J o u r n a l o f t h e S e n a t e FORTY-FOURTH DAY -------- SENATE CHAMBER, TOPEKA, KANSAS Monday, March 17, 1997--2:30 p.m. The Senate was called to order by President Dick Bond. The roll was called with thirty-one senators present. Senators Barone, Becker, Brownlee, Corbin, Gooch, Jones, Ranson, Salmans and Stei neger were excused. Invocation prepared by Father Michael Mullen, Pastor, Saint Patrick Church, Kansas City, Kansas, was delivered by Senator Mark Gilstrap, member of Saint Patrick Church: Fellow Senators, on this Saint Patrick Day, we celebrate the gift of life and our heritage as Kansans. We rejoice in the community spirit that unites us. We praise God for the Divine Presence that ennobles our lives and leadership. We remember Saint Patrick as a person with a mission, a mission to bring not only to the people of Ireland but to all people of every nation God's truth and love. Humble, determined, a true servant, Saint Patrick left no stone unturned, no road untraveled, in his desire to share the Good News of Hope that flows from God. Today we ask you to bless our State and to bless our Senate. May we as elected leaders be persons on a mission of service to all our citizens. Through our commit ment may human life in our State be treasured from conception to natural death. May the needs of the poor and those with special cares be graciously met. May the common good of all our brothers and sisters be upheld and enhanced by what we say and do. God, we thank you for the gifts of leadership. We ask you to bless the men and women of this assembly for their generous and unselfish commitment to public service. Help us to see the fruit of your Spirit and our work abound to the benefit of every Kansan. In the days and weeks ahead, may the following prayer, adapted from the prayer of Saint Patrick, be always on our lips and in our hearts as we strive to serve: GOD BE BESIDE ME, GOD BE BEFORE ME GOD BE BEHIND ME, KING OF MY HEART. GOD BE WITHIN ME, GOD BE BELOW ME, GOD BE ABOVE ME, NEVER TO PART. GOD ON MY RIGHT HAND, GOD ON MY LEFT HAND, GOD ALL AROUND ME, SHIELD IN THE STRIFE. GOD IN MY SLEEPING, GOD IN MY SITTING, GOD IN MY RISING, LIGHT OF MY LIFE. AMEN INTRODUCTION OF BILLS AND CONCURRENT RESOLUTIONS The following bill was introduced and read by title: SB 383An act concerning salaries and compensation for certain state officers and em ployees; longevity bonus payments; making appropriations for the fiscal year ending June 30, 1998; amending K.S.A. 1996 Supp. 40-102, 46-137a, 46-137b, 75-3101, 75-3103, 75 292 JOURNAL OF THE SENATE 3104, 75-3108, 75-3110 and 75-3111a and repealing the existing sections, by Committee on Ways and Means. COMMUNICATIONS FROM STATE OFFICERS OFFICE OF THE ATTORNEY GENERAL March 13, 1997 Carla J. Stovall, Attorney General, submitted for confirmation to the Senate the appoint ment of Earline Wesley, to the Crime Victims Compensation Board, pursuant to K.S.A. 747303, such term to expire March 15, 2001. KANSAS SUPREME COURT February 1997 Chief Justice, Kay McFarland, submitted pursuant to K.S.A. 20-320 the Annual Report of the Chief Justice of the Kansas Supreme Court. The President announced the above reports are on file in the office of the Secretary of the Senate and are available for review at any time. MESSAGE FROM THE HOUSE Announcing passage of Substitute HB 2368; HB 2479, 2484; SB 83, 121, 275. Also, passage of SB 197, as amended, 201, as amended. The House concurs in Senate amendments to HB 2057. The House nonconcurs in Senate amendments to HB 2110, requests a conference and has appointed Reps. Jennison, Wagle and Sawyer as conferees on the part of the House. The House nonconcurs in Senate amendments to HB 2071, requests a conference and has appointed Reps. Bradley, Wilson and Kirk as conferees on the part of the House. The House nonconcurs in Senate amendments to HB 2083, requests a conference and has appointed Reps. Bradley, Wilson and Kirk as conferees on the part of the House. The House announces the appointment of Rep. Aurand to replace Rep. Howell as a conferee on SB 17. INTRODUCTION OF HOUSE BILLS AND CONCURRENT RESOLUTIONS Substitute HB 2368; HB 2479, 2484 were thereupon introduced and read by title. ORIGINAL MOTION On motion of Senator Steffes, the Senate acceded to the request of the House for a conference on HB 2071. The President appointed Senators Steffes, Praeger and Feleciano as conferees on the part of the Senate. On motion of Senator Steffes, the Senate acceded to the request of the House for a conference on HB 2083. The President appointed Senators Steffes, Praeger and Feleciano as conferees on the part of the Senate. REPORTS OF STANDING COMMITTEES Committee on Agriculture recommends HB 2279 be passed. Also HB 2289, as amended by House Committee of the Whole, be amended on page 1, in line 31, by striking ``burragweed'' and inserting ``bur ragweed''; and the bill be passed as amended. Committee on Commerce recommends HCR 5015 be adopted. Also HB 2176 be passed and, because the committee is of the opinion that the bill is of a noncontroversial nature, be placed on the consent calendar. SB 325 be amended on page 4, in line 43, after ``guest'', by inserting a comma; On page 5, by striking lines 16 through 18; in line 19, by striking all