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


                                FIFTY-FIFTH DAY
                                    --------


                                                SENATE CHAMBER, TOPEKA,
     KANSAS
                                            Tuesday, April 1, 1997--10:00 a.m.

  The Senate was called to order by Vice-President Alicia Salisbury.
  The roll was called with forty senators present.
  Invocation by Chaplain Fred S. Hollomon:
   Heavenly Father,
   It seems like it'd be great, O God,
   (The kids would say, ``It's cool'')
   If all our problems went away
   By saying, ``April Fool.''
   A legislator's fantasy:
   No need for laws or rules
   If social ills would vanish
   By saying, ``April Fool.''
   Intimidation, threats and greed
   Using people like a tool;
   All such things would go away
   By saying, ``April Fool.''
   Bigotry, disease, and crime
   All flushed down the stool
   Along with booze and drug abuse
   By saying, ``April Fool.''
   But you have a better plan, O God;
   You make us go to school
   To learn that character's not built
   By saying, ``April Fool.''
   Faith in God and real hard work
   Sometimes is ridiculed,
   But You do things that won't get done
   By saying, ``April Fool.''
   And for that I thank You
   in the Name of Christ,
   AMEN

REFERENCE OF BILLS AND CONCURRENT RESOLUTIONS

  The following bill was referred to Committee as indicated:
  Commerce: SB 387.

CHANGE OF REFERENCE

  The Vice-President withdrew Sub. HB 2331 from the Committee on
Ways and Means, and referred the bill to the Committee of the Whole.

528                          JOURNAL OF THE SENATE


MESSAGE FROM THE GOVERNOR

  SB 169, 225, 245, 246, 267 approved March 31, 1997.

MESSAGE FROM THE HOUSE

  Announcing passage of HB 2213, 2330; Substitute HB 2501, 2509.
  Also, passage of SB 43, as amended.
  Also, adoption of Substitute SCR 1601, as amended; SCR 1608, as
amended, 1609, as amended.
  The House nonconcurs in Senate amendments to HB 2007, requests a
conference and has appointed Reps. Carmody, Presta and Garner as conferees on
the part of the House.
  The House nonconcurs in Senate amendments to HB 2010, requests a
conference and has appointed Reps. Hayzlett, Howell and McKinney as conferees
on the part of the House.
  The House nonconcurs in Senate amendments to HB 2011, requests a
conference and has appointed Reps. Lane, Geringer and Pauls as conferees on
the part of the House.
  The House nonconcurs in Senate amendments to HB 2025, requests a
conference and has appointed Reps. Boston, Tanner and Gilbert as conferees on
the part of the House.
  The House nonconcurs in Senate amendments to HB 2055, requests a
conference and has appointed Reps. Carmody, Presta and Garner as conferees on
the part of the House.
  The House nonconcurs in Senate amendments to HB 2056, requests a
conference and has appointed Reps. Carmody, Presta and Garner as conferees on
the part of the House.
  The House nonconcurs in Senate amendments to HB 2064, requests a
conference and has appointed Reps. Tomlinson, Powers and Welshimer as
conferees on the part of the House.
  The House nonconcurs in Senate amendments to Senate Substitute for HB
2082, 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 2129, requests a
conference and has appointed Reps. Mayans, Morrison and Henry as conferees on
the part of the House.
  The House nonconcurs in Senate amendments to HB 2143, requests a
conference and has appointed Reps. Carmody, Swenson and Garner as conferees
on the part of the House.
  The House nonconcurs in Senate amendments to HB 2185, requests a
conference and has appointed Reps. Mayans, Morrison and Henry as conferees on
the part of the House.
  The House nonconcurs in Senate amendments to HB 2218, requests a
conference and has appointed Reps. Glasscock, Powers, and Welshimer as
conferees on the part of the House.
  The House nonconcurs in Senate amendments to HB 2223, requests a
conference and has appointed Reps. Hayzlett, Howell, and McKinney as
conferees on the part of the House.
  The House nonconcurs in Senate amendments to HB 2226, requests a
conference and has appointed Reps. Lloyd, Freeborn and McClure as conferees
on the part of the House.
  The House nonconcurs in Senate amendments to HB 2255, requests a
conference and has appointed Reps. Mayans, Morrison and Henry as conferees on
the part of the House.
  The House nonconcurs in Senate amendments to HB 2315, requests a
conference and has appointed Reps. Benlon, Tomlinson and Welshimer as
conferees on the part of the House.
  The House nonconcurs in Senate amendments to HB 2361, requests a
conference and has appointed Reps. Lloyd, Freeborn and McClure as conferees
on the part of the House.
  The House nonconcurs in Senate amendments to Substitute HB 2368,
requests a con ference and has appointed Reps. Lloyd, Sloan and McClure as
conferees on the part of the House.

INTRODUCTION OF HOUSE BILLS AND CONCURRENT RESOLUTIONS

  HB 2213, 2330; Substitute HB 2501; HB 2509 were thereupon introduced
and read by title.

COMMITTEE OF THE WHOLE

  On motion of Senator Emert, the Senate resolved itself into Committee of
the Whole for consideration of bills on the calendar under the heading of
General Orders with Senator Karr in the chair.

                                 April 1, 1997                              529

  On motion of Senator Karr the following report was adopted:
  Recommended that HB 2127, 2150 be passed.
  Also SB 242; HB 2350, 2490 be amended by adoption of the committee
amendments and the bills be passed as amended.
  HB 2374 be amended by adoption of the committee amendments, and the
bill be passed as amended.
  The following amendment offered by Senator Jones to HB 2374 was
rejected:
  Senator Jones moved to amend the bill on page 1, after line 21, by
inserting:
  ``Section 1.  K.S.A. 74-8701 is hereby amended to read as follows: 74-8701.
K.S.A. 748701 through 74-8721, and sections 3, 4 and 5, and amendments
thereto, shall be known as and may be cited as the Kansas lottery act.
  Sec. 2.  K.S.A. 74-8702 is hereby amended to read as follows: 74-8702. As
used in this act, unless the context otherwise requires:
  (a)  ``Commission'' means the Kansas lottery commission.
  (b)  ``Executive director'' means the executive director of the Kansas
lottery.
  (c)  ``Gaming equipment'' means any electric, electronic or mechanical
device or other equipment unique to the Kansas lottery used directly in the
operation of any lottery and in the determination of winners pursuant to this
act.
  (d)  ``Instant bingo'' means instant bingo, as defined by subsection
(c), excluding subpart   (4), of K.S.A. 79-4701 and amendments thereto.
  (d) (e)  ``Kansas lottery'' means the state agency created by
this act to operate a lottery or lotteries pursuant to this act.
  (f)  ``Keno'' means a game in which a player selects up to 20 numbers
from a total of 80 numbers and a computer or other selection device randomly
selects up to 20 numbers from the same pool of 80 numbers. Winners are
determined by the correct matching of the num bers selected by the player
with the numbers randomly selected by the computer or other selection device.
If the player wins the game, as determined in accordance with the rules of
the game adopted by rules and regulations of the commission, the player may
be awarded game credits redeemable in cash.
  (e) (g)  ``Lottery retailer'' means the Kansas lottery or
any person with whom the Kansas lottery has contracted to sell lottery
tickets or shares, or both, to the public.  ``Lottery retailer'' does not
include a racetrack lottery retailer.
  (f) (h)  ``Lottery'' or ``state lottery'' means the lottery or
lotteries operated pursuant to this act.
  (g) (i) (1)  ``Major procurement'' means any gaming product or
service, including but not limited to gaming products and services related
to racetrack lottery games, facilities, advertising and promotional
services, annuity contracts, prize payment agreements, con sulting services,
equipment, tickets and other products and services unique to the Kansas
lottery, but not including.
  (2)  ``Major procurement'' does not include materials, supplies,
equipment and services common to the ordinary operations of state agencies.
  (j)  ``Net income from racetrack lottery games'' means all revenue from
the sale of race track lottery tickets and shares less amounts paid by
racetrack lottery retailers or by the lottery as prizes for racetrack lottery
games.
  (k)  ``Parimutuel lottery game'' means any lottery game in which: (1) The
total money wagered by individuals playing the game is placed in pools; (2)
the winners are paid prizes from such pools; (3) the size and extent of the
prizes are determined by the size and extent of the pools; and (4) the
takeout for purses, taxes and the share of the racetrack lottery retailer
from each pool is not less than 5% nor more than 20%, as determined by the
com mission, of the total amount wagered in such pool and is not affected by
the outcome of the game.  ``Parimutuel lottery game'' does not include any
game involving off-track betting in connection with horse and dog racing.
  (h) (l)  ``Person'' means any natural person, association,
corporation or partnership.
  (i) (m)  ``Prize'' means any prize paid directly by the Kansas
lottery pursuant to its rules and regulations.

530                          JOURNAL OF THE SENATE

  (n)  ``Racetrack facility'' means racetrack facility as defined by
K.S.A. 74-8802 and amendments thereto.
  (o)  ``Racetrack licensee'' means: (1) A facility owner or facility manager
licensee, as defined by K.S.A. 74-8802 and amendments thereto; or (2) an
organization licensee, as defined by K.S.A. 74-8802 and amendments thereto,
that owns a racetrack facility.
  (p)  ``Racetrack lottery game'' means any lottery game conducted by the
Kansas lottery at racetrack lottery retailer locations, including but not
limited to: (1) Instant bingo; (2) keno; and (3) any parimutuel lottery game.
  (q)  ``Racetrack lottery retailer'' means a racetrack licensee with which
the executive director has entered into a contract pursuant to section 3.
  (r)  ``Racetrack lottery retailer locations'' are those locations where
racetrack lottery re tailers are authorized to conduct racetrack lottery
games pursuant to a contract with the lottery at a racetrack facility in
existence on the effective date of this act in Crawford, Greenwood, Harper,
Sedgwick or Wyandotte county.
  (s)  ``Racetrack organization licensee'' means an organization licensee as
defined by K.S.A. 74-8802 and amendments thereto.
  (t)  ``Returned ticket'' means any ticket that was transferred to a lottery
retailer or race track lottery retailer, was not sold by such retailer and
was returned to the Kansas lottery for refund by issuance of a credit or
otherwise.
  (j) (u)  ``Share'' means any intangible manifestation
authorized by the Kansas lottery to prove participation in a lottery game,
including a racetrack lottery game.
  (v)  ``Slot machine'' means a mechanical, electromechanical or
computerized device: (1) Into which cash, tokens or other consideration is
placed and play is activated by a player;   (2) which displays symbols in a
game of chance or skill, or plays or simulates the play of a game of chance
or skill; and (3) which determines whether the player has won or lost. If the
player is a winner, the device distributes the prize, or paper, tokens or
other tangible or intangible evidence of the prize.
  (k) (w)  ``Ticket'' means any tangible evidence issued by the
Kansas lottery to prove participation in a lottery game, including a
racetrack lottery game.
  (l) (x)  ``Vendor'' means any person who has entered into a
major procurement contract with the Kansas lottery.
  (m)  ``Returned ticket'' means any ticket which was transferred to a
lottery retailer, which was not sold by the lottery retailer and which was
returned to the Kansas lottery for refund by issuance of a credit or
otherwise.
  (n) (y)  ``Video lottery machine'' means any electronic video
game machine that, upon insertion of cash, is available to play or simulate
the play of a video game authorized by the commission, including but not
limited to bingo, poker, black jack and keno, and which uses a video display
and microprocessors and in which, by chance, the player may receive free
games or credits that can be redeemed for cash.
  New Sec. 3.  (a) The executive director may enter into contracts with
racetrack licensees for the sale of racetrack lottery game tickets or shares
to the public, as provided by this act and rules and regulations adopted
pursuant to this act. Each contract shall be renewable annually on approval
of the commission and the Kansas racing and gaming commission and shall be
conditioned on the racetrack lottery retailer's remaining a facility owner
licensee, facility manager licensee or organization license under the Kansas
parimutuel racing act during the term of the contract and a finding by the
Kansas racing and gaming commission that the contract is in the best
interests of the racing industry in Kansas. Such contracts shall not be
subject to the provisions of K.S.A. 75-3738 through 75-3744, and amendments
thereto.
  (b)  Contracts entered into pursuant to this section shall include but not
be limited to:
  (1)  Provisions for the racetrack lottery retailer to pay all costs
associated with advertising and promotional services, consulting services,
equipment, tickets and other products or services for the operation of
racetrack lottery games, including start-up costs that shall be determined by
and paid pursuant to the contracts authorized by this section;
  (2)  accounting procedures to determine the net income from racetrack
lottery games, unclaimed prizes and credits;

