of the United
States.

282                          JOURNAL OF THE SENATE

  (ii)  Any amounts received which are included in federal adjusted gross
income but which are specifically exempt from Kansas income taxation under
the laws of the state of Kansas.
  (iii)  The portion of any gain or loss from the sale or other disposition
of property having a higher adjusted basis for Kansas income tax purposes
than for federal income tax purposes on the date such property was sold or
disposed of in a transaction in which gain or loss was recognized for
purposes of federal income tax that does not exceed such difference in basis,
but if a gain is considered a long-term capital gain for federal income tax
purposes, the modification shall be limited to that portion of such gain
which is included in federal adjusted gross income.
  (iv)  The amount necessary to prevent the taxation under this act of any
annuity or other amount of income or gain which was properly included in
income or gain and was taxed under the laws of this state for a taxable year
prior to the effective date of this act, as amended, to the taxpayer, or to a
decedent by reason of whose death the taxpayer acquired the right to receive
the income or gain, or to a trust or estate from which the taxpayer received
the income or gain.
  (v)  The amount of any refund or credit for overpayment of taxes on or
measured by income or fees or payments in lieu of income taxes imposed by
this state, or any taxing jurisdiction, to the extent included in gross
income for federal income tax purposes.
  (vi)  Accumulation distributions received by a taxpayer as a beneficiary of
a trust to the extent that the same are included in federal adjusted gross
income.
  (vii)  Amounts received as annuities under the federal civil service
retirement system from the civil service retirement and disability fund and
other amounts received as retire ment benefits in whatever form which were
earned for being employed by the federal government or for service in the
armed forces of the United States.
  (viii)  Amounts received by retired railroad employees as a supplemental
annuity under the provisions of 45 U.S.C. 228b (a) and 228c (a)(1) et
seq.
  (ix)  Amounts received by retired employees of a city and by retired
employees of any board of such city as retirement allowances pursuant to
K.S.A. 13-14,106, and amendments thereto, or pursuant to any charter
ordinance exempting a city from the provisions of K.S.A. 13-14,106, and
amendments thereto.
  (x)  For taxable years beginning after December 31, 1976, the amount of the
federal tentative jobs tax credit disallowance under the provisions of 26
U.S.C. 280 C. For taxable years ending after December 31, 1978, the amount of
the targeted jobs tax credit and work incentive credit disallowances under 26
U.S.C. 280 C.
  (xi)  For taxable years beginning after December 31, 1986, dividend income
on stock issued by Kansas Venture Capital, Inc.
  (xii)  For taxable years beginning after December 31, 1989, amounts
received by retired employees of a board of public utilities as pension and
retirement benefits pursuant to K.S.A. 13-1246, 13-1246a and 13-1249 and
amendments thereto.
  (xiii)  For taxable years beginning after December 31, 1993, the amount of
income earned on contributions deposited to an individual development account
under K.S.A. 1996 Supp. 79-32,117h, and amendments thereto.
  (d)  There shall be added to or subtracted from federal adjusted gross
income the tax payer's share, as beneficiary of an estate or trust, of the
Kansas fiduciary adjustment deter mined under K.S.A. 79-32,135, and
amendments thereto.
  (e)  The amount of modifications required to be made under this section by
a partner which relates to items of income, gain, loss, deduction or credit
of a partnership shall be determined under K.S.A. 79-32,131, and amendments
thereto, to the extent that such items affect federal adjusted gross income
of the partner.'';
  Also on page 6, by renumbering sections 7 and 8 accordingly; in line 40,
before ``are'' by inserting ``and 79-32,117'';
  In the title, in line 13, after ``32-962'' by inserting ``and K.S.A. 1996
Supp. 79-32,117''; and the bill be passed as amended.
  Committee on Financial Institutions and Insurance recommends HB
2094, as amended by House Committee, be amended on page 2, following line
13, by inserting two subsections as follows:

                                 March 13, 1997                             283

  ``(f)  Notwithstanding the provisions of this section, until October 10,
1999, the com missioner may require the registration of any federal covered
security for which the fees required by this section have not been paid
promptly following written notification from the commissioner to the issue of
the nonpayment or underpayment of such fees. An issuer shall be considered to
have promptly paid such fees if they are remitted to the commissioner within
15 days following such person's receipt of written notification from the
commissioner.
  (g)  This section shall be part of and supplemental to the Kansas
securities act.'';
  On page 5, in line 42, by striking all following ``thereunder''; by
striking all of line 43;
  On page 6, by striking all of lines 1 and 2 and all of line 3 before the
period; in line 7, by striking all after ``1940''; by striking lines 8
through 11; by striking all of line 12 before the period;
  On page 7, in line 25, after ``adviser'' where it occurs the second time,
by inserting a comma; in line 36, after the period by inserting the
following: ``Notwithstanding the pro visions of this subsection, until
October 10, 1999, the commissioner may require the reg istration of any
federal covered adviser for which fees required by this subsection have not
been paid promptly following written notification from the commissioner of
the nonpay ment. A federal covered adviser shall be considered to have
promptly paid such fees if they are remitted to the commissioner within 15
days following such person's receipt of written notification from the
commissioner.'';
  On page 10, in line 4, before ``and'' by inserting ``, federal covered
advisers''; also in line 4, by striking ``, federal cov-''; in line 5, by
striking all before ``representatives'';
  On page 14, in line 14, before the period, by inserting ``for which the fee
has been paid and documents have been filed as required by section 1''; in
line 41, by striking all after the period; by striking all of lines 42 and
43;
  On page 15, by striking all of line 1; in line 2, by striking all before
``If'';
  On page 17, in line 37, by striking ``except that until July 1, 1993,'';
and the bill be passed as amended.
  Committee on Judiciary recommends HB 2007, 2013, 2043, 2049,
2211, as amended by House Committee of the Whole, be passed.
  Committee on Public Health and Welfare recommends HB 2199 be
passed.
  Also HB 2181 be amended on page 1, by striking all in lines 31
through 34; in line 35, by striking ``(c)'' and inserting in lieu thereof
``(b)'';
  On page 2, in line 11, after ``registery'' by inserting ``shall be
confidential, shall not be disclosed except as provided in section 5 and
amendments thereto, shall not be subject to subpoena, discovery or
introduction into evidence in any civil or criminal proceeding and''; in line
17, after ``data'' by inserting ``collected pursuant to this act''; and the
bill be passed as amended.
  Committee on Transportation and Tourism recommends HB 2203 be
passed.

REPORT ON ENGROSSED BILLS

  SB 72, 168, 292, Sub. SB 317; SB 346 reported correctly engrossed on March
13, 1997.
  On motion of Senator Emert the Senate adjourned until 9:00 a.m., Friday,
March 14, 1997.
                                           HELEN A. MORELAND, Journal Clerk.
PAT SAVILLE, Secretary of the Senate.
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