before the semicolon and inserting the following: ``(i) That capital improvements costing not less than $100,000,000 will be built in the state to construct a project for such major tourism area; and (ii) that the project constructed will be designated within the standard industrial clas sification code 7948-0201''; March 17, 1997 293 On page 7, in line 40, by striking ``statute book'' and inserting ``Kansas register''; and the bill be passed as amended. SB 337 be amended on page 2, in line 9, by striking ``7948'' and inserting ``7948-0201''; in line 13, by striking all after ``code''; by striking line 14; in line 15, by striking all before the period and inserting ``7948-0201, such enterprises must operate an auto racetrack in the state involving capital improvements costing not less than $100,000,000''; On page 3, in line 2, by striking ``statute book'' and inserting ``Kansas register''; and the bill be passed as amended. HB 2011 be amended on page 2, after line 10, by inserting an additional section as follows: ``Sec. 2. K.S.A. 1996 Supp. 44-532 is hereby amended to read as follows: 44-532. (a) Where the payment of compensation of the employee or the employee's dependents is insured by a policy or policies, at the expense of the employer, or the employer is a member of a qualified group-funded workers compensation pool, the insurer or the qualified groupfunded workers compensation pool shall be subrogated to the rights and duties under the workers compensation act of the employer so far as appropriate, including the immunities provided by K.S.A. 44-501 and amendments thereto. (b) Every employer shall secure the payment of compensation to the employer's em ployees by insuring in one of the following ways: (1) By insuring and keeping insured the payment of such compensation with an insurance carrier authorized to transact the business of workers compensation insurance in the state of Kansas; (2) by showing to the director that the employer carries such employer's own risk and is what is known as a self-insurer and by furnishing proof to the director of the employer's financial ability to pay such com pensation for the employer's self; (3) by maintaining a membership in a qualified groupfunded workers compensation pool. The cost of carrying such insurance or risk shall be paid by the employer and not the employee. (c) The knowing and intentional failure of an employer to secure the payment of workers compensation to the employer's employees as required in subsection (b) of this section is a class A misdemeanor. (d) In addition, whenever the director has reason to believe that any employer has engaged or is engaging in the knowing and intentional failure to secure the payment of workers compensation to the employer's employees as required in subsection (b) of this section, the director shall issue and serve upon such employer a statement of the charges with respect thereto and shall conduct a hearing in accordance with the Kansas administra tive procedure act, wherein the employer may be liable to the state for a civil penalty in an amount equal to twice the annual premium the employer would have paid had such em ployer been insured or $25,000, whichever amount is greater. (e) Any civil penalty imposed or final action taken under this section shall be subject to review in accordance with the act for judicial review of agency actions in the district court of Shawnee county. (f) All moneys received under this section for costs assessed or monetary penalties im posed shall be deposited in the state treasury and credited to the workers compensation fund. (g) (1) Every insurance carrier writing workers' compensation insurance for any em ployment covered under the workers compensation act shall file, with the director or the director's designee, written notice of the issuance, nonrenewal or cancellation of a policy or contract of insurance, or any endorsement, providing workers compensation coverage, within 10 days after such issuance, nonrenewal or cancellation. Every such insurance carrier shall file, with the director, written notice of all such policies, contracts and endorsements in force on the effective date of this act. (2) Every employer covered by the workers compensation act who is a qualified selfinsurer shall give written notice to the director or the director's designee, if such employer changes from a self-insurer status to insuring through an insurance carrier or by maintaining a membership in a qualified group-funded workers compensation pool, such notice to be given within 10 days after the effective date of such change. Every self-insurer shall file with the director annually a report verifying the employer's continuing ability to pay com pensation to the employer's employees. 