                                 April 1, 1997                              531

  (3)  provisions requiring the racetrack lottery retailer to remit to the
Kansas lottery the net income from racetrack lottery games operated by such
retailer and procedures for re mittance of such income;
  (4)  subject to the provisions of subsection (c), the times of operation of
racetrack lottery games, the locations of operation of racetrack lottery
games within the racetrack facility, and other matters relating to the
operation of racetrack lottery games;
  (5)  minimum requirements for a racetrack lottery retailer to provide
qualified oversight, security and supervision of the operation of racetrack
lottery games at a racetrack facility; and
  (6)  provisions for the racetrack lottery retailer to file a surety bond or
other security with the executive director, based on the expected volume of
such retailer's sales of lottery tickets or shares and conditioned on the
retailer's performance of such retailer's obligations pursuant to the
contract, the provisions of this act and rules and regulations adopted pur
suant to this act.
  (c)  Days of operation of racetrack lottery games shall not be restricted
except as follows:
  (1)  No racetrack lottery game shall be operated at a racetrack facility,
other than at a fair association location, except: (A) On days when live
races are conducted or simulcast races are displayed at the racetrack
facility; and (B) at times when, within the preceding 72 hours, live horse or
dog racing has been conducted at the racetrack facility, except during those
extended periods in which live races are not scheduled to allow for track
maintenance, emergencies declared pursuant to subsection (b)(4) of K.S.A.
74-8836 and amendments thereto or similar circumstances.
  (2)  No racetrack lottery game shall be operated at a racetrack facility at
a fair association location except when live racing has been scheduled during
the same calendar year at the location where the racetrack lottery games will
be operated. The number of days during which racetrack lottery games may be
operated at a fair association location shall not exceed twice the number of
simulcast race days authorized at such location.
  (d)  No racetrack lottery game shall be operated pursuant to this act:
  (1)  At a racetrack facility, other than a fair association location, where
the conduct of both live horse and live greyhound races is authorized
pursuant to the Kansas parimutuel racing act unless the racetrack
organization licensee conducting live races at the racetrack facility: (A)
Seeks approval of not less than 45 days of live horse racing at the racetrack
facility during the first year in which racetrack lottery games are permitted
at the racetrack facility and 55 days of live horse racing during every year
thereafter; and (B) seeks approval of not less than 250 days of live
greyhound racing at the racetrack facility during each year in which
racetrack lottery games are operated at the racetrack facility; or
  (2)  at a racetrack facility, other than a fair association location, where
the conduct of only live greyhound races is authorized pursuant to the Kansas
parimutuel racing act unless the racetrack organization licensee conducting
live races at the racetrack facility seeks ap proval of not less than 250
days of live greyhound racing at the racetrack facility during each year in
which racetrack lottery games are operated at the racetrack facility.
  (e)  All moneys received by the commission from racetrack lottery games
operated pur suant to this section shall be deposited in the state treasury
and credited to the racetrack lottery operating fund established by section
4.
  New Sec. 4.  (a) There is hereby established in the state treasury the
racetrack lottery operating fund.
  (b)  The executive director shall remit at least weekly to the state
treasurer the net income from the operation of racetrack lottery games
collected pursuant to this act. Upon receipt of any such remittance, the
state treasurer shall deposit the entire amount thereof in the state treasury
and credit it to the racetrack lottery operating fund. Moneys credited to the
fund shall be expended or transferred only as provided by this act.
Expenditures from such fund shall be made in accordance with appropriations
acts upon warrants of the director of accounts and reports issued pursuant to
vouchers approved by the executive director or by a person designated by the
executive director.
  (c)  Moneys in the racetrack lottery operating fund shall be used for:

532                          JOURNAL OF THE SENATE

  (1)  The payment of expenses of the Kansas lottery attributable to the
operation of race track lottery games and implementation, administration and
enforcement of contracts en tered into pursuant to section 3;
  (2)  transfers to the state racing fund pursuant to subsection (d);
  (3)  transfers to the state tourism fund pursuant to subsection (e);
  (4)  transfers to the breed and purse enhancement fund pursuant to
subsection (f);
  (5)  payments to organization licensees pursuant to subsection (g); and
  (6)  payments to racetrack lottery retailers pursuant to subsection (h).
  (d)  On or before the 15th day of each month, commencing with the month
following the first month in which moneys are credited to the racetrack
lottery operating fund, the director of accounts and reports shall transfer
moneys in the racetrack lottery operating fund to the state racing fund
created by K.S.A. 74-8826 and amendments thereto in an amount certified
monthly by the executive director and determined as equal to the expenses of
the Kansas racing and gaming commission attributable to the operation of
racetrack lottery games, based on an accounting by the executive director of
the Kansas racing and gaming commission.
  (e)  On or before the 15th day of each month, commencing with the month
following the first month in which moneys are credited to the racetrack
lottery operating fund, the director of accounts and reports shall transfer
moneys in the racetrack lottery operating fund to the state tourism fund
created by section 18 in an amount certified monthly by the executive
director and determined as equal to 10% of the net income from racetrack
lottery games credited to the racetrack lottery operating fund during the
preceding calendar month.
  (f)  On or before the 15th day of each month, commencing with the month
following the first month in which moneys are credited to the racetrack
lottery operating fund, the director of accounts and reports shall transfer
moneys in the fund to the breed and purse enhancement fund established
pursuant to section 5, in an amount certified monthly by the executive
director and determined as equal to the following percentages:
  (1)  Subject to the provisions of subsection (f)(4), of the proportionate
amount of moneys in the racetrack lottery operating fund in excess of the
those needed for the purpose de scribed in subsection (c)(3) that were
derived from the operation of racetrack lottery games at a racetrack where a
racetrack organization licensee conducts both live horse races and live
greyhound races: (A) 12% shall be credited to the greyhound account; (B) 5%
shall be credited to the thoroughbred account; and (C) 3% shall be credited
to the quarter horse account;
  (2)  of the proportionate amount of moneys in the racetrack lottery
operating fund in excess of the those needed for the purpose described in
subsection (c)(3) that were derived from the operation of racetrack lottery
games at a racetrack where a racetrack organization licensee conducts only
live greyhound races: (A) 14% shall be credited to the greyhound account; (B)
3.75% shall be credited to the thoroughbred account; and (C) 2.25% shall be
credited to the quarter horse account;
  (3)  subject to the provisions of subsection (f)(5), of the proportionate
amount of moneys in the racetrack lottery operating fund in excess of the
those needed for the purpose de scribed in subsection (c)(3) that were
derived from the operation of racetrack lottery games at a racetrack where a
racetrack organization licensee conducts only live horse races: (A) 6% shall
be credited to the greyhound account; (B) 13.85% shall be credited to the
quarter horse account; and (C) 0.15% shall be credited to the account for
racing horses other than thoroughbreds and quarter horses;
  (4)  of the proportionate amount of moneys in the racetrack lottery
operating fund in excess of those needed for the purpose described in
subsection (c)(3) that were derived from the operation of racetrack lottery
games at Anthony Downs when a racetrack organi zation licensee conducts both
live horse races and live greyhound races at Anthony Downs: (A) 12% shall be
credited to the greyhound account; (B) 4.9% shall be credited to the
thoroughbred account; (C) 3% shall be credited to the quarter horse account;
and (D) 0.1% shall be credited to the account for racing horses other than
thoroughbreds and quarter horses; and
  (5)  of the proportionate amount of moneys in the racetrack lottery
operating fund in excess of the those needed for the purpose described in
subsection (c)(3) that were derived

                                 April 1, 1997                              533

from the operation of racetrack lottery games at Anthony Downs when a
racetrack organi zation licensee conducts only live horse races at Anthony
Downs: (A) 6% shall be credited to the greyhound account; (B) 8.5% shall be
credited to the thoroughbred account; (C) 5.25% shall be credited to the
quarter horse account; and (D) .25% shall be credited to the account for
racing horses other than thoroughbreds and quarter horses.
  (g)  On or before the 15th day of each month, commencing with the month
following the first month in which moneys are credited to the racetrack
lottery operating fund, the executive director shall authorize payments from
the fund to racetrack organization licensees conducting live races at
racetrack facilities where racetrack lottery games are conducted. Such
payments shall be in an aggregate amount equal to 1% of the moneys in the
racetrack lottery operating fund in excess of those needed for the purposes
described in subsections   (c)(1) and (c)(2). The payment to each licensee
shall be in an amount proportionate to that portion of the moneys in the fund
that were derived from racetrack lottery games operated at the racetrack
facility where the licensee conducts live racing. All amounts received by a
racetrack organization licensee pursuant to this subsection shall be
distributed to organi zations qualified to receive distributions of the
licensee's net earnings under subsection   (d)(1) of K.S.A. 74-8813 and
amendments thereto, subject to the limitation of subsection   (d)(2) of
K.S.A. 74-8813 and amendments thereto.
  (h)  On or before the 15th day of each month, commencing with the month
following the first month in which moneys are credited to the racetrack
lottery operating fund, the executive director shall authorize payments from
the fund to racetrack lottery retailers. Such payments shall be in an
aggregate amount equal to the moneys in the fund in excess of those needed
for the purposes described in subsections (c)(1), (c)(2), (c)(3), (c)(4) and
(c)(5). The payment to each retailer shall be in an amount proportionate to
that portion of the moneys in the fund that were derived from racetrack
lottery games operated by the retailer.
  New Sec. 5.  (a) There is hereby established in the state treasury the
breed and purse enhancement fund.
  (b)  There is hereby created, in the breed and purse enhancement fund, the
greyhound account, the thoroughbred account, the quarter horse account and
the account for racing horses other than thoroughbreds and quarter horses.
Moneys in such accounts shall be used as directed by the Kansas racing and
gaming commission for the respective breeds for: (1) Purse supplements; and
(2) awards to owners of Kansas-bred horses and owners of Kansasbred
greyhounds.
  (c)  Expenditures from the breed and purse enhancement fund shall be made
in accor dance with appropriation acts upon warrants of the director of
accounts and reports issued pursuant to vouchers approved by the executive
director of the Kansas racing and gaming commission or by a person designated
by such executive director.
  Sec. 6.  K.S.A. 74-8704 is hereby amended to read as follows: 74-8704. (a)
The executive director shall have the power to:
  (1)  Supervise and administer the operation of the state lottery in
accordance with the provisions of this act and such rules and regulations as
adopted hereunder.
  (2)  Appoint, subject to the Kansas civil service act and within the
limitations of appro priations therefor, all other employees of the Kansas
lottery, which employees shall be in the classified service unless otherwise
specifically provided by this act.
  (3)  Enter into contracts for advertising and promotional services, subject
to the provi sions of subsection (b); annuities or other methods deemed
appropriate for the payment of prizes; data processing and other technical
products, equipment and services; and facilities as needed to operate the
Kansas lottery, including but not limited to gaming equipment, tickets and
other services involved in major procurement contracts, in accordance with
K.S.A. 74-8705 and amendments thereto.
  (4)  Enter into contracts with persons for the sale of lottery tickets or
shares to the public, as provided by this act and rules and regulations
adopted pursuant to this act, which contracts shall not be subject to the
provisions of K.S.A. 75-3738 through 75-3744, and amendments thereto.
  (5)  Require lottery retailers to furnish proof of financial stability or
furnish surety in an amount based upon the expected volume of sales of
lottery tickets or shares.

534                          JOURNAL OF THE SENATE

  (6)  Examine, or cause to be examined by any agent or representative
designated by the executive director, any books, papers, records or memoranda
of any lottery retailer or race track lottery retailer for the purpose
of ascertaining compliance with the provisions of this act or rules and
regulations adopted hereunder.
  (7)  Issue subpoenas to compel access to or for the production of any
books, papers, records or memoranda in the custody or control of any lottery
retailer or racetrack lottery retailer, or to compel the appearance of
any lottery retailer, racetrack lottery retailer or employee of any
lottery retailer or racetrack lottery retailer, for the purpose of
ascertaining compliance with the provisions of this act or, rules
and regulations adopted hereunder or terms of any contract entered into
pursuant to section 3. Subpoenas issued under the pro visions of this
subsection may be served upon natural persons and corporations in the man ner
provided in K.S.A. 60-304 and amendments thereto for the service of process
by any officer authorized to serve subpoenas in civil actions or by the
executive director or an agent or representative designated by the executive
director. In the case of the refusal of any person to comply with any such
subpoena, the executive director may make application to the district court
of any county where such books, papers, records, memoranda or person is
located for an order to comply.
  (8)  Administer oaths and take depositions to the same extent and subject
to the same limitations as would apply if the deposition were in aid of a
civil action in the district court.
  (9)  Require fingerprinting of employees and such other persons who work in
sensitive areas within the lottery as deemed appropriate by the director. The
director may submit such fingerprints to the Kansas bureau of investigation
and to the federal bureau of inves tigation for the purposes of verifying the
identity of such employees and persons and ob taining records of their
criminal arrests and convictions.
  (b)  The Kansas lottery shall not engage in on-site display advertising or
promotion of the lottery at any amateur athletic or sporting event including,
but not limited to, amateur athletic sporting events at institutions under
the jurisdiction and control of the state board of regents.
  Sec. 7.  K.S.A. 74-8706 is hereby amended to read as follows: 74-8706. The
executive director shall have the duty to:
  (a)  Make and keep books and records which accurately and fairly reflect
each day's transactions, including but not limited to: The distribution of
tickets and shares to lottery retailers; receipt of funds, prize claims,
prize disbursements made by the Kansas lottery or otherwise or prizes liable
to be paid by the Kansas lottery; expenses and other financial transactions
of the Kansas lottery necessary so as to permit daily accountability.
  (b)  Make quarterly and annual financial reports to the commission, the
governor, the state treasurer and the legislature. Such reports shall be
based upon generally accepted accounting principles and include a full and
complete statement of lottery revenues, prize disbursements, expenses, net
revenues and other financial transactions for the reporting period.
  (c)  Make available for inspection by the commission, upon request, all
books, records, files and other information and documents of the Kansas
lottery.
  (d)  Engage, in accordance with K.S.A. 74-8705 and amendments thereto, an
independ ent firm experienced in security procedures, including but not
limited to computer security and systems security, to periodically conduct a
comprehensive study and evaluation of all aspects of security in the
operation of the Kansas lottery.
  (e)  Engage, in accordance with K.S.A. 74-8705 and amendments thereto, an
independ ent firm experienced in marketing research and analysis to
periodically conduct an evalua tion to determine the effectiveness of
marketing, promotion and public information pro grams used by the Kansas
lottery and make recommendations which will enhance such programs.
  (f)  Prepare and submit budgets and proposals for the operation of the
Kansas lottery.
  (g)  Operate the Kansas lottery in such a manner that, after the initial
state appropriation, it is self-sustaining and self-funded.
  (h)  Make available at the point of sale of any lottery tickets or shares a
list of the odds of winning such game, based upon the number of tickets or
shares projected to be sold.