294 JOURNAL OF THE SENATE (3) Every employer covered by the workers compensation act who is a member of a qualified group-funded workers compensation pool shall give written notice to the director or the director's designee, if such employer changes from a group-funded workers compen sation pool to insuring through an insurance carrier or becoming a self-insurer, such notice to be given within 10 days after the effective date of such change. (4) The mailing of any written notice or report required by this subsection (d) in a stamped envelope within the prescribed time shall comply with the requirements of this subsection. (5) The director shall provide by regulation for the forms of written notices and reports required by this subsection (d). (h) As used in this section, ``qualified group-funded workers compensation pool'' means any qualified group-funded workers compensation pool under K.S.A. 44-581 through 44591 and amendments thereto or any group-funded pool under the Kansas municipal groupfunded pool act which includes workers compensation and employers' liability under the workers compensation act. (i) A private firm shall not be eligible to apply to become a self-insurer unless it has been in continuous operation for at least five years or is purchasing an existing self-insured Kansas firm, plant or facility and the operation of the purchased firm, plant or facility: (1) Has been in continuous operation in Kansas for at least 10 years; (2) has generated an aftertax profit of at least $1,000,000 annually for the preceding three consecutive years; and (3) has a ratio of debt to equity of not greater than 3.5 to 1. As used in this subsection, ``debt'' means the sum of long-term borrowing maturing in excess of one year plus the current portion of long-term borrowing plus short-term financial institution borrowing plus com mercial paper borrowing, and ``equity'' means the sum of the book value of stock plus paidin capital plus retained earnings.''; And renumbering the existing sections; On page 3, in line 3, after ``12-2621'', by inserting ``, 44-532''; In the title, in line 10, after ``12-2621'', by inserting ``, 44-532''; and the bill be passed as amended. Committee on Energy and Natural Resources recommends HB 2303, 2305, as amended by House Committee of the Whole, be passed. Committee on Ways and Means recommends SB 373 be amended on page 1, in line 16, by striking ``(a)''; by striking all in lines 18 through 43; On page 2, in line 1, by striking ``(7) the'' and inserting ``(a) The''; in line 8, by striking all after ``(b)''; by striking all in lines 9 through 10; in line 11, by striking ``education and research.'' and inserting ``Such quality hospital, health care and related facilities require specialized management and operation to remain economically viable to earn revenues nec essary for its operation and to engage in arrangements with public and private entities and other activities, taking into account changes that have occurred or may occur in the future in the provisions of health care and related services.''; On page 3, in line 20, by striking ``16'' and inserting ``14''; in line 21, by striking ``Nine'' and inserting ``Eight''; in line 23, by striking ``or'' and inserting ``, health care providers,''; also in line 23, after ``affairs'' by inserting ``, education or government''; in line 25, by striking all after the period; by striking all in line 26; in line 27, by striking ``Kansas school of medicine. Five'' and inserting ``Three''; in line 29, after ``center'' by inserting ``and''; in line 30, after ``medicine'' by inserting ``. Three members shall be nonvoting ex officio members consisting of''; in line 31, by striking ``and'' and inserting a comma; in line 32, before the period, by inserting ``and the dean of the university of Kansas school of nursing''; On page 4, in line 5, by striking all after ``(e)''; by striking all in lines 6 through 10; in line 11, by striking ``(f)''; And by relettering subsections accordingly; On page 5, in line 3, by striking ``a three-quarters majority'' and inserting ``seven''; in line 16, by striking ``three-quarters majority'' and inserting ``vote of seven members''; in line 25, by striking ``voting''; in line 31, by striking ``not-for-profit''; in line 32, by striking ``state'' and inserting ``Kansas legislature''; in line 42, after ``act'' by inserting ``when the disclosure of the information in the records would be harmful to the competitive position of the author ity''; March 17, 1997 295 On page 6, in line 18, after ``total'' by inserting ``voting''; in line 23, after ``session'', by inserting ``when disclosure of the items would be harmful to the competitive position of the authority''; in line 29, by striking ``where disclosure of such strategies would be harm-''; in line 30, by striking ``ful to the competitive position of the authority''; On page 7, in line 6, by striking ``Any member'' and inserting ``All members''; also in line 6, by striking ``and any'' and inserting ``shall file a written statement pursuant to K.S.A. 46247 et seq. and amendments thereto regarding any substantial interests within the meaning of K.S.A. 46-229 and amendments thereto that each director may hold. Any''; On page 8, in line 18, by striking all after ``(15)''; by striking all in lines 19 through 24; in line 25, by striking ``(16)''; in line 31, by striking ``(17)'' and inserting ``(16)''; On page 10, in line 35, after ``(c)'' by inserting ``All current hospital employees of the university of Kansas medical center shall transfer to the authority.''; in line 36, before ``jointly'', by inserting ``then''; also in line 36, by striking ``those persons'' and inserting ``any other medical center employees''; in line 38, by striking ``The date upon''; by striking all in line 39; in line 40, by striking ``''option date.``''; in line 41, by striking ``of the option date,''; On page 12, in line 1, by striking all after ``(i)''; by striking all in lines 2 and 3; in line 4, by striking ``as of the transfer date.''; in line 9, by striking the comma; in line 10, by striking ``and who so elects to continue such participation''; in line 12, by striking ``Alternatively, an employee may elect to be-''; by striking all in lines 13 through 14; in line 15, by striking all after ``(j)''; by striking all in lines 16 through 18; in line 19, by striking ``of the university of Kansas medical center, the'' and inserting ``The''; also in line 19, after ``authority'' by inserting ``will be a participating employer for the purposes of the Kansas public employees retirement system and''; in line 24, by striking all after ``center''; in line 25, by striking all before the period; On page 15, in line 43, after ``be'' by inserting ``comprehensive information regarding all audit reports performed in such year including any legislative post audit report performed under K.S.A. 46-1106 et seq. and amendments thereto and''; On page 17, in line 2, after ``and'' by inserting ``may be''; following line 8, by inserting the following: ``Sec. 16. K.S.A. 1996 Supp. 75-6117 is hereby amended to read as follows: 75-6117. (a) There is hereby established in the state treasury the tort claims fund which shall be administered by the attorney general. All expenditures from such fund shall be made upon warrants of the director of accounts and reports pursuant to vouchers approved by the attorney general or by a designee of the attorney general. (b) Moneys in the tort claims fund shall be used only for the purpose of paying (1) compromises, settlements and final judgments arising from claims against the state or an employee of the state under the Kansas tort claims act or under the civil rights laws of the United States or of the state of Kansas and (2) costs of defending the state or an employee of the state in any actions or proceedings on those claims. Payment of a compromise or settlement shall be subject to approval by the state finance council as provided in K.S.A. 75-6106 and amendments thereto. Payment of a final judgment shall be made from the fund if there has been a determination of any appeal taken from the judgment or, if no appeal is taken, if the time for appeal has expired. No payment shall be made from the fund to satisfy a compromise, settlement or final judgment when there exists insurance coverage obtained therefor, except that payment shall be made from the fund to satisfy a compromise settlement or final judgment for claims against the state or an employee of the state in any actions or proceedings arising from rendering or failure to render professional services by (A) a charitable health care provider as defined by K.S.A. 75-6102 and amendments thereto, (B) a local health department as defined by K.S.A. 65-241 and amendments thereto or an employee thereof, or (C) an indigent health care clinic as defined by K.S.A. 75-6115 and amendments thereto, or an employee thereof, even if there exists insurance coverage ob tained therefor. (c) Upon certification by the attorney general to the director of accounts and reports that the unencumbered balance in the tort claims fund is insufficient to pay an amount for which the fund is liable, the director of accounts and reports shall transfer an amount equal to the insufficiency from the state general fund to the tort claims fund. 296 JOURNAL OF THE SENATE (d) When payment is made from the Kansas tort claims fund on behalf of the university of Kansas hospital authority, the authority shall transfer to the tort claims fund an amount equal to the payment made by the tort claims fund on behalf of the authority. (e) This section shall be part of and supplemental to the Kansas tort claims act. Sec. 17. K.S.A. 1996 Supp. 76-745 is hereby amended to read as follows: 76-745. (a) As used in this section ``negotiating committee'' means a committee to negotiate as provided in this act, and consisting of the executive officer of the state board of regents or a person designated by the executive officer, two representatives of the state educational institutions as designated by the state board of regents and the director of purchases or a person des ignated by the director of purchases
, except that for collection services for hospital revenue collection for the university of Kansas medical center, the negotiating committee shall con sist of the chairperson of the state board of regents or a person designated by the chairper son, the attorney general or a person designated by the attorney general, and the chancellor of the university of Kansas or a person designated by the chancellor. (b) The state board of regents shall convene a negotiating committee to obtain collection services. The negotiating committee is authorized to negotiate contracts with one or more qualified parties to provide collection services for the state educational institutions and such contracts may be entered on a multi-year basis, except in the case of collection services for hospital revenue collection for the university of Kansas medical center, each contract