                                 April 1, 1997                              535

  (i)  Make provision for the timely and efficient transfer of funds due from
lottery retailers and racetrack lottery retailers to the lottery
operating fund or the racetrack lottery operating fund, as provided by
law, including the use of electronic funds transfers whenever possible.
  Sec. 8.  K.S.A. 74-8708 is hereby amended to read as follows: 74-8708. (a)
The executive director shall select as lottery retailers such persons as
deemed best able to serve the public convenience and promote the sale of
tickets or shares in accordance with marketing plans developed by the Kansas
lottery. In the selection of lottery retailers, the executive director shall
consider factors such as financial responsibility, security of the
applicant's place of business or activity, accessibility of the applicant's
place of business or activity, integrity, reputation, volume of expected
sales and such other factors as the executive director may deem appropriate.
The Kansas lottery may engage in direct sales of lottery tickets and
shares as a lottery retailer at the Kansas lottery's regional offices at
Great Bend, Topeka and Wichita and at other locations when conducting a
promotional event, except that no direct sales of lottery tickets or shares
during a promotional event shall be made for more than two weeks at any one
location during any calendar year. The executive director may select the
state fair board as a lottery retailer to sell lottery tickets or shares only
on the state fairgrounds and only during the time of the annual state fair.
Other persons lawfully engaged in non governmental business on state property
may be selected as lottery retailers.
  (b)  The executive director may charge an application fee to persons
applying to become lottery retailers.
  (c)  All lottery retailer contracts awarded by the Kansas lottery under
this act shall be renewable annually after issuance unless sooner canceled or
terminated.
  (d)  No lottery retailer contract awarded under this act shall be
transferred or assignable.
  (e)  Each lottery retailer shall be issued a lottery retailer certificate
which shall be con spicuously displayed at the place where the lottery
retailer is authorized to sell lottery tickets or shares.
  (f)  Lottery tickets or shares shall only be sold by the lottery retailer
at the location stated on the lottery retailer certificate.
  (g)  To be selected as a lottery retailer, a natural person acting as a
sole proprietor must:
  (1)  Be at least 18 years of age;
  (2)  have sufficient financial resources to support the activities required
to sell lottery tickets or shares;
  (3)  be current in payment of all taxes, interest and penalties owed to any
taxing subdi vision where the lottery retailer will sell lottery tickets or
shares;
  (4)  be current in filing all applicable tax returns and in payment of all
taxes, interest and penalties owed to the state of Kansas, excluding items
under formal appeal pursuant to applicable statutes; and
  (5)  not be engaged exclusively in the sale of lottery tickets and shares.
  (h)  No natural person shall be selected as a lottery retailer who:
  (1)  Has been convicted of a felony in this or any other jurisdiction,
unless at least 10 years have passed since satisfactory completion of the
sentence or probation imposed by the court for each such felony;
  (2)  has been convicted of an illegal gambling activity in this or any
other jurisdiction;
  (3)  has been found to have violated the provisions of this act or any rule
and regulation adopted hereunder;
  (4)  is a vendor or an employee or agent of any vendor doing business with
the Kansas lottery;
  (5)  resides in the same household of an employee of the Kansas lottery or
of a member of the commission; or
  (6)  has made a statement of material fact to the Kansas lottery, knowing
such statement to be false.
  (i)  For a partnership to be selected as a lottery retailer, the
partnership must meet the requirements of subsections (g)(2), (g)(3), (g)(4)
and (g)(5) and each partner must meet the requirements of subsections (g)(1),
(g)(3), (g)(4) and (h)(1) through (h)(6).
  (j)  For a corporation to be selected as a lottery retailer, the
corporation must meet the requirements of subsections (g)(2), (g)(3), (g)(4)
and (g)(5) and each officer or director and

536                          JOURNAL OF THE SENATE

each stockholder who owns 5% or more of the stock of such corporation must
meet the requirements of subsections (g)(3), (g)(4) and (h)(1) through
(h)(6).
  (k)  For an unincorporated association to be selected as a lottery
retailer, the association must meet the requirements of subsections (g)(2),
(g)(3), (g)(4) and (g)(5) and each officer or director must meet the
requirements of subsections (g)(1), (g)(3), (g)(4) and (h)(1) through (h)(6).
  (l)  The executive director may terminate the certificate of any lottery
retailer who fails to meet any of the applicable qualifying standards for
selection as a retailer provided in this section or on the grounds for
termination provided in the contract pursuant to rules and regulations
adopted by the commission.
  (m)  If a lottery retailer's rental payments for the business premises are
contractually computed, in whole or in part, on the basis of a percentage of
retail sales, and such com putation of retail sales is not explicitly defined
to include sale of tickets or shares in a stateoperated lottery, the
compensation received by the lottery retailer from the lottery shall be
considered the amount of the retail sale for purposes of computing the rental
payment.
  Sec. 9.  K.S.A. 1996 Supp. 74-8710 is hereby amended to read as follows:
74-8710. (a) The commission, upon the recommendation of the executive
director, shall adopt rules and regulations governing the establishment and
operation of a state lottery as necessary to carry out the purposes of this
act. Temporary rules and regulations may be adopted by the com mission
without being subject to the provisions and requirements of K.S.A. 77-415
through 77-438, and amendments thereto, but shall be subject to approval by
the attorney general as to legality and shall be filed with the secretary of
state and published in the Kansas register. Temporary and permanent rules and
regulations may include but shall not be limited to:
  (1)  Subject to the provisions of subsection (b), the types of lottery
games to be con ducted, including but not limited to instant lottery, on-line
and, traditional and racetrack lottery games, but not
including games on slot machines or video lottery machines.
  (2)  The manner of selecting the winning tickets or shares, except that, if
a lottery game utilizes a drawing of winning numbers, a drawing among entries
or a drawing among finalists, such drawings shall always be open to the
public and shall be recorded on both video and audio tape.
  (3)  The manner of payment of prizes to the holders of winning tickets or
shares.
  (4)  The frequency of the drawings or selections of winning tickets or
shares.
  (5)  The type or types of locations at which tickets or shares may be sold.
  (6)  The method or methods to be used in selling tickets or shares.
  (7)  Additional qualifications for the selection of lottery retailers
and racetrack lottery retailers and the amount of application fees to
be paid by each, which fees shall be sufficient to pay all expenses of any
background investigation and processing of the application.
  (8)  The amount and method of compensation to be paid to lottery retailers,
including special bonuses and incentives and a commission of not less than
7.5% of sales.
  (9)  Deadlines for claims for prizes by winners of each lottery game.
  (10)  Provisions for confidentiality of information submitted by vendors
pursuant to K.S.A. 74-8705, and amendments thereto.
  (11)  Information required to be submitted by vendors, in addition to that
required by K.S.A. 74-8705, and amendments thereto.
  (12)  The major procurement contracts or portions thereof to be awarded to
minority business enterprises pursuant to subsection (a) of K.S.A. 74-8705,
and amendments thereto, and procedures for the award thereof.
  (13)  For racetrack lottery games, minimum prize pay-outs of not less
than 80% of the total sales of tickets and shares for such games, computed on
an annual basis, and maximum prize pay-outs of not more than 95% of the total
sales of tickets and shares for such games, computed on an annual basis.
  (14)  Minimum and maximum prize pay-outs for instant bingo conducted by
lottery re tailers.
  (15)  Provisions for security, monitoring, auditing and control of
racetrack lottery games.
  (b)  Rules and regulations adopted by the commission pursuant to this
section shall re quire that the odds in racetrack lottery games be posted in
prominent locations on the premises where the games are operated or
conducted.

                                 April 1, 1997                              537

  (c)  No new racetrack lottery game or other lottery game shall
commence operation after the effective date of this act unless first approved
by the governor or, in the governor's absence or disability, the lieutenant
governor.
  Sec. 10.  K.S.A. 74-8711 is hereby amended to read as follows: 74-8711. (a)
There is hereby established in the state treasury the lottery operating fund.
  (b)  The executive director shall remit at least weekly to the state
treasurer all moneys collected from the sale of lottery tickets and shares
and any other moneys received by or on behalf of the Kansas lottery, other
than net income from racetrack lottery games. Upon receipt of any such
remittance, the state treasurer shall deposit the entire amount thereof in
the state treasury and credit it to the lottery operating fund. Moneys
credited to the fund shall be expended or transferred only as provided by
this act. Expenditures from such fund shall be made in accordance with
appropriations acts upon warrants of the director of ac counts and reports
issued pursuant to vouchers approved by the executive director or by a person
designated by the executive director.
  (c)  Moneys in the lottery operating fund shall be used for:
  (1)  The payment of expenses of the lottery, which shall include all costs
incurred in the operation and administration of the Kansas lottery; all costs
resulting from contracts entered into for the purchase or lease of goods and
services needed for operation of the lottery, including but not limited to
supplies, materials, tickets, independent studies and surveys, data
transmission, advertising, printing, promotion, incentives, public relations,
communi cations, and distribution of tickets and shares; and reimbursement of
costs of facilities and services provided by other state agencies;
  (2)  the payment of compensation to lottery retailers;
  (3)  transfers of moneys to the lottery prize payment fund pursuant to
K.S.A. 74-8712 and amendments thereto;
  (4)  transfers to the state general fund pursuant to K.S.A. 74-8713 and
amendments thereto;
  (5)  transfers to the state gaming revenues fund pursuant to subsection (d)
of this section and as otherwise provided by law; and
  (6)  the transfers to the county reappraisal fund as prescribed by law.
  (d)  The director of accounts and reports shall transfer moneys in the
lottery operating fund to the state gaming revenues fund created by K.S.A.
79-4801 and amendments thereto, on or before the 15th day of each month, for
fiscal years commencing on or after July 1, 1988 in an amount certified
monthly by the executive director and determined as follows, whichever is
greater:
  (1)  In an amount equal to the moneys in the lottery operating fund in
excess of those needed for the purposes described in subsections (c)(1)
through (c)(4); or
  (2)  an amount equal to not less than the sum of the following:
  (A)  For on-line games with drawings occurring no more frequently than once
a day, 30% of total monthly revenues from the sales of lottery
tickets and shares, less estimated returned tickets and compensation
paid to lottery retailers for on-line instant bingo sales by lottery
retailers;
  (B)  for on-line games with drawings occurring more frequently than once a
day, 20% of total monthly revenues from sales of tickets and shares, less
estimated returned tickets;
  (C)  for instant lottery games, 25% of total monthly revenues from sales of
tickets and shares, less estimated returned tickets; and
  (D)  for pull-tab lottery games, total monthly revenues, less estimated
returned tickets and amounts needed for the purposes described in subsections
(c)(1) through (c)(3).
  Sec. 11.  K.S.A. 74-8712 is hereby amended to read as follows: 74-8712. (a)
There is hereby established in the state treasury the lottery prize payment
fund.
  (b)  The executive director shall certify periodically to the director of
accounts and re ports such amounts as the executive director determines
necessary to pay prizes to the holders of valid winning lottery tickets or
shares. Upon receipt of such certification, the director of accounts and
reports shall promptly transfer the amount certified from the lottery
operating fund to the lottery prize payment fund. Moneys credited to the fund
shall be expended only for the payment of prizes to the holders of valid
winning lottery tickets or shares, for the purchase of nonmonetary
prizes, for the reimbursement of retailers who have

538                          JOURNAL OF THE SENATE

paid holders of winning tickets or shares or as otherwise authorized by law.
Prior to making any expenditure for reimbursement of a retailer or payment of
a prize of $50 or more, the executive director shall cause all proposed prize
payments to be matched against the state debtor files maintained by the
director of accounts and reports and shall certify and pay or deliver any
matched prize or the cash amount thereof to the director of accounts and
reports for setoff as prescribed under K.S.A. 75-6201 et seq. and
amendments thereto. Expenditures from such fund shall be made in accordance
with appropriations acts upon warrants of the director of accounts and
reports, or a person designated by the director of accounts and reports
pursuant to K.S.A. 75-3732 and amendments thereto, issued pursuant to
vouchers approved by the executive director, or a person designated by the
executive director.
  Sec. 12.  K.S.A. 74-8716 is hereby amended to read as follows: 74-8716. (a)
It is unlawful for the executive director, a member of the commission or any
employee of the Kansas lottery, or any person residing in the household
thereof to:
  (1)  Have, either directly or indirectly, an interest in a business or
person knowing that such business or person contracts with the
Kansas lottery for a major procurement, whether such interest is as a natural
person, partner, member of an association, stockholder or di rector or
officer of a corporation;
  (2)  have, either directly or indirectly, an interest in: (A) A
racetrack lottery retailer; or (B) a business or person knowing that such
business or person contracts with a racetrack lottery retailer for goods or
services related to the operation of racetrack lottery games;
  (2) (3)  accept or agree to accept any economic opportunity,
gift, loan, gratuity, special discount, favor or service, or hospitality
other than food and beverages, having an aggregate value of $20 or more in
any calendar year from a person knowing that such person (A) contracts or
seeks to contract with the state to supply gaming equipment, materials,
tickets or consulting services for use in the lottery or (B) is a lottery
retailer, racetrack lottery retailer or an applicant for lottery
retailer or racetrack lottery retailer.
  (b)  It is unlawful for a lottery retailer or racetrack lottery
retailer, an applicant for lottery retailer or racetrack lottery
retailer or a person who contracts or seeks to contract with the state
or with a racetrack lottery retailer to supply gaming equipment,
materials, tickets or consulting services for use in the lottery to offer,
pay, give or make any economic oppor tunity, gift, loan, gratuity, special
discount, favor or service, or hospitality other than food and beverages,
having an aggregate value of $20 or more in any calendar year to a person,
knowing such person is the executive director, a member of the commission or
an employee of the Kansas lottery, or a person residing in the household
thereof.
  (c)  Violation of this section is a class A misdemeanor.
  (d)  If the executive director, a member of the commission or an employee
of the Kansas lottery, or any person residing in the household thereof, is
convicted of an act described by this section, such executive director,
member or employee shall be removed from office or employment with the Kansas
lottery.
  (e)  In addition to the provisions of this section, all other provisions of
law relating to conflicts of interest of state employees shall apply to the
members of the commission and employees of the Kansas lottery.
  Sec. 13.  K.S.A. 1996 Supp. 74-8718 is hereby amended to read as follows:
74-8718. (a) It is unlawful for:
  (1)  Any person to sell a lottery ticket or share at a price other than
that fixed by rules and regulations adopted pursuant to this act;
  (2)  any person other than a lottery retailer or racetrack lottery
retailer authorized by the Kansas lottery to sell or resell any lottery
ticket or share; or
  (3)  any person to sell a lottery ticket or share to any person, knowing
such person to be under 18 years of age.
  (b) (1)  Violation of this section subsection (a) is a class A
nonperson misdemeanor upon conviction for a first offense; and
  (2)  violation of this section subsection (a) is a severity
level 9, nonperson felony upon conviction for a second or subsequent offense.
  (c)  No person less than 18 years of age shall purchase a lottery ticket
or share. Any person violating this subsection shall be subject to
adjudication as a juvenile offender pur suant to the juvenile offenders
code.