for such collection services shall be negotiated on the basis of criteria prescribed by the uni versity of Kansas medical center and shall be entered into by the university of Kansas medical center and one or more qualified parties. (c) Prior to negotiating for collection services, the committee shall advertise for pro posals, negotiate with firms submitting proposals and select among those submitting such proposals the party or parties to contract with for the purposes of collection services. (d) Contracts entered into pursuant to this section shall not be subject to the provisions of K.S.A. 75-3738 to 75-3740a, inclusive, and amendments thereto.''; And by renumbering sections accordingly; Also on page 17, in line 24, after ``sell'' by inserting ``or lease''; in line 31, after ``Sec. 20.'' by inserting ``(a)''; following line 38, by inserting the following: ``(b) The authority shall also be subject to any applicable state, county and local building codes. (c) The state building codes shall supersede any like standards of a county or local code unless those standards are more stringent than the state standards.''; On page 18, following line 3, by inserting the following: ``Sec. 25. K.S.A. 1996 Supp. 74-4910 is hereby amended to read as follows: 74-4910. (1) An eligible employer may join the system on January 1 of any year. Application for affiliation shall be in the form of a resolution approved by the governing or legislative body of the eligible employer or by any other body or officer authorized by law or recognized by the board to approve the action. No city or township shall become a participating employer except by the adoption of a resolution therefor, which shall be published once in the official city or township newspaper or, if there is none, in a newspaper of general circulation in the city or county. No such resolution shall take effect until 60 days after its final publication. If within 60 days of its final publication a petition signed by electors equal in number to not less than 10% of the electors who voted at the last preceding regular election in the township, in the case of townships, the last regular city election in the city, in the case of cities is filed in the office of the clerk of such city, or township demanding that such resolution be sub mitted to a vote of the electors, the resolution shall not take effect until submitted to a referendum and approved by a majority of the electors voting thereon. A 2/3 vote of the members-elect of the governing body shall be necessary for the affiliation of any eligible employer other than a city or township. An application for affiliation with the system shall be filed with the board not later than 30 days prior to the date participation is to begin, except as such time limit may be extended by the board. Upon the filing of a certified copy of such resolutions with the board an election pursuant to this section shall be irrevocable, and the employer shall become a participating employer on January 1 of the year immedi ately following the filing of such election with the board. March 17, 1997 297 (2) The state of Kansas in its capacity as an eligible employer, shall become, by operation of law, a participating employer on the first entry date as shall the university of Kansas hospital authority. The Kansas turnpike authority shall not become a participating employer nor shall its officers or employees be covered by the retirement system until such time as its governing body by a 2/3 vote of the members of such governing body adopts a resolution for affiliation and files the same in the same manner and on the same conditions as in the case of an eligible employer other than a city or township. (3) If a participating employer is paying or has paid the salary or other compensation of the judge, clerk or any other employee, whether elective or appointive, such judge, clerk or other employee of such court or courts, whether elective or appointive, shall be deemed an employee of the participating employer. Such employee shall be governed by the pro visions governing other eligible employees of such participating employer. Any participating employer which has not heretofore included such employees as eligible employees under the retirement system shall on the first day of the month coinciding with or following the effective date of this act include such employees if otherwise eligible as eligible employees under the retirement system. Such employees, whether elective or appointive, if employed on the employer's entry date may elect to pay forthwith the employee contributions from the employer's entry date and thereby be governed by the provisions governing other em ployees employed by the participating employer on entry date except that no such employee shall be considered to be new employees on the first day of the month coinciding with or following the effective date of this act and commence making employee contributions in compliance with other provisions governing the retirement system and the participating employer shall make the employer contributions in accordance with the alternative elected by the employee and other provisions governing the retirement system. (4) Any employer whose employees are covered by social