                                 April 1, 1997                              539

  Sec. 14.  K.S.A. 1996 Supp. 74-8719 is hereby amended to read as follows:
74-8719. (a) It is unlawful for any person to purchase a lottery ticket or
share, or to share in the lottery winnings of a person, knowing that such
person is:
  (1)  The executive director, a member of the commission or an employee of
the Kansas lottery;
  (2)  an officer or employee of a vendor contracting with the Kansas lottery
to supply gaming equipment or tickets to the Kansas lottery for use in the
operation of any lottery conducted pursuant to this act;
  (3)  a spouse, child, stepchild, brother, stepbrother, sister, stepsister,
parent or steppar ent of a person described by subsection (a)(1) or (2); or
  (4)  a person who resides in the same household as any person described by
subsection   (a)(1) or (2).
  (b) (1)  Violation of subsection (a) is a class A nonperson misdemeanor
upon conviction for a first offense.
  (2)  Violation of subsection (a) is a severity level 9, nonperson felony
upon conviction for a second or subsequent offense.
  (c)  Notwithstanding subsection (a), the executive director may authorize
in writing any employee of the Kansas lottery and any employee of a lottery
vendor to purchase a lottery ticket for the purposes of verifying the proper
operation of the state lottery with respect to security, systems operation
and, lottery retailer contract compliance and racetrack
lottery retailer contract compliance. Any prize awarded as a result of
such ticket purchase shall become the property of the Kansas lottery and be
added to the prize pools of subsequent lottery games.
  (d)  Certain classes of persons who, because of the unique nature of the
supplies or services they provide for use directly in the operation of a
lottery pursuant to this act, may be prohibited, in accordance with rules and
regulations adopted by the commission, from participating in any lottery in
which such supplies or services are used.
  (e)  Nothing in this section shall prohibit lottery retailers or
racetrack lottery retailers, or their employees, from purchasing
lottery tickets and shares or from being paid a prize of for a
winning ticket or share.
  (f)  Each person who purchases a lottery ticket or share thereby agrees to
be bound by rules and regulations adopted by the commission and by the
provisions of this act.
  Sec. 15.  K.S.A. 74-8720 is hereby amended to read as follows: 74-8720. (a)
As nearly as practical and except as provided by subsection (b)(13) of
K.S.A. 74-8710, and amendments thereto, an amount equal to not less than
45% of the total sales of lottery tickets or shares, computed on an annual
basis, shall be allocated for payment of lottery prizes.
  (b)  The prize to be paid or awarded for each winning ticket or share shall
be paid to one natural person who is adjudged by the executive director, the
director's designee or the lottery retailer or racetrack lottery
retailer paying the prize, to be the holder of such winning ticket or share,
or the person designated in writing by the holder of the winning ticket or
share on a form satisfactory to the executive director, except that the prize
of a deceased winner shall be paid to the duly appointed representative of
the estate of such winner or to such other person or persons appearing to be
legally entitled thereto.
  (c)  The executive director shall award the designated prize to the holder
of the ticket or share upon the validation of a claim or confirmation of a
winning share. The executive director shall have the authority to make
payment for prizes by any means deemed appro priate upon the validation of
winning tickets or shares.
  (d)  The right of a person to a prize drawn or awarded is not assignable.
  (e)  All prizes awarded shall be taxed as Kansas source income and shall be
subject to all state and federal income tax laws and rules and regulations.
State income taxes shall be withheld from prizes paid whenever federal income
taxes are required to be withheld under current federal law.
  (f)  Unclaimed prize money not payable directly by lottery retailers shall
be retained for the period established by rules and regulations and if no
claim is made within such period, then such unclaimed prize money shall be
added to the prize pools of subsequent lottery games.

540                          JOURNAL OF THE SENATE

  (g)  The state of Kansas, members of the commission and employees of the
Kansas lottery shall be discharged of all further liability upon payment of a
prize pursuant to this section.
  (h)  The Kansas lottery shall not publicly disclose the identity of any
person awarded a prize except upon written authorization of such person.
  Sec. 16.  K.S.A. 1996 Supp. 74-8810 is hereby amended to read as follows:
74-8810. (a) It is a class A nonperson misdemeanor for any person to have a
financial interest, directly or indirectly, in any racetrack facility within
the state of Kansas or in any host facility for a simulcast race displayed in
this state:
  (1)  While such person is a member of the commission or during the five
years imme diately following such person's term as member of the commission;
or
  (2)  while such person is an officer, director or member of an organization
licensee, other than a fair association or horsemen's nonprofit organization,
or during the five years immediately following the time such person is an
officer, director or member of such an organization licensee.
  (b)  It is a class A nonperson misdemeanor for any member, employee or
appointee of the commission, including stewards and racing judges, to
knowingly:
  (1)  Participate in the operation of or have a financial interest in any
business which has been issued a concessionaire license, racing or wagering
equipment or services license, facility owner license or facility manager
license, or any business which sells goods or services to an organization
licensee;
  (2)  participate directly or indirectly as an owner, owner-trainer or
trainer of a horse or greyhound, or as a jockey of a horse, entered in a race
meeting conducted in this state;
  (3)  place a wager on an entry in a horse or greyhound race conducted by an
organization licensee; or
  (4)  accept any compensation, gift, loan, entertainment, favor or service
from any li censee, except such suitable facilities and services within a
racetrack facility operated by an organization licensee as may be required to
facilitate the performance of the member's, employee's or appointee's
official duties.
  (c)  It is a class A nonperson misdemeanor for any member, employee or
appointee of the commission, or any spouse, parent, grandparent, brother,
sister, child, son-in-law, daugh ter-in-law, grandchild, uncle, aunt,
parent-in-law, brother-in-law or sister-in-law thereof, to:
  (1)  Hold any license issued by the commission, except that a steward or
racing judge shall hold an occupation license to be such a steward or judge;
or
  (2)  enter into any business dealing, venture or contract with an owner or
lessee of a racetrack facility in Kansas; or
  (3)  have, directly or indirectly, an interest in a business or person
knowing that such business or person contracts with a racetrack lottery
retailer pursuant to subsection (b)(1) of section 3.
  (d)  It is a class A nonperson misdemeanor for any officer, director or
member of an organization licensee, other than a fair association or
horsemen's nonprofit organization, to:
  (1)  Receive, for duties performed as an officer or director of such
licensee, any com pensation or reimbursement or payment of expenses in excess
of the amounts provided by K.S.A. 75-3223 and amendments thereto for board
members' compensation, mileage and expenses; or
  (2)  enter into any business dealing, venture or contract with the
organization licensee or, other than in the capacity of an officer or
director of the organization licensee, with a facility owner licensee,
facility manager licensee, racing or wagering equipment or services license
or concessionaire licensee, or with any host facility for a simulcast race
displayed in this state.
  (e)  It is a class A nonperson misdemeanor for any facility owner licensee
or facility manager licensee, other than a horsemen's association, or any
officer, director, employee, stockholder or shareholder thereof or any person
having an ownership interest therein, to participate directly or indirectly
as an owner, owner-trainer or trainer of a horse or grey hound, or as a
jockey of a horse, entered in a live race conducted in this state.

                                 April 1, 1997                              541

  (f)  It is a class A nonperson misdemeanor for any licensee of the
commission, or any person who is an officer, director, member or employee of
a licensee, to place a wager at a racetrack facility located in Kansas on an
entry in a horse or greyhound race if:
  (1)  The commission has by rules and regulations designated such person's
position as a position which could influence the outcome of such race or the
parimutuel wagering thereon; and
  (2)  such race is conducted at or simulcast to the racetrack facility where
the licensee is authorized to engage in licensed activities.
  (g)  It is a class B nonperson misdemeanor for any person to use any animal
or fowl in the training or racing of racing greyhounds.
  (h)  It is a class A nonperson misdemeanor for any person to:
  (1)  Sell a parimutuel ticket or an interest in such a ticket to a person
knowing such person to be under 18 years of age, upon conviction of the first
offense;
  (2)  accept, transmit or deliver, from a person outside a racetrack
facility, anything of value to be wagered in any parimutuel system of
wagering within a racetrack facility, upon conviction of the first offense;
  (3)  administer or conspire to administer any drug or medication to a horse
or greyhound within the confines of a racetrack facility in violation of
rules and regulations of the com mission, upon conviction of the first
offense;
  (4)  possess or conspire to possess, within the confines of a racetrack
facility, any drug or medication for administration to a horse or greyhound
in violation of rules and regulations of the commission, upon conviction of
the first offense;
  (5)  possess or conspire to possess, within the confines of a racetrack
facility, equipment for administering drugs or medications to horses or
greyhounds in violation of rules and regulations of the commission, upon
conviction of the first offense;
  (6)  enter any horse or greyhound in any race knowing such horse or
greyhound to be ineligible to compete in such race pursuant to K.S.A. 74-8812
and amendments thereto; or
  (7)  prepare or cause to be prepared an application for registration of a
horse pursuant to K.S.A. 74-8830 and amendments thereto knowing that such
application contains false information.
  (i)  It is a severity level 8, nonperson felony for any person to:
  (1)  Sell a parimutuel ticket or an interest in such a ticket to a person
knowing such person to be under 18 years of age, upon conviction of the
second or a subsequent offense;
  (2)  accept, transmit or deliver, from any person outside a racetrack
facility, anything of value to be wagered in any parimutuel system of
wagering within a racetrack facility, upon the second or a subsequent
conviction;
  (3)  conduct or assist in the conduct of a horse or greyhound race, or the
display of a simulcast race, where the parimutuel system of wagering is used
or is intended to be used and where no license has been issued to an
organization to conduct or simulcast such race;
  (4)  enter any horse or greyhound in any race conducted by an organization
licensee knowing that the class or grade in which such horse or greyhound is
entered is not the true class or grade or knowing that the name under which
such horse or greyhound is entered is not the name under which such horse or
greyhound has been registered and has publicly performed;
  (5)  use or conspire to use any device, other than an ordinary whip for
horses or a mechanical lure for greyhounds, for the purpose of affecting the
speed of any horse or greyhound at any time during a race conducted by an
organization licensee;
  (6)  possess or conspire to possess, within the confines of a racetrack
facility, any device, other than an ordinary whip for horses or a mechanical
lure for greyhounds, designed or intended to affect the speed of a horse or
greyhound;
  (7)  administer or conspire to administer any drug or medication to a horse
or greyhound within the confines of a racetrack facility in violation of
rules and regulations of the com mission, upon conviction of the second or a
subsequent offense;
  (8)  possess or conspire to possess, within the confines of a racetrack
facility, any drug or medication for administration to a horse or greyhound
in violation of rules and regulations of the commission, upon conviction of
the second or a subsequent offense;

542                          JOURNAL OF THE SENATE

  (9)  possess or conspire to possess, within the confines of a racetrack
facility, equipment for administering drugs or medications to horses or
greyhounds in violation of rules and regulations of the commission, upon
conviction of the second or a subsequent offense;
  (10)  sponge the nostrils or windpipe of a horse for the purpose of
stimulating or de pressing such horse or affecting its speed at any time
during a race meeting conducted by an organization licensee;
  (11)  alter or attempt to alter the natural outcome of any race conducted
by, or any simulcast race displayed by, an organization licensee or transmit
or receive an altered race or delayed broadcast race if parimutuel wagering
is conducted or solicited after off time of the race;
  (12)  influence or attempt to influence, by the payment or promise of
payment of money or other valuable consideration, any person to alter the
natural outcome of any race con ducted by, or any simulcast race displayed
by, an organization licensee;
  (13)  influence or attempt to influence any member, employee or appointee
of the com mission, by the payment or promise of payment of money or other
valuable consideration, in the performance of any official duty of that
member, employee or appointee;
  (14)  fail to report to the commission or to one of its employees or
appointees knowledge of any violation of this act by another person for the
purpose of stimulating or depressing any horse or greyhound, or affecting its
speed, at any time during any race conducted by an organization licensee;
  (15)  commit any of the following acts with respect to the prior racing
record, pedigree, identity or ownership of a registered horse or greyhound in
any matter related to the breed ing, buying, selling or racing of the
animal-r o) Falsify, conceal or cover up, by any trick, scheme or device, a
material fact; (B) make any false, fictitious or fraudulent statement or
representation; or (C) make or use any false writing or document knowing that
it contains any false, fictitious or fraudulent statement or entry; or
  (16)  pass or attempt to pass, cash or attempt to cash any altered or
forged parimutuel ticket knowing it to have been altered or forged.
  (j)  No person less than 18 years of age shall purchase a parimutuel ticket
or an interest in such a ticket. Any person violating this subsection shall
be subject to adjudication as a juvenile offender pursuant to the Kansas
juvenile offenders code.
  Sec. 17.  K.S.A. 1996 Supp. 38-1602 is hereby amended to read as follows:
38-1602. As used in this code, unless the context otherwise requires:
  (a)  ``Juvenile'' means a person 10 or more years of age but less than 18
years of age.
  (b)  ``Juvenile offender'' means a person who does an act while a juvenile
which if done by an adult would constitute the commission of a felony or
misdemeanor as defined by K.S.A. 21-3105 and amendments thereto or who
violates the provisions of K.S.A. 21-4204a or, K.S.A. 41-727
or, subsection (j) of K.S.A. 74-8810 or subsection (c) of
K.S.A. 74-8718, and amendments thereto, but does not include:
  (1)  A person 14 or more years of age who commits a traffic offense, as
defined in subsection (d) of K.S.A. 8-2117 and amendments thereto;
  (2)  a person 16 years of age or over who commits an offense defined in
chapter 32 of the Kansas Statutes Annotated;
  (3)  a person 16 years of age or over who is charged with a felony or with
more than one offense of which one or more is a felony after having been
adjudicated in a separate prior juvenile proceeding as having committed an
act which would constitute a felony if com mitted by an adult and the
adjudications occurred prior to the date of the commission of the new act
charged;
  (4)  a person who has been prosecuted as an adult by reason of subsection
(b)(3) and whose prosecution results in conviction of a crime;
  (5)  a person whose prosecution as an adult is authorized pursuant to
K.S.A. 38-1636 and amendments thereto;
  (6)  a person who has been convicted of aggravated juvenile delinquency as
defined by K.S.A. 21-3611 and amendments thereto; or
  (7)  a person 16 years of age or over who has been adjudicated to be a
juvenile offender under the Kansas juvenile offender's code and who is
charged with committing a felony or more than one offense of which one or
more is a felony while confined in any training or

                                 April 1, 1997                              543

rehabilitation facility under the jurisdiction and control of the department
of social and rehabilitation services or while running away or escaping from
any such institution or facility.
  (c)  ``Parent,'' when used in relation to a juvenile or a juvenile
offender, includes a guard ian, conservator and every person who is by law
liable to maintain, care for or support the juvenile.
  (d)  ``Law enforcement officer'' means any person who by virtue of that
person's office or public employment is vested by law with a duty to maintain
public order or to make arrests for crimes, whether that duty extends to all
crimes or is limited to specific crimes.
  (e)  ``Youth residential facility'' means any home, foster home or
structure which provides twenty-four-hour-a-day care for juveniles and which
is licensed pursuant to article 5 of chapter 65 of the Kansas Statutes
Annotated.
  (f)  ``Juvenile detention facility'' means any secure public or private
facility which is used for the lawful custody of accused or adjudicated
juvenile offenders and which must not be a jail.
  (g)  ``State youth center'' means a facility operated by the secretary for
juvenile offenders.
  (h)  ``Warrant'' means a written order by a judge of the court directed to
any law en forcement officer commanding the officer to take into custody the
juvenile named or de scribed therein.
  (i)  ``Secretary'' means the secretary of social and rehabilitation
services.
  (j)  ``Jail'' means:
  (1)  An adult jail or lockup; or
  (2)  a facility in the same building as an adult jail or lockup, unless the
facility meets all applicable licensure requirements under law and there is
(A) total separation of the juvenile and adult facility spatial areas such
that there could be no haphazard or accidental contact between juvenile and
adult residents in the respective facilities; (B) total separation in all
juvenile and adult program activities within the facilities, including
recreation, education, counseling, health care, dining, sleeping, and general
living activities; and (C) separate ju venile and adult staff, including
management, security staff and direct care staff such as recreational,
educational and counseling.
  (k)  ``Court-appointed special advocate'' means a responsible adult, other
than an attor ney appointed pursuant to K.S.A. 38-1606 and amendments
thereto, who is appointed by the court to represent the best interests of a
child, as provided in K.S.A. 1996 Supp. 381606a, and amendments thereto, in a
proceeding pursuant to this code.
  (l)  ``Juvenile intake and assessment worker'' means a responsible adult
authorized to perform intake and assessment services as part of the intake
and assessment system estab lished pursuant to K.S.A. 1996 Supp. 75-7023
and amendments thereto.'';
  Also on page 1, in line 22, by striking ``Section 1.'' and inserting ``Sec.
18.'';
  And by renumbering the remaining sections accordingly;
  On page 6, in line 18, before ``74-9001'' by inserting ``74-8701, 74-8702,
74-8704, 748706, 74-8708, 74-8711, 74-8712, 74-8716, 74-8720 and''; in line
19, by striking ``is'' and inserting ``K.S.A. 1996 Supp. 38-1602, 74-8710,
74-8718, 74-8719 and 74-8810 are'';
  In the title, in line 18, before ``amending'' by inserting ``; concerning
lotteries; providing for the operation of certain state owned and operated
lottery games at certain racetrack facilities; providing for disposition of
revenues from certain lottery games; prohibiting certain acts and providing
penalties for violations;''; also in line 18, before ``74-9001'' by inserting
``74-8701, 74-8702, 74-8704, 74-8706, 74-8708, 74-8711, 74-8712, 74-8716,
74-8720 and''; also in line 18, before ``re-'' by inserting ``K.S.A. 1996
Supp. 38-1602, 74-8710, 74-8718, 748719 and 74-8810''; in line 19, by
striking ``section'' and inserting ``sections''
  A ruling of the chair was requested to verify the germaness of the
amendment to HB 2374. The chair ruled the amendment to be germane.  The
ruling of the chair was challenged and upon the showing of five hands a roll
call vote was requested to sustain the decision of the chair.
  On roll call, the vote was: Yeas 23, nays 17, present and passing 0; absent
or not voting 0.
  Yeas: Barone, Becker, Biggs, Bond, Corbin, Downey, Emert, Feleciano,
Gilstrap, Gooch, Goodwin, Hensley, Jones, Karr, Langworthy, Lee, Morris,
Petty, Praeger, Ranson, Schraad, Steineger, Vidricksen.

544                          JOURNAL OF THE SENATE

  Nays: Bleeker, Brownlee, Clark, Donovan, Hardenburger, Harrington,
Huelskamp, Jor dan, Kerr, Lawrence, Oleen, Pugh, Salisbury, Salmans, Steffes,
Tyson, Umbarger.
  The chair was sustained, and the amendment was considered.
  On motion to adopt the amendment, the motion failed, and the amendment was
rejected.
  On motion of Senator Emert, the Senate recessed until 2:30 p.m.
 Afternoon Session   The Senate met pursuant to recess with
Vice-President Salisbury in the chair.

GUESTS OF THE SENATE

  Senator Biggs introduced Medal of Honor Recipients, Col. (retired) Roger
Donlon and Lt. Col. (retired) Charles Hagemeister . Accompanying the
recipients were Col. Donlon's wife, Norma, and Local Historian John Reichley,
Leavenworth, Kansas.

MESSAGE FROM THE GOVERNOR

  SB 117 approved on April 1, 1997.

MESSAGE FROM THE HOUSE

  Announcing passage of HB 2516; SB 12, 27, 61, 66, 123.
  Also, passage of SB 7, as amended, 68, as amended, 87,
as amended, 93, as amended, 106, as amended, 146, as
amended, 188, as amended, 207, as amended, 214, as amended,
262, as amended, 264, as amended by House Substitute for
SB 264.
  The House nonconcurs in Senate amendments to HB 2159, requests a
conference and has appointed Reps. Boston, Tanner and Gilbert as conferees on
the part of the House.

INTRODUCTION OF HOUSE BILLS AND CONCURRENT RESOLUTIONS

  HB 2516 was thereupon introduced and read by title.

CONSIDERATION OF MOTIONS TO CONCUR OR NONCONCUR

  On motion of Senator Kerr the Senate nonconcurred in the House amendments
to SB 43 and requested a conference committee be appointed.
  The President appointed Senators Kerr, Salisbury and Petty as a conference
committee on the part of the Senate.
  On motion of Senator Praeger the Senate nonconcurred in the House
amendments to SB 220 and requested a conference committee be appointed.
  The President appointed Senators Praeger, Salmans and Steineger as a
conference com mittee on the part of the Senate.
  On motion of Senator Praeger the Senate nonconcurred in the House
amendments to SB 221 and requested a conference committee be appointed.
  The President appointed Senators Praeger, Salmans and Lee as a conference
committee on the part of the Senate.

ORIGINAL MOTION

  On motion of Senator Emert, the Senate acceded to the request of the House
for a conference on HB 2007.
  The President appointed Senators Emert, Pugh and Goodwin as conferees on
the part of the Senate.
  On motion of Senator Vidricksen, the Senate acceded to the request of the
House for a conference on HB 2010.
  The President appointed Senators Vidricksen, Jordan and Gilstrap as
conferees on the part of the Senate.
  On motion of Senator Salisbury, the Senate acceded to the request of the
House for a conference on HB 2011.
  The President appointed Senators Salisbury, Ranson and Barone as conferees
on the part of the Senate.

                                 April 1, 1997                              545

  On motion of Senator Emert, the Senate acceded to the request of the House
for a conference on HB 2025.
  The President appointed Senators Emert, Oleen and Goodwin as conferees on
the part of the Senate.
  On motion of Senator Emert, the Senate acceded to the request of the House
for a conference on HB 2055.
  The President appointed Senators Emert, Schraad and Goodwin as conferees on
the part of the Senate.
  On motion of Senator Emert, the Senate acceded to the request of the House
for a conference on HB 2056.
  The President appointed Senators Emert, Schraad and Goodwin as conferees on
the part of the Senate.
  On motion of Senator Hardenburger, the Senate acceded to the request of the
House for a conference on HB 2064.
  The President appointed Senators Hardenburger, Becker and Gooch as
conferees on the part of the Senate.
  On motion of Senator Langworthy, the Senate acceded to the request of the
House for a conference on S. Sub. HB 2082.
  The President appointed Senators Langworthy, Steffes and Lee as conferees
on the part of the Senate.
  On motion of Senator Praeger, the Senate acceded to the request of the
House for a conference on HB 2129.
  The President appointed Senators Praeger, Salmans and Steineger as
conferees on the part of the Senate.
  On motion of Senator Emert, the Senate acceded to the request of the House
for a conference on HB 2143.
  The President appointed Senators Emert, Pugh and Goodwin as conferees on
the part of the Senate.
  On motion of Senator Praeger, the Senate acceded to the request of the
House for a conference on HB 2185.
  The President appointed Senators Praeger, Salmans and Steineger as
conferees on the part of the Senate.
  On motion of Senator Hardenburger, the Senate acceded to the request of the
House for a conference on HB 2218.
  The President appointed Senators Hardenburger, Becker and Gooch as
conferees on the part of the Senate.
  On motion of Senator Hardenburger, the Senate acceded to the request of the
House for a conference on HB 2223.
  The President appointed Senators Hardenburger, Becker and Gooch as
conferees on the part of the Senate.
  On motion of Senator Corbin, the Senate acceded to the request of the House
for a conference on HB 2226.
  The President appointed Senators Corbin, Morris and Biggs as conferees on
the part of the Senate.
  On motion of Senator Praeger, the Senate acceded to the request of the
House for a conference on HB 2255.
  The President appointed Senators Praeger, Salmans and Steineger as
conferees on the part of the Senate.
  On motion of Senator Hardenburger, the Senate acceded to the request of the
House for a conference on HB 2315.
  The President appointed Senators Hardenburger, Becker and Gooch as
conferees on the part of the Senate.
  On motion of Senator Corbin, the Senate acceded to the request of the House
for a conference on HB 2361.
  The President appointed Senators Corbin, Morris and Biggs as conferees on
the part of the Senate.

546                          JOURNAL OF THE SENATE

  On motion of Senator Corbin, the Senate acceded to the request of the House
for a conference on Sub. HB 2368.
  The President appointed Senators Corbin, Morris and Biggs as conferees on
the part of the Senate.