security and who otherwise do not meet the provisions of subsection (13) of K.S.A. 74-4902 and amendments thereto may elect to affiliate under this section upon meeting the definition of a governmental entity or instrumentality as determined by the system. If, subsequent to such determination, the United States internal revenue service determines that such employer does not meet the definition of a governmental entity or instrumentality, such affiliation shall be null and void and all employee accrued rights associated with such affiliation shall be null and void and the system shall refund such amounts presently credited to each employee's account and an equivalent amount to the employer for each employee. The provisions of this subsection shall apply to current and future participating employers. ``Sec. 26. K.S.A. 1996 Supp. 74-4925 is hereby amended to read as follows: 74-4925. (1) The state board of regents shall: (a) Assist all those members of the faculty and other persons who are employed by the state board of regents or by educational institutions under its management and members of the university of Kansas hospital authority who are in the unclassified service under the Kansas civil service act as provided in subsection (1)(f) of K.S.A. 75-2935 and amendments thereto, except health care employees, as defined by subsection (1)(f) of K.S.A. 75-2935 and amendments thereto, in the purchase of retirement annuities for their service rendered after December 31, 1961. Effective on the first day of the first payroll period commencing with or following July 1, 1994, county extension agents employed by Kansas state university under K.S.A. 2-615 and amendments thereto shall be eligible for assistance by the state board of regents in the purchase of retirement annuities under this section. The state board of regents shall not assist any such person who is employed after December 31, 1961, until such person has been employed for a waiting period of at least one year except that (i) the state board of regents may assist any newly employed person immediately if at the time of the com mencement of employment the person is covered by a valid retirement annuity contract issued by a company described in subsection (2) which was entered into pursuant to a retirement pension plan adopted for faculty members or other persons, or both, employed by an institution of higher education and to which such person or such person's employer on such person's behalf has been making contributions for at least one year, and (ii) all periods of employment with (A) participating employers under the Kansas public employees retirement system, for which employment participating service credit accrued, or (B) insti tutions of higher education in other states for which employment retirement benefits ac 298 JOURNAL OF THE SENATE crued under a retirement system or plan provided for such employment, shall be credited toward satisfaction of such one-year waiting period if served, in either case, during the five years immediately preceding employment with the state board of regents or with an edu cational institution under its management in the unclassified service under the Kansas civil service act as provided in subsection (1)(f) of K.S.A. 75-2935 and amendments thereto, in addition to such employment with the state board of regents or with an educational insti tution under its management; no period of employment as a student employee, as a seasonal or temporary employee or as a part-time employee, whose employment requires less than 1,000 hours of work per year, shall be credited toward the one-year waiting period under subsection (1)(a); this act shall not apply to persons employed in such temporary and parttime positions designated by the state board of regents as exceptions hereto; (b) require such members of the faculty and others described in subsection (1)(a) who are so assisted by the state board of regents to contribute an amount toward the purchase of such retirement annuities of 5.5% of their salaries, such contributions to be made through payroll deductions and on a pretax basis; (c) contribute an amount toward the purchase of such retirement annuities equal to the percentage amount, as prescribed by K.S.A. 74-4925e and amendments thereto, of the total amount of the salaries on which such members of the faculty and others described in sub section (1)(a) contribute during such period for which the contribution of the state board of regents is made; (d) provide, under such rules and regulations as the state board of regents may adopt, for the retirement of any such member of the faculty or other person described in subsection (1)(a) on account of age or condition of health, retirement of such member of the faculty or other person described in subsection (1)(a) on account of age to be not earlier than the 55th birthday and prior to January 1, 1994, not later than the end of the academic year following the 70th year. On and after January 1, 1994, there shall be no mandatory retire ment on account of age. Any person who retires under this section and who receives benefits from the Kansas public employees retirement system for prior service credit shall have such benefits calculated in accordance with the applicable provisions of K.S.A. 74-4914 and 744915 and amendments thereto. (2) For the purposes of this section the state board of regents may contract with: (a) Any life insurance company authorized to do business in this state; or (b) any life insurance company organized and operated without profit to any private shareholder or individual exclusively for the purpose of aiding and strengthening educational institutions by issuing insurance and annuity contracts only to or for the benefit of such institution and individuals engaged in the services of such institutions, whether or not such company is authorized to do business in Kansas. No premium tax or income tax shall be due or payable on such annuity contract or contracts for such retirement programs issued by a company described in this subsection (2)(b), except that neither the purchase nor the issuance of such retirement annuities from or by a company described in this subsection (2)(b) shall constitute the effecting of a contract of insurance. (3) (a) Such member of the faculty or other person described in subsection (1)(a) shall also be a member of the Kansas public employees retirement system, but only for the purpose of granting retirement benefits based on prior service only which was rendered prior to January 1, 1962, which shall be credited to the member as provided in subsection (1) of K.S.A. 74-4913 and amendments thereto, except that such member of the faculty or other person described in subsection (1)(a) who was employed prior to July 1, 1962, who has not yet retired and who is employed on July 1, 1988, on an academic year contract, shall receive credit for 12 months of prior service for each nine months of prior service for which such member or person was employed on an academic year contract prior to July 1, 1962. For the purpose of determining eligibility for a vested benefit, service by such a member of the faculty or other person after December 31, 1961, shall be construed to be credited service under subsection (2) of K.S.A. 74-4917 and amendments thereto. (b) Any member of the faculty or other person described in subsection (1)(a) who retires after 10 years of continuous service immediately preceding retirement shall be granted a retirement benefit based on prior service only which was rendered prior to January 1, 1962. Application for such benefit shall be in such form and manner as the board shall prescribe. March 17, 1997 299 (4) For the purpose of establishing a procedure whereby the state board of regents and any member of the faculty or other person described in subsection (1)(a), subject to rules and regulations of the state board of regents, may take advantage of section 403(a) or (b) of the federal internal revenue code of 1986 or any other section of the federal internal revenue code of 1986 which defers or excludes amounts from inclusion in income, any member of the faculty or any other person described in subsection (1)(a), whether or not such person has satisfied the one-year waiting period requirement under subsection (1)(a), may request in writing that the state board of regents reduce such person's annual salary, as fixed by the board, in an amount equal to not less than 5% nor more than the percentage allowed under section 403(b) of the federal internal revenue code of 1986, as designated by such member of the faculty or other person described in subsection (1)(a), of the gross amount of such annual salary. In the event of such request by a faculty member or other person who is required to make the contribution as provided in subsection (1)(b), such person shall not be required to make such contribution and the state board of regents shall provide a sum equal to the percentage amount, as prescribed by K.S.A. 74-4925e and amendments thereto, of the gross annual salary of the member of the faculty or other person and shall purchase for and on behalf of each such person whose salary has been so reduced a retirement annuity contract or contracts, the annual premiums for which shall be equal to the sum of the amount of the salary reduction of the member of the faculty or other person and the amount paid by the state board of regents. In the event of such request by a faculty member or other person who is serving the one-year waiting period pursuant to subsection (1)(a) who is not required to make the contribution as provided in subsection (1)(b), the state board of regents shall purchase for and on behalf of each such person whose salary has been so reduced a retirement annuity contract or contracts, the annual premiums for which shall be equal to the sum of the amount of the salary reduction of the member of the faculty or other person, but the state board of regents shall not provide the sum equal to the percentage amount, as prescribed by K.S.A. 74-4925e and amendments thereto, of the gross annual salary of such person as provided for such person who is required to make the contribution as provided in subsection (1)(b). Such retirement annuity contracts may be purchased by the state board of regents from companies described in subsection (2)(a) and subsection (2)(b) or from noninsurance companies who offer retirement plans that meet the requirements of section 403(b) of the federal internal revenue code of 