REPORTS OF STANDING COMMITTEES

  Committee on Assessment and Taxation recommends HB 2105, as
amended by House Committee of the Whole, on page 1, in line 38, by striking
``1997'' and inserting ``1996''; in line 41, by striking ``minus 3%'' and
inserting ``plus one percentage point'';
  On page 3, in line 13, by striking ``to'' and inserting ``from''; in line
15, by striking ``to'' and inserting ``from''; also, in line 15, before the
period by inserting ``, except that no interest shall be allowed on any such
refund if the same is paid within 60 days after the date of the return or the
date of payment, as the case requires'';
  On page 7, in line 31, by striking ``before the director of taxation''; in
line 32, by striking ``information'' and inserting ``an informal'';
   On page 9, in line 2, by striking the second ``and'' and inserting ``or'';
in line 11, by striking ``reconsid-''; in line 12, by striking ``eration''
and inserting ``informal'';
  On page 13, in line 21, after the period, by inserting ``In the event a
taxpayer has timely requested a hearing before the director of taxation
pursuant to K.S.A. 79-3226, as in effect prior to the effective date of this
act, and whether or not such hearing was conducted, the taxpayer shall be
deemed to have requested an informal conference pursuant to K.S.A. 793226,
and amendments thereto.'';
  On page 16, by striking all in lines 3 through 5; in line 15, by striking
``may'' and inserting ``shall''; by striking all in line 43;
  On page 17, by striking all in lines 1 through 8; after line 8, by
inserting the following:
  ``(a)  For the purpose of the proper administration of the Kansas
retailers' sales tax act and to prevent evasion of the tax imposed
thereunder, it shall be presumed that all gross receipts from the sale of
tangible personal property or enumerated services are subject to tax until
the contrary is established. The burden of proving that a sale is not subject
to tax is upon the vendor unless the vendor takes from the purchaser an
exemption certificate to the effect that the property or service purchased is
not subject to tax.
  (b)  An exemption certificate shall relieve the vendor from collecting and
remitting the tax when taken in good faith. A vendor shall be deemed to have
taken an exemption certif icate in good faith if the certificate is properly
completed, the vendor has ascertained the identity of the person or entity
who presented the exemption certificate and the vendor has no knowledge that
the presentation of the certificate by the purchaser is otherwise im
proper.'';
  By relettering existing subsections accordingly;
  On page 19, by striking all in lines 29 through 43;
  By striking all on pages 20 through 23;
  On page 24, by striking all in lines 1 through 15;
  On page 25, in line 17, before the period by inserting ``and interest at
the rate prescribed by K.S.A. 79-2968, and amendments thereto, minus two
percentage points''; in line 30, by striking ``and interest''; in line 41,
after the period, by inserting ``In any county; such board, upon the adoption
of a resolution so providing, may elect to recommend any such tax refund upon
a majority vote.'';
  On page 26, in line 26, before ``per'' by inserting ``plus two percentage
points,''; in line 32, before ``per'' by inserting ``plus two percentage
points,'';
  On page 27, in line 7, before ``per'' by inserting ``plus two percentage
points,''; in line 26, before ``per'' by inserting ``plus two percentage
points,''; in line 30, before ``per'' by inserting ``plus two percentage
points,''; in line 43, before ``per'' by inserting ``plus two percentage
points,'';
  On page 30, in line 6, after ``(l)'' by inserting ``(1)''; in line 12,
before ``from'' by inserting ``at the rate prescribed by K.S.A. 79-2968, and
amendments thereto, minus two percentage points, per annum''; in line 14,
before the period by inserting ``, except that, with respect to that portion
of any such refund attributable to interest the county treasurer shall charge
the county general fund. In the event that the board or court finds that any
time delay in making

                                 April 1, 1997                              547

its decision is unreasonable and is attributable to the taxpayer, it may
order that no interest or only a portion thereof be added to such refund of
taxes''; after line 14, by inserting the following:
  ``(2)  No interest shall be allowed pursuant to paragraph (1) in any case
where: (A) A taxpayer has failed to produce documentation at or prior to the
informal conference with the county or district appraiser required by K.S.A.
79-1448, and amendments thereto, or this section necessary, to determine the
correctness of the valuation established for the property subject to the
appeal or protest; or (B) the tax paid under protest was inclusive of
delinquent taxes.'';
  On page 31, in line 27, by striking ``and'' and inserting ``or'';
  On page 35, by striking all in lines 2 through 26; after line 26, by
inserting the following:
  ``Sec. 28.  K.S.A. 1996 Supp. 79-1460 is hereby amended to read as follows:
79-1460. The county appraiser shall notify each taxpayer in the county
annually on or before March 1 for real property and May 1 for personal
property, by mail directed to the taxpayer's last known address, of the
classification and appraised valuation of the taxpayer's property, ex cept
that for tax year 1995, and each year thereafter, the valuation for all
real property shall not be increased unless: (a) The record of the latest
physical inspection was reviewed by the county or district appraiser, and
documentation exists to support such increase in val uation in compliance
with the directives and specifications of the director of property val
uation, and such record and documentation is available to the affected
taxpayer; and (b) for the taxable year next following the taxable year that
the valuation for real property has been reduced due to a final determination
made pursuant to the valuation appeals process, doc umented substantial and
compelling reasons exist therefor and are provided by the county appraiser.
For the purposes of this section and in the case of real property, the term
''ta xpayer'' shall be deemed to be the person in ownership of the property
as indicated on the records of the office of register of deeds or county
clerk. Such notice shall specify separately both the previous and current
appraised and assessed values for each property class iden tified on the
parcel. Such notice shall also contain the uniform parcel identification
number prescribed by the director of property valuation. Such notice shall
also contain a statement of the taxpayer's right to appeal and the procedure
to be followed in making such appeal. In any year in which no change in
appraised valuation of any real property from its ap praised valuation in the
next preceding year is determined, an alternative form of notification which
has been approved by the director of property valuation may be utilized by a
county. Failure to timely mail or receive such notice shall in no way
invalidate the classification or appraised valuation as changed. The
secretary of revenue shall adopt rules and regulations necessary to implement
the provisions of this section.'';
  On page 39, in line 17, by striking ``and the''; by striking all in line
18; in line 19, by striking all before ``it''; in line 30, by striking all
after the period; by striking all in lines 31 through 34; in line 35, by
striking all before ``All'' and inserting ``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 condi tions and standards
for the granting and maintaining of such status.'';
  On page 40, in line 23, by striking all after the comma; in line 24, by
striking all before ``it''; in line 35, by striking all after the period; by
striking all in lines 36 through 39; in line 40, by striking all before
``All'' and inserting ``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.'';
  On page 48, by striking all in lines 18 through 29;
  On page 49, in line 27, after ``treasurer'' by inserting ``, except that
with respect to pay ments received by mail, receipts shall be given only'';
  On page 52, in line 41, after the comma, by inserting ``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

548                          JOURNAL OF THE SENATE

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,'';
  On page 56, after line 42, by inserting the following:
  ``New Sec. 37.  For all purposes associated with property taxation, the
provisions of K.S.A. 79-412 notwithstanding, that portion of the fair market
value of real property attrib utable to the leasing of real property, or the
creation of any other interest of less than fee simple in real property, for
the purpose of the placement of a wireless communication tower, antenna or
relay site upon the real property, shall be entered on the assessment roll
separate from the remaining fair market value. Such portion of the fair
market value shall be sepa rately taxed to the owner of such wireless
communication tower, antenna or relay site as real property at the same
classification and same tax rate as the real property upon which the wireless
communications tower, antenna or relay site is located except that, in the
event the real property upon which the wireless communications tower, antenna
or relay site is located is exempt from property taxation, such real property
shall continue to be exempt from property taxation, except that portion of
the fair market value of such tax-exempt real property attributable to the
leasing of such tax-exempt real property, or the creation of any other
interest of less than fee simple in such tax-exempt real property, for the
purpose of the placement of a wireless communications tower, antenna or relay
site upon such taxexempt real property, shall be taxable and shall be
assessed to the owner of such wireless communications tower, antenna or relay
site as real property at 25% of value. Such tax shall be a lien on the
interest in the real property of such owner of the wireless communications
tower, antenna or relay site and shall be collected in the same manner as the
collection of other taxes on real property.
  New Sec. 38.  (a) Any real property, or portion thereof, which is otherwise
exempt from property taxation pursuant to the provisions of K.S.A. 79-201,
79-201a, 79-201b, 79-201g and amendments thereto, and which is leased or
otherwise used for the location of a wireless communications tower, antenna
or relay site, shall be deemed to be used exclusively for the purposes of
such sections.
  (b)  The provisions of this section shall be applicable to all taxable
years commencing after December 31, 1995.
  Sec. 39.  K.S.A. 75-5105a is hereby amended to read as follows: 75-5105a.
The director of property valuation shall:
  (a)  Devise and prescribe uniform assessment forms and records,
property-identification maps, land-classification maps, land-value maps,
permanent record cards, and other essen tial assessment tools, and to assist
each county with the installation and maintenance of the same.
  (b)  Devise or prescribe guides, or both, showing fair market value in
money for the valuation of personal property. The director of
property valuation may furnish to each county one copy of each guide so
prescribed and a copy or copies of each guide so devised. In the preparation
of such guides, the director of property valuation shall confer with represen
tatives of the county appraisers and district appraisers, and shall seek
counsel from official representatives of organized groups interested in and
familiar with the value of classes of property with which they are concerned.
  (c)  Render all assistance possible toward uniform assessments within the
counties and throughout the state.
  (d)  Assist county appraisers and district appraisers to determine the fair
market value in money of nonstate assessed properties, the valuation of which
requires specialized tech nical knowledge.
  (e)  Compile assessment sales ratio data as provided by K.S.A.
79-1435 to 79-1438, in clusive 1996 Supp. 79-1486 through
79-1493, and amendments thereto, and to analyze such assessment data.
  (f)  Perform such other duties as may be prescribed by law.
  Sec. 40.  K.S.A. 1996 Supp. 79-1476 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 reappraisal 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

                                 April 1, 1997                              549

shall have the duty of reappraising all of the real property in the county
pursuant to guide lines and timetables prescribed by the director of property
valuation and of updating the same on an 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 guidelines and timetables and of updating the
same on an 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 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

550                          JOURNAL OF THE SENATE

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. 41.  K.S.A. 1996 Supp. 79-1439 is hereby amended to read as follows:
79-1439. (a) All real and tangible personal property which is subject to
general ad valorem taxation shall be appraised uniformly and equally as to
class and, unless otherwise specified herein, shall be appraised at its fair
market value, as defined in K.S.A. 79-503a, and amendments thereto.
  (b)  Property shall be classified into the following classes and assessed
at the percentage of value prescribed therefor:
  (1)  Real property shall be assessed as to subclass at the following
percentages of value:
  (A)  Real property used for residential purposes including multi-family
residential real property, real property necessary to accommodate a
residential community of mobile or manufactured homes including the real
property upon which such homes are located and residential real property
used partially for day care home purposes if such home has been registered or
licensed pursuant to K.S.A. 65-501 et seq., and amendments thereto at
12% 11.5%;
  (B)  land devoted to agricultural use valued pursuant to K.S.A. 79-1476,
and amend ments thereto, at 30%;
  (C)  vacant lots at 12%; and
  (D)  real property which is owned and operated by a not-for-profit
organization not subject to federal income taxation pursuant to section 501
of the federal internal revenue code and included herein pursuant to K.S.A.
79-1439a, and amendments thereto, at 12%;
  (E)  public utility real property, except railroad property which shall be
assessed at the average rate all other commercial and industrial property is
assessed, at 33%. As used in this paragraph, ``public utility'' shall have
the meaning ascribed thereto by K.S.A. 79-5a01, and amendments thereto;
  (F)  real property used for commercial and industrial purposes and
buildings and other improvements located upon land devoted to agricultural
use at 25%; and
  (D) (G)  all other urban and rural real property not otherwise
specifically subclassed at 30%.

                                 April 1, 1997                              551

  (2)  Personal property shall be classified into the following classes and
assessed at the percentage of value prescribed therefor:
  (A)  Mobile homes used for residential purposes at 12% 11.5%;
  (B)  mineral leasehold interests, except oil leasehold interests the
average daily produc tion from which is five barrels or less, and natural gas
leasehold interests, the average daily production from which is 100 mcf or
less, which shall be assessed at 25%, at 30%;
  (C)  public utility tangible personal property at 30%. As used in this
paragraph, ``public utility'' shall have the meaning ascribed thereto by
K.S.A. 79-5a01, and amendments thereto; public utility tangible
personal property including inventories thereof, except railroad per sonal
property including inventories thereof, which shall be assessed at the
average rate all other commercial and industrial property is assessed, at
33%. As used in this paragraph, ``public utility'' shall have the meaning
ascribed thereto by K.S.A. 79-5a01, and amendments thereto;
  (D)  all categories of motor vehicles listed and taxed pursuant to K.S.A.
79-306d, and amendments thereto, and over-the-road motor vehicles defined
pursuant to K.S.A. 79-6a01, and amendments thereto, at 30%;
  (E)  commercial and industrial machinery and equipment, including
rolling equipment defined pursuant to K.S.A. 79-6a01, and amendments
thereto, which, if its economic life is seven years or more, shall be
valued at its retail cost when new less seven-year straight-line
depreciation, or which, if its economic life is less than seven years, shall
be valued at its retail cost when new less straight-line depreciation over
its economic life, except that, the value so obtained for such property as
long as it is being used shall not be less than 20% of the retail cost when
new of such property at 20% 25%; and
  (F)  all other tangible personal property not otherwise specifically
classified at 30%.
  Sec. 42.  K.S.A. 1996 Supp. 79-503a is hereby amended to read as follows:
79-503a. ``Fair market value'' means the amount in terms of money that a well
informed buyer is justified in paying and a well informed seller is justified
in accepting for property in an open and competitive market, assuming that
the parties are acting without undue compulsion. For the purposes of this
definition it will be assumed that consummation of a sale occurs as of
January 1.
  A variance of 10% in any individual appraisal at fair market value shall
not be considered willful neglect of the county appraiser's duty to achieve
fair market value. The foregoing provision shall not be construed to mean
that a series of such variances does not constitute willful neglect.
  Sales in and of themselves shall not be the sole criteria of fair market
value but shall be used in connection with cost, income and other factors
including but not by way of exclusion:
  (a)  The proper classification of lands and improvements;
  (b)  the size thereof;
  (c)  the effect of location on value;
  (d)  depreciation, including physical deterioration or functional, economic
or social ob solescence;
  (e)  cost of reproduction of improvements;
  (f)  productivity;
  (g)  earning capacity as indicated by lease price, by capitalization of net
income or by absorption or sell-out period;
  (h)  rental or reasonable rental values;
  (i)  sale value on open market with due allowance to abnormal inflationary
factors influ encing such values;
  (j)  restrictions imposed upon the use of real estate by local governing
bodies, including zoning and planning boards or commissions; and
  (k)  comparison with values of other property of known or recognized value.
The as sessment-sales ratio study shall not be used as an appraisal for
appraisal purposes.
  The appraisal process utilized in the valuation of all real and tangible
personal property for ad valorem tax purposes shall conform to generally
accepted appraisal procedures which are adaptable to mass appraisal and
consistent with the definition of fair market value unless otherwise
specified by law.