1986, except that the state board of regents may require that the first 5% of the gross amount of such person's annual salary which is reduced under this subsection (4) and the amount equal to the per centage amount, as prescribed by K.S.A. 74-4925e and amendments thereto, of the gross amount of such person's annual salary which is provided by the state board of regents for the purchase of retirement annuity contracts under this subsection (4), if required to be provided under this subsection (4), shall be used to purchase such retirement annuity con tracts from such company or companies as may be designated by the state board of regents for such purposes. The director of accounts and reports is authorized to draw warrants on the state treasurer upon the filing with the director of proper vouchers for the amount of the premium on the retirement annuity contract to be paid pursuant to the terms of such contracts and this act. (5) All employees who are described in subsection (1)(a) and who commence such employment on and after July 1, 1976, shall receive assistance under subsection (1) and shall be covered by a valid retirement annuity contract issued by a company described in subsection (2). (6) Any employee of the state board of regentsorof an educational institution under its management or members of the university of Kansas hospital authority, other than an elected official, who is receiving or is eligible for assistance by the state board of regents in the purchase of a retirement annuity under this section and who becomes ineligible for such assistance because such employee's position is reclassified to a position in the classified service under the Kansas civil service act or who becomes ineligible for such assistance because such employee transfers to a position in the classified service under the Kansas civil service act with the state board of regents or an educational institution under its manage ment, shall become a member of the Kansas public employees retirement system in accor dance with the provisions of subsection (5) of K.S.A. 74-4911 and amendments thereto, 300 JOURNAL OF THE SENATE unless such employee files a written election in the office of the Kansas public employees retirement system, in the form and manner prescribed by the board of trustees thereof, to remain eligible for assistance by the state board of regents under this section prior to the first day of the first complete payroll period occurring after the effective date of such re classification or transfer. Failure to file such written election shall be presumed to be an election not to remain eligible for assistance by the state board of regents under this section and to become a member of the Kansas public employees retirement system under subsec tion (5) of K.S.A. 74-4911 and amendments thereto. Such election, whether to remain eligible for such assistance or to become a member of such system, shall be effective as of the effective date of such reclassification or transfer and shall be irrevocable. (7) The state board of regents shall adopt uniform policies applicable to members of the faculty and other persons, who are employed by the state board of regentsor, by any educational institution under its management or the university of Kansas hospital authority and who are in the unclassified service under the Kansas civil service act as provided in subsection (1)(f) of K.S.A. 75-2935 and amendments thereto, except health care employees, as defined by subsection (1)(f) of K.S.A. 75-2935 and amendments thereto, for the purposes of administering the provisions of this section and the provision of retirement annuities and other benefits hereunder. All assistance provided by the state board of regents for such persons, and agreements entered into therefor, pursuant to this section prior to the effective date are hereby authorized, confirmed and validated. (8) Any employee described in subsection (1)(a) who is on leave of absence and who accepts a position in the executive branch of government may file a written election in the office of the Kansas public employees retirement system, in the form and manner prescribed by the board, to remain eligible for assistance by the state board of regents under this section prior to the first day of the first complete payroll period occurring after the commencement of such service in the executive branch of government. Failure to file such written election shall be presumed to be an election not to remain eligible for assistance by the state board of regents. The state board of regents shall contribute an amount toward the purchase of retirement annuities on behalf of such employee equal to the sum of the amounts provided in subsection (1)(c). Sec. 27. K.S.A. 1996 Supp. 74-4910, 74-4925, 75-6117 and 76-745 are hereby re pealed.''; Also on page 18, in line 4, by striking ``23'' and inserting ``28''; On page 1, in the title, in line 11, after ``thereof'' by inserting ``; amending K.S.A. 1996 Supp. 74-4910, 74-4925, 75-6117 and 76-745 and repealing the existing sections''; and the bill be passed as amended. On motion of Senator Emert the Senate adjourned until 2:30 p.m., Tuesday, March 18, 1997. HELEN A. MORELAND, Journal Clerk. PAT SAVILLE, Secretary of the Senate. +--+ | | +--+