552                          JOURNAL OF THE SENATE

  Sec. 43.  K.S.A. 1996 Supp. 79-1448 is hereby amended to read as follows:
79-1448. Any taxpayer may complain or appeal to the county appraiser from the
classification or appraisal of the taxpayer's property by giving notice to
the county appraiser on or before April 15 within 30 days subsequent
to the date of mailing of the valuation notice required by K.S.A. 79-1460,
and amendments thereto, for real property, and on or before May 15
for personal property. The county appraiser or the appraiser's designee shall
arrange to hold an informal meeting with the aggrieved taxpayer with
reference to the property in question. At such meeting it shall be the duty
of the county appraiser or the county appraiser's des ignee to initiate
production of evidence to substantiate the valuation of such property. The
county appraiser may extend the time in which the taxpayer may informally
appeal from the classification or appraisal of the taxpayer's property for
just and adequate reasons. Except as provided in K.S.A. 79-1404, and
amendments thereto, no informal meeting regarding real property shall be
scheduled to take place after May 15, nor shall a final determination be
given by the appraiser after May 20. Any taxpayer who is aggrieved by the
final deter mination of the county appraiser may appeal to the hearing
officer or panel appointed pursuant to K.S.A. 1996 Supp. 79-1611, and
amendments thereto, and such hearing officer, or panel, for just cause shown
and recorded, is authorized to change the classification or valuation of
specific tracts or individual items of real or personal property in the same
manner provided for in K.S.A. 79-1606, and amendments thereto. Any
taxpayer who is aggrieved by the final determination of a hearing officer or
panel may appeal to the state board of tax appeals as provided in K.S.A.
79-1609, and amendments thereto. An informal meeting with the county
appraiser or the appraiser's designee shall be a condition precedent to an
appeal to the county or district hearing panel.
  Sec. 44.  K.S.A. 1996 Supp. 45-221 is hereby amended to read as follows:
45-221. (a) Except to the extent disclosure is otherwise required by law, a
public agency shall not be required to disclose:
  (1)  Records the disclosure of which is specifically prohibited or
restricted by federal law, state statute or rule of the Kansas supreme court
or the disclosure of which is prohibited or restricted pursuant to specific
authorization of federal law, state statute or rule of the Kansas supreme
court to restrict or prohibit disclosure.
  (2)  Records which are privileged under the rules of evidence, unless the
holder of the privilege consents to the disclosure.
  (3)  Medical, psychiatric, psychological or alcoholism or drug dependency
treatment re cords which pertain to identifiable patients.
  (4)  Personnel records, performance ratings or individually identifiable
records pertain ing to employees or applicants for employment, except that
this exemption shall not apply to the names, positions, salaries and lengths
of service of officers and employees of public agencies once they are
employed as such.
  (5)  Inrmation which would reveal the identity of any undercover agent or
any informant reporting a specific violation of law.
  (6)  Letters of reference or recommendation pertaining to the character or
qualifications of an identifiable individual.
  (7)  Library, archive and museum materials contributed by private persons,
to the extent of any limitations imposed as conditions of the contribution.
  (8)  Information which would reveal the identity of an individual who
lawfully makes a donation to a public agency, if anonymity of the donor is a
condition of the donation.
  (9)  Testing and examination materials, before the test or examination is
given or if it is to be given again, or records of individual test or
examination scores, other than records which show only passage or failure and
not specific scores.
  (10)  Criminal investigation records, except that the district court, in an
action brought pursuant to K.S.A. 45-222, and amendments thereto, may order
disclosure of such records, subject to such conditions as the court may
impose, if the court finds that disclosure:
  (A)  Is in the public interest;
  (B)  would not interfere with any prospective law enforcement action;
  (C)  would not reveal the identity of any confidential source or undercover
agent;
  (D)  would not reveal confidential investigative techniques or procedures
not known to the general public;

                                 April 1, 1997                              553

  (E)  would not endanger the life or physical safety of any person; and
  (F)  would not reveal the name, address, phone number or any other
information which specifically and individually identifies the victim of any
sexual offense in article 35 of chapter 21 of the Kansas Statutes Annotated,
and amendments thereto.
  (11)  Records of agencies involved in administrative adjudication or civil
litigation, com piled in the process of detecting or investigating violations
of civil law or administrative rules and regulations, if disclosure would
interfere with a prospective administrative adjudication or civil litigation
or reveal the identity of a confidential source or undercover agent.
  (12)  Records of emergency or security information or procedures of a
public agency, or plans, drawings, specifications or related information for
any building or facility which is used for purposes requiring security
measures in or around the building or facility or which is used for the
generation or transmission of power, water, fuels or communications, if
disclosure would jeopardize security of the public agency, building or
facility.
  (13)  The contents of appraisals or engineering or feasibility estimates or
evaluations made by or for a public agency relative to the acquisition of
property, prior to the award of formal contracts therefor.
  (14)  Correspondence between a public agency and a private individual,
other than cor respondence which is intended to give notice of an action,
policy or determination relating to any regulatory, supervisory or
enforcement responsibility of the public agency or which is widely
distributed to the public by a public agency and is not specifically in
response to communications from such a private individual.
  (15)  Records pertaining to employer-employee negotiations, if disclosure
would reveal information discussed in a lawful executive session under K.S.A.
75-4319, and amendments thereto.
  (16)  Software programs for electronic data processing and documentation
thereof, but each public agency shall maintain a register, open to the
public, that describes:
  (A)  The information which the agency maintains on computer facilities; and
  (B)  the form in which the information can be made available using existing
computer programs.
  (17)  Applications, financial statements and other information submitted in
connection with applications for student financial assistance where financial
need is a consideration for the award.
  (18)  Plans, designs, drawings or specifications which are prepared by a
person other than an employee of a public agency or records which are the
property of a private person.
  (19)  Well samples, logs or surveys which the state corporation commission
requires to be filed by persons who have drilled or caused to be drilled, or
are drilling or causing to be drilled, holes for the purpose of discovery or
production of oil or gas, to the extent that disclosure is limited by rules
and regulations of the state corporation commission.
  (20)  Notes, preliminary drafts, research data in the process of analysis,
unfunded grant proposals, memoranda, recommendations or other records in
which opinions are expressed or policies or actions are proposed, except that
this exemption shall not apply when such records are publicly cited or
identified in an open meeting or in an agenda of an open meeting.
  (21)  Records of a public agency having legislative powers, which records
pertain to proposed legislation or amendments to proposed legislation, except
that this exemption shall not apply when such records are:
  (A)  Publicly cited or identified in an open meeting or in an agenda of an
open meeting; or
  (B)  distributed to a majority of a quorum of any body which has authority
to take action or make recommendations to the public agency with regard to
the matters to which such records pertain.
  (22)  Records of a public agency having legislative powers, which records
pertain to research prepared for one or more members of such agency, except
that this exemption shall not apply when such records are:
  (A)  Publicly cited or identified in an open meeting or in an agenda of an
open meeting; or

554                          JOURNAL OF THE SENATE

  (B)  distributed to a majority of a quorum of any body which has authority
to take action or make recommendations to the public agency with regard to
the matters to which such records pertain.
  (23)  Library patron and circulation records which pertain to identifiable
individuals.
  (24)  Records which are compiled for census or research purposes and which
pertain to identifiable individuals.
  (25)  Records which represent and constitute the work product of an
attorney.
  (26)  Records of a utility or other public service pertaining to
individually identifiable residential customers of the utility or service,
except that information concerning billings for specific individual customers
named by the requester shall be subject to disclosure as provided by this
act.
  (27)  Specifications for competitive bidding, until the specifications are
officially ap proved by the public agency.
  (28)  Sealed bids and related documents, until a bid is accepted or all
bids rejected.
  (29)  Correctional records pertaining to an identifiable inmate, except
that:
  (A)  The name, sentence data, parole eligibility date, disciplinary record,
custody level and location of an inmate;
  (B)  the ombudsman of corrections, the attorney general, law enforcement
agencies, counsel for the inmate to whom the record pertains and any county
or district attorney shall have access to correctional records to the extent
otherwise permitted by law;
  (C)  the information provided to the law enforcement agency pursuant to the
sex of fender registration act, K.S.A. 22-4901, et seq., and amendments
thereto, shall be subject to disclosure to any person; and
  (D)  records of the department of corrections regarding the financial
assets of an of fender in the custody of the secretary of corrections shall
be subject to disclosure to the victim, or such victim's family, of the crime
for which the inmate is in custody as set forth in an order of restitution by
the sentencing court.
  (30)  Public records containing information of a personal nature where the
public dis closure thereof would constitute a clearly unwarranted invasion of
personal privacy.
  (31)  Public records pertaining to prospective location of a business or
industry where no previous public disclosure has been made of the business'
or industry's interest in locating in, relocating within or expanding within
the state. This exception shall not include those records pertaining to
application of agencies for permits or licenses necessary to do business or
to expand business operations within this state, except as otherwise provided
by law.
  (32)  The bidder's list of contractors who have requested bid proposals for
construction projects from any public agency, until a bid is accepted or all
bids rejected.
  (33)  Engineering and architectural estimates made by or for any public
agency relative to public improvements.
  (34)  Financial information submitted by contractors in qualification
statements to any public agency.
  (35)  Records involved in the obtaining and processing of intellectual
property rights that are expected to be, wholly or partially vested in or
owned by a state educational institution, as defined in K.S.A. 76-711, and
amendments thereto, or an assignee of the institution organized and existing
for the benefit of the institution.
  (36)  Any report or record which is made pursuant to K.S.A. 65-4922,
65-4923 or 654924, and amendments thereto, and which is privileged pursuant
to K.S.A. 65-4915 or 654925, and amendments thereto.
  (37)  Information which would reveal the precise location of an
archeological site.
  (38)  Any financial data or traffic information from a railroad company, to
a public agency, concerning the sale, lease or rehabilitation of the
railroad's property in Kansas.
  (39)  Risk-based capital reports, risk-based capital plans and corrective
orders including the working papers and the results of any analysis filed
with the commissioner of insurance in accordance with K.S.A. 1996 Supp.
40-2c20, and amendments thereto.
  (40)  Memoranda and related materials required to be used to support the
annual ac tuarial opinions submitted pursuant to subsection (b) of K.S.A.
40-409, and amendments thereto.

                                 April 1, 1997                              555

  (41)  Disclosure reports filed with the commissioner of insurance under
subsection (a) of K.S.A. 1996 Supp. 40-2,156, and amendments thereto.
  (42)  All financial analysis ratios and examination synopses concerning
insurance com panies that are submitted to the commissioner by the national
association of insurance commissioners' insurance regulatory information
system.
  (43)  Any records the disclosure of which is restricted or prohibited by a
tribal-state gaming compact.
  (b)  Except to the extent disclosure is otherwise required by law or as
appropriate during the course of an administrative proceeding or on appeal
from agency action, a public agency or officer shall not disclose financial
information of a taxpayer which may be required or requested by a county
appraiser or the director of property valuation to assist in the deter
mination of the value of the taxpayer's property for ad valorem taxation
purposes; or any financial information of a personal nature required or
requested by a public agency or officer, including a name, job description or
title revealing the salary or other compensation of officers, employees or
applicants for employment with a firm, corporation or agency, except a public
agency. Nothing contained herein shall be construed to prohibit the publi
cation of statistics, so classified as to prevent identification of
particular reports or returns and the items thereof.
  (c)  As used in this section, the term ``cited or identified'' shall not
include a request to an employee of a public agency that a document be
prepared.
  (d)  If a public record contains material which is not subject to
disclosure pursuant to this act, the public agency shall separate or delete
such material and make available to the requester that material in the public
record which is subject to disclosure pursuant to this act. If a public
record is not subject to disclosure because it pertains to an identifiable
individual, the public agency shall delete the identifying portions of the
record and make available to the requester any remaining portions which are
subject to disclosure pursuant to this act, unless the request is for a
record pertaining to a specific individual or to such a limited group of
individuals that the individuals' identities are reasonably ascertainable,
the public agency shall not be required to disclose those portions of the
record which pertain to such individual or individuals.
  (e)  The provisions of this section shall not be construed to exempt from
public disclosure statistical information not descriptive of any identifiable
person.
  (f)  Notwithstanding the provisions of subsection (a), any public record
which has been in existence more than 70 years shall be open for inspection
by any person unless disclosure of the record is specifically prohibited or
restricted by federal law, state statute or rule of the Kansas supreme court
or by a policy adopted pursuant to K.S.A. 72-6214, and amend ments thereto.
  Sec. 45.  K.S.A. 1996 Supp. 75-5133 is hereby amended to read as follows:
75-5133. (a) Except as otherwise more specifically provided by law, all
information received by the di rector of taxation from applications for
licensure or registration made or returns or reports filed under the
provisions of any law imposing any excise tax administered by the director,
or from any investigation conducted under such provisions, shall be
confidential, and it shall be unlawful for any officer or employee of the
department of revenue to divulge any such information except in accordance
with other provisions of law respecting the enforcement and collection of
such tax, in accordance with proper judicial order and as provided in K.S.A.
74-2424, and amendments thereto.
  (b)  Nothing herein in this section shall be construed to
prohibit the publication of sta tistics, so classified as to prevent
identification of particular reports or returns and the items thereof, or the
inspection of returns by the attorney general. Nothing in this section shall
prohibit the post auditor from access to all such excise tax reports or
returns in accordance with and subject to the provisions of subsection (g) of
K.S.A. 46-1106, and amendments thereto. Nothing in this section shall be
construed to prohibit the disclosure of the taxpayer's name, social
security number, last known address and total tax liability, including
penalty and interest, taxpayer information from excise tax returns
to a debt collection agency persons or entities contracting with
the secretary of revenue pursuant to K.S.A. 75-5140 to 75-5143, inclusive,
and amendments thereto where the secretary has determined disclosure of
such

556                          JOURNAL OF THE SENATE

information is essential for completion of the contract and has taken
appropriate steps to preserve confidentiality.
  (c)  Notwithstanding the foregoing provisions of this section, the director
of taxation may provide such information from returns and reports filed under
article 42 of chapter 79 of the Kansas Statutes Annotated to county
appraisers as is necessary to insure proper valua tions of property.
Information from such returns and reports may also be exchanged with any
other state agency administering and collecting conservation or other taxes
and fees imposed on or measured by mineral production. Nothing in this
section shall prohibit the disclosure of oil and gas production statistics.
  (d)  Any person receiving any information under the provisions of
subsection (b) or (c) of this section shall be subject to the
confidentiality provisions of subsection (a) of this section and to the
penalty provisions of subsection (e) of this section.
  (e)  Any violation of this section shall be a class B nonperson
misdemeanor, and if the offender is an officer or employee of this state,
such officer or employee shall be dismissed from office.
  Sec. 46.  K.S.A. 1996 Supp. 79-3234 is hereby amended to read as follows:
79-3234. (a) All reports and returns required by this act shall be preserved
for three years and thereafter until the director orders them to be
destroyed.
  (b)  Except in accordance with proper judicial order, or as provided in
subsection (c) or in K.S.A. 17-7511, subsection (g) of K.S.A. 46-1106, K.S.A.
46-1114, or K.S.A. 79-32,153a, and amendments thereto, it shall be unlawful
for the director, any deputy, agent, clerk or other officer, employee or
former employee of the department of revenue or any other state officer or
employee or former state officer or employee to divulge, or to make known in
any way, the amount of income or any particulars set forth or disclosed in
any report, return, federal return or federal return information required
under this act; and it shall be unlawful for the director, any deputy, agent,
clerk or other officer or employee engaged in the ad ministration of this act
to engage in the business or profession of tax accounting or to accept
employment, with or without consideration, from any person, firm or
corporation for the purpose, directly or indirectly, of preparing tax returns
or reports required by the laws of the state of Kansas, by any other state or
by the United States government, or to accept any employment for the purpose
of advising, preparing material or data, or the auditing of books or records
to be used in an effort to defeat or cancel any tax or part thereof that has
been assessed by the state of Kansas, any other state or by the United States
government.
  (c)  Nothing herein in this section shall be construed to
prohibit the publication of sta tistics, so classified as to prevent the
identification of particular reports or returns and the items thereof, or the
inspection of returns by the attorney general or other legal represen tatives
of the state. Nothing in this section shall prohibit the post auditor from
access to all income tax reports or returns in accordance with and subject to
the provisions of subsection   (g) of K.S.A. 46-1106 or K.S.A. 46-1114, and
amendments thereto. Nothing in this section shall be construed to prohibit
the disclosure of the taxpayer's name, social security number, last known
address and total tax liability, including penalty and interest,
taxpayer information from income tax returns to a debt collection
agency persons or entities contracting with the secretary of revenue
pursuant to K.S.A. 75-5140 through 75-5143, and amendments thereto
where the secretary has determined disclosure of such information is
essential for completion of the contract and has taken appropriate steps to
preserve confidentiality. Nothing in this section shall be construed to
prohibit the disclosure of job creation and investment infor mation derived
from tax schedules required to be filed under the Kansas income tax act to
the secretary of commerce.  Nothing in this section shall be construed to
prohibit the dis closure of the taxpayer's name, last known address and
residency status to the department of wildlife and parks to be used solely in
its license fraud investigations. Any person receiving any information under
the provisions of this subsection shall be subject to the confidentiality
provisions of subsection (b) and to the penalty provisions of subsection (d).
  (d)  Any violation of subsection (b) or (c) is a class B nonperson
misdemeanor and, if the offender is an officer or employee of the state, such
officer or employee shall be dis missed from office.
  (e)  Notwithstanding the provisions of this section, the secretary of
revenue may permit the commissioner of internal revenue of the United States,
or the proper official of any state

                                 April 1, 1997                              557

imposing an income tax, or the authorized representative of either, to
inspect the income tax returns made under this act and the secretary of
revenue may make available or furnish to the taxing officials of any other
state or the commissioner of internal revenue of the United States or other
taxing officials of the federal government, or their authorized rep
resentatives, information contained in income tax reports or returns or any
audit thereof or the report of any investigation made with respect thereto,
filed pursuant to the income tax laws, as the secretary may consider proper,
but such information shall not be used for any other purpose than that of the
administration of tax laws of such state, the state of Kansas or of the
United States.
  (f)  Notwithstanding the provisions of this section, the secretary of
revenue may:
  (1)  Communicate to the executive director of the Kansas lottery
information as to whether a person, partnership or corporation is current in
the filing of all applicable tax returns and in the payment of all taxes,
interest and penalties to the state of Kansas, excluding items under formal
appeal, for the purpose of determining whether such person, partnership or
corporation is eligible to be selected as a lottery retailer;
  (2)  communicate to the executive director of the Kansas racing commission
as to whether a person, partnership or corporation has failed to meet any tax
obligation to the state of Kansas for the purpose of determining whether such
person, partnership or cor poration is eligible for a facility owner license
or facility manager license pursuant to the Kansas parimutuel racing act; and
  (3)  provide such information to the president of Kansas, Inc. as required
by K.S.A. 1996 Supp. 74-8017, and amendments thereto. The president and any
employees or former em ployees of Kansas, Inc. receiving any such information
shall be subject to the confidentiality provisions of subsection (b) and to
the penalty provisions of subsection (d).
  Sec. 47.  K.S.A. 1996 Supp. 79-3614 is hereby amended to read as follows:
79-3614. All information received by the director from returns filed under
this act, or from any investi gations conducted under the provisions of this
act, shall be confidential, except for official purposes, and it shall be
unlawful for any officer or employee of such director to divulge any such
information in any manner, except in accordance with a proper judicial order,
or as provided in K.S.A. 74-2424, and amendments thereto. The post auditor
shall have access to all such information in accordance with and subject to
the provisions of subsection (g) of K.S.A. 46-1106, and amendments thereto.
Nothing in this section shall be construed to prohibit the disclosure of
the taxpayer's name, social security number, last known address and total
tax liability, including penalty and interest, taxpayer information
from sales tax returns to a debt collection agency persons or
entities contracting with the secretary of revenue pursuant to K.S.A.
75-5140 to 75-5143, inclusive where the secretary has deter mined
disclosure of such information is essential for completion of the contract
and has taken appropriate steps to preserve confidentiality.
Notwithstanding the provisions of this section, the secretary of revenue may
provide such information to the president of Kansas, Inc. as required by
K.S.A. 1996 Supp. 74-8017, and amendments thereto. The president and any
employees or former employees Any person receiving any such
information pursuant to this section shall be subject to the same duty
of confidentiality imposed on officers and employ ees of the department of
revenue by this section and shall be subject to any civil or criminal
penalties imposed by law for violations of such duty of confidentiality.
  Sec. 48.  K.S.A. 79-32,111 is hereby amended to read as follows: 79-32,111.
(a) The amount of income tax paid to another state by a resident individual,
resident estate or resident trust on income derived from sources in another
state shall be allowed as a credit against the tax computed under the
provisions of this act. Such credit shall not be greater in proportion to the
tax computed under this act than the adjusted gross income for such year
derived in another state while such taxpayer is a resident of this state is
to the total Kansas adjusted gross income of the taxpayer. As used in this
subsection, state shall have the meaning ascribed thereto by subsection (h)
of K.S.A. 79-3271, and amendments thereto. The credit allowable hereunder for
income tax paid to a foreign country or political subdi vision thereof shall
not exceed the difference of such income tax paid less the credit allowable
for such income tax paid by the federal internal revenue code.
  (b)  There shall be allowed as a credit against the tax computed under the
provisions of the Kansas income tax act, and acts amendatory thereof and
supplemental thereto, on the

558                          JOURNAL OF THE SENATE

Kansas taxable income of an individual, corporation or fiduciary the amount
determined under the provisions of K.S.A. 79-32,153 to 79-32,158, and
amendments thereto.'';
  By renumbering sections accordingly;
  Also on page 56, in line 43, before ``77-548'' by inserting ``75-5105a,'';
also, in line 43, by striking ``79-6a02,'';
  On page 57, in line 1 after ``and'' by inserting ``79-32,111 and''; in line
2, after ``Supp.'' by inserting ``45-221,''; also, in line 2, before
``77-549'' by inserting ``75-5133,''; also, in line 2, by striking ``79-'';
in line 3, by striking ``332a,''; also, in line 3, by striking ``79-1422,
791427a,'' and inserting ``79-503a,''; also, in line 3, before ``79-1575'' by
inserting ``79-1439, 79-1448, 79-1460, 79-1476,''; in line 4, before
``79-32,105'' by inserting ``79-3234,''; in line 5, before ``79-3615'' by
inserting ``79-3614,'';
  In the title, in line 13, before ``77-548'' by inserting ``75-5105a,'';
also, in line 13, by striking ``79-6a02,''; in line 15, before ``and'' by
inserting ``and 79-32,111''; also, in line 15, after ``Supp.'' by inserting
``45-221,''; also, in line 15, before ``77-549'' by inserting ``75-5133,'';
in line 16, by striking ``79-332a,''; also, in line 16, by striking
``79-1422, 79-1427a,'' and inserting ``79-503a,''; also, in line 16, before
``79-1575'' by inserting ``79-1439, 79-1448, 79-1460, 791476,''; in line 17,
before ``79-32,105'' by inserting ``79-3234,''; in line 18, before
``79-3615'' by inserting ``79-3614,''; and the bill be passed as amended.

REPORT ON ENGROSSED BILLS

  SB 242, 244 reported correctly engrossed April 1, 1997.
  Also, SB 280 correctly re-engrossed April 1, 1997.

REPORT ON ENROLLED BILLS

  SB 33, 41, 136, 281 reported correctly enrolled, properly signed and
presented to the Governor on April 1, 1997.

COMMITTEE OF THE WHOLE

  The Committee of the Whole returned to consideration of bills on the
calendar with Senator Karr in the chair.
  Recommended SB 154 be amended by adoption of the committee
amendments, and the bill be passed as amended.
  S. Sub for HB 2272, as amended by adoption of the committee report
recommending a substitute bill, be amended by motion of Senator Goodwin on
page 2, in line 1, after ``transfers,'' by inserting ``capital improvement
projects,'';
  On page 22, following line 13, by inserting the following:
``Provided, That, the Kansas commission on veterans affairs is hereby
authorized and di rected to proceed with negotiations with the United States
department of veterans affairs for the operation by the commission on
veterans affairs of an existing 60-bed intermediate care nursing facility
located adjacent to the United States department of veterans affairs hospital
in Wichita, Kansas: Provided, however, That upon concluding such
agreement with the United States department of veterans affairs, the Kansas
commission of veterans affairs shall not seek United States department of
veterans affairs certification for the operation of the above nursing
facility until expressly authorized by the state legislature.
  (b)  There is appropriated for the above agency from the state institutions
building fund for the fiscal year ending June 30, 1997, for the capital
improvement project or projects specified as follows:
Winfield veterans home                                          $1,700,000'';
  On page 1, in the title, in line 36, after ``transfers,'' by inserting
``capital improvement projects,''.
  S. Sub for HB 2272 also be amended by motion of Senator Huelskamp on
page 4, by striking all in line 7, and the bill be passed as amended.
  The following amendment to S. Sub for HB 2272 was rejected:
  Senator Huelskamp offered an amendment to the bill.
  A request was made for the amendment to be divided into two parts.
  Part I: Senator Huelskamp moved to amend the bill on page 5, by striking
all in lines 15 through 17;

                                 April 1, 1997                              559

  On page 12, by striking all in lines 27 through 29; in line 30, by striking
``(b)'' and inserting in lieu thereof ``(a)'';
  On page 21, in line 37, by subtracting $25,000 from the dollar amount and
by adjusting the dollar amount in line 37 accordingly.
  The motion failed and Part 1 was rejected.
  Part 2: Senator Huelskamp moved to amend the bill on page 20, by striking
all in line 31.
  The motion failed and Part 2 was rejected.
  Having voted on the prevailing side to recommend HB 2374 favorably
for passage, Sen ator Jones moved the Committee reconsider its previous
action.  The motion carried and HB 2374 remains on General
Orders.

ORIGINAL MOTION

  Pursuant to Senate Rule 75, the President determined SB 207,
amended by the House, to be materially changed and referred the bill to
the Committee on Energy and Natural Resources.
  On motion of Senator Emert the Senate adjourned until 10:00 a.m.,
Wednesday, April 2, 1997.
                                           HELEN A. MORELAND, Journal Clerk.
PAT SAVILLE, Secretary of the Senate.
                                      +--+
                                      |  |
